The coalition We Can, Zagreb is ours, New Left, ORAH, and Workers’ Front dedicated 16 pages to the economy in their plan. Read what they have predicted to achieve regarding the economy.
GREEN RESILIENT ECONOMY AND DIGNIFIED WORKING CONDITIONS
For thirty years, Croatia has lacked a development policy. The political elites that have led this country so far have shown a brazen combination of neglect for the public interest and ignorance about how to manage development in the interest of their own population within European and global frameworks. Instead of a developmental economic and social policy, for more than twenty years we have had governments that fulfill integration into the European and global market as a homework assignment for which they have neither the knowledge nor the will. They pro forma meet the conditions and do not understand that our membership in the European Union, along with obligations, also opens many opportunities. In other words, the dominant approach to the development of Croatia from the nineties to today has led to increasing lagging and stagnation.
The result of decades of absence of development planning is that today in Croatia, jobs in sectors that do not require high professional qualifications dominate. In such jobs, the supply of workers is generally greater than demand, which leads to constant pressure on working conditions and wages. In recent years, our unemployment rates have fallen, but not exclusively due to significant employment growth, but also because many people have emigrated from Croatia in search of work.
When the government mentions GDP growth rates, it does not emphasize that they are largely the result of the fact that we exploit the sun and the sea on one side and remittances from our workers abroad on the other. Tourism accounts for one-fifth of our GDP, and in terms of the share of remittances from abroad, we are at the highest level in the EU. For many years, analysts have warned that we should not passively rely on tourism, but only the crisis caused by the current global pandemic has prompted us to realize the full extent of such poor decisions. We will inevitably feel the economic consequences, including those on unemployment rates, in the months ahead.
Croatia is characterized by a segmented labor market structure in which one part of the people works in relatively secure jobs, with somewhat better wages, while another part works in insecurity, seasonally, and with lower wages. The first group, besides legal measures, is usually additionally protected by collective agreements and the actions of trade unions, while the opposite is a growing number of outsiders in the labor market: the unemployed and temporarily employed who work in insecure jobs and are not unionized or protected.
Furthermore, Croatia is gradually taking on more characteristics of peripheral economies, in which the largest part of the labor market consists of employees and self-employed individuals in small enterprises, i.e., in which there is no productive private sector with the potential for investment, innovation, international competitiveness, and export. Without development policies that would encourage consolidation and development of the private sector and strengthen the influence of strategic public enterprises, we have no reason to hope for better working conditions in Croatia.
The current structure dominated by micro and small enterprises is linked to the growth of temporary and occasional forms of work, such as seasonal work and fixed-term employment. We are at the very top of the EU in terms of the share of such work. After having 50 percent unemployment among young people in 2013, they are now typically employed in Croatia precisely through such temporary forms of work. To stop the further peripheralization of our economy and the degradation of working conditions, we need to introduce serious interventions in development planning that encompass a whole range of domains such as industrial policies, research and development policies, and labor market-oriented measures. We will work on creating a fair green economy resilient to disruptions caused by capitalist cycles, pandemics, and the consequences of climate change.
We must change.
DEVELOPMENT MANAGEMENT
We will actively manage the development of this country through a range of industrial, economic, and social policies whose common goal is to create dignified living and working conditions for citizens.
We will develop high value-added production in the private and public sectors, accompanied by development policies that encourage consolidation and development of both sectors. In this process, the focus should be placed on medium-high and technologically highly complex production with a special emphasis on post-carbon technologies. At the same time, we base development on wage growth and an increase in aggregate consumption, abandoning the policy of wage reduction that has proven economically and demographically harmful.
We will democratize the management of public enterprises through civil oversight in supervisory boards that include users of public services, workers, and various social groups. We will professionalize the management of public enterprises, whose business performance we will evaluate according to criteria that include measures of fulfilling the public interest. Such criteria will include, for example, service quality, price and physical availability of the service, financial sustainability, level of working conditions, environmental protection, efficiency and transparency of management, and others. Public enterprises will thus achieve greater social and financial value, and at the same time, we will reduce the party management logic through broader social oversight, thereby minimizing corruption and eliminating clientelist networks.
We will break with the practice that covers poor results with an increase in costs for the end user. Strategically important companies, which are natural monopolists such as electricity, water, communication, and other networks, can currently raise prices to achieve greater profits because there is no market penalty. In doing so, the high social cost is neglected, and what is even worse, these moves are often driven by particular party interests, clientelist practices, and ignorance.
We will strengthen our position as an equal member of the European Union that respects the common legal framework, but we will also interpret the obligations arising from membership in the interest of our society.
We will restore meaning to democracy by shaping institutions that allow citizens to participate in decision-making processes on issues important to their lives. To achieve this, we will cut the clientelist ties that currently stifle state, local, and public administration.
We will facilitate business for economic entities with regulations that take into account their size, type of activity, and capacities. We are guided by the principle that the same state support programs, incentive measures, legal solutions, or tax rules should not be applied to large companies on one side and to micro, small, or medium enterprises on the other.
As much as 90 percent of enterprises in Croatia fall into the category of micro enterprises. The owners of these companies and crafts are also workers, exposed to insecurity in both the market and the legal and tax framework of business. For micro and small enterprises, we will ensure lines of financing, conduct a review of parafiscal levies, and provide support and appropriate time periods for achieving business conditions, with the aim of initiating their development. In situations where the owners of small and medium enterprises cannot or do not want to pass them on to their descendants or sell them on the market, we will enable the transfer of ownership to workers.
Small enterprises have low capacities for investing in development and innovation, and we will change such an economic structure with targeted support that directs enterprises towards organic growth. We will encourage investments by companies in the quality of jobs, in the introduction of green technologies, and in research, development, and innovation. An example of such incentives is the exemption from paying profit tax that is reinvested in the aforementioned goals. Likewise, we will direct state support, including support from EU funds, towards the goals of creating a green resilient economy and dignified working conditions.
We also foresee significant investments within the social entrepreneurship sector, i.e., in those activities aimed at solving specific social problems or needs and whose goal is not continuous profit growth, but investment in quality jobs and the development of the local economy.
GREEN PLAN FOR CROATIA
The Green Plan for Croatia is our long-term vision of sustainable development of a modern and environmentally conscious state. Such a Croatia, above all, cares for the health and well-being of its citizens, contributes to maintaining the ecological stability of our common planet in solidarity, and transitions to a non-carbon economy.
If we do not keep the total average temperature increase below the threshold of 1.5°C within a period shorter than 10 years, climate changes will cross a point of no return, threatening the survival of the world as we know it. An increase in the average global temperature above 1.5°C for the area of Croatia means up to twice the average temperature increase, as well as droughts and fires, along with rising sea levels along the coast, and changes in extreme precipitation (floods) and droughts on the continent.
Croatia is among the European countries that suffer the greatest damage from extreme weather and climate events in relation to its gross domestic product. Therefore, we will break with policies that treat climate change as a sectoral problem, isolated within the jurisdiction of one ministry where the issue of adapting to climate change is subordinated to the energy business. If we care about building a society resilient to the challenges ahead, the entire economic policy must have embedded goals for reducing carbon emissions. Our goal is a radical reduction of carbon emissions in Croatia – by 65% by 2030 and carbon neutrality by 2050. This must be based on an equal approach of all citizens to basic needs for energy produced from water, wind, and sun.
In doing so, we are guided by the principle of distributing the burden of these adaptations proportionally to responsibilities and the ability to influence rapid and far-reaching changes. Economic entities that pollute the most and wealthy members of society who leave high levels of ecological footprints should bear the relatively largest cost of accelerated transition and stabilization. Within Croatia, there are pronounced inequalities in vulnerability to the consequences of climate change, such as levels of poverty, health status, socio-economic status, and profession. Therefore, we will create conditions for greater resilience of citizens to the consequences of climate change through targeted measures to reduce social inequalities through planned social support.
The starting point of our Green Plan for Croatia is the European Green Plan. We believe that we need to be more ambitious in the long run, primarily because long-term sustainability cannot be achieved without abandoning consumer society and the logic of unquestionable economic growth. The long-term goal of the economy should be a quality life for citizens within the renewable capacities of ecosystems. To direct overall social development towards this goal, we advocate for the inclusion of alternative indicators of social development into the macroeconomic framework. Economic policies should be evaluated based on their impact on people’s well-being, on resource use, on inequalities, and on ensuring decent work. In decision-making, these indicators should take precedence over GDP movements.
Our long-term goal is to maintain a stable economy that enables a good quality of life, equality, more free time, a sense of community, quality and stimulating education, good individual and collective health, participatory democracy, and a range of other positive social outcomes. We are building an economy that will remain within the renewable capacities of the ecosystem in which we live.
In the next 5 to 10 years, our goal is to achieve significant progress in a just transition to a non-carbon economy, thereby simultaneously achieving pollution reduction and creating sustainable and quality jobs. We will propose medium-term measures that direct development towards the desired goal and short-term measures that respond to the economic crisis caused by the coronavirus pandemic and the years-long stagnation of the Croatian economy.
When we talk about transitioning to a green economy, the first thing to understand is that 80% of the previous carbon dioxide pollution on a global scale is the result of the actions of about a hundred companies engaged in fossil fuel exploitation. We will introduce emission taxes on the revenues and profits of polluting industries such as the oil and gas industry and air traffic, in order to encourage them towards more sustainable business practices and reduce air traffic.
In cooperation with employees and unions of these companies, we will initiate the process of transforming the operations of polluting enterprises in which the state has a significant stake, based on the principles of just transition. Through the investment bank, we will encourage our valuable industrial facilities to produce technologies such as wind turbines and solar panels. The economic effect is greater if we accompany the energy transition with domestic production of green technologies, as this will retain existing jobs and open new ones. In transitioning to a non-carbon economy, it is essential to act strategically to ensure job preservation and retraining of workers for jobs in the green industry. Furthermore, through the European mechanism and the fund for just transition, we will secure funds for new jobs, retraining, and reducing energy poverty.
A fundamental aspect of our Green Plan is the transition to a circular economy to reduce waste production and excessive resource use. In the first phase, we will close the loop: we will reduce the use of new natural materials and encourage reuse and recycling. A good example is replacing single-use plastic waste with other materials. The second measure is to extend the lifespan of products and ban planned obsolescence through new legal regulations and open new jobs in service sectors. In the second phase, our goal is to reduce the overall level of production and consumption to a sustainable level, i.e., to create a green resilient economy.
ENERGY TRANSITION
To become climate neutral by 2050, Croatia needs to invest in an ambitious energy transition towards sustainable energy, in line with the recommendations of the European Union and the latest report from the Intergovernmental Panel on Climate Change. We will revise permits and prevent further investments in the exploration and exploitation of oil and gas and in harmful projects that involve the import of fossil fuels into Croatia and neighboring countries. We will advocate for the closure of coal-fired power plants, while ensuring new jobs in the clean energy sector. Future state investments will be directed towards renewable energy sources.
Priorities include public investment in the solarization of Croatia and the establishment of energy cooperatives, so that citizens and local communities can produce their own energy from solar sources. We already find good examples in Croatia on the island of Krk, and we have a valuable initiative for solarization and energy independence of Croatian islands.
Another necessary aspect of the transition is working on the energy efficiency of existing infrastructure such as district heating systems and heating plants in areas of high urbanization and population density, and encouraging the construction of heat pumps and insulation of houses and buildings in less populated areas. Investing in mass energy renovation of facades and thermal insulation of the existing housing stock will simultaneously reduce heating and cooling costs of buildings, while also contributing to reducing energy poverty and pollution. In the construction of new housing stock, we will introduce a legal obligation for energy efficiency of buildings, construction of passive buildings, solarization, and green roofs.
To ensure a just transition, we will invest in research and development and encourage inclusive cooperation with strategic industries, companies, and unions. Domestic industrial facilities need to be participants in this transition and direct their production towards green technologies such as solar panels and parts of wind turbines. The HEP Group, which manages the energy network that we need to modernize, must also become a leader in clean energy production, under public administration and control.
RURAL DEVELOPMENT AND SUSTAINABLE AGRICULTURE
Rural development and agriculture are key to transitioning to a circular economy, i.e., a model that ensures sustainable resource management, extends the lifespan of products with the aim of reducing waste, and increases the use of renewable energy sources.
Thanks to natural characteristics, tradition, and knowledge, Croatia in the agricultural sector, which is linked to the food sector, can reach a level of production sufficient to bridge the gap in today’s foreign trade balance in which over 60% of food products come from abroad.
The agricultural-food sector accounts for almost 15% of domestic GDP, which speaks to its importance for the domestic economy. The backbone of domestic agricultural production is family farms (OPG) which make up 96.8% of all farmers and use 76.1% of arable agricultural land. One of our priorities is to change the structure of agricultural production and create an agricultural-food bioeconomy, for which key investments in agro-ecological measures and organic agriculture, as well as research, development, and innovation in the field of bioeconomy, are essential.
In this, a key role is played by strengthening the market for locally grown products by introducing mandatory green public procurement for food and beverages supply in all public and state institutions. This means that quality criteria for cultivation and proximity criteria (reducing transport) are incorporated into tenders, thereby giving preference to local products. To ensure a basis for the development of organic agriculture, we will relieve small and medium-sized companies in the food industry of taxes and invest in them for the purpose of developing organic production of goods with added value.
We will improve the records of agricultural land to activate unused agricultural land, and in cases where owners cannot ensure agricultural production, we will lease or sell the land. Similar projects in other European countries have increased land availability for interested parties and thus created conditions for the resettlement of rural regions. We will revitalize agriculture by leasing 400,000 hectares of state agricultural land that is currently not in use at a symbolic price, primarily aimed at promoting ecological agriculture and revitalizing rural areas. We will regulate land registries and cadastres to encourage consolidation and aggregation of small agricultural plots, thereby enabling better control and easier applications for agricultural subsidies.
We will achieve financial stabilization of OPGs and agricultural cooperatives by ensuring access to cheap credit resources for agriculture, by establishing an Agro Bank based on ethical financing principles. The public investment policy in the bioeconomy sector will focus on financing research, development, and innovation in the recovery of agricultural-food products and the use of organic waste and residues for the purpose of creating new products.
We will increase the areas under organic agriculture and agro-ecological measures, aiming to reduce pesticide use by 50% by 2030 and increase nature protection measures and promote regenerative agriculture. These measures are in line with the Common Agricultural Policy of the European Union, which foresees stronger development of environmentally friendly farms and an increase in ecologically cultivable areas.
The rural development policy will focus on creating equal access to goods and services and improving the quality of life in rural areas. Budget investments and investments from EU funds for rural development will focus on building and improving basic communal and public services, as well as business, ICT, and agricultural infrastructure.
We will encourage investments in local energy production from sustainable sources and local ownership of energy production. We will promote cooperatives as a model for better land utilization and increased product quality by changing the legal framework, giving preference in obtaining subsidies, and through assistance in establishing cooperatives. Cooperatives reduce production costs and increase income through joint marketing and strengthening the negotiating position in the market. We will encourage joint management models between representatives of local authorities and cooperatives.
