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When Dubrovnik was an independent maritime republic in the late middle ages, its main rival was Venice, just across the Adriatic. Today the Croatian city is trying to avoid Venice’s fate – of turning into a global tourist destination that is increasingly unattractive and expensive for ordinary people to live in.

Dubrovnik’s white stone and marble walls and medieval city pull in more than 2m visitors a year, and are a mainstay of the local economy, but the worry is that the 40,000 locals will find the city too pricey and end up living further away, merely commuting into Dubrovnik for seasonal jobs.

That is what has spurred Andro Vlahusic, the city’s left-of-centre mayor, to devise a programme he calls “education vertical” aimed at improving Dubrovnik’s teaching system from kindergarten to university, with additional help for graduates to find a first job.

“We must protect the city,” says 52-year-old Vlahusic, sitting in the same room in the centuries-old city hall that he occupied in 1995 as Dubrovnik’s chief of logistics while the final Serb artillery shells rained down on the old town before the Serb forces were repelled. “The goal is to attract young people to the city.”

The programme is a mixed bag of projects being pushed by Vlahusic, but the general idea is to make education more affordable for people who are often only seasonally employed in tourism, which provides most of Dubrovnik’s jobs.

The first of the new schemes is a kindergarten project that uses a textbook produced by Mensa, the high IQ society. By bringing in an element of learning through play, this breaks with the traditional approach of focusing on rote learning. The city paid to train teachers and organised meetings with parents to promote the idea.

“My husband came back very enthusiastic,” says Marja Djurovic, mother of a five-year-old who is taking part in the programme.

So far there have been no metrics to measure the impact of the programme, but Boja Mustac, head of the city’s kindergartens, says she thinks the pupils have an edge when they enter elementary school.

At that level, the city is also hiring extra teachers to extend school hours so that children can stay at elementary school for the whole day, as well as allowing the schools to be used during the summer.

“As Dubrovnik is a tourist city, most parents work and schools are empty, so children stay in the streets during the day,” says Vlahusic.

In all, the kindergarten and elementary school programmes cost the city about €530,000 a year.

Although high schools are run by the regional government, the city is subsidising extra classes to help prepare students for school matriculation exams, which are crucial for winning places at university. The goal is to formalise after-school instruction by paying teachers out of the city budget and reducing the demand for private lessons. This has also reduced the corruption that, Vlahusic says, results from teachers hiring themselves out to give private lessons after hours.

The city is also helping students pay for the cost of university by offering scholarships and a loan programme that pays a student up to €20,000, with the city covering the 6.5 per cent interest rate while the student is at college and for one year after graduation.

Antoneta Alamat-Kusijanovic, 26, a fine-arts student at Columbia University in New York, is using the programme, which gives her €550 a month towards living costs in the US.

The key is whether students like her will decide to move back to Dubrovnik after graduation. The increase in the skill and knowledge base of the city would imply that the programme, which costs the city €146,000 a year, is value for money.

Some of the signs are good. In Alamat-Kusijanovic’s case, she has no firm intention to live permanently in Dubrovnik, but she hopes to use the city as a base for some future film projects. “This is my safe place that I’ll always come back to,” she says.

Students who do well in their studies will have some of their debt waived. The mayor is also setting up a Dubrovnik student club in Zagreb, Croatia’s capital, where about half of Dubrovnik’s graduates attend university. A city employee will keep an eye on the students to make sure they are hitting the books and not partying too much.

The mayor estimates 10 per cent of those receiving financial aid will not be able to repay it, even though the programme caps repayment costs at 20 per cent of a graduate’s salary.

“It may be stupid when seen through the eyes of the private sector, but this is the public sector,” Vlahusic says. “People are much more important in Dubrovnik than the city’s walls.”

The mayor and the city council take a personal interest in many cases, something that is relatively easy to do, with only 212 loans issued so far. But this informal, hands-on approach, which avoids some bureaucracy, can cause trouble.

Vlahusic is in the midst of a corruption trial after being charged with giving a €300,000 loan to a fellow city council member without the council’s authorisation. Vlahusic denies the charges but does admit to making “some small mistakes”.

The final part of Vlahusic’s programme aims to help university graduates find work.

Croatia’s unemployment rate was 17.3 per cent in June, and the economy is slowing as the ripples of the eurozone crisis spread. The European Bank for Reconstruction and Development predicts the economy will contract by 0.6 per cent this year, before returning to 1.7 per cent growth in 2013, when Croatia joins the EU.

“Growth for the rest of the year is likely to be either non-existent or negative, reflecting the overall lack of competitiveness in the economy,” the EBRD says.

The city contributes 2,500 kunas ($420) a month – about half the average salary – towards the pay of any university graduate hired for a one-year trial period by a local business.

This initiative has had some impact, especially for recent graduates, who would usually hope for at most a seasonal tourist job. So far the city has signed 70 contracts with companies.

“One of my friends has the same degree as me but is working in a souvenir shop,” says Blanka Bradvica, who graduated in marketing from the university in Dubrovnik and now works at Dubrovnik Sati, a travel agency.

“Were it not for the payroll programme, we would never have hired her, but we’re now going to keep her on after the subsidy expires,” says Mare Batinic, director of the agency.

The programme also helped Anja Markovic, head of Drvo Mladih Bonsai, a non-governmental organisation aimed at encouraging volunteering, by allowing her to hire her first employee.

“Without this programme, it would be really hard to find year-round work,” says Meri Klaic, the new worker recently hired by Markovic, sitting in a café just outside Dubrovnik’s city walls.

The city is also setting up an incubator for new businesses, offering 12 companies (with 27 employees between them) free office space and other help.

The programmes are still at a very early stage – many of them are a year old or less – and Vlahusic has only the haziest grasp of their impact on student results, graduation rates or even his ultimate goal of keeping Dubrovnik’s population stable.

“Dubrovnik should mean intellectual power – it shouldn’t just be a place to come for millions of visiting cruise-ship passengers,” he says.

Whether that goal is realistic is debatable. Dubrovnik’s main economic engine is tourism, with government work second. There is almost no investment outside the tourist industry, and even some projects in that sector are running into trouble – as seen by the six years of delays for a $1.1bn golf course and luxury housing project in the hills overlooking the city and a nearby villa development.

The projects have run into thickets of red tape for trying to build in areas that may be visible from the old town (the same areas that the Serb artillery used in the early 1990s to bombard the city).

“It has been a very unpleasant surprise to have to wait six years, but we are hopeful we will eventually get permission,” says Ivan Kusalic, head of Razvoj Golf, the golf course developer.

Improving access to education is just one of the factors that could make people stay in Dubrovnik. Those locals who do not own their own houses also face the prospect of seasonal eviction, as landlords kick out Croats and revamp flats to rent to better-paying foreigners during the summer tourist season.

But for many locals, even if working abroad were easier, the attractions of living within sight of the deep blue Adriatic and the shimmering white walls of the old town make them want to stay.

“I know that Croatia is joining the EU next year,” says Klaic. “But I have no interest in ever leaving.”

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