Pan-Croatian Economic Forum: A Step Forward Or Just A Lot Of Hot Air?

Pan-Croatian Economic Forum 2013
Front row right: Tomislav Karamarko, President of HDZ
Photo: Goran Mehkek/Cropix

In both Western and Eastern folk superstitions Friday the 13th is a day of bad luck! But, there are exceptions as, for instance, in Croatia an old folktale says that a Friday the 13th is the most desirable date in the year to have one’s fortune told, whether it be through coffee-cup readings, tarot cards or a clairvoyant’s knowhow. So, Friday 13th can cut either way – good or bad – if one is to believe in the superstitious side of human nature. We’ll see how the one from December 2013 will pan out for the Croatian Democratic Union as it gets closer to general elections.

On Friday, 13th December 2013, there was a “Pan-Croatian Economic Forum” held at Zagreb’s Westin Hotel and organised by the Croatian Democratic Union’s (HDZ’s/the largest party in parliamentary opposition) “Croatian Statehood Foundation”. This, the first Pan-Croatian Economic Forum had its sub-title: Croatia and the world, new model of economic growth. The aim of the Forum was to present the Croatian economic potentials with a special emphasis on the current economic situation and perspectives of Croatian economy. The Forum gathered some 800 participants and guests, bringing together Croats who live and work in Croatia, those who live in the diaspora as well as representatives of other countries’ emigrants and economy specialists and scientists from Croatia and the world. The Forum was to discuss and debate Croatian economic future and to formulate proposals for the revitalisation of Croatian economy, putting forth economic models which Croatia can offer to the European and World economy.

In summary, regardless of the powerful and mighty statements made at the Forum about the economic salvation, equally powerful and mighty concrete or specific measures were not heard. The Forum ended on the note that everything that had been put forward, debated, suggested, proposed…and there was a great deal that transpired through the four working-groups the Forum split into, will be collated, grouped etc. and concrete proposal or directions that HDZ would take as the next general elections draw near (in 2015) would be formulated and presented to the voting public.

This kind of brainstorming is, in essence – good. It’s good because it draws upon the opinion and the know-how of many stakeholders. Brainstorming of this sort often occurs when the current situation, in whatever we do, is at a crisis point or at crossroads, which demand activation of positive stages towards drawing a Strategic plan that would, through steps of a related Action plan usher in a better future. And Croatian economy (as many in the world) is at such a crisis point.

The one thing about this Forum I feel uneasy about is the fact that threads of pure politics, distanced from the actual economic measures, are tangled up with this Pan-Croatian Economic Forum. In his statement to the Forum, Tomislav Karamarko, president of HDZ, said that Croatia was in a similar state as that of the 1990’s and emphasised HDZ, with its coalition partners, will win the second war for Croatia – “the war for a qualitative Croatia in which the Croatian person and all other citizens will live from the dignity of their own work”.

“Let’s raise our heads and fight for our Croatia, because Croatia deserves it,” Karamarko emphasised and said that the togetherness of the diaspora and domestic Croatia will be stronger than ever and that this will be one of the fundamental premises HDZ would promote.

Karamarko articulated his doubts about the current government’s ability to do anything useful for Croatia, because, he said, it has the same mental pattern and structures that called HDZ a party of dangerous intentions only because it wanted to create an independent Croatia.

“Their forerunners had, on 25 June 1991, when voting for an independent Croatia was afoot, courageously walked out of the Croatian parliament and, by this move, said everything they thought about the Croatian state”, Karamarko emphasised while stating that HDZ was then and is now, for reconciliation and that it will not allow that reconciliation means a loss of Croatian identity. “They’re attempting to change the substance of Croatian people through ideological attacks.”

It’s disappointing that Karamarko spoke about reconciliation at this economic forum. Reconciliation between the WWII opposing ideologies in Croatia is an important issue that should not be thrown into brainstorming of pan-Croatian economic recovery. The state of the economy affects everyone, equally. But since he did bring up the reconciliation, it’s disappointing that while speaking about reconciliation and ideological attacks in this Forum Karamarko actually omitted to be specific and to to articulate the absolute need to eradicate the increasingly antagonistic moves by the current government and their supporters to label people as fascists or Nazi’s just because they express love for Croatia. It’s disappointing that Karamarko did not articulate a resolve to pursue with the condemnation and processing of communist crimes as part of the reconciliation he supposedly holds high on his political platform or agenda.

But be that as it may, an economically prosperous Croatia is the goal to be achieved for all Croatians, regardless of their political affiliations and any past political transgressions as far as independent Croatia is concerned (the WWII one and the modern one). When it comes to actual economic reform and economic maneuvering out of the crisis then all citizens are affected and as many as possible need to be involved with the process. When it comes to economy of the country, political past and how it spreads its tattered remaining threads today do not bring bread on the table today, do not create jobs – but they do create diversions from tackling the real issues such as bringing bread to the table, creating new jobs, stopping job losses, sifting through incompetent or politically wired people in important positions…

And associated to that line I particularly like the message given by Robin Harris, former adviser to British Prime Minister Margaret Thatcher, who was a guest at this Forum. The message is that pessimism is pulling Croatia down, and the Socialists do not understand that the economy must be dynamic. That Croatia can reduce its deficit by the reduction of tax burdens and by stimulating business…Margaret Thatcher refused to accept that Britain was on its knees, that is associated with patriotism!

Stimulating small to medium business in Croatia has been the subject of several of my posts and published interviews. So, of course I agree with what Robin Harris has to say on the matter. It’s a shame though, that he is not “preaching to the converted” – much, much has been missed and ignored when it comes to actual steps undertaken in Croatia to achieve the goal of business entrepreneurship.  Little effort has been invested in transitioning from communism on this platform.

Karamarko, in no uncertain words pointed to the view that Croatia is once again on its knees – just as it was in 1990’s. He calls upon a fight for a prosperous Croatia! Nothing new – a prosperous Croatia was one of the main goals HDZ had in 1990’s, when it set out to create an independent Croatia with overwhelming support from the people. Between then (late 1990’s when the last patch of Serb-occupied Croatian territory was peacefully reintegrated into Croatia) and today Croatia has had both HDZ and Social Democrat led governments. Prosperity as defined through a solid culture change in all public service and government funded business as part of transitioning from totalitarian communism has failed miserably.

And now, from this Forum, it transpires that HDZ has its eye on taking burdens off the tax, doing away with dividend tax and on a reduction of PDV (goods and services tax; VAT etc). They also seem to be looking at putting a stop on all excises with which public companies are financed.

It seems that all this, including the Forum, is tinkering at the edges of an economy at its breaking point, delivering little in the way of the constructive reform required for Croatian economy, which is still heavily polluted with stale, unproductive, badly regulated government-dependent funds injections.  The tinkering at this Forum has in no way provided any concrete measures which would declutter the economy from the stifling administrative processes working against rather than for an economic progress.

European Union is edging closer to the introduction of a financial transaction tax. The way things are going Europe’s debts can never be repaid. And Croatia is a member of the EU, placing much of its future economic development on EU funds – still! It has it seems achieved little in the way of stimulating business – particularly small to medium business – even though its Reconstruction and Development bank has seen billions flush through it over the past twenty years!

The current Croatian government has energetically delved into tax reform over the past two years and the fact remains that these reforms have been experienced as widely punitive and all about raking in of the tax income into the government coffers; the coffers that continue feeding an unsustainable large public administration. Hence, the aforementioned proposals by HDZ could in fact find their way to stimulating business and investments, but I am not about to hold my breath on that one. Especially not when brainstorming on ways to economic recovery and growth gets to play second fiddle amidst the rhetoric of political ideologies; amidst the blaming games each plays against the other.  It may take the doubling of national debt (and its unsustainable as we speak) before the ideological opponents stop blaming each other at every turn and both roll up their sleeves and put matters into their due perspective.
The failure of politicians in Croatia (whether governing or in opposition) to widely debate Croatia’s tax structures is to my view one of the most gripping indictments of today. A proper tax structure that rewards growth and stimulates productivity will result in a fairer economy – in prosperity that was part and parcel of Croatia’s path to independence and secession from communist Yugoslavia. Failing to come to terms with the consequences of its tax system, which fails to stimulate growth and investment, in a mature and honest way condemns Croatian economy to a tax system which is unfairly structured and ensures that the economy never reaches its true potential. An example can be given in the current discriminatory practices of taxing foreign pensions in Croatia.

The Economic Forum in Zagreb, on Friday 13th December has had quite a bit of political rhetoric on the way Croatian diaspora is treated and how valuable it in fact is when it comes to the money it brings into Croatia every year.  I am yet to hear a concrete measure from HDZ that would tackle this increasingly serious problem of unfair and discriminatory taxation rules.

Having said all this, let’s for the moment give HDZ a chance to demonstrate whether this Forum has emitted hot air only or whether in fact it is a start of a more productive set of “Action plans” that will see Croatia out of the economic nightmare and the public administrative swamp cluttered with stale, inflexible, politically charged barriers to progress – decluttered. Ina Vukic, Prof. (Zgb); B.A., M.A.Ps. (Syd)