If the crime of insult, which I agree is nuts, is enough for anyone to slap such a nasty label on a country then I think it speaks more about the intolerance of the person.
No, it speaks more about the corruption of a country to have such a stupid law. Keep in mind Croatia declared its independence in 1991. Starting with a clean slate to make up common sense laws they chose to adopt the "crime of insult." At no point do I see anybody insult the ethnicity of the region.