Croatian Recovery and Resilience Programme Faces More Criticism

Lauren Simmonds

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As Poslovni Dnevnik/Ana Blaskovic writes, not even ten days before being sent to Brussels, criticism of the Croatian Recovery and Resilience Programme, the key to the 6.3 billion euro grant to try to drag us up and out of the ongoing pandemic crisis, hasn’t stopped.

Those to whom it should refer didn’t participate in the programme’s creation, only about eighty pages of the summary were released to the public and it included projects that have nothing to do with reforms.

Disappointment with the plan, which the prime minister calls a “generational opportunity”, is shared by the Croatian Employers’ Association (HUP), who demand that the document be changed in such a way as to direct more money to the real sector.

At a recently held conference, which dissected the plan with the specific question of what kind of investments can get us out of the crisis, chief economist Iva Tomic pointed out that in terms of GDP per capita, Croatia is at the very bottom of the EU, at 65 percent of the European Union average.

If we want to get closer to 75 percent then we need to grow faster than others in as much as is possible by boosting merchandise exports and private investments with a quick return, rather than repeating the mistake we made back in 2008 when public investment and infrastructure were favoured.

”We need bold growth rates’’

“The patient is now in the terminal phase, and we’re treating him with aspirin, so in five years we’ll be sitting, scratching our heads and again wondering why we’re lagging behind. We need bolder growth rates, and we can only achieve that by direct investments in entrepreneurship,” HUP’s Igor Skrgatic, from the company BE-ON, stated.

“I really don’t understand how we can allocate 7.5 billion kuna for the renovation of buildings and facades, and only 2.5 billion kuna for healthcare, which is less than a dozen annual investments in the sector,” asked HUP president and Pliva’s main man, Mihael Furjan. He noted that productivity must be increased, but “we don’t see how the plan is planned to be used in the right way, in order to increase efficiency.”

He added that investments in equipment are welcomed because in healthcare it can increase disease prevention and bring savings, but that it should be used to the maximum with accompanying investments in people. “In healthcare, we have great doctors and pockets of excellence. For example, efficiency already exists in dental tourism and transplant medicine,” Furjan pointed out, highlighting brighter Croatian examples.

Skrgatic emphasised that there is too much allocation in the public sector already, which doesn’t have the capacity to absorb money in the short term, instead of in the private sector, where one kuna of investment would create a new 3-4 kuna. “There is a thesis that we’re asking for helicopter money. No, we’re asking for money for projects in a high stage of development, to make programmes in accordance with the pillars of the EC, to which entrepreneurs will apply,” said Skrgatic.

Mislav Balkovic, the Dean of the Algebra University College, believes that the Croatian Recovery and Resilience Programme and its plan shouldn’t be viewed only from the perspective of cash but also the creation of jobs. He stated that education is the foundation of competitiveness, and Croatia is in the company of the Philippines and Costa Rica in this regard, which isn’t much to shout about.

“Investments in infrastructure aren’t going to work to create new jobs, and we aren’t going to be able to maintain the existing system of intergenerational solidarity for long. Key reforms must emerge. That’s why it’s much better for the changes to be designed after the local elections when the pressure for investments in local infrastructure is reduced,” said Balkovic.

The age old Croatian mentality of helplessness

“The Rimac Campus and the Sisak Refinery are very potent projects. But why don’t we have 200 projects in the catalog? We can’t even get anywhere close to that if the person compiling the catalog doesn’t come and talk to us,” stated Atlantic Group CEO Emil Tedeschi.

He pointed out that he opposes the stereotyping that projects are divided into the private and public sectors, but that it’s important to see how to allocate money to create a multiplier effect. He also pointed his arrow to the address of the private sector and discussed the role, or lack of, of the state in that field.

“If Infobip had waited for the Government, it wouldn’t have become a unicorn, if Rimac had waited, he wouldn’t have attracted investments from Porsche and Hyundai”

We’ve unfortunately got a mentality which is a combination of rentiership and helplessness, and there’s still an awful lot of work which needs to be done. But that doesn’t simply get the Croatian Government out of its duties of taking some responsibility,” Emil Tedeschi concluded when discussing the Croatian Recovery and Resilience Programme and its content.

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