September the 13th, 2024 – Foreign Minister Gordan Grlić Radman has discussed the potentials and benefits of future Croatian OECD membership.
As Poslovni Dnevnik/Marija Brnic writes, following the Republic of Croatia’s entry into full NATO membership back in 2009, entry into the EU in 2013, Schengen and the Eurozone and Schengen in 2023, one step remains – full Croatian OECD membership
For Andrej Plenković’s government, entry into the Organisation for Economic Cooperation and Development (OECD) has been highlighted as the goal and completion of integrative processes since the very beginning. Only 38 countries in the world are members of the OECD, and Croatian OECD membership would provide a plethora of benefits. The entry procedure is long, stringent and demanding, and neighbouring countries who already hold OECD membership include Hungary, Slovenia and Italy. Croatia, The EU Member States of Romania, Bulgaria, Cyprus and Malta on the other hand are not members. However, it seems that Croatian OECD membership is now firmly on the cards, in as much as is possible at this stage.
Minister of Foreign and European Affairs Gordan Grlić Radman, who is also the main negotiator in the process, delved deeper into why this is so important, and how Croatian OECD membership would improve the country’s overall standing and status, which also means a big thumbs up for its credit rating and competitiveness level.
what needs to be done to ensure croatian oecd membership?
Croatia is at a very advanced stage of the OECD accession process now. When we compare ourselves to the five countries that started the negotiation process at the same time, we’re leading in terms of the dynamics of monitoring and adoption. We calculate that after the economic review, which would be completed by the end of next year, Croatian OECD membership could occur by 2026. Within the framework of this accession process, Croatia is evaluated and harmonised with the most advanced global policies and practices in a number of areas. Croatia’s conformity assessments are made through 25 OECD committees and 26 subsidiary bodies within these committees, which assess the country’s compliance with 267 legal OECD instruments and key principles applicable to entry.
how does croatia stand within the accession process?
It’s currently doing well. The steps necessary to be taken were taken, and Croatia completed the work before 14 out of 25 committees and 13 out of 26 subsidiary bodies. I expect that we’ll finish the technical part of the accession process by the end of next year, with Croatian OECD membership coming to fruition in 2026. However, although we’re making excellent progress, there’s still a lot of work to be done, and every day we have coordination meetings and activities for the purpose of implementing reforms and joining the OECD.
How can it said that Croatia is doing well, when on the OECD website it shows that Croatia has adopted the fewest legal instruments of all the countries that started the accession process alongside it?
It’s important to explain that regardless of the formal adoption of a legal instrument of the OECD, acceding countries undergo checks of compliance with these instruments again before the OECD committees. In this sense, the number of instruments that we’ve accessed isn’t important for the accession process, but the number of positive evaluations by the committee, and this is where Croatia leads the accession process. The list of legal instruments of the OECD to which the countries have acceded was important when, before the beginning of the accession process, how much each country cooperates with the OECD was being looked at.
The truth is, among the six countries that started the accession process together back in 2022, Croatia was at the back of the list. In 2017, Croatia expressed its interest in membership in the OECD. Certain countries such as Brazil, which started the accession process alongside Croatia, or Indonesia, which is just starting the accession process to the OECD, have been OECD partners since 2007. It’s therefore only logical to expect that they’ve cooperated more intensively. However, what we’ve done over these two years of the accession process is commendable. Namely, with determination, good organisation and dedicated work, Croatia has become a leader in the access process.
is croatian oecd membership even necessary? the country has successfully joined all important integrations, the EU, NATO… What are the benefits of the OECD when so much energy is spent on joining?
It is certainly necessary. Croatia wouldn’t bother to enter into this process if it didn’t bring benefits for both people and the economy, that is, the country as a whole. There are a number of direct and indirect benefits of Croatian OECD membership, and even of the accession process itself.
what will croatian oecd membership mean for the average joe and the economy?
Croatian OECD membership will have a positive effect on economic growth, and thus on the further increase of living standards. The whole of Croatia benefits from it. Joining the OECD means further support for reforms and improvement of the system in a number of segments from environmental protection, waste, education, healthcare, finance, the economy, market competition, agriculture, trade, construction, shipbuilding, industry, innovation to traffic, transport and everything else.
What the point of Croatian OECD membership is for the average person and the economy is part of a wider discussion, as it will have an effect on a range of policies that concern the everyday life of people and the economy. For students and experts in various fields, Croatian OECD membership means access to yet another respected international organisation, either through professional practice, employment or the exchange of knowledge, experience and, most importantly, the availability of analyses and statistical data.
The OECD is one of the world’s largest and most reliable sources of internationally comparable economic statistics. For politics, Croatia’s membership implies the additional strengthening of ties with the most developed countries across the world. It means the possibility of exchanging experiences in adopting new policies. For the public administration, this is an excellent platform for exchanging experiences with colleagues at a professional level in the areas in which they operate, and also an excellent platform for further strengthening our administration entirely. As the slogan of the OECD reads “Better Policies for Better Lives”, that is actually the essence of the OECD – it allows us to adopt recommendations, i.e. legal instruments (the so-called legal acquis of the OECD) that will propose the best practices and the highest standards in various areas for the growth of the economy and society, and ultimately, for the well-being of people.
Perhaps all that was easier for people to identify with EU membership because everyone could find space for themselves through EU funds, and here there are no such sums of cash. How will the economy recognise the benefits of the OECD?
Accession implies the implementation of numerous reforms, which will achieve the strengthening of institutions and the legal security of people and businesses alike, which is also important for further improvement of the investment climate. Croatian OECD membership will further strengthen the country’s good reputation across the world, and thus make it more attractive for foreign investors.
Back in April, I visited Canada and had a conversation with the Minister of Foreign Affairs Mélanie Joly. I use every visit to lobby for support for Croatian entry into the OECD. She told me that when Canadian business owners want to invest in a country, they first ask if that country a member of the OECD. It is, therefore, a certain guarantee of security for people investing.
When croatia joined the EU and the Eurozone, the credit rating improved, what are the estimates of the impact of joining the OECD on the country’s rating?
We believe that Croatian OECD membership will have a positive impact on the country’s credit rating. This was especially felt after joining the Eurozone, when Croatia received the highest investment grade credit rating to date.
Hungary and Slovenia entered the OECD before croatia, how useful was membership in their example(s)?
Yes, those countries joined before Croatia, Hungary joined 1996, and Slovenia did the same in 2010. I believe that membership in the OECD benefited both Hungary and Slovenia, that’s why they joined the OECD, just as Croatia is in the process of joining today. The OECD is a great organisation.
what sort of discussions are still on the table in terms of croatian accession?
We’re currently left with discussions on topics such as investment, trade, agriculture, corporate governance, education, fiscal issues, environmental protection, chemicals and biotechnology, as well as some other economic reviews.
One of the major reforms is the law on state-owned legal entities…
Yes, this is an important reform in the management of public enterprises, which is being prepared by the Ministry of Finance. They’re currently in the final phase of drafting a new legislative framework that will establish appropriate mechanisms for the more active management of public companies. The ownership policy will be determined, the management’s work will be professionalised, the transparency of the work being done will be increased, as will the process of selecting company leaders. It’s an important reform package that is also related to Croatian OECD membership and accelerating that process. It’s important to emphasise that as part of a project financed by the EU, the OECD provided technical assistance in the creation of that legal framework.
why does this process take such a long time?
It doesn’t a long time when you consider how wide the scope of things the OECD covers actually is. Croatia has only been in the accession process for two years. I believe that among the eight countries that are currently in the accession process, we’ll complete the accession and become a member of the OECD in record time. Croatia is leading the way in the accession process.
croatia’s path to the OECD has already been blocked by the Hungarians and the Slovenians, and the decision must be unanimous. Is there a possibility that such a thing will happen again?
I don’t think that’s likely. Croatia has been a member of the EU for eleven years now, it’s a member of NATO, never before has the unity of countries that share the same values been so desirable, and we all do now share the same values. What we’ve managed to build over all these years is a culture of awareness that we support each other. Regardless of some open issues we have with some countries, they’re being resolved bilaterally and I don’t think anyone blocking Croatia’s path is very likely.
In other words, the dynamics of negotiations and entry will depend mostly on croatia itself?
Exactly. I can say with certainty that Croatia has the support of all current OECD members.
might someone from croatia block its entry?
No, they can’t do that. First of all, it is not a political organisation and by joining, nothing of sovereignty is lost, and, most importantly, no one is against it. Croatian OECD membership is supported by the opposition, trade unions and employers, no one is against it.
