Instead of a systematic economic policy and development strategy, Croatia has lived off euphoria in recent years, emphasized economic analyst and professor at the Faculty of Economics in Zagreb, Ljubo Jurčić, during tonight’s lecture.
-We have had several major euphoria: transformation, privatization, PIFization, liberalization, EUphoria, stock market euphoria, public-private partnership euphoria, and now investment euphoria, Jurčić told students at the Efectus Business School.
He pointed out that we still expect foreign investments to drive the economy, which is a major misconception because investments in infrastructure cannot have a positive effect on gross domestic product as much as investments in final products, which are lacking.
In addition to this capital misconception, Jurčić claims we have also expected too much from the influence of the ‘invisible hand’, which, combined with an atypical economic model, incorrect monetary policy, wrong investment structure, and lack of a development strategy, has resulted in chronic stagnation of the economy.
Alongside all of the above, Croatia also suffers from a lack of microeconomic knowledge. The best example is shipyards, which need better conditions to operate positively.
– This does not mean that ship parts are imported and then just assembled at the shipyards. Those same parts must be produced by small and medium Croatian entrepreneurs, while the shipyards will continue to be merely assembly plants, he stated.
Jurčić finds the solution to the situation we are in by raising the overall level of efficiency of the state and administration, the efficiency of state leadership, and creating starting points and a concept for a development strategy.
