ZAGREB, Sept 19 (Hina) - High deficits and debt, inadequate land registry and property and creditor rights, poorly functioning judiciary, weak governance, and the fragmented, politicised and poorly co-ordinated public administration
are cited by the World Bank as five "critical bottlenecks" for sustainable economic growth of Croatia.
ZAGREB, Sept 19 (Hina) - High deficits and debt, inadequate land
registry and property and creditor rights, poorly functioning
judiciary, weak governance, and the fragmented, politicised and
poorly co-ordinated public administration are cited by the World
Bank as five "critical bottlenecks" for sustainable economic
growth of Croatia. #L#
Presenting 'Croatia: Country Economic Memorandum: A Strategy for
Growth through European Integration' in Zagreb on Friday, Anand K.
Seth, the new World Bank director for southern and central Europe,
urged Croatia "to consolidate the impressive economic and social
reform agenda it has embarked on" in order to promote growth and
advance towards its goal - integration into the EU.
Seth said that key challenges which Croatia was facing included
deepening reforms and speeding them up so as to enhance the
country's competitiveness and improve living standards for all.
The Economic Memorandum for Croatia (CEM) analyses the structural
reforms which Zagreb should undertake to complete its transition to
a market economy and mobilise national potentials for growth.
The reforms cover the fiscal policy and public administration, the
improvement of property and creditor rights, an efficient legal
system, the adjustment of agriculture and environmental protection
and reforms in education.
The report urges Croatia to launch such reforms immediately, as
their implementation would take some time.
The CEM points out the importance of the Croatia-EU Stabilisation
and Association Agreement (SAA). In this context, the adjustment of
legislation, institutions and polices with the EU Acquis
Communautaire are cited as being of the strongest impact on the
integration process.
Croatian Premier Ivica Racan said at the presentation that he would
take Croatia's answers to the European Commission questionnaire --
necessary to evaluate Croatia's EU membership application -- to
Brussels early in October. "This important task is nearing
completion and I'm taking the answers to Brussels in early
October," the PM said.
Racan said Croatia was on a good road to development and that the
World Bank's memorandum provided good answers to weak points and
problems.
He recalled that his cabinet had three duties: to ensure political
and macroeconomic stability, launch reforms, and ensure
development, and these three objectives were intertwined. The
achievement of these objectives depends on the basic task, namely
Croatia's accession into the EU, the premier added.
Racan said that Croatia had considerably progressed on that road,
and corroborated his statement with figures on an increase of this
year's GDP to 6,000 dollars per capita, a GDP growth rate of five
percent, rising employment, and low inflation.
We are aware of a high external debt and problems in the current
account, and this is closely connected to the strengthening of the
competitiveness of Croatian products, he added.
Seth commended Croatia for its substantial headway in the process
of integration into the EU.
He voiced hope that options of polices defined in the CEM for
Croatia could facilitate the country's bids to join the EU.
The paper also recommends the speedy adoption and implementation of
various policies of institutions, contained in the EU Acquis, but
in two fields -- agriculture and environmental protection -- a
gradual approach is recommended.
The study also noted that "much of the growth impact will come not
only from increased access to the EU and integration with markets,
but from the improved investment climate that would result from
aligning Croatian policies and institutions with the EU's best
practices. This would facilitate the development of low-cost,
high-quality integrated infrastructure, harmonisation of
financial regulatory frameworks, modern social institutions and
more generally private sector development driven by the
strengthening of competition from broad-based stronger trade
liberalisation".
The World Bank has compiled similar reports focusing on the
economic growth and EU accession of other transition economies in
Central and Eastern Europe, taking into account their
macroeconomic and social situation.
(hina) ms