The first year of the Kukuriku coalition’s rule will be remembered as a year of futile sacrifices and the most expensive education in the world.
It must be acknowledged, right at the beginning of the assessment of what was (not) done in 2012, that Prime Minister Zoran Milanović and his team faced a dreadful legacy from the rule of HDZ. It was equally expected that many harsh measures would have to be taken in the first year of the mandate, that the standard of living would have to realistically decline, and that the broadest layers of society (and who else?) would have to pay for the reduction of imbalances accumulated over the years.
Unfortunately, due to the wrong economic policy on the active side of the balance sheet of Milanović’s government, these sacrifices are mostly in vain. Their offerings did not create the conditions for growth to be achieved in 2013 and beyond, which, even in the best-case scenario, will be at the level of statistical error. The completely erroneous perception that state investments this year could stimulate economic growth will have far-reaching consequences. It is incredible how Radimir Čačić could be so uninformed and unprepared that he did not understand the timelines in which he could implement parts of his stubbornly defended, yet never simulated, model of economic recovery based on ‘pumping’ state investments, i.e., public sector investments.
Expensive Milanović MBA It is even more incredible how persistently Prime Minister Milanović has catered to his first deputy. And here we come to the second characteristic of 2012, that of ‘the most expensive education in the world’.
Insiders say that a year of acquiring economic knowledge at the prestigious Stanford costs between $70,000 and $100,000. Thus, approximately half a million kuna. However, Croatian citizens paid at least three billion kuna for a year of learning how to manage the macroeconomics of a country for their Prime Minister, which is about one percent of the GDP decline. This decline occurred because Milanović stood behind Čačić’s wrong economic policy. If the wrong direction had not been taken, if the first deputy had directed his great energy, with the help of the Prime Minister, towards identifying about three hundred healthy and potent domestic producers and worked on promoting exports and substituting imports (but not just electricity!), the GDP would likely be around zero, and it certainly would not have fallen by 1.9 percent.
What is worst, it is uncertain whether this Prime Minister’s education on the living example of the Croatian recession has yielded results – whether Milanović learned anything about the basics of macroeconomics or if he does not care how much damage he can still cause. Because, no matter how guilty this or that coalition partner is, no matter how some minister ‘went off track’ in the wrong direction – the responsibility lies with the Prime Minister. Let us hope he has learned not to trust sweet talkers. Let us hope he will take a few days to write an economic program that he will stand behind.
It is incredible how the Government managed to quarrel with the business community in less than a year. Generalizations that entrepreneurs and managers in Croatia are incompetent are unacceptable. If there are those who consciously undermine the economic future of the country, they should be specifically named. Of course, there are all kinds of businessmen in Croatia, but a wise government would know how to identify those with whom it should and must be an ally.
Since there is currently no party on the political bench that could take over the management of the country, entrepreneurs are clearly doomed to this government. Likewise, the Kukuriku coalition is doomed to the entrepreneurs it has. And that is why they should be made allies, not enemies.
