Croatian economy has a brighter future with the country's pending EU entry.
By Drazen Remikovic for Southeast European Times in Zagreb --10/11/12
Once the country joins the EU, Croatia should attract investments, especially in transport, energy, and environment. [AFP]
After Croatia joins the EU in July 2013, numerous existing business barriers will be removed turning the country to a safer investment haven, according to political leaders and analysts.
Politicians see an opening of potential investment opportunities for the Western investors especially in transport, energy and environment.
"Croatian membership in the EU will mean security for investors and investments, regardless of whether they are US, European, Asian or domestic," Danijela Barisic, spokeswoman for the ministry of foreign affairs, told SETimes.
"Capital goes where it can make sure profit, and where it can be legally protected, where the regulations are clear, transparency and applications equal. Deregulation and reduced bureaucratic barriers, lower income taxes, functioning of primarily administrative institutions, functioning of the judiciary -- are key to attracting capital," she added.
US State Secretary Hillary Clinton, on an official visit to Zagreb on October 31st, said that the higher possibility for US future investments lay ahead.
"I believe Croatia is well-positioned to attract more foreign investment if it opens its domestic markets. You have an educated workforce and a developed infrastructure. There is, of course, a problem of the actual openness to investment. But we are aware that the Croatian government is preparing a number of measures to facilitate investments in Croatia, and I am sure that there will be a major number of American investors who will invest in Croatia," Clinton said.
In 2011, the European Commission (EC) announced that Croatia has met the requirements for closing the last four chapters of its EU entry talks, proposing July 1st 2013 as the official date for the Balkan country's admission into the EU, as its 28th member.
Officials of the Croatian Employment Association (HUP) emphasise, however, that complicated administration and a number of different taxes are major obstacles to both local and foreign investors.
"Administrative inefficiencies, legal uncertainty and the burden of different payments are 'choking' business. Croatia's geostrategic position, developed telecommunications, and transport infrastructure are comparative advantages that might be of interest to foreign investors in Croatia. Foreign direct investment as an important channel to activate the required potential for the development of the entire state economy," Ana Pavlic, HUP spokeswoman, told SETimes.
Regardless, analysts said, Croatia will be in the best strategic position for Western investments after July. "Obstacles to good business are definitely there, especially because of an inefficient administration, but are slowly being removed through legislation," Damir Novotny, an economic analyst and the former member of the governors' council at the Croatian National Bank, told SETimes.
"When Croatia joins the EU it will be forced to operate under EU law and function as other Western countries. Also, once an EU member, Croatia will be able to use EU investment funds. For example, a US citizen willing to invest in Croatia will be able to use EU funds for investment, even up to 50 percent of total investment," Novotny said.
Once a member, Croatia will have access to EU funding programmes -- including being a partner in the Union budget. The budget, which was 864 billion euros from 2007 to 2013, covers expenditures in member states for sectors including agriculture, internal policies, administration and compensation.