After exhausting the economic model based on foreign investments that were directed to the wrong sectors, it is time to attract investments that we will direct towards export production.
Ireland stands out as the best example of such a country, where 90 percent of direct foreign investments ultimately generate export products, while the same ratio in Croatia is only 47 percent. These conclusions were presented by participants at the conference ‘Direct Foreign Investments – A Driver of Economic Development’ organized by the Croatian National Bank (HNB) and the Ministry of Regional Development.
At the conference, three Irish experts presented their proposals and solutions – Frank McCabe from the supervisory board of Citibank, Kieran Corrigan, a renowned financial expert, and lawyer and honorary Croatian consul in Ireland, Gerarn Danaher. The initial idea for the gathering came to HNB Governor Boris Vujčić during a meeting with the aforementioned trio, when it increasingly seemed to them after each beer that Zagreb could become an important regional financial center.
McCabe, who was once also the vice president of Intel, stated that direct foreign investments are immensely important for countries like Ireland and Croatia:
– “This is perhaps best seen today in the example of Croatia, which cannot expect significant economic growth without foreign investments. Moreover, such investments greatly enhance corporate management capabilities, overall productivity, and the level of investment in research and development throughout the country,” he said.
According to him, Croatia must immediately create the basic tax, legal, contractual, and other conditions for attracting investments and do everything possible to bring one of the 50 companies from the list compiled by Fortune magazine to Croatia. He emphasized that a particularly significant problem is the lack of entrepreneurship, speed, and flexibility, which is especially necessary in both the public and private sectors.
An additional downside that McCabe may not be fully aware of is the uncompromising moral integrity that guarantees a culture of overall success.
Regarding the government’s efforts and measures taken, Finance Minister Slavko Linić spoke, explaining how measures such as reducing health contributions and abolishing some parafiscal levies are a good way to create a healthy investment climate.
– “We will continue to reduce the cost of gross labor, especially on the contribution side. This does not mean that we will deprive the budget of part of the revenue, but we will earn that same revenue by introducing property taxes. The government has also reduced its costs, and through nominal budget cuts, we have brought the deficit down to a manageable three percent of gross domestic product,” he stated.
Linić described creating a loyal market competition as one of the more important tasks of the Ministry of Finance. In this regard, the introduction of fiscalization is also on track, as well as the possibility for entrepreneurs who reinvest their profits to be exempt from paying taxes. Linić also thanked the banking sector, which has always been ready to support government initiatives to assist private entrepreneurs.
Optimism was also radiated by Deputy Prime Minister Branko Grčić:
– “In addition to being able to count on one billion euros from European Union funds this year, we must know that all transition countries experienced a boom in direct foreign investments three years after joining the EU. The reason for such a boom is always the security provided by joining such a community.
