The Deadline for Fruitless Politicization of Necessary Moves Has Expired

We must start implementing measures against the recession immediately, without delay. Even if we do something incorrectly, correcting mistakes on the go will still cost us less than postponing the inevitable

writes Ivica Mudrinić
CEO of T-HT and President of GSV
[email protected]

The crisis is becoming quite tangible… and it is now clear that there is no magic wand that could protect Croatia from its waves. The State Bureau of Statistics announced that in January there were 14,000 more unemployed than in December 2008, and GDP has been declining for the fifth consecutive month. In the media, we follow reports daily about layoffs due to reduced demand or loss of export orders, especially in smaller private companies and manufacturing plants; the World Bank has announced that Croatia will have a negative economic growth of at least 1.5 percent of total GDP this year and that urgent anti-recession measures need to be introduced, among which the budget rebalancing, i.e., balancing revenues and expenditures, as well as abandoning capital investments without short-term returns, stand out.

A solution is not in sight The crisis is global, its negative effects are well known to everyone, and world political leaders talk about it almost daily, numerous measures are being introduced… At the same time, no serious and responsible person can accurately predict the duration and extent of the global upheaval, which has spilled over from the financial world into the real sector, so the decline in production at the global level is dramatic. It is also becoming increasingly clear that a solution is not in sight ‘tomorrow’ and that this is the deepest economic crisis that has hit the world since World War II. It is understandable that every country must necessarily shape an anti-recession program in accordance with its specific conditions and that it is not possible to directly apply foreign solutions.

Precious time has been wasted on a terminological ‘war’ regarding the dilemma of whether we are or are not in a recession. In Croatia, a broad consensus on any topic rarely occurs, but the crisis, despite the differences in approaches to solving it, has nonetheless brought closer the views of various social groups – employers, economic experts, different political options, media analysts, part of the unions, and even the broader public. They are all convinced that Croatia urgently needs anti-recession measures, which include savings in the public sector, but also incentives for the economy, especially exports, so that we can endure this difficult period and thus ensure later recovery and development.

Along with maintaining economic activities, preserving jobs, monetary stability, and Croatia’s credit rating abroad, proactively implementing measures to mitigate the crisis would also maintain positive social work energy, hope, and optimism, which are extremely important for all those who create value and support themselves and their families, as well as this state. Furthermore, the expected decisive moves by the Government, i.e., the adoption of an anti-crisis program, are the best remedy against panic and fear of catastrophic scenarios, to which even economically significantly more developed environments than Croatia are not immune.

Enough of the polemics! The public is already somewhat tired of numerous proposals for measures, which have so far remained dead letters on paper. The deadline for fruitless politicization of necessary moves has truly expired because, in the end, the bill will be presented to every citizen of our country: it is time for action and a focus on the future! Economic and financial trends are more than clear. We have debated enough; we must start implementing concrete measures against the financial problems we have and the recession that has become our reality immediately, without delay. If we do something incorrectly in the process, I am convinced that correcting mistakes on the go will still cost us significantly less than postponing the inevitable.

Let us bravely use this time of crisis to begin the necessary long-term reforms that will enable the economy to grow and be competitively sustainable in the long run. Let us not forget that the crisis is also an opportunity to set the vision and strategy for the development of the Croatian economy and society. We are in a year where we face the difficult challenge of confronting the crisis and at the same time an even more challenging task – to ensure that we do not jeopardize our own future with wrong short-term moves. In other words, the measures necessary to overcome the crisis are also measures that will ensure long-term prosperity. Some of them are long-neglected obligations, such as the reform of public administration or the restructuring of shipbuilding, others concern support for exports, agriculture, and tourism, and we also face the imperative of investing in the high-tech sector, energy, and education. The crisis should be a chance to demonstrate our ability for painful reforms and to work on emergency solutions for today while simultaneously working for the Croatia we all want tomorrow.