Let Us Start Thinking Positively

10 years of dormancy from the start of functioning of economy to full wallets

It is usual practice at the end of a year to take stock of what has been accomplished on a personal and business level. At the personal level, I am satisfied because I believe that, with the intense work pace, I managed to make at least small progress in the areas I am in charge of. Following my return from the government into the parliament, I was active in politics with a success that voters will soon assess. In the field of medicine, in the past year I published several scientific articles in foreign magazines where there is great competition. The end of the year saw a promotion of a valuable expert book of which I was editor-in-chief. In the area of entrepreneurship, I received an award – “Medicina”… I should be content, but I am not. As member of parliament, I wish to share my content or discontent with our citizens. Can I do that?

There are two standpoints that dominate in the assessment of the year 2006. The first, voiced by most business people, is positive and optimistic. The second is the pessimism of our citizens, of whom only one third believes that Croatia is moving in the right direction. Who is correct? Let us try and analyse this issue.

Business people are satisfied because we have achieved a large part of plans in the development of the post-war economy. I had the honour of being a member of a team that drafted the electoral plans of my party. As with all my tasks, I learnt this one from the best. For me, this means Ireland, which has, with an annual 10 percent annual GDP growth, realised the unattainable European record. Before that, I studied a similar result of the so-called Asian tigers. When I asked for an analysis of the cause of such a soar, Irish experts consented that there was no universal answer. They cited the first five causes as being: a stimulating tax policy, fiscal discipline, social dialogue, membership in the EU and the development of entrepreneurship. We solved problems in this order. Through taxes and other measures, we boosted an increase in investments, which, in 2006, grew doubly faster than in EU countries. With regards to fiscal discipline, we have achieved great progress, decreasing budgetary deficit from 6,3% to 3 percent, according to World Bank calculations, with a simultaneous triennial budgetary increase of 38 billion kuna! We regularly settled the large foreign debt, decelerated its growth, and decreased the country’s debts to five percent. We directed the continuing debt towards domestic sources, so, although some criticise the sometimes higher interest rates, I tell them that they shall stay in Croatia! If only we had done this with debts for the construction of roads. In the field of social dialogue, we placed social partners, unions and employers as required links in the chain of decision-making. The policy of our drawing closer to the EU was aggressive and has definitely separated us from other countries in the region with regards to our scores in implemented reforms.

In the field of entrepreneurship, we have developed an enviable infrastructure of 480 registered business zones, although some laughed when I, at the start of my stint in parliament, announced 550 business zones. Today, 55% of the total number of workers are employed in small-scale companies, which have marked a 300% business escalation, while small and middle-scale entrepreneurships realised a revenue of over 200 billion kuna.

An important business indicator of the number of entrepreneurs per 100 citizens increased from 3.1 to 6.1. Overall unemployment, according to EU criteria, is at an annual decrease of one percent, the price of shares and their trade are increasing, the Crobex and Vin indexes are higher than ever. Education reforms have begun, as has the restructuring of large companies. We have not sold any state-owned company with a positive equity to foreign companies, the privatisation of the PIK Belje and PIK Vrbovec companies is yielding excellent results, we rescued the Suncani Hvar company from being sold, and generated excellent investment and business results…

Nevertheless, dissatisfaction is dominant on the public scene. Why? Because a latency period of some dozen years has to pass from the commencement of economy to a tangible “filling of wallets”. Investments in infrastructure and education are yielding results, but long-term. In Croatia, this will be even more accentuated due to the harsh war-time destruction that we had to mend. Countries in transition, which we compare ourselves to, began such a development in 1990, while we did so eight years later. During these eight years, they created, while in Croatia, the period of Serb aggression destroyed hundreds of thousands of business, housing and infrastructural facilities, destroyed the most productive of lives, halted education and completely closed down tourism. However, we are being compared to countries that were at peace while we were at war. It is as Switzerland being compared to France, which was healing its wounds, at the end of the 1940’s.

As in the past several years, so the year 2006 was a year of development, but also a year of dealing with the consequences of war. We spent a total of seven billion kuna from the government budget for reconstruction and dealing with the consequences of war! The past several years were similar. In the past couple of years we almost completed the reconstruction worth some US$20 billion. Had we been able to direct this capital towards the development of the economy, the ratio of the real standard and that of countries in transition would be in our favour. This is a good sign and is cause for optimism, although the cost for the consequences of war will continue. The reconstruction of destroyed facilities continues, a large percentage of funds from the budget must be earmarked for the victims of war and soldiers, for returning the remainder of debt to pensioners, for the removal of the remaining 250,000 mines… Despite this, our chief task until the end of our mandate is to direct new values towards the neediest, meaning the unemployed, those working for insultingly low wages, pensioners… Can Croatia do this? If it managed to liberate the country from a multiply stronger enemy, provide care for a million refugees and displaced persons, reconstruct war-torn areas and in most part separate itself from communist and regional heritage, then it will manage this task. On condition that we start thinking positively, that we value our abilities at least as much as others value us, and that we stop believing devil’s advocates.

Self-confidence is the prerequisite of any progress and optimism is the foundation of development. Thus, my New Year’s wish is: Let 2007 be a year of progress, but also of pride and self-confidence!

Andrija Hebrang