Investment Issues: Croats Do Not Want to Work, Complain All the Time

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The InvestCro conference on investment issues in Croatia was held in Zagreb, attended by representatives of large companies, governments and local administration units, reports Večernji List on March 21, 2019.

“We expect big investments, but really important are those investors who hire two or three people. Bjelovar had investments worth 100 million euro last year, mostly from small businesses. We want to send a message to investors that their kuna is worth more in our town than elsewhere. We do not invest money in buying voters, but in development, we now have 750 more employees in the town than before, and the budget revenues are growing,” said Dario Hrebak, the mayor of Bjelovar.

“Bjelovar quickly reached the top ten towns by investments. Construction permits are issued within 15 days. We want to achieve standardisation, so investors are no longer dependent on the goodwill of municipal employees. The only chance is to digitise all the processes in the state administration system, which demands the political will. While the government is dealing with rescuing Uljanik, we have to stop projects because we do not have enough money. By the way, Bjelovar is the first town in Croatia by the number of cafes. We have to create the ideal of work since about 40 per cent of Croats do not want to work at all,” said Hrebak.

Zdenko Lucić, state secretary at the Ministry of the Economy, said that Croatia should be branded as a desirable destination for investments, just as it has managed to become branded as a tourist country. “We have over 500 self-government units. Digitisation will help us have a standardised service level. Quick results will be visible with the introduction of an online establishment of businesses. We are sometimes shy to say that our investment promotion law is the best in Europe,” Lucić said.

Viktor Pavlinić, the CEO of Tele2, said digitalisation was an opportunity, but a change in the pattern of behaviour was needed. He pointed out that the government in 2014 tripled the charges for telecom operators. “That was no longer a stimulating investment environment. This government has resolved this problem and returned the levies to the previous levels, which are still higher than in other countries. Now, Tele2 is employing 40 per cent more people, and the market competition is better. Encouraged by this optimism, the owner has decided to double the amount of investment. Achieving economic growth of five per cent is possible. Although we have a good staff in the ICT sector, the labour costs have become a serious problem. There is a need to revise the tax rate, to lower income tax if we want our workers to stay here,” said Pavlinć.

Regional Director of Dogus Holding, Burak Baykan, said that the experiences of the hotel company in Zadar and Šibenik are positive and must be transferred to new investors as well. “I would not say bureaucracy here is worse than in other countries. We have a hard time finding the right employees, we do not have enough people for greenfield investments, and construction costs have grown tremendously, as in Western countries, but with lower revenues here. The return on investment is meagre, we need to think about direct incentives,” said Baykan.

Zdenko Adrović, director of the Croatian Bank Association, complained about high fees for bankers, whose regulatory cost is three times higher than in Germany, and there is a problem with parafiscal charges as well, with the Ministry of Tourism attempting to increase the amount of tourist board fees.

Mladen Fogec, president of the Association of Foreign Investors in Croatia, said that foreigners are worried because Croats just complain. “We are too burdened with negativity, although there are many good examples. Why are investments in Međimurje or Istria possible but not in the south? Local units should act in favour of investors, both Croatian and foreign. Our capacity to change is currently not strong enough. Croatia has a great chance, but we need political courage,” Fogec said.

Translated from Večernji List (reported by Ana Blašković).

More news about investment in Croatia can be found here.

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