President: Export Development is the Best Measure for Employment

President of the Republic of Croatia Kolinda Grabar-Kitarović praised the government’s efforts at the Lider conference regarding the initiated economic reforms, but also warned that reforms are necessary as other countries with which Croatia competes in the global market are progressing.

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– It is being shown that reforms are possible, a tax reform has been initiated, greater fiscal responsibility has begun, and the removal of some administrative barriers has also started. The effect is visible in the latest macroeconomic indicators, and these reforms have led to a reduction in public debt. Croatia’s risk premium shows a strong decline, and after a long time, we can expect an increase in credit rating. These efforts deserve praise, but even with positive indicators, we must not relax. Decades of development without vision and strategy, a lack of focus on strategic activities have led us to a state of chronic crisis that cannot be resolved overnight. Growth is not sufficient for our needs; our competitors are developing faster, and in developing the business environment, we have just started walking while most others are already running – said the President of the Republic of Croatia.

Highlighting paradoxes, such as that counties with the highest employment and share of exports and industry have the lowest average salaries in the country, the President of the Republic of Croatia pointed out negative demographic trends and the ‘exodus we are particularly witnessing since Croatia’s entry into the EU’ as a special problem. As a good illustration of the consequences of emigration, she recalled IMF data indicating that from 1993 to 2013, Croatia lost 15 percent of GDP growth.

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– We must focus on policies with long-term effects that will create a positive environment and perspective for the youth. We listen to the young, and if we hear what they are telling us, it will be easier for us to choose the right direction and necessary measures to retain young people in Croatia. The most effective social and demographic measure is employment, ensuring stable and globally competitive jobs. An economy like Croatia’s can achieve this only through the development of an export economy – said Kolinda Grabar Kitarović.

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According to the President of the Republic, a change in the structure of the entire economy is necessary, and a way must be found for Croatia to stop relying on a single economic sector, which, moreover, like tourism, is seasonal and has low wages.

– We can change this by developing domestic export capacities and attracting quality and targeted foreign direct investments. It is necessary to utilize the transfer of knowledge and economy and enable our companies to develop a global value chain. The first step is the Three Seas Initiative, which focuses on the development of energy and digital infrastructure projects and connecting the north and south of the EU. Joint development will enable us all to create jobs. The initiative is gaining increasing attention and is recognized as a platform for development, cohesion, competitiveness, and eliminating disparities between various parts of the EU – explained the President the purpose of this initiative.

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However, for the orientation of the economy towards exports, cheap labor as in previous centuries is no longer necessary, but educated human capital is. Therefore, she emphasized the reform of education as key to achieving the goals she spoke about.

– Improving the business climate, entrepreneurial spirit, and attitude towards entrepreneurship is crucial for all who want to do business in Croatia, to view entrepreneurs as those who generate development, not as those who exploit people. Our plans must not be small and limited. They must be big, and we must monitor how we implement them year after year. Export will continue to be on my agenda, I guarantee – said the President of the Republic of Croatia.