The opening of the ZV revealed deep divisions in the business community. The ZV was attended mainly by exporting manufacturers. Bankers, brokers, and fund managers remained on the other side of the Sava. They are concerned about news from Wall Street
|
Written by: Miodrag Šajatović |
Polančec announced investments in energy of 10 billion euros. One small detail still needs to be resolved: securing that money somehow and somewhere. |
|
The Zagreb Fair should be an exhibition of products. Unfortunately, it is increasingly becoming a fair of irreconcilably opposed political-economic ideologies that have already divided the business community. The half-empty congress hall of the ZV, where the President of the Republic of Croatia Stjepan Mesić spoke at the opening of the 84th autumn exhibition, and the not much larger audience at the afternoon Forum, when Deputy Prime Minister Damir Polančec spoke, said a lot. It was known in advance that Mesić would again warn about the wrong economic policy that has been pursued in Croatia for about fifteen years, and that Prime Minister Sanader (this time he had the welcome obligation in Brussels so that the present manufacturers would not bother him with questions) would minimize the criticisms. The composition of business people who came to the ZV is not noticeable. It was evident that they were entrepreneurs and managers of middle and older age, in not very modern suits. Concern could be read on most faces. Not so much about another mini-crash on the Zagreb Stock Exchange as about the worries they brought from their manufacturing companies. Export-oriented, and thus located in the ‘province’. The other part of the business community was not on the right bank of the Sava. Bankers, brokers, fund managers, and all that modern, younger world remained, real or virtual, in Zagreb’s ‘city’, on the other bank of the Sava. They were worried that Tuesday whether the U.S. government would save the largest insurance company AIG or whether another bankruptcy like that of the investment house Lehman Brothers would follow. The heads of brokerage firms did not have time to cross the Sava and socialize with manufacturers because they were just giving statements to the newspapers that the five percent drop in Crobex was a consequence of global tremors, and that everything would be fine because domestic companies ‘have solid fundamentals’. They do not have good foundations! If they had gone to the Fair, they would have seen that GDP will not recover quickly, that companies whose shares are listed on the stock exchange have serious problems, and that this will be reflected in the final accounts for 2008. The last investment cycle was driven by road construction. Now the same is planned with the construction of power plants and power lines. Due to wrong economic policies, Croatian companies are losing the race with competitors in Central Europe. This was best seen in last week’s ranking compiled by Deloitte experts, published by Lider. There are fewer and fewer Croatian companies among the 500 largest. The reason is simple: they are not export-oriented, so they can no longer record serious growth in the domestic market. Therefore, let’s not deceive ourselves. The stock market will not recover so quickly and easily! The media highlighted the quarrel between Mesić and the government regarding whether to sell INA to MOL or not at the opening of the ZV. This should have been considered ten and five years ago. Now it is too late. From the opening of this autumn’s ZV, it is worth remembering the opposing concepts of what should be the engine of national economic development in the future. Mesić advocates for exports (of goods). Polančec is for import substitution (of energy). Similar divisions are at play when it comes to how to stimulate GDP growth. Mesić wants everything, including the exchange rate, to be put in the function of production for export. It should be believed that Polančec, as a businessman, is not against this, but as the second man in the government, he promotes investments in energy as the engine of development. For the construction of power plants and other energy facilities, investments of 10 billion euros are needed. It seems already seen. Over the last seven years, roads have been built, which opened jobs, enabled the opening of a number of construction companies, stimulated demand for cement, signaling, fences, and noise barriers. Now, the same is desired with the construction of power plants. If there will again be work for builders and equipment suppliers like Končar or Dalekovod, one small detail remains: where will Croatia get 10 billion euros for energy? Borrowing abroad? Difficult. Allowing foreigners to build power plants? Feasible, but then it will not be ‘Croatian electricity’, and its price will be questionable. In this issue, we write about the idea of building a lowland railway by granting concessions for built highways to foreigners. Who knows, maybe the energy lobby will be stronger than the railway one. |
|
