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28 I Cover story bne September 2018
that was put under state-run administra- tion in 2017 after running up debts of HRK58bn ($9.1bn), around three times its current value. She was also upbeat on ongoing tax reforms.
Croatia’s recovery from a prolonged recession has been respectable, if not stellar. Regional bank Addiko
“[The government is] taking the right path, and what I’d like to see continue is further tax reform aimed at reducing the cost of doing business for employers, and increasing the salaries of employees,” Grabar-Kitarovic said. “But I’d like all of us to be a bit more ambitious in setting goals not just for GDP growth but for overall development in Croatia. I think
ed a new initiative to tackle emigration. This includes tax reductions, pro-family measures, and changes to legislation
to encourage the integration of immi- grants. According to figures used by
the president, 80,000 Croats left the country in 2017 alone, and the country could see its population drop by 1.1m by 2051. This is putting further strain on an economy in which the ratio of people in employment to pensioners
is already 1:1.
East-west convergence
Grabar-Kitarovic has been an advocate of the Three Seas Initiative (TSI), which seeks to strengthen the economies of CEE, particularly through improving interconnectivity in energy and trans- port. The Croatian president sees the TSI as a means to close the gap between the EU’s east and west, and reinvigorate the European project as a whole.
“The Three Seas Initiative is about convergence; it’s also about connectivity, cohesion, and the competitiveness of our businesses,” she said. “I believe that if we focus on improving lives and erasing the differences across the European continent we will also move a lot closer
“I’d like all of us to be a bit more ambitious in setting goals not just for GDP growth but for overall development in Croatia”
forecasts GDP growth of 3.0% in 2018, following two consecutive years of 3.2% growth.
But while the country stands a respect- able 51st in the world on the World Bank’s Doing Business rankings, the perception on the ground remains that Croatia has been sluggish in implement- ing economic reforms. Businesses com- plain about red tape, high taxes, and a lack of clarity in property rights, among other things.
that we need to be a bit more self-asser- tive on the European and global stage in terms of promoting investment in Croa- tia, and promoting Croatia as a leader rather than a follower. And of course coupled with that is continued reform of the state administration and the neces- sary measures to reduce bureaucracy to the lowest level possible.”
While the president’s influence over such slow-grind reform is largely limited to the bully pulpit, in July she present-
Russian President Vladimir Putin, FIFA president Gianni Infantino, French president Emmanuel Macron, Croatia president Kolinda Grabar-Kitarovic in torrential rain. Alizada Studios / Shutterstock.com
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