Croatia’s economic competitiveness dropping

This year’s competitiveness research included 133 countries and the first place went to Switzerland.

According to the World Economic Forum and their ‘Global Competitiveness Report 2009-2010’, Croatia is currently at 72nd place; which means that it dropped 11 places compared to last year.

This is the worst result for Croatia in the past eight years and they are based on data obtained during the first quarter of the year only. They did not include government’s recent increase in taxes and fees in mobile telephony, so some National Competitiveness Council members speculate that things are even worse.

This year’s competitiveness research included 133 countries and the first place went to Switzerland, who was consecutively followed by US, Singapore, Sweden and Denmark.

Compared to last year, Croatia dropped 11 places and is preceded only by Latvia who, compared to other transition countries, dropped 14 places. We were also beat by Romania (64th), Montenegro (62nd place) and Hungary (58th place).

The largest decline was recorded in the labor market efficiency

Croatian competitiveness worsened from 4:22 to 4:03, which is a significant decline of 4.5 percent. Out of 12 factors affecting competitiveness, the largest decrease was noted in the labor market (24 points) and the efficiency in trade of goods (18 points).

Quality and level of financial markets, similarly as sophistication and quality of financial institutions, also got relatively low ratings.  On the other hand, good grades were given to technological readiness, healthcare and primary education, as well as infrastructure and macroeconomic stability.

These results show a sharp decline in the competitiveness of Croatian society, while neighboring countries continue to make progress faster than us, Council member Mladen Vedris warns.

Croatian goal was to catch up with the top 50 states - because it is considered that this position intrinsically carries the potential for significant improvements - while the opposite trend is considered a sort of alarm signal, Vedris said. He also added that Croatia needs to make urgent changes and do whatever it takes to increase its competitiveness in the international environment.

Other Council members were also very critical of the situation in Croatia and its current policy.

'The government does not apply union’s suggestions'

Croatian system today is identical to the one from 1991 and we do not seem to recognize the need for changes, the head of T-Com Ivica Mudrinic said, adding that our institutions are populated with "people who do not feel any sense of responsibility."

Foreign capital does not flow in because our system does not work and our laws are changed every other day, Sipos said. In addition to bad laws that manage to make it to headlines, such as artificial insemination laws, smoking ban, or work on Sundays, the economy has a number of equally bad laws that never get discussed.

President of the Autonomous Trade Unions, Ana Knezevic, warns that Croatia’s efficiency in legal disputes ranks as 126^th among 133 countries.

Representatives of trade unions, employers and the academic community participate in the work of the Council and provide high-quality proposals, but all of their efforts are in vein since the government neither hears them or applies them, said Knezevic, announcing that syndicate members would further review their involvement with the Council.

President of the Council, Darko Marinac, announced upcoming changes, stressing that Council would continue to formalize their proposals and try to find more allies in creating “a strong front for change.”