We Sink Lower And Deeper

It is time we stopped being at the very bottom, sticky bottom of Europe.

With great impatience in the world, the publication of this year`s edition of “Index of economic freedom for 2007” was awaited in Washington, published by The Heritage Foundation and The Wall Street Journal.

For those who circulate money in the world this list of countries ranked by their economic freedoms and business success and development is much more important than war in Iraq for instance, or the search for Osama bin Laden.

Croatia only in the 37^th place in Europe

In the first place according to economic freedom for 2007 is, just as the year before, Hong Kong, followed by Singapore, Australia, USA and New Zealand. We are, of course, not in the top ten, although we should be somewhere around there according to the exaggerated success of our government.

We are not even in the top 10 European countries among which are Great Britain, Luxembourg and Ireland for example. Out of 41 observed European countries, Croatia is in the 37^th place, leaving behind only Bosnia-Herzegovina, The Russian Federation, Ukraine and Belarus.

109^th in the world

In the world list, Croatia is in the 109^th place out of 157 countries according to economic freedoms for 2007. Croatian economy is 55 percent free, according to the assessment for 2007, which puts it in the “mostly” non-free economies category, while its total grade is bellow the regional average.

Croatia has the biggest tax burden out of all countries which went through the transition process.

Croatian economy, it is believed at the Heritage, still is under the too powerful state influence, freedom of investment is endangered by slow red tape and the abilities of the state to occasionally intervene in the already arranged contracts. That is why the categories of ownership rights were evaluated poorly and entrepreneurial freedoms from corruption.

State regulations hold back the trade flow

Croatian state expenditures are extremely high, the index authors wrote, explaining the criteria for evaluation, and powerful state regulations hold back the natural flow of trade. An even bigger issue is the legal system which is “prone to corruption, political interference and inefficient red tape, so some investors would rather seek international arbitrage”.

Those investors who have shown the readiness to confront the “Croatian regulatory labyrinth” regularly face considerable unofficial limitations, especially when it comes to usually equal parties in front of the law, which ordinarily get lost in the highly politicised decision-making process.

Croatian labour market still is under heavy pressure of legal employment limitations which prevent employment and growth of productivity. The expense of employment is high and excess labour dismissal is expensive. High cost of brutto worth salaries and severe labour legislature inhibit business activities, the Heritage claim.

Wonderful, and what now? We are in an election year, in which less is done, more or less, and more promises are made.

Battle for survival and success

While the government rocks us in the net of its successes we sink lower and fall deeper.

This is a battle for survival and success. Today, countries are divided to successful and non-successful. If we do not realise this, there will be no us. Aslong as we do not go into battle against corruption seriously, into battle for attraction of capital, for the protection of ownership, for more simple taxes and for transparency of behaviour we will be at the very back.

Real businesses are not what we are being served, like dinners in Verona, deals with tenders, deceptive promises from property a card of the more deceitful prime minister. Real businesses bypass us exactly because of these things.

If we do not wake up from dreaming about success, the remaining four European countries will get ahead of us next year.

As you can see, we are awakened once a year that we are not “in” and that we are not doing well. And this list only nailed us to the bottom of Europe. It is time we stopped being the very bottom, sticky bottom of Europe.

Vesna Skare-Ozbolt, The Democratic Centre Party (DC)