This should have been 'Ekonomalije' about the unutilized opportunity for savers in Croatia to at least partially protect themselves from the devaluation of deposits due to ten percent inflation. They only needed to change the currency structure of their savings, in accordance with a folk custom that has lasted for at least half a century. Euros and kunas should have been converted into US dollars a few months ago. It was very likely that the dollar would strengthen against the euro. And it has strengthened by about ten percent. Even with unfavorable bank spreads on the selling and buying rates of the dollar, those who restructured their savings in currency could have lost only two to three percent of their savings in kunas or euros instead of a ten percent real loss.
When it became clear that the number of those seeking refuge in the dollar remained very low (of 81 billion kunas in deposits in May, only 5.1 percent was in dollars), the topic took on a second dimension. The public's awareness that the USA is still, no matter how much China presses, in many ways the strongest economic power in the world is actually low in Croatia. This fits into the ignoring of the dollar. If 90 percent of Croatian citizens had marks or euros in their hands, it is very likely that 90 percent have never held a dollar bill.
Numbers Deceive
Similarly, 90 percent of politicians and members of the academic community have not contemplated, and consequently have not put on paper, what relations with the largest economic power in the democratic world should be. In Croatia, both the opportunities and dangers of economic relations with the USA are underestimated.
America is a minor foreign trade partner when it comes to goods. For example, in 2020, exports of goods to the USA were at the level of two billion kunas, while imports were one billion kunas. But this conceals the real state of affairs. The dependence is far greater than what appears from the data on foreign trade exchange.
The USA, for example, in the 1980s with its monetary policy aimed at reducing inflation was the trigger for the debt crisis in Yugoslavia (remembered for shortages of derivatives, coffee, bananas…). The Yugoslav (including Croatian) foreign debt was in dollars, while exports were mostly to markets of European currencies. In 1981, the real interest rate on the dollar rose in just a few months from one to over eight percent. At the same time, the dollar's growth against European currencies amounted to an incredible 80 percent. This undermined the local foreign exchange solvency and caused an irreversible loss of developmental momentum.
