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Vol 2, No 19
15 May 2000
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A New Starting Point
Mladen Vedriš, PhD

At the beginning of this year, Croatia began yet another fresh start. The turn of the economy has (finally) come. The independence of the state in 1990, the international recognition of its sovereignty in 1992 and the liberation of its own temporarily occupied territory in 1995 are all significant dates in recent Croatian history. Though these are exceptionally significant dates, they are not sufficient for the integral or permanent life of the nation and society - that is, for the survival of the state. The preconditions have been made, but that is not enough. They are only the body of the car. Now it is time for the engine.

It takes a powerful economy to enable both the realization of social welfare and to give equal attention to all citizens. The task is so complex that it is not possible to achieve it at one go: neither by a parliamentary move, nor by a government act, not even by popular support in a referendum. It is a project which takes into account the insight into what other countries have already achieved in that respect, an estimation of one's own potential and a discovery of the niches where one might find one's own place within the global economy.

How can this be realized? A contemporary and transparent legal system, an efficient public administration and, last but not least, an optimally organized macroeconomic policy are the basic cornerstones of such a project. Full democratization of society, openness to the world as well as a focus on the standardisation of laws and other issues in the European Union are the key parameters of such an orientation.

Croatia today

If you are a pessimist, then you will see Croatia as a country whose economy registers an unemployment rate of more than 20 per cent, where investments are on the level of amortization, where the degree of foreign and internal debt is close to being in the red and the foreign trade deficit, as well as the balance-of-payments deficit, make the color even brighter and the tax pressure has exceeded all theoretically acceptable limits.

If, on the other hand, you are an optimist, you will see that there has been a price and a currency exchange rate stability assured for the whole medium term. Public consumption, although permanently increasing, has been duly serviced and, on foreign capital markets Croatia has, with no major problems, serviced the debt service liabilities and made new financial commitments.

If you ask an average person today (in one of the many questionnaires carried out on a daily basis) what worries him or her most, you would get the answer that it is a combination of the unemployment problem, the problem of employment stability and the security of their pension. More and more, it is the future of their children, schooling and employment.

There is also a feeling of optimism and the belief that the political turning may, or rather must, be followed by that of the economy. After January 2000, Europe and the world are no longer notorious enemies of national sovereignty, especially in terms of the media and current policy. The process of privatisation is no longer a synonym for acts connected to the "wild capitalism" associated with the former government, from which only politically correct entrepreneurs could benefit.

Croatia, the way we want it

What can Croatia actually do? Being in the key positions both with the city of Zagreb and on the Croatian Chamber of Commerce, I have had numerous opportunities to talk to entrepreneurs, be they individuals or corporations, who had a range of plans and ideas with plausible financial, marketing and technological underpinning. They all wanted to create something, to expand their lines, to export.

Two dominant obstacles in the first years of the new state were the state of war and a constant apprehension of its outcome, with the aggressor on our borders and a part of the country occupied. It was difficult to realise a consistent developmental policy then. A new beginning could, and should, have developed from the second half of 1995. By then, the country had been liberated and more than 20 months of the realization of phase one of the stabilization programme (stabilization of the currency exchange rate) had passed.

In those days, it was possible and essential to get the developmental and investment cycles started and to realize the connection of the New Deal and the Marshall plan to the full.

But, as the British say: there's no use crying over spilt milk. Today, five years later, Croatia has to urgently embark on that task. Many others have done it; in the Far East, on the Mediterranean and in the vicinity of Middle Europe.

It is hic Rhodus, hic salta for Croatia now.

We've had a new Parliament since January and a new Government since February; the new President of the Republic was elected almost unanimously. The political framework is there. The new government is expected to develop a new philosophy of society, new developmental strategies and industrial policy measures for achieving the dynamics of economic growth. It is, however, necessary to simultaneously restore financial soundness in the banking or, in a larger sense, the financial sector. All this is supposed to create a new climate for the interest of foreign capital in the context of investment in Croatia; from the beginning portfolio, that is, but more and more green field in the future.

Croatia has to find strategic partners in the shipbuilding industry as well as in tourism, in the financial sector as well as in the new forms and models of investment in infrastructure. Croatia has to work on the competitive advantages of the nation and the country as such, since it has been blessed with comparative advantages. It is situated in an optimal position on the European continent, between the Mediterranean and Middle Europe, with the coastline and islands and the global traffic location that joins different worlds and cultures, without neglecting anyone.

In this enterprise, Croatia has to have real partners, global institutions, and institutions and programmes of the European Union. It should, however, more and more on its own accord, pique the interest of the "business community," in order to entice businesses to come to Croatia and to embark on business ventures today, only to spread it to the whole region tomorrow.

Croatia should remain endlessly proud of its history, but should, at the same time, be fully engaged in changing its presence, simultaneously building the foundations of its future in the world. The global knowledge of the world doubles almost every four years. In such a world, you either become successful or merely serve as scaffolding and building material to those who have found their position in it.

As our President says, Croatia is a country of opportunities, and both time and circumstances are now on its side to realize them. On its way, it can, and has to, find motivated partners from the world of business, the same as it was able to find political friends when gaining its independence and international recognition.

Mladen Vedriš, PhD, 15 May 2000

The author has been the President of the Executive Council of the City of Zagreb (Mayor), Deputy Prime Minister for Economy, a Member of the Parliament and the Chairman of the Croatian Chamber of Economy. Today, he is the key person at Sonder, Ltd, Consulting Engineering, Representation of Foreign Companies.

Moving on:



Focus: Croatia
Dejan Jović
Tuđman's Convenient Death

Dragan Antulov

Sharon Fisher
EU Hopes

Đurđa Knežević
Gender Politics

Mirjana Domini

Zoran Ferić
New Literature

Jurica Pavičić

Sue Bagust

Borko Špoljarić
Music Days

Ivo Goldstein
The Yugoslav Conflicts

Zoran Pusić

Igor Nobilo

Mladen Vedriš
The Economy

William A Everett
Contemporary Music

Anna Maria Gruenfelder
The Church

President of Croatia
Stipe Mesić

Croatian Deputy PM
Goran Granić

Vesna Pusić, Croatian People's Party leader

Vlado Gotovac, Liberal Party leader

Brian J Požun
Tito Revival

Oliver Craske
UK Looks East

Jan Čulík
Roma and TV

Mel Huang
Latvian Victory

Elke de Wit
Klaus Krämer

Culture Calendar:

Ustaša Legacy

PR and Extremism

Czech Republic