Unsuccessful Government

The success of a country, or an individual, can be measured only by comparing it with the environment in which one lives, acts and creates.

What in fact is the main task of modern government in the world we live in? Is economy more important than social issues? Is economic growth an absolute category per se or is its impact on the progress of society determined through its harmonisation with other indicators. What about unemployment? Is solving this issue a matter of the state and is unemployment an economic or social issue?

These are important questions, answers to which would also provide answers to the question how successful a government really is. Take unemployment. It was only in the fifth decade of the 20th century (Employment Act, 1946) that the American legislation, thus politics, took responsibility for the level of employment in society. During the decades before, employment was treated primarily as an economic issue, liable to the cycles of growth, stagnation and fall. This was no state matter. Today this is not the case. The European Union prioritises the issue of employment in all its acts. Article 3 of the Treaty establishing a Constitution for Europe, that seems not meant to be, puts full employment among the main aims of the Union, along with well-balanced economic growth. Thus, full employment stands as one of the basic values of the Union. This provision will also remain as it is in the future edition of the European Constitution.

Without economic growth there can be no progress or space to implement projects which would provide more equal distribution of the new riches among the population. The traditional (justified) objection to the European left has been that it is more focused on distribution than on the creation of new values. Today this remark no longer stands. However, the requirement that all, not only the minority, should benefit from the new value has not been abandoned. In cases when only a small number of people feel the progress as, unfortunately, is the case in Croatia, the majority do not feel as participants and think that the country is not headed in the right direction. As they do in our country.

Croatia is going through a period of moderate growth. In historical retrospective, the average growth rate of 4% in the period of five years is an excellent result. The USA, a superpower which for the last one hundred years has been spared of wars and destructions of the kind Europe had been exposed to, during that period had the average economic growth only slightly higher than 1% a year! And this was enough to get them to the economic position they occupy today. However, we live in a different world, in which other transition states we are competing are making (far) more progress than we are, while the progress of countries much more developed than we are, such as the USA, Great Britain, Sweden, even Austria, is only slightly slower. Going at this rate will not get us to the desired levels of welfare and development.  

The success of a country, as well as that of an individual, can be measured only by comparing it with the environment in which one lives, acts and creates. The real and relative (“position”) value of goods of until recently unimaginable value, has been decreasing in accordance with their availability levels. We keep comparing ourselves with our neighbours and fellow citizens. Yesterday’s luxury is turning into luxury available to all. The same thing goes for states. If we start comparing ourselves with the ones we should be comparing ourselves to, we will see that the economic growth rate in Croatia is at the very bottom as far as the rates of new EU member states (ex communist countries) go. Luckily, Hungary is going through a serious fiscal crisis so the bottom is all hers. Then there is also Slovenia, twice as rich as Croatia, with the same growth rate. All other countries are above us.

As far as unemployment is concerned, the picture is the same. Just a short reminder – it would be more accurate to talk about employment rates of the labour/economically active population; this rate has been falling during the mandate of the current Government and is in addition weighing on the otherwise negligible fall in unemployment, which in turn is regularly seasonal. In this area as well our results have ranked us at the very bottom. Along with Poland and Slovakia we have been going around 15%. Both countries, which is not to be disregarded, had greater economic growth than Croatia in the past year, with the same or even better forecasts for 2007.

Unfortunately, this data is the only real measure of success of the present Croatian Government. It is the only data that can provide answers to the question: Are we heading in the right direction and are we doing it fast enough?

Finally, let me say something about the entrepreneurial character of the state and the need/desirability of having a successful manager or entrepreneur as its first man. State and society are not companies and cannot be lead by business principles. There are too many public and private interests opposed, too many centres of power and too many pressure groups. A company, compared to a state, is a single-cell organism. This, of course, does not mean that a great entrepreneur cannot become a great statesman as well. Yet again – Roosevelt, Churchill, de Gaulle, Adenauer, de Gasperi, Kennedy, Clinton, Blair, Merkel, Segolene Royal, Zapatero, Prodi, etc., etc. The list goes on. Not one true and great statesman comes from the business lines. Excuse me, there was one – Berlusconi. Great? Well...

Zoran Milanovic