Emerging from Recession in 2015 is More Important than the Emergence of Most

Božo Petrov may call for reforms to exhaustion, but the HDZ and Most government faces a different criterion. Milanović leaves them a mild exit from the recession. Successors will have to record the same or better results to survive.

Regular readers ‘Ekonomalija’ probably already know that at the end of each year I take the liberty of choosing ‘person’ (actually phenomenon) of the year that is coming to an end. For 2014, the title was shared by applications and exports. A virtual tool that brought accelerated changes to almost every business model and exports, which showed great resilience and high growth that year. For 2015, I made my choice a few months earlier  (at the end of September) because I needed it for the title of the last chapter for my column book ‘When the Wind Blows, Turkeys Fly’. For ‘person’, i.e., phenomenon of the year, I chose – emerging from the recession.  However, parliamentary elections came, and Most emerged. A dilemma also arose: what is more important for 2015, emerging from the recession or the political emergence of Most of independent lists.

Atmosphere of Optimism

If there were any doubts, they were resolved this Tuesday at the pre-New Year gathering of the Croatian Employers’ Association. Emerging from the recession is, without competition, the phenomenon that marked 2015! The best proof was the atmosphere at the gathering. It exuded business optimism from the gathered entrepreneurs and managers. No matter how much the macroeconomic growth of GDP of about one percent seemed like a statistical error to some outside the business, in the real economy it looks ‘like a house’. Two years ago, at the same HUP gathering, the atmosphere was somber. There was no end in sight to the recession. Despair could be seen on the faces of successful businessmen. It was clear what the five-year recession had done.

Last year, a change in mood was already visible. Those who survived the sixth year of recession knew roughly how they ended 2014. Those who had turned to exports in time, as well as those who were their suppliers in the supply chain, felt the consequences of the correct orientation.

This year, most of those gathered at the Westin hotel in Zagreb have a year behind them in which they achieved better business results than before. And the atmosphere of optimism has a contagious effect. Many companies have pulled out long-prepared development projects from their drawers. A kind of flywheel is happening. Orders are capillary flowing down to the widest business base. Or they will, with a shift, flow down. Of course, not for everyone. Because there are those who have not developed, have not innovated, and have nothing to offer to awakened markets that is currently in demand. But those who did not waste the recession on whining and waiting for solutions from above now have an opportunity.

Colleague Manuela Tašler, who edits Lider’s traditional supplement on the next business year (the title of ‘Business 2016’ reads: ‘A Year of New Beginnings’), is a bit more moderate in her perception, so the title of her introduction in the mentioned special that we bring with this issue of Lider is ‘A Thin Slice of Optimism and a Thick Spread of Caution’. She probably has a point, but again, optimism is a common denominator for many in the business community.

Survived the ‘Ice Age’

Now someone will say that the optimism based on a technical exit from the recession is largely without long-term coverage. But if that is the case, we have no other optimism, so let us be allowed to use what we have. Conversations with HUP members reveal that they plan moderate growth for their companies next year. This was confirmed by the survey that HUP conducts every year at this time. It is evident that most enjoy having survived the ‘Ice Age’ of the recession, which is among the survivors, and from their eyes, one can read the rekindled zeal for victories.

From the Westin hotel to the Lider editorial office is not even five hundred meters. Upon entering the editorial office, opening the news on the computer feels like entering a different, surreal world. How did the consultations with President Grabar-Kitarović go? What do Petrov, Grmoja, and others from Most say today? What did Milanović say, and what did Karamarko say? Who will be the mandate holder of the government…? In relation to the concrete agreements on the margins of the entrepreneurs’ gathering at Westin, this political folklore seems surreal.

If anything can steal the smile from businessmen’s faces in the next 12 months, it is the events on the political scene. Entrepreneurs and managers, more than ever, just want political games not to destroy the awakened recovery. As I unreservedly stated three weeks ago that the government will be formed by HDZ and Most, I repeat it again. Political star Božo Petrov may call for reforms to exhaustion, he should understand that the responsible for the new composition of the government will wait for a completely different criterion. GDP growth will have to be nurtured like the most delicate plant. Whether deserving or just lucky, this government leaves a mild exit from the recession. Successors will have to record the same or better results to survive.