ZAGREB, August 8 (Hina)- At its session on Thursday the Croatian Government adopted a part of the "Strategic Development of Croatia in the 21st Century" on macro-economics and sent it the Sabor for discussion.
ZAGREB, August 8 (Hina)- At its session on Thursday the Croatian
Government adopted a part of the "Strategic Development of Croatia
in the 21st Century" on macro-economics and sent it the Sabor for
discussion. #L#
Prime Minister Ivica Racan concluded the discussion on macro-
economics - which is one of the 19 sections of the said strategy -
saying that this is a good basis to achieve agreement over
development of the country and recognising those who truly support
development and those who only support it with their words.
He claimed that the objectives outlined were not possible without
agreement between social partners but policies too.
The main objectives of macro-economic development according to
Ante Babic, one of the participants in formulating the Strategy, is
to increase exports and investments, to invest more in the know-how
as well as to decrease state spending.
In 15 years time the GDP should be doubled which requires economic
growth of 5 to 7 per cent per annum.
The basic presumption to achieve this objective are human
resources, the authors of the Strategy pointed out, as well as a
long industrial tradition, favourable geographic position, land,
preserved natural wealth and a relatively good infrastructure.
It is recommended to increase exports with stimulation for good
quality local products which will be competitive on foreign
markets.
Stable conditions in productivity as well as fiscal and legal
conditions are also pre-requisites for long-term investments into
Croatia. Croatia will not attract foreign capital, Babic claimed,
by just lowering tax rates without any legal security for
investors.
Babic believes that costs of the army and police need to be cut while
savings should be re-directed to knowledge. It is necessary to
balance out tax policies where there will be no exceptions or
privileges. Tax concessions can only be achieved with an expansion
of the taxable basis and not only with lower tax rates. He
recommended budget freezes on salaries in the public sector for
five years if this could decrease public spending.
Deputy prime minister Goran Granic believes that the Strategy is
not only a direction for the Government to determine priorities in
development but also for citizens and managers and supervisory
boards because without their engagement and support there will be
no progress. He warned that the price of the war which is reflected
in the foreign debt will continue to limit ambitious development.
Finance Minister Mato Crkvenac considers that Croatia has a good
basis to realise development objectives because of its stable
exchange rate and the growth of production. However, he believes
the growth rates recommended will be difficult to achieve and some
measures may be unrealistic.
Deputy Prime Minister Ante Simonic and Ministers of Science and
Economy, Gvozden Flego and Ljubo Jurcic respectively, believe that
human resources and knowledge were Croatia's greatest development
potential and should be given more emphasis in the strategy.
Labour and Social Welfare Minister Davorko Vidovic believes the
authors of the strategy recommend cuts in social allowances without
considering the fact that Croatia allocates 0.7 per cent of budget
funds for social allowances whereas in European countries, this
figure is about 1.7 per cent.
Minister of European Integration Neven Mimica described the
development of market and competitive economics rather than a rise
in the GDP as a macro-economic pre-condition for the country's bids
to enter the EU.
(hina) sp ms