Corruption, cronyism, and a general lack of transparency stymied meaningful economic reform, as well as much-needed foreign investment in Croatia during the past decade or so.
Much of the blame for corruption and cronyism has been directed towards Croatian Democratic Union/HDZ as it had up until December 2011 been in government for most of those years. Certainly the now ruling Kukuriku coalition (comprised of political parties that arose out of the former Communist League or former Communist party) has enjoyed a rich feast of electoral success on the back of reported HDZ cronyism and alleged corruption; it won majority seats in the Croatian parliament at December 2011 general elections.
The Croatian voters had demonstrated they were sick and tired of corruption and cronyism that particularly saw severe depletion and impoverishment of public companies, employment discrimination and severe lack of competitive non-politically and non-nepotistic opportunities run rife.
When former Prime Minister (HDZ) Ivo Sanader suddenly resigned his post (2006) and was subsequently arrested on an array of criminal corruption charges, there was an air of optimism in and outside Croatia. Bringing Sanader to criminal trials served as a catalyst that would help social and political transformation closer to what democracy should look like; be like.
Sanader and HDZ were often portrayed in foreign press has having dismantled the country’s democratic institutions.
But the reality is that destruction and dismantlement of Croatia’s democratic institutions has never been worse than what is happening right now, under the Social Democrats/SDP and Croatian Peoples Party/HNS.
Not only is Croatia’s leftist government practicing cronyism but also it has now taken it to the extreme. The embattled First Deputy Prime Minister Radimir Cacic is now pushing for changes to Constitutions of organisations (e.g. Environment Protection Fund) in order to create conditions for employment that fit the personal qualifications of a persons from Social Democratic Party (SDP) he wants to install into high positions.
Despite the fact that such positions already have professional incumbents Cacic says that he’s installing his people because he wants his people in important public companies who will not undermine him. Cacic and the government do not seem to know much about job accountability and how to ensure it without bringing politics into it.
What’s distressing is that Prime Minister Zoran Milanovic is in agreement with Cacic. This is shattering not only because of the ugly face of such brazen cronyism but because he himself recently sought Environment Minister Mirela Holy’s resignation for attempting to secure a job for the wife of an SDP member, and Milanovic should ensure that such zero tolerance of cronyism continues.
Croatian media and Croatian parliamentary opposition (including HDZ) rallying and criticisms against practices of cronyism (such as the latest ones by Cacic) is, sadly, only raising dust that may settle in discomfort but end up ineffective in attempts to rid Croatia of the stymying cronyism for some time yet.
European Commission’s April 2012 Monitoring Report on Croatia’s EU accession preparations concludes, on page 10,
“In the field of social policy and employment, attention must be given to further legislative alignment in the fields of anti-discrimination and equal opportunities. Structural weaknesses of the labour market as well as further capacity-building of social partners and further strengthening of administrative capacity across all areas must also be addressed”.
Well, guess what?
It seems the SDP led government in Croatia is paying more attention to “legislative alignment in the fields of anti-discrimination and equal opportunities” – it is, just as Communists did in former Yugoslavia, aligning company Constitutions and bylaws to create conditions of employment that fit the personal characteristics of the specific individual they want to install into positions.
This is truly obscene! This is truly un-democratic. This is truly anti-equal-opportunity.
Having said this, it may, nevertheless, be argued that patronage politics (type of cronyism) is a phenomenon present in every political system, irrespective of the country, whether democratic or not. In fact, in some political systems, endorsement of patronage is an acceptable occurrence at the highest levels of government, where the ruling authorities are entitled to select their cabinet and department heads.
In relatively recent years many governments (e.g. United Kingdom, Canada …) have felt the need to enhance public confidence in the integrity of the political processes around public sector appointments. They have established transparent processes with a high degree of independence, if not also attention to ensuring merit-based appointments.
Milanovic, Cacic and the whole of the Croatia’s current government have been installing their politically suitable individuals on numerous Boards and into leadership of various companies. But now, they’re not talking about departmental Heads or most senior public servants, they’re installing politically suitable people throughout public organisations and companies.
Evidence shows that patronage systems (cronyism) “extending down the organizational chain are susceptible to incompetence, unprofessionalism and corruption” (West’s Encyclopedia of American Law, 2008).
So nothing is really changing in Croatia when it comes to reducing opportunities for corruption, cronyism and incompetence. In fact, things are getting worse despite public, media and parliamentary opposition outcries.
A turnaround back to the oppressive and discriminatory employment tactics of communist Yugoslavia is more than visible – it’s becoming a brazen practice.
Instead of stamping it out, cronyism, it seems, will continue to affect every facet of government functionaries, every company or organisation where the government has shares or direct involvement, leading to gross inefficiencies in service delivery and increased corruption, most likely with private sector connivance with public officials to dupe government of taxes and revenues.
In the past week the government has succeeded in getting it’s bill through the parliament that will see names of individuals and companies with tax debts posted on publicly displayed lists (pillar of shame!) – except those who succeed in postponing the payment of their tax debt or have it struck out. One doesn’t need too much imagination to realise that conniving with politically installed public officials will run rife when it comes to tax evasion. It’ll happen elsewhere and the power of belonging to a political party will rule life and “decent” existence. The same as it did in communist Yugoslavia.
Cronyism and corruption stymied foreign investment before and it will, undoubtedly, continue to do so under this climate of extreme and brazen cronyism.
But then, the leftist government may not be worried about this – their arrogance could well be fed by a “sure” promise of EU development funding.
Croatia seems to be the “darling” of EU and NATO at the moment (probably due to Croatia’s geopolitical strategic position in influencing EU expansion into the rest of former Yugoslavia eastern states and therefore, lessening Russia’s influence in the region?) and, alarmingly, standards it needs to achieve in areas of EU accession monitoring may become compromised.
In March 2012, when Croatia’s leftist government was still in its honeymoon period, the very Radimir Cacic (who is also the Minister for Economy) expressed his position on the economic crisis:
Now, in this July of 2012, not only are public companies in Croatia marionettes of the Social Democrats led government but also the people at large. The parliamentary opposition and the media must ensure that such trends are rooted out before it’s too late – before Croatian nation, once again, becomes a hostage to oppressive communism/socialism it lost thousands of lives to escape from. Ina Vukic, Prof. (Zgb); B.A., M.A.Ps. (Syd)
Croatia, the War, and the Future 
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