In the past year, Croatia has made the biggest leap in strengthening the competitiveness of its economy among the new, transitional EU member states, as Adriano Milovan/Novac writes on the 11th of October, 2019.
According to a report by the World Economic Forum this year, Croatia is ranked 63rd on the list of the world’s competitiveness ranking, an improvement of five places compared to the previous year.
While this is a success that should be commended, it’s not enough to celebrate. Yet. There are several reasons why we have neither reason nor room for a great deal of enthusiasm.
First of all, Croatia’s leap a few places on the global competitiveness scale is largely the result of maintaining macroeconomic stability, that is, low inflation. Croatia also received good marks for infrastructure, which in practice means that we are finally doing better in withdrawing money from EU funds.
But, despite the above, this is where the success story ends, and the door opens to failure, or at the very least – omissions. The first of these refers to an already chronic ”Croatian pain”, the total lack of structural reforms. Despite progress on the ladder, Croatia is still a ridiculously over the top bureaucratic country with a large public sector and an extremely slow judiciary.
The second minus concerns the unwillingness of the state and society to tackle the challenges of the 21st century, or to encourage innovation and the implementation of new technologies more strongly, without which we will only continue to go backwards in the future.
Admittedly, it cannot be said that digitalisation is not happening in Croatia, albeit slowly, nor can it honestly be claimed that that there is no innovation taking place, but all this is too slow and on far too much of a small scale. It cerrtainly is not enough for Croatia to actively participate in the fourth industrial revolution.
Because of all this, despite progress in the global competitiveness ranking, Croatia still has the most uncompetitive economy in the whole of the EU.
Yes, the country may be comforted by the fact that it continues to be more competitive than Western Balkan countries, which are not EU members. However, we must also keep in mind that on the global market, all countries are fighting for their place under the sun, and thus for the best possible ranking on the competitiveness ladder.
Croatia’s position on that list ultimately depends on them and their moves, and not just our own. This, once again, means that in the future Croatia will have to be faster and better at making changes than others, and that’s a difficult thing to imagine indeed. The question remains as to whether or not the country is remotely capable of such a thing.
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