With the budget for 2011, Prime Minister Kosor’s government has outdone itself. Instead of encouraging exports, which is the only contributor to GDP growth, funding for incentives has been reduced from 560 to 180 million kuna!
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Written by: Miodrag Šajatović |
This government will, however, stimulate one type of production in 2011 – it will increase pre-election demand for the cornerstone of fictitious investments. |
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A week ago, Prime Minister Jadranka Kosor ‘celebrated’ by stating that we are ‘on the path to recovery’. A week later, at the presentation of the 2011 budget, the Prime Minister already claimed that this is ‘a budget for the post-crisis period’!? How efficient is the current Croatian government: in just a few days, it is capable of traversing the path from ‘the abyss of economic reality’ to overcoming the crisis! Rotten Compromises This is a rotten budget that all Croatian citizens will pay dearly for in the years to come. The warning that Croatia can only survive for at most another year under the old model, as indirectly pointed out by Governor Rohatinski, is now gaining importance. The prospects for economic collapse in the next 12 months with the proposed budget are drastically increasing. The fact that expenditures are only intended to be kept at 122 billion kuna is not nearly enough for this moment. Within that amount, radical changes towards stimulating production and exports must be made. Because only they can increase employment, added value, and effectively fill the state treasury. The amount of incompetence and lack of ideas concentrated in the Banski dvori is shown by the incredible fact that funding for export incentives has been reduced from this year’s 560 to barely 180 million kuna. And exports this year, with a growth of about ten percent, have contributed to ensuring that the decline in GDP is not greater. And instead of giving maximum support to the generator of development, a group of high-minded politicians decided to cut assistance. According to sources from Novi list, it was decided that no one could prove to the ministers that those allocated funds contributed to increasing exports. It is indeed difficult to penetrate the secrets of the functioning of such minds! Instead of directing the largest part of the 14 billion budget deficit to assist producers and exporters so that they could multiply it at least two or three times, the election-defeated ruling coalition intends to spend those funds on a desperate attempt to buy the electorate. That things have become dramatic is also shown by the fact that even Ante Vlahović, the CEO of the Adris group, after seven years decided to give a newspaper interview. Speaking for Večernji list, among other things, he said that ‘gaining cheap political points in such a situation on one hand, and sporadically patching holes without a clear vision on the other, prolongs the economic agony.’ When even the head of a financially stable company like Adris sounds the alarm, the drama is clear. Everyone is Bought The criterion for whether the government is implementing serious reforms in the world of budgetary policy is the number of protests from affected interest groups. The budget that came out of Minister Ivan Šuker’s workshop was made so that no one would attempt to break through the police cordon to come protest at Markov trg. Since, at least for now, farmers, former defenders, pensioners, and employees in state administration are satisfied, everything will go smoothly. The fact that the creeping crisis due to irresponsible, uninventive authorities will extinguish tens of thousands of jobs in the next year does not concern the Prime Minister and her team in the slightest. So economic thinker Andrija Hebrang, without batting an eye, will ‘cut off’ the idea of the IMF coming to ‘cut salaries and pensions’. But what is the consequence? Purchasing power, production, citizen security, and budget filling are decreasing. And that is why the government did not accept those cuts. If he were to publish those thoughts, Hebrang could be nominated for a Nobel Prize. The fact that budget filling is based on external borrowing is just a small crack in his brilliant economic thought. Nevertheless, it should be acknowledged that the government will contribute to the growth of one sector in 2011. Producers of cornerstones that will be sown across the country during the pre-election period could have increased orders. The fact that there will be nothing from investments afterwards is not their concern. And it does not worry the team in power. |
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