ZAGREB, June 12, 2018 – Attending the Entrepreneurs Day event in Zagreb on Tuesday, Prime Minister Andrej Plenković said that the national economy was growing on sound foundations and that the government’s economic policy was based on the reduction of tax and non-tax levies, while President Kolinda Grabar-Kitarović said that Croatia faced great opportunities but that “lack of a systematic approach and political immaturity” posed an obstacle to seizing those opportunities.
Croatia can do and deserves better, but that requires resolute reforms, a consensus on development goals, political readiness and openness to contribution from various social stakeholders, it was said at the event, organised by the Croatian Employers’ Association.
In her introductory speech, HUP president Gordana Deranja described Croatia as a country which, owing to resolute reforms, was high in all relevant rankings such as “Doing Business” and international competitiveness ratings, with the level of development accounting for 78% of the EU average, a reformed public sector and preconditions for strong development. Croatia is attractive to IT and other industries, it is very much export-oriented, emigration has been stopped and emigrants are returning, she added. “Unfortunately, Croatia is none of those things, our reality is much different, even though we could have done better,” said Deranja. “Had there been more wisdom and courage, we could have been saying those things in 2018,” she said, adding that Croatia had had a much better starting position for transition than other countries.
We talk too much, constantly announcing that we will do something and then don’t do it, and that is why our growth is insufficient, Deranja said, stressing that “people’s lives and jobs depend on ratings no one seems to be worried about.” She added that “we stubbornly refuse to change, while tectonic changes are happening around us.” “Croatia is not as we want it to be and we are losing investors and people,” she said, concluding that Croatia could do better and deserved it.
Addressing the event, Prime Minister Andrej Plenković said that the national economy was growing on sound foundations and that the government’s economic policy focused on measures designed to reduce tax and non-tax levies as well as removing administrative obstacles to doing business.
Commenting on Deranja’s statements, Plenković said that Croatia did not have the same starting position as the other transition countries due to the war. “The war cost us 160% of GDP, and for the sake of comparison, the tsunami in Japan cost the country 4% of its GDP,” said Plenković, stressing that today’s growth was based on sound foundations. He recalled that Croatia had exited the Excessive Deficit Procedure and that its GDP was growing, while public debt and the deficit were decreasing. All of that will facilitate accession to the euro area, he said.
The PM also announced the reduction of the standard VAT rate.
As for emigration, Plenković said that the higher rates of emigration were as expected and due to the openness of borders for Croatian workers following the country’s accession to the EU. “That is crucial and it would have been the same had we joined the EU sooner,” said Plenković.
President Kolinda Grabar-Kitarović, too, addressed the conference, saying that great opportunities lay before Croatia, yet “lack of a systematic approach and political immaturity” made it impossible to seize them. She welcomed the government’s efforts but added that they did not change the main indicators which showed that Croatia did not do well in relation to comparable countries.
This is so because problems, notably economic ones, are not approached systematically and because of policies that did not recognise constructive contributions but downplayed them, she said. “Our traditional political elites are evidently shut off to constructive contribution. While on the one hand, the entire society is called on to participate in formulating bills or long-term social strategies, on the other hand, a proposed dialogue on proposals is being rejected due to technical details,” she said.
She added that surveys that indicated problems were being described as intentional spreading of pessimism. “According to that logic, those who point to a problem and want to contribute to solving it are described as the ones who have caused it. The voice of a large portion of society is being silenced and degraded. There is something very wrong about that approach. It can be justified to some extent when the political rival, the opposition, is concerned. But the people are not the opposition, our citizens are not a political rival,” said Grabar-Kitarović.
She called for taking into account, in decision-making, general social benefits rather than only the impact of those decisions on the budget.
As for emigration, Grabar-Kitarović recalled the results of a recent HUP survey which revealed that Croatians were emigrating due to lack of prospects, dissatisfaction with ideological disputes dominating politics and, only as the least frequent reason, lack of jobs and inadequate salaries.
