Grčić on Doing Business report: The progress is impressive

The Deputy Prime Minister and Minister of Regional Development and EU Funds, Branko Grčić, assessed on Wednesday that the results of the World Bank report “Doing Business 2016” show a tremendous leap for Croatia in competitiveness, and he considers the Croatian progress from 89th to 40th place in two years to be impressive.

The latest data from the Doing Business report show “a huge leap in competitiveness, especially in the last two years,” Grčić said at a press conference.

– Croatia’s 40th place out of 189 analyzed countries is very, very high, especially considering the circumstances of the last five to six years and the great effort of the Government – stated Grčić.

He evaluates Croatia’s progress on this World Bank ranking of ease of doing business in the last two years from 89th to 40th place as impressive. He adds that it is particularly pleasing that Croatia has surpassed most countries from Southeast Europe, as well as countries like Belgium, Italy, and Hungary.

Grčić emphasizes that Croatia’s result on the Doing Business ranking is not accidental and is a result of the Government’s efforts, to which, he says, Croatian membership in the EU has also contributed. He concludes that Croatia is becoming an increasingly desirable destination for business and investment.

In response to journalists’ remarks that Croatia has actually fallen one place on the Doing Business ranking in the last year according to the new methodology, Grčić replies that its progress in the last two years is indisputable.

For the Minister of Economy, Ivan Vrdoljak, the Croatian result is proof that the current government has vision and knowledge, unlike the previous one. He criticizes the opposition for, as he said, undermining the country’s reputation with claims about the Croatian economy being one of the worst in the world. For Vrdoljak, this is not patriotism but rudeness.
Justice Minister Orsat Miljenić points out that Croatia’s position on the Doing Business ranking would be even better if the World Bank had taken into account the Government’s actions since June, which include a significant expected reduction in the cost of starting a business from November 1, speeding up property registration and resolving commercial disputes, and a new bankruptcy law.

When asked if he expects the European Commission to ease its stance on Croatia in the Excessive Deficit Procedure due to the migrant crisis, which has been announced as a possibility from the EU, Deputy Prime Minister Grčić replied that he does not have high expectations, and that Croatia is working on fulfilling the tasks from that procedure, expecting part of the funds for covering refugee costs from the EU.

When asked if the Government would extend the fixing of the exchange rate of the currency against the kuna in the event of the fall of the law on the conversion of loans in francs, which was raised today by the Franak Association, Grčić replied that the Government has other solutions and called on banks not to calculate and to respect the law.

World Bank: Encouraging progress in the area of easing business in Croatia

In the latest report from the World Bank “Doing Business 2016,” Croatia ranked 40th in terms of business conditions among a total of 189 countries worldwide.

In the latest report, the World Bank changed its methodology, so last year Croatia ranked 39th according to the new methodology, not 65th as initially published. In the new report, Croatia recorded the maximum of 100 points in the category of international trade and is among the most successful in that category. In contract enforcement, it ranked 10th, followed by minority shareholder protection, ranking 29th. In tax payment, Croatia ranks 38th, in resolving insolvency 59th, and in property registration 60th.

It ranked 66th in terms of electricity availability, 70th in credit availability, and 83rd in starting a business. Croatia records its weakest ranking in issuing building permits, where it ranks 129th out of 189 countries worldwide.

The World Bank stated that contract enforcement and judgments have been facilitated by the introduction of an electronic system for monitoring public sales of movable property and simplifying the enforcement process as a whole. Croatia has achieved particularly good results regarding the new index of judicial management quality, receiving the highest possible score (5 out of 5 points) for the sub-index related to the analysis of court IT infrastructure, which includes systems for resolving commercial cases and small claims.

Additionally, Croatia is among only six economies that achieved 5.5 out of 6 points for the new sub-index that examines the application of case management techniques (e-file). When it comes to the property registration indicator, Croatia has advanced in the ranking thanks to the introduction of a new index of land registry quality, placing it among the top 45 percent of economies.

Regarding the indicator of issuing building permits, Croatia has introduced a new index for monitoring the quality of new buildings and achieved 12 out of 15 possible points. Croatia has achieved particularly good results in terms of the quality of building regulations, quality control during and after construction, and requirements for professional certification, as stated by the World Bank.

– We are encouraged by the progress that the competent authorities have made in the area of easing business for entrepreneurs and investors in Croatia. Such efforts need to be maintained and further deepened in the coming years. By faster implementation of these regulatory reforms, not only will the investment climate improve and job creation be stimulated, but the recovery of the economy will also accelerate, thanks to attracting private sector investments – stated Carlos Pińerúa, head of the World Bank Office in Croatia.

Mrak Taritaš: Huge progress achieved, unnecessary contributions remain to be resolved

The Minister of Construction and Spatial Planning, Anka Mrak Taritaš, assessed on Wednesday that Croatia has made huge progress in the area of construction on the World Bank’s Doing Business ranking, and that its still relatively low position in this area is primarily the result of numerous contributions that precede investment, such as water or communal contributions, which she said need to be resolved differently.

– Croatia is 40th in the world, and that is an extremely significant achievement of which we can only be proud. When it comes to this part related to construction, last year we were behind 180th place, and now we are at 129th, meaning we have improved by 60 places. A significant step has been made, a huge leap – said Mrak Taritaš in a statement to Hina.

She explains that in the area of construction, the country’s rating depends on four segments. The first is the quality of construction, and here Croatia, she says, is exceptionally high (achieving 12 out of 15 possible points). The second is the issuance of building and occupancy permits, where it counts how many days those permits are issued from the start of the procedure, from the property-legal arrangement of papers, and Croatia is also good here (128 days).

– However, the third is the contributions needed before the start of work, namely water and communal contributions. We have separated these contributions from the issuance of building permits, meaning they are not necessary for its issuance. But without that, you cannot start work, and we are poor in this regard for the simple reason that Europe does not have this at all. In Europe, communal equipping is done differently, from other fees, funds, etc., and the investor pays nothing for it. We knew this was a problem, and I have already announced that we need to change this and that we cannot burden investors with having to equip the surrounding three streets when they build. We need to set this up differently, and we have an idea of how it should be – said Mrak Taritaš. In this area, the World Bank states that costs in Croatia are 8.8 percent of the value of the investment.

The fourth area evaluated includes all special conditions and all approvals, such as fire protection, conservation requirements, etc., and the minister emphasizes that there are too many of these conditions and approvals, and they will also need to be “removed to be attractive to investors.” The World Bank states that there are 19 such conditions and approvals in Croatia.

– Therefore, a significant step has been made, a huge leap. We are 60 places better than we were last year, and it is clear that the problem is neither permits nor the quality of construction, but these two things that are not directly in this department, but with good cooperation, this can also be resolved – assessed Mrak Taritaš.

She also reflected on the process of real estate certification, which is also mentioned in the report. – We always advocate for order, but with someone else. When we started with legalization, we had everyone against us, no one liked it, and legalization is a normal thing. So will certification be a normal thing in two years. The point is to certify everything. Just as your refrigerator has a certificate when purchased, so will real estate so we know what the consumption problems are. So now everyone is complaining, but in the end, they will accept it too, you just have to be consistent in this, and we have shown that we are – concluded the Minister of Construction and Spatial Planning.