A deep hole has been dug that cannot be easily filled, is the conclusion of the interview with prominent macroeconomist Vladimir Gligorov regarding Croatia. At least five years are needed for significant growth, provided that everything is done correctly.
Regarding where we are and what should be done, Gligorov, a long-time researcher at the Vienna Institute for International Economic Studies, a professor at the University of Vienna, and an expert on Balkan countries, speaks in an interview for Lider.
In Croatia, we have been happy in recent years that exports are growing, but your data is disappointing as it shows that exports grew only by six percent from 2008 to 2014. This is particularly low compared to other countries in the region where exports grew by up to 60 percent. How do you interpret this?
– This is the main problem. The strategy for adapting to the crisis was to reduce costs and increase the competitiveness of the economy for export growth. However, Croatia’s problem is the limited supply of export goods. And when we look only at services during that period, there is no significant growth in exports despite tourism. Since the export of agricultural products, unfortunately, does not function, only industry remains, and the share of industry in the structure of the Croatian economy is very small.
At Lider’s conference ‘Day of Great Plans’, you presented the data that the real value of the kuna has decreased by almost 20 percent during the crisis. However, this real devaluation has not brought the desired effects, why?
– Because there are no investments to increase the export supply. This growth in exports that you are currently recording is based on reduced domestic consumption. As long as there are no larger investments in the export supply, there will be no positive effects. The question is why there are no such investments, because, as we see in the example of countries where such supplies exist, the possibility of export is not limited. If you are a small country with a small supply that does not affect world prices, you can sell more or less everything you produce. Thus, even in recessionary conditions in the Baltic countries, you have enormous export growth of up to sixty percent, in Serbia fifty percent, in Macedonia forty percent, etc.
