ZAGREB, Sept 17 (Hina) - A simple and transparent tax system, macroeconomic stability, a consolidated banking system, transport infrastructure, a simple procedure to set up business companies, and a relatively non-polluted environment
are listed as Croatia's competitive advantages in the first annual report of the National Council for Competitiveness (NVK), which was presented on Wednesday.
ZAGREB, Sept 17 (Hina) - A simple and transparent tax system,
macroeconomic stability, a consolidated banking system, transport
infrastructure, a simple procedure to set up business companies,
and a relatively non-polluted environment are listed as Croatia's
competitive advantages in the first annual report of the National
Council for Competitiveness (NVK), which was presented on
Wednesday. #L#
Unfortunately, the list of shortcomings is much longer, NVK
president Zeljko Covic said at the presentation of the report,
citing as the most significant shortcomings high operating costs,
high taxes, a high public debt and the inefficiency of public
administration and the judiciary.
A high cost of labour was one of the main reasons why Croatia failed
to attract any significant foreign investments compared to other
transition countries.
The cost of labour in Croatia is 800 euros on average, while in
Hungary it is about 550 euros and in Bulgaria 185 euros. If the cost
of labour is adjusted to the level of productivity, the real cost of
labour in Croatia is very close to that in the European Union, or
3,200 euros, which explains the reluctance of foreign investors,
Covic said.
The lengthy list of competitive shortcomings includes failure to
keep up with technological progress, lack of investment in research
and development, lack of coordination between the education system
and the business sector, and lack of influence of the business
sector on the process of adoption of legal regulations.
Kresimir Sever, leader of the Independent Croatian Trade Unions,
singled out as major shortcomings lack of cooperation between
employers and employees, and lack of social dialogue and a social
partnership in the country. He opposed reduction of the cost of
labour, saying that it could contribute to economic growth only in
the short term.
Deputy Prime Minister Slavko Linic said that the level of the
foreign trade deficit showed how vulnerable the Croatian economy
was. He said that the government should continue reforms in the
education and justice systems and initiate reforms in the public
sector.
The report also defined development priorities, including a new
system of education that would encourage growth and development,
adjustment of laws to those of the EU, technological development,
regional development, promotion of small and medium-size
businesses, and competitive costs and prices.
The NVK consists of representatives of employers, trade unions, the
government and the science and education sector.
(hina) vm