Croatia Weakest in Regulatory Reform Area

The Agency for the Promotion of Exports and Investments (APIU) presented, in collaboration with the OECD, the Investment Reform Index (IRI) for 2006. Its purpose is to analyze the policies for attracting foreign direct investments in the region, and the IRI also suggests ways in which these countries (Albania, Bosnia and Herzegovina, Macedonia, Moldova, Montenegro, Romania, Serbia, and Croatia) can improve their investment climate in a very short period.

 OECD Investment Compact Director Anthony O’Sullivan stated that Croatia has shown progress in investment, tax, and trade policy as well as human capital, while reforms in the areas of investment promotion, competition policy, and regulatory reform are still slower.

– Croatia achieved the highest index value in the area of trade policy (4 out of 5), which is one of the highest values in the region and is on par with Romania and Bulgaria, followed by investment policy (3.75 out of 5), then human capital (3.5 out of 5), and on average, the countries in the region in the areas of investment promotion, tax policy, and anti-corruption policy – said O’Sullivan, adding that the IRI for Croatia is the lowest in the area of regulatory reforms, at 2.5 out of five, which is below the regional average.

Croatia should better protect intellectual property, increase the competitiveness of its products to achieve better results in the markets of European Union countries, and improve its trade balance, and it is also necessary to enhance the policy of sanctioning violations of laws in the area of market competition protection.

– It is necessary to define a strategy for foreign direct investments, invest in human capital because there is still a gap between what exists in the market and what businesses require, and combat corruption in public procurement and conflicts of interest – added O’Sullivan. APIU Director Slobodan Mikac noted that Croatia has potential and that the cost of labor is not key, but that the strength of the Croatian economy in the future lies in education and skills.

– The presentation of the Index showed that Croatia has taken another step to be attractive for investments, and the foreign investment strategy and sectoral analysis will improve conditions – said Mikac, adding that the first draft of the foreign investment strategy has been made and will soon be presented. (Bojana Božanić)