Friday, 19 April 2019

As Croatia Raises Prices, Nautical Tourism Turns to Greece and Turkey

As Morski writes on the 19th of April, 2019, Croatia's nautical tourism season has already started, beginning about a month ago and lasts the longest of all, for about eight months in total. What can be expected this season and whether or not the Greeks have taken away part of what would have been Croatian guests due to the Greek state's measures, are just a couple of the issues that Robert Pende, an assistant in the Croatian Ministry of Tourism, Roko Vuletić, the president of HUP's nautical sector and the Croatian Chamber of Commerce's Sean Lisjak discussed on HTV's "Good morning, Croatia" show.

Robert Pende stated the nautical season has just begun, and so far we have room to be satisfied and we can expect the season to be on the same level as last year.

Vuletić said that according to field information, the data isn't so great.

"We're the leaders in the world in one segment of nautical tourism, and that's renting a boat without a crew. We're receiving information from our colleagues who have charter agencies that some existing reservations have been canceled due to Croatia's price increases, which has been a big trend in recent years, although charter agencies raised their prices the least, given the growth of offers and competition,'' said Vuletić.

He added that guests are increasingly looking for package deals and that there are less and less classic nautical guests - they're wanting to have a whole package, from airline transfers, accommodation, gastronomic offers, and all of that has increased in price, including in marinas.

''In combination with the announced recession, people are becoming more cautious about what they're spending, they want to go to new destinations, and Greece and Turkey are growing rapidly,'' he said.

Lisjak said he was not afraid about people cancelling their reservations, he stated that Croatia's nautical tourism sector is a vigorous activity and in the last fifteen years Croatia has had continuity. He added that Croatia needs to be careful because new markets are opening their doors that have recently been avoided for security and various other reasons. He added that believes that if Croatia manages to accomplish last year's results despite all of that, then it can be satisfied.

He said that Croatia made 860 billion kuna from tourism last year and added that a way should be found to allow existing investors to invest in marinas.

He noted that a certain drop in transit has been recorded with the aforementioned Croatian price increases, adding that Croatia does have to be careful with its pricing policy and that the country needs to focus on being as competitive as possible.

Vuletić believes that boosting advertising activities on new markets needs to be done. Austria, Germany, Slovenia, Slovakia and the Czech Republic are Croatia's traditional markets, and the country should turn to the growing American or Scandinavian market, reports HRT.

Make sure to follow our dedicated lifestyle page for much more. Interested in learning more about sailing in Croatia? Give Total Croatia Sailing a follow.

Wednesday, 17 April 2019

Number of Companies Which Would Reinvest in Croatia Falls Significantly

Croatia hasn't done the best job of showcasing itself in the investment world, with investors often referring to it as the ''Bermuda Triangle'' and with the phrase ''ABC'' having come to mean ''Anything but Croatia'', things aren't looking all too bright. Things can be altered, but as the old British saying goes; mud sticks.

As Ana Blaskovic/Poslovni Dnevnik writes on the 16th of April, 2019, when compared to 2018, the share of companies that would reinvest in the Republic of Croatia dropped from 68 down to 54 percent. If they were asked to do so again today, almost half of the German companies operating here would decide against investing here again, and over sixty percent of those investors have an extremely poor economic picture of the country.

This is the result of a survey by the German-Croatian Chamber of Commerce conducted between February and April of this year among 150 of its member companies. In almost six years since joining the European Union, investors first had high expectations which quickly fell, but that was apparently somewhat expected. Following Croatia's accession to the EU, there was a period of transition in which investors were waiting anxiously and looking forward to seeing European practices come to life here, but that wasn't quite the case here.

Unlike former new member states of the EU who were given the green light to join during previous wave of the EU's enlargement, Croatia stalled, at least that is the overall impression one gets when asking members of the German Chamber of Commerce, including huge names such as Allianz, Siemens, Bauerfeind, Knauf, Müller, Spar, RWE...

"The survey is a perception, but it speaks about the overall impression of companies doing business [in Croatia], and that's that nothing important is changing,'' said Thomas Sichla, president of the Chamber. As stated, when compared with the previous year, the share of companies that would reinvest in the country dropped from 68 percent to 54 percent, which speaks volumes about perception and just how mud really does stick.

The fact that this isn't just an isolated case of pessimism, but is the contour of very worrying trends is best illustrated by the fact that eighty percent of the respondents had already previously responded to the survey.

While in Croatia almost half of investors would say "Auf Wiedersehen" to investing here again, in other countries in Central and Eastern Europe where parallel research was conducted, only one fifth of the companies who responded would say the same, so it shouldn't come as any surprise whatsoever that investments and their investors simply bypass Croatia entirely. Things aren't changing in Croatia, and if they are, it isn't fast enough at all.

Out of twenty Central and Eastern European countries, Croatia is still "relatively attractive" in eighth place on the list. Siemens' leader Medeja Lončar says that "more flexibility and speed in Croatia for a better economic and investment climate are needed", adding that Siemens will continue to invest in Croatia, depending on the business environment. If one scratches the surface, the companies that make up the German-Croatian Chamber of Commerce are almost repeating some very well-known criticisms that many have about Croatia.

At the top of that ''criticism list'' lies an insufficient fight against corruption and crime, followed by the burden of high taxes and general dissatisfaction with the tax authorities and the system despite the three waves of ''tax relief'' under Finance Minister Zdravko Marić. The top five barriers are Croatia's below par public administration and lack of legal security.

On the other hand, as a business advantage, investors pointed out the fact that operating in Croatia opens the door to the EU's single market and to infrastructure. Despite the ever-burning workforce problem that is rapidly evolving into an enormous problem of epic proportions for Croatia, employee qualifications and the quality of higher education continue to be among the main benefits in Croatia, are are productivity and employee motivation. However, in Germany the Chamber notes that the Croatian state should engage and talk much more to the private sector about the demand for labour and adapt its education system to that need.

With Croatia's continually deteriorating growth prognosis, which without reform is falling more and more, more than sixty percent of the surveyed companies find Croatia's economic environment to be very poor, and only a third claim it to be satisfactory.

Make sure to stay up to date by following our dedicated business page for more information on doing business and investment in Croatia.

 

Click here for the original article by Ana Blaskovic for Poslovni Dnevnik

Tuesday, 16 April 2019

Mediterranean Festival of Books to Offer More Than 10,000 Titles

As Morski writes on the 15th of April, 2019, the Mediterranean Festival of Books, a book fair with a sales and festival nature will be organised by the Association of Publishers and Bookstores of the Croatian Chamber of Commerce (HGK) and under the auspices of the Ministry of Culture, Split-Dalmatia County and the City of Split, will be held from the 8th to the 12th of May, 2019.

A record 100 exhibitors will be offering discounted books with up to seventy percent off, with around 10,000 titles to choose from.

As always, entrance is free and during the five days of the festival, you will be able to see the latest publications covering a space of more than two thousand square metres in the large hall of ŠC (Arena) Gripe, and there are also three other stages where the Mediterranean Festival of Books program will take place.

In addition to the well-known Bookvarij and Mali Bookvarij locations where children's workshops, panel discussions and a professional program will be held, the evening part of this event related to all things books will also be located at the "Cukarin" hospitality facility in Gripe.

Fifty program activities have been prepared, and the expectation is for as many as 35 promotions of the latest works of some award-winning and acclaimed authors to take place.

 

Among other things, this year's Mediterranean Festival of Books program will include panels consisting of prominent lecturers who will talk about important local topics, and there will of course be a multitude of workshops for the youngest among the festival's visitors on offer. Numerous promotions for new children's editions are also being planned.

All information and a detailed oveview of the Mediterranean Festival of Books 2019 program with its workshop schedule is available here, as well as having been published on the event's official Facebook page and on Instagram.

The Mediterranean Book Festival is being organised with the support of numerous partners such as the Split Tourist Board, Split University, Split Student Centre, the Split Sports Facilities public institution, Hotel Zagreb - Split, Cukarin Gripe, Slobodna Dalmacija, Europlakat, Mandis, CineStar, Barcaffè, CedevitaGo, and Kala.

Make sure to follow our dedicated lifestyle page for much more.

Saturday, 13 April 2019

Croatian Chamber of Commerce Sings Praises of Nautical Tourism

As Morski writes on the 12th of April, 2019, the Republic of Croatia has achieved growth in terms of nautical tourism, but the problem of the lack of berths has to be resolved - these were some of the conclusions drawn from the meeting of the nautical associations of the Croatian Chamber of Commerce (HGK) with the relevant nautical institutions, which took place within the framework of the two-day Nautical Tourism Days conference organised by HGK for the preparation of a peaceful, successful and safe season at sea.

The conference covered the need for communication on all of the important issues which concern and involve Croatia's blossoming nautical tourism sector.

''With a fleet of more than 4000 charter boats, with over 140 nautical tourism ports, 17,000 berths, and then more than a million passengers having arrived on cruise ships back in 2018, Croatia is a nautical superpower and one of the most important nautical destinations not only in the Mediterranean, but in the world,'' said HGK's Dragan Kovačević on the first day of the conference.

The revenue achieved by Croatia's nautical tourism ports amounted to 857 million kuna, while the average guest spends a handsome 183 euros per day on a charter vessel, which is more than twice the daily consumption of the average Croatian tourist.

''Money is not only spent on boats, but on all other forms of tourism, and more than 30 percent at that; from culture, sport, entertainment to gourmet and gastronomic offerings, Kovačević pointed out, adding that all these are parameters that speak volumes about nautical tourism in the Republic of Croatia as the country's most dynamic tourist offer and has enormous potential. However, Croatia also needs to make sure to take wise steps to direct the further development of this branch of tourism.

HGK's Paško Klisović pointed out a number of problems facing members of this association, as well as the Croatian nautical tourism sector itself.

''Part of the problem can be solved by better promotion on some markets, especially in the United States. We need to motivate Americans to come in larger numbers, at least as far as Croatia's nautical tourism is concerned. Existing markets are stagnating because we've reached the limit. Last year, our fleet grew by seven percent, and the number of guests grew by less than two percent. The fleet will grow this year, and we will be happy to repeat the past. We're somewhat concerned about the fact that, as far as bookings are concerned, Greece has become the most sought after charter destination. These are the trends and we need to make the right moves,'' stated Klisović.

The conference also discussed new regulations for nautical tourism, the prevention of unregistered activities, as well as the overall sustainability and safety of nautical tourism.

Make sure to stay up to date by following our dedicated lifestyle and travel pages for much more. If it's just nautical tourism and sailing in Croatia you're interested in, give Total Croatia Sailing a follow.

Thursday, 11 April 2019

Energy Can Be Driver of Investment Development

ZAGREB, April 11, 2019 - The energy sector can be the driver of Croatia's investment development, so it is important to have a good energy strategy, the head of the Energy and Environmental Protection Division at the Croatian Chamber of Commerce (HGK), Marija Šćulac Domac, said on the occasion of the Energy Democracy Summit, the HGK said in a statement on Thursday.

The summit is taking place in the northern coastal city of Pula from 10 to 12 April and has brought together over 400 participants from 14 countries.

The idea of energy democracy implies the highest level of responsibility for the future of the planet through energy policies, technological development, international and regional cooperation, and vision, the statement said.

"The energy transition on which we are embarking is not just an energy and economic issue, but also a major social and political issue. The importance of energy for economic activity and growth is unquestionable. It is to be expected that the energy sector will be the main driver of Croatia's investment development with a series of projects that will come not just from public companies but also from the private sector. That's why it is very important to have a good energy strategy," Šćulac Domac said.

Ortal Elbaz, Consul at the Israeli Embassy in Croatia, said that her country, which is the partner country of the energy summit, had once been an energy importer and the situation had changed after the discovery of natural gas sources in the Mediterranean.

The summit will discuss the wider regional context of the complexity of the energy sector and supply security, with emphasis on the priorities of Croatia's energy policy by 2030. Among the key issues are the institutional framework in the energy sector, the implementation of short-term sectoral measures aimed at encouraging growth, the launch of medium- and long-term measures in specific energy subsectors, and the promotion of the advanced energy network.

More energy news can be found in the Business section.

Thursday, 4 April 2019

Potential for Croatian Producers as Prosciutto Exports Continue to Grow

As Morski writes on the 3rd of April, 2019, what has been happening with prosciutto for the past three to four years is truly spectacular. Due to its superior properties and specific traditional production technology, Croatian prosciutto producers have stumbled upon some great export potential and even more potential for the product's better placement in Croatian tourism through the country's already rich gastronomic offer.

When compared to five years ago in 2014, exports have increased in quantity by fourteen times, and perhaps most importantly, in value eleven times. Approximately 88 percent of total exports go to the EU market, and just over eleven percent go to CEFTA countries.

''The latest 2018 statistics show an increase in exports of shank and aitchbone products by nearly sixty percent, but unfortunately, we still don't even cover a third of imports. We need new investments and we need to invest in new prosciutto production capacities to double our production, and 700,000 pieces annually to at least meet the needs of the domestic market,'' said Dragan Kovačević, vice president of the Croatian Chamber of Economy for Agriculture and Tourism, at a press conference announcing the event Days of Croatian Prosciutto.

Ante Madir, Executive Director of the "Hrvatsko pršuta" (Croatian prosciutto) cluster, which brings together producers responsible for 95 percent of the total prosciutto production in the Republic of Croatia, explained more precisely what awaits Croatia on the fifth Days of Croatian prosciutto, which is being held from the 26th to the 27th of April at the Zagreb International Hotel this year.

''On the first day, we'll have a manifestation with round tables and workshops, the expert part of the gathering, and the second day at Ban Jelačić Square, there'll be a show-selling part where people can taste our prosciutto,'' Madir said, adding that they decided on Zagreb because quite a large market and a high demand for the product can be found in the Croatian capital.

"What's been happening with prosciutto over the past three to four years is truly spectacular. The signs of protection (special labels) are our tickets to the wider European Union market, that's very important for being able to [have our products] arrive to shop shelves. In Croatia, we still need to work on presenting [our products] to consumers to have them pay more money for something which is domestic and specific,'' said Igor Miljak, chairman of the PPK Karlovac meat industry, stressing that Croatia still doesn't have key gastro brands that are recognised on the European or global market, but it definitely does have the quality to be able to cope well with the competition.

Ana Babić from Voštane pršut, a representative of the Association of Dalmatian Prosciutto, explained the difference between Dalmatian and Istrian, or more specifically Krk prosciutto.

''Dalmatian prosciutto is smoked, while Istrian and Krk prosciutto isn't. There are no additives or preservatives in its production, and the process itself lasts for at least a year,'' Babić explained, adding that the tradition of Dalmatian prosciutto production draws its roots from as far back as ancient Roman times.

Drago Pletikosa of Belcrotrade and the president of the Association of Drniš pršut stressed that Drniš prosciutto is a little and is therefore certified, although there is no difference between Drniš and Dalmatian prosciutto when it comes to the production process itself.

''Last year, we imported 3,848 tons of products worth more than 21.5 million euros and exported 1.113 tons (6.5 million euros). Compared to 2014, exports have increased in quantity fourteen times, and by value eleven times. Approximately 88 percent of our total exports go to the EU market, and just over eleven percent go to CEFTA countries. We export the most to Slovenia (35.5 percent of total exports) and to Italy (28.1 percent),'' stated Pletikosa.

''This event brings together and promotes prosciutto producers from all over the country, whose products are protected by a stamp of designation of origin, and labels of geographical origin (Krk, Dalmatian and Drniš prosciutto) at the EU level,'' stated the Croatian Chamber of Commerce (HGK).

Quality labels for consumers guarantee the purchase of authentic and properly controlled products, with recognised quality and a local origin. Protecting products without educating consumers and business partners about its proper valuation has no great benefit. Therefore, this event contributes to the strengthening of the recognisability of these Croatian meat products with higher added value and a better market positioning, all with the aim of developing the wider Croatian economy.

Make sure to follow our dedicated business and Made in Croatia pages for much more.

Friday, 15 March 2019

Vienna Highlights That Croatia's Awareness of Digitalisation is Lacking

As Bernard Ivezic/Poslovni Dnevnik writes on the 14th of March, 2019, the Austrian capital of Vienna boasts as many as 5,830 IT companies currently in operation, which is more than are in operation on the entire territory of Croatia.

The Croatian Chamber of Commerce (HGK) took with them as many as 32 Croatian companies, mostly from the IT sector, to Vienna's fifth international B2B Software Days.

Among them, the conference was participated in by King ICT, Megatrend business solutions, Mediatoolkit and Ekobit. Tajana Kesić Šapić, the director of the Croatian Chamber of Commerce's industry sector, said that the visit was organised in cooperation with the Austrian Chamber of Commerce, Advantage Austria, and the European Entrepreneurship Network who are interested in the Croatian IT sector.

"Over the last five years, IT companies' revenue in Croatia grew by 7.4 percent, and exports rose almost twice as fast, to 11.3 percent per year," stated Kesić Šapić.

Although the startup scene in the Croatian capital of Zagreb has been ''coming to life'' over the last few years, the same sector in Austria's capital city has been growing stronger at double Zagreb's rate. In Vienna alone, there are more IT companies than are in operation in the whole of the Republic of Croatia, an impressive 5,830 of them.

Vienna is investing more than the equivalent of a quarter of a billion kuna per year into the city's startup scene, and just like in Zagreb, the city readily provides all the necessary support for the free establishment of startups, up to half a million euros worth.

Goran Mrvoš, director of Infosite, one of the Croatian IT companies at the fair, said that in Vienna he realised that the overall awareness of digitalisation in Croatia was low, and that it created a market advantage for foreign competition.

Make sure to follow our dedicated lifestyle and business pages for much more.

 

Click here for the original article by Bernard Ivezic for Poslovni Dnevnik

Saturday, 2 March 2019

Fewer Tourists in 2019? Croatia Must Work Harder for Results this Year

In foreign markets last month, the results of tourist bookings in Croatia for all of 2019 were weaker than expected due to slowed down or reduced demand, but also from the increasing number of competitors in the Mediterranean. Thus, the Croatian tourism sector will have to put in more efforts to get the results this year, reports Poslovni.hr on March 2, 2019. 

President of the Association of travel agencies at the Croatian Chamber of Economy, and the president of the management board of tourist company Uniline, Boris Žgomba, added that the information on reduced bookings this time of the year is from virtually all channels and from many of their Croatian and foreign partners.

"There has been a reduction in foreign demand, which could be seen already in the summertime when there are empty capacities. It was then clear that the dynamic overhead we had from 2016 to 2018 will not last forever. I am sure that many in the Croatian tourism sector are aware of this and are working on adjustments,” Žgomba said to Hina.

The current lower demand for domestic and foreign travel agencies and tour operators, means that they will have to invest in additional marketing and promotional activities to fill in their programs, almost immediately, because in Croatia, they account for about 70 percent of the total pre and post-season tourism , which largely depends on their total annual business results.

"By selectively looking at the tourism segment, some of the hotel capacities are now poorly filled for all of 2019, with the fact that the backlog of the previous bookings in hotels compared to the same period last year was lower than in private accommodation and camps. It is important to note that all this is not another reason for panic, because the time of more intense foreign bookings is on the way, but it is very likely that this year will be more ‘last minute’ and we will have to fight for every guest,” says Žgomba.

He points out that such trends do not only apply to Croatia, but also many other destinations in the world. Žgomba added that it is caused by the increased supply of competitive capacities in the Mediterranean, their more intense marketing efforts followed by significant price advantages, and partly the recession in some European countries. Europe’s demand for shorter and longer vacations is being redirected to other destinations, such as Turkey, Greece, North African countries and their own countries.

Due to all this, Žgomba believes that more needs to be done this year in terms of tourism promotion at the national level, and it is good that the Croatian National Tourist Board recently raised 10 million kuna for marketing and PR activities in 16 markets, because, as he says, “it is not time to wait, but for prompt actions".

Important campaigns are also targeted through social networks and all other channels and communication platforms for all periods of the tourist year, and Žgomba believes that it is necessary to continue opening regular and charter flights and introduce other combined measures.

Regarding the dynamics of sales, which, as well as the price depends on the policy of each individual subject, Žgomba thinks that the prices should be mindful, but that lowering them is not a solution. Instead, it should be about what value we give for the money and whether we have customers at all.

"I consider it a key factor - and not that domestic tourism is viewed exclusively through the prism of price, which is only one of the factors of competitiveness. Tourists to Croatia do not come only because of low or high prices, but because they get adequate value for their money and I am convinced we are globally competitive here,” said Žgomba. 

Žgomba, therefore, expects that in the foreseeable future, certain price corrections may be made. He added that it is high time to reduce the VAT rate in tourism to the level of competitive Mediterranean destinations and to adequately regulate the special procedure of taxation of tourist agencies, which still puts them in an inequitable cost market position.

To read more about travel in Croatia, follow TCN’s dedicated page.

Monday, 25 February 2019

Croatia-Russia Economic Relations Strengthening

ZAGREB, February 25, 2019 - There is a lot of potential to strengthen Croatia-Russia economic relations, particularly in the energy, tourism, pharmaceutical, construction and agriculture sectors, it was said on Monday at a meeting of the Business Council for Cooperation with the Russian Federation and a seminar on how to successfully do business on the Russian market, held at the Croatian Chamber of Commerce (HGK).

HGK president Luka Burilović underscored that due to sanctions between the EU and Russia, there were certain restrictions and obstacles to economic cooperation between the two countries and that it was necessary to focus on the sectors that were not covered by those sanctions. "Business has to be a bridge and channel of dialogue between countries, particularly in times of political tension," he said.

He said possible areas of cooperation were energy and tourism as well as the chemical and pharmaceutical industries, mechanical engineering, shipbuilding, construction, infrastructure projects, wood and manufacturing industry, agriculture and food industries, textile industry and the like.

Burilović added that figures show that relations between the two countries have stabilised and that foreign trade is slowly growing. Burilović said that in 2012 trade between the two countries totalled more than 2 billion US dollars, however, due to the sanctions it has decreased. Now, its recovery is noticeable and the aim is to get back to the level of 2 billion US dollars as soon as possible and reach 3 billion.

Russia's Ambassador to Croatia Anvar Azimov underscored that economic relations always had the role of an engine and that that was why they had to improve.

We have to learn to develop economic relations regardless of the sanctions, Azimov said, adding that Russia's economy had suffered 50 billion euro in losses because of the sanctions and that the EU had lost up to 200 billion euro.

We want those relations to grow while Americans want them to decrease so that they can achieve more, he said and added that relations between Russia and Croatia had to be better given the great potential for cooperation.

He said that last year Croatia imported more than 2.5 billion cubic metres of Russian gas and added that gas deliveries would continue regardless of plans to build an LNG terminal on the island of Krk, which he sees as healthy competition.

Azimov said that Russians were prepared to invest in Croatia but were not always successful because it was not wanted by some strategic partners in Croatia, who, he said, believed that increasing Russia's share in the energy sector was undesirable.

Croatia-Russia trade in the first eleven months of 2018 amounted to 600.6 million dollars, up 16.6% from the same period in 2017.

Croatian National Bank (HNB) data shows that in the period from 1993 to the end of 2017, Russia invested 416.9 million euro in Croatia, which makes it the 14th biggest foreign investor in Croatia. In the same period, Croatia's investments in Russia amounted to 98.1 million euro.

Asked about the LNG terminal on Krk and if it could affect Croatia's relations with Russia, Burilović said that Croatia had to have a backup solution that was competitive in price and ecologically acceptable.

"I see the construction of the LNG terminal primarily as an alternative to the only existing supply route and the market will show where we will supply gas from. Our primary concern are Croatia's interests and the interests of consumers," Burilović said.

More news on the relations between Croatia and Russia can be found in the Politics section.

Saturday, 23 February 2019

Investment in Croatia - More Legal Security Attracts Foreign Cash

Investment in Croatia is at an all time low. With the phrase ''ABC'' having become the term for ''Anything But Croatia'' in investor circles, the country needs to do some serious work in order to redeem itself. In order for Croatia to become much more attractive to foreign strategic investors, more concrete and clear steps need to be taken, and high on the agenda lie the proper preparation of public finances and more legal security.

As Ana Blaskovic/Poslovni Dnevnik writes on the 21st of February, 2019, despite dramatic headlines, the economy is growing and Croatia's level of public debt is falling. It is commonly forgotten that Croatia is growing at a pace below three percent - the slowest of all. Neighbouring Slovenia experienced 4.9 percent GDP growth, Hungary experienced growth of 4.1 percent, and Bulgaria saw 3.8 percent growth. There's no such great wisdom to be spoken of in Croatia's case here, the economy will grow as much as it has, or is given, the power to do so, and its momentum is the only thing that can make Croatia look much more friendly to investors, a move it desperately needs to make.

Even if there was a real willingness and the capacity for proper reforms existed, which are both evidently lacking, the key question is what moves should be made first to garner the fastest results in terms of investment in Croatia.

In that regard, there are no real dilemmas in the mind of respected economist Velimir Šonje, and what needs to be ensured are business climate reforms which include the Doing Business Report of the World Bank's recommendations for Croatia.

"By moving to around number 30 on the Doing Business Report, we've entered the club of countries like Poland, we're visible on the Eastern European map (which isn't the case today) and we have a marketing tool to attract investors," said Šonje, adding that these concrete measures would have a direct impact on Croatia's ability to properly facilitate business and investment, such as issuing building permits or reducing the number of steps required when paying taxes.

At the very top of the Croatian Government's priorities lies the transparent privatisation of state-owned companies through their listing on the stock market within the wider revitalisation plan of the capital market in order to better stimulate foreign investment in Croatia.

"It's no accident that investments are at a relatively low level since the capital market has died in Croatia. Without its revival through several major privatisations and listing and strengthening programs to attract medium-sized businesses in some of the simpler stock quotes, there will be no better investments, as capital market development has positive spill-over effects and attracts the interest of foreign investors,'' stated the esteemed economist.

Following the liberalisation of the internal market, the strengthening of the protection of equal market competition (so that there are no already protected existing players), the transparency of public procurement and the abolition of parafiscal charges and other obstacles to strengthening competition, especially in the service sectors where there are significant area of potential such as the health, education and IT industries,''

When it comes to better attracting investment in Croatia, the proper and decent handling of public finances also ranks very high on the list of consultant Andrej Grubišić from Grubišić and partners, with a very specific goal.

"It's necessary to reduce government spending, ie, a 30 billion kuna budget over a five-year period, and thus leave more money to a private initiative that will drive the development of small and medium-sized enterprises for their own economic interests (independently and without the help of the state),'' said Grubišić. This would become more attractive for investment by foreign strategic investors through takeovers and/or recapitalisations through which intensified internationalisation would continue.

The hope is that the state will cease their classic style of favouring particular sectors or industries, such as IT or renewable energy sources, as this approach almost always promotes unwanted crony capitalism. Moreover, treating everyone in the same way is a clear signal to a foreign investor that he does not have to fear that his industry will be considered less desirable tomorrow and lose his privileged status to someone else who is deemed closer to the wishes of the political elites and those who are better lobbied.

In this context, there is a real need for adequate judicial protection. In the Croatian Chamber of Commerce (HGK), the emphasis is placed on attracting investors to production and opening up an investment space that would be geared towards the design of high value added products, investments in research, and in development and exports.

"We need to create a business climate that will stimulate domestic entrepreneurs, thus creating the conditions for the stronger engagement of foreign entrepreneurs and investments in Croatia," stated HGK's Luka Burilović.

He added that entrepreneurs have the most objections in the area of ​​legal certainty, justice, taxation and public administration.

"Here we can take the appropriate concrete measures that could immediately show results. Investors are becoming more demanding, they're looking for solutions, not just locations. One of the options for a change of approach is to put the focus on Croatia's "portfolio", and not on the entire territory,'' Burilović stated.

When asked how Croatia will look in the eyes of an investor, the answer remains very the same according to Burilović: "We're relatively unknown to investors, we don't have a brand built, and we're mostly recognised as a tourist destination,''

Make sure to stay up to date with our dedicated business and politics pages for much more on investment in Croatia.

 

Click here for the original article by Ana Blaskovic for Poslovni Dnevnik

Page 7 of 11

Search