Miodrag Šajatović: Shock for Neoliberals – The Government Has Started to Plan and Choose Winning Sectors

Almost unnoticed passed the HINA news that 'the Government on Thursday established a working group to define the framework for cooperation with the domestic IT company Infobip in the field of artificial intelligence and prerequisites for positioning Croatia as a center for the development of artificial intelligence in the EU'.

That one sentence means a drastic turnaround in policy towards the economy. With it, consciously or not, the ruling policy renounces at least a quarter-century influence of the neoliberal doctrine according to which one of the greatest and unforgivable sins of the state is when it dares to 'choose winning branches' in the economy. Because everything should be left to the invisible hand of the market.

A Copernican Turn

Prime Minister Andrej Plenković has, in his governance so far, at least on the surface, adhered to that rule. This with Infobip is indeed an unexpected Copernican turn. The cautious and, when it comes to the economy, unambitious prime minister (e.g., satisfied with GDP growth rates below three percent annually) suddenly stands behind the announcement that he wants to position Croatia as nothing less than a center for the development of artificial intelligence in the EU!

And that’s not all! Until now, the overly cautious prime minister in this case, besides choosing the 'industry' of artificial intelligence as a strategic branch, without any, even formal, public tender, opens the doors and chooses the company that should be the foundation for the development of the entire AI branch!

But that’s not all! In a similar way, only less directly, Prime Minister Plenković’s government has chosen another branch. It is about the development of electric vehicles. And again, a specific company has been chosen that should be the foundation for development. Of course, it is Rimac Automobili.

Suddenly awakened courage of the prime minister has its foundation in yet another nightmare of local extreme neoliberal economic thinkers and sympathizers. For thirty years, every thought and every author who dared to notice that every modern state needs some form of planning has been persecuted. Those who dared were accused and ridiculed by neoliberals for advocating the introduction of Soviet five-year plans. And now, behold, the European Commission has imposed on Croatia the writing of 'seven-year plans' and 'nine-year plans'.

If there are brave neoliberals, they would now loudly protest against EU funds, state planning, and the selection of branches that will have a special state 'push'. Since a flood of gifted billions of euros is smiling at us, they do not dare to speak up. They do not even want to see that the Government had to write the National Recovery and Resilience Plan. The second word in the title of the document is 'PLAN'!

When 'choosing winners' is mentioned, it is an outdated and inaccurate expression. It is about wise governance looking at which companies in the market have become winners on their own. And then they are encouraged to create domestic ecosystems around them.

Importing or Exporting Cars?

These days, heated debates are taking place about whether Mate Rimac, as he promised, can launch autonomous electric taxis on the streets of Zagreb by 2024. There are many of Rimac's followers who do not allow any doubt about their 'saint'. Rimac, who is not the most likable entrepreneur I have met, has also created an enviable circle of detractors. Thus, heated debates are being held about whether he is a visionary or an unfounded megalomaniac.

Without the desire to take sides, here is one perspective. Simplified, the team from the EC has allocated several billion for electric cars for Croatia. This money was supposed to come in as a gift, and then it was supposed to be spent on purchasing electric cars produced in, for example, Germany or France. By coincidence, Rimac had development programs. They were presented to bureaucrats in Brussels, and they reluctantly had to, as things stand now, reserve money for local development of electric cars. Therefore, those who say that even if Rimac does not succeed, investments in engineers and other specialties will remain for some other projects are right.

The relationship between states and business in the world is drastically changing. Croatia is finally in a position to jump on that train. Of course, the dangers are great. Working groups are completely insufficient to define a quality and layered relationship between the state and the driving companies. Perhaps Infobip and Rimac Automobili were chosen only because of their popularity among younger voters. And 2024, when Rimac announces driverless taxis, is coincidentally or not, the year of parliamentary elections. And again, if votes are bought with EU money for the stimulated automotive industry or the 'industry' of artificial intelligence, why not? 

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