Croatia has fallen three places in the global competitiveness ranking in 2008, after a slight improvement last year. It is now ranked 61st, and as Goran Radman from the National Council for Competitiveness, which presented the results of the World Economic Forum on Thursday, stated, it should be around the 40th position.
– Croatia is not progressing, it is failing to catch up with the new EU members, and countries in the region are starting to catch up with us – said Radman. There are no changes among the top four (USA, Šwitzerland, Denmark, and Šweden), but Canada has entered the top ten, while Germany has recorded a drop of two places. The main drivers of the most competitive countries in the world are the transparent functioning of institutions, excellent connectivity between academia and the business sector, and strong investment in science and innovation. Therefore, it is not surprising that Croatia’s poor results, which have been citing these criteria as extremely important for years, show negligible progress.
The Deputy Prime Minister and Minister of Economy, Damir Polančec, stated that the competitiveness report is more than welcome, but it must be taken into account that alongside clear statistical data, the report also includes subjective assessments from 101 companies in Croatia. Commenting on the positive and negative changes in Croatian competitiveness, he emphasized that these are subjective assessments from 101 individuals, to which Radman replied, ‘facts are facts, and impressions are truth.’
What Croatia can take comfort in is that it currently ranks better than Hungary, which has fallen 14 places to the 62nd position, but Hungary’s problems such as corruption, the gray economy, inflation, low GDP growth, and rising unemployment are not solely Hungarian issues. As Krešimir Sever stated, this should be a wake-up call for Croatia.
In contrast to Croatia, neighboring countries have achieved growth in competitiveness, with Montenegro jumping 18 places to 65th, Romania rising 7 places to 68th, and Serbia climbing 7 places to 85th. Compared to last year, Croatia has performed worse in terms of market efficiency for goods and labor, the efficiency and quality of institutions, and business sophistication. Positive shifts have been achieved in the areas of environmental quality, availability of new technologies, and the burden of agricultural subsidies, while negative shifts have occurred in the prevalence of bribery among domestic companies, irregular payments in public contracts, and the presence of ICT in government offices. It is almost tragic that among Croatia’s top three competitive advantages is the low impact of HIV, malaria, and tuberculosis on business operations, while the main shortcomings are the impact of business regulations on foreign direct investment, cooperation in employee-employer relations, foreign investments, and technology transfer.
Thus, regardless of how anyone interprets the results, Croatian entrepreneurs complain about the efficiency of public administration, corruption, tax regulation, and access to financial resources, and it is hard for anyone to convince them they are wrong. Additionally, it should be noted that the research was conducted in the spring of this year and did not include a series of subsequent events that have been making headlines in all media, from the financial sector crisis to organized crime. The Council has thus called on all participants for urgent and greater engagement in the areas of modernization and reform of public administration, combating corruption, more efficient labor markets, and developing the business sector, emphasizing that reform measures will be implemented under increasingly complex conditions. (Bojana Božanić)
