The Croatian Government has only a few weeks to resolve the shipyard problem, and the result may be a temporary reduction in Croatian exports, stated Prime Minister’s economic advisor Borislav Škegro at today’s 9th International Conference on Export Promotion.
All our shipyards are exporters, which significantly improve export statistics with a few ships, but at the same time, they are companies that have been generating losses for decades and survive thanks to state guarantees, Škegro explained while speaking at a forum on the challenges of the new decade for export policy. Therefore, export with profit is more important than export itself, and the Croatian economy will achieve this only by increasing competitiveness, for which it is necessary to “quickly and fully” implement the Economic Recovery Program, Škegro emphasized. He supported the Government’s initiative to establish venture capital funds, warning that Croatian companies are undercapitalized, and to address this issue, a country the size of Croatia should have at least 20 venture capital funds instead of the current three. PBZ’s chief economist Marko Škreb estimated that next year GDP in Croatia will grow by 1.4 percent, and in 2012 by slightly more than two percent.
Such low growth rates indicate that the current crisis in Croatia is a structural problem, and that annual growth rates of 4.5 percent from the pre-crisis period can no longer be repeated as they were primarily based on high consumption, says Škreb. He also warned of the necessity for quick and efficient implementation of reforms, assessing that the Government’s Economic Recovery Program is good, but is being implemented too slowly, which is why we have recently fallen five places in the global competitiveness ranking. He dismissed proposals to stimulate export growth through changes in the exchange rate, asserting that all serious economic studies claim that devaluation is not a solution. Instead, economic policy should focus on fiscal consolidation, public administration reform, and the fight against corruption, as well as labor market flexibility, believes Škreb.
