Roundtable on Current political and economic climate in Croatia

Thank you very much Lord Mayor,
Dear representatives of the British business community,
Ladies and gentlemen,

It is a great pleasure for me to be here today and to have the opportunity to meet the representatives of the British business community at such a distinguished venue.

I would like to thank all those who supported the realization of this Roundtable, particularly to the Lord Mayor and the City of London.

The initiative to organize this gathering reflects both the importance of the growing mutual interest in economic cooperation between Croatia and Great Britain and the reality of today’s globalised world which puts economic issues on top of the agenda.

Before going into details about the opportunities for doing business in Croatia, I would like to share with you why the current political context of Croatia makes me confident that there are grounds for our economic ties to deepen.

In addition to being allies in NATO since April 2009, Croatia and Great Britain will soon be partners in the European Union as well.

If I were to describe our accession negotiations for the membership in the European Union, which started five years ago, as a marathon, then I would say that today Croatia is running its final miles.

The fact that all negotiation chapters are opened and 25 of them provisionally closed, proves that our work is almost done.

That is why we expect to conclude the negotiations and sign the Accession Treaty in the course of next year.

We are aware that this plan, however realistic when it comes to Croatia’s dedication, also very much depends on the support of our European partners.

Therefore, we highly value the encouraging signals we have been receiving, such as the incoming Hungarian EU presidency putting the conclusion of Croatia’s negotiations among its priorities.

In order to successfully bring the process to its conclusion, such signals from our partners, including Great Britain, are more than welcome.

I can assure you that such support is well-deserved, as we will spare no effort to finish the job we have started.

At present we are focusing our efforts on two chapters that are among the most demanding in the negotiating process: 8 Competition Policy and 23 Judiciary and Fundamental Rights. 

The restructuring of the shipbuilding sector and the reform of the judiciary and public administration are all-encompassing issues that cut across many layers of society and require the widest possible support for their implementation.

Although we are aware of the difficulty of the task in front of us we are determined to carry these reforms through. 

The main priority of the Croatian Government continues to be the resolute and effective fight against corruption. 

Our intention is to send a clear and explicit message – that we will vigorously promote zero tolerance towards corruption and that nobody is above the law.

This is one of the building blocks in the overall efforts of the Croatian Government to realise the full potential of economic growth and to boost the competitiveness of Croatia’s economy.

A number of measures that have been introduced within the Economic Recovery Programme are already showing tangible results, such as the overall increase of Croatian exports in the first nine months of 2010 by 16%.

The level of exports to the EU countries alone rose by 17%. 

What we want to see in the following period are even better results.

In order to achieve them, we will put an emphasis on further strengthening the economic development.

This entails the implementation of necessary structural reforms and a series of measures towards creating a better and more supportive business climate.

This will surely have a positive impact on Croatia’s attractiveness to FDI.

We are aware that foreign investors have been encountering certain difficulties in reaching the Croatian market. 

Along with establishing a Committee for the identification and elimination of barriers for FDI, the Croatian Government is doing all in its power to make it as easy as possible for foreign investors to do business in Croatia.

As a market economy that is soon to be integrated into the internal market of the European Union, Croatia wants to offer an environment attractive for foreign investors, one that inspires confidence and enables further economic growth.

In this context, let me draw your attention to the new investment cycle launched by the Croatian Government.

Amounting to a total of 13.8 billion Euro, the cycle includes projects ranging from tourism, energy, transport, and water management to the strengthening of small and medium-sized enterprises through greenfield investments. 

I hope that these projects will attract the interest of foreign investors, including some of you present here.

The potential for doing business in Croatia derives not only from the projects themselves, but also from a number of comparative advantages Croatia has to offer.

In addition to its legal framework largely harmonized with that of the EU, access to the CEFTA market and a well educated work force, Croatia is increasingly recognised as the central point for doing business in South East Europe.

Due to a favourable geostrategic position, situated at the crossroads between the Mediterranean and Central Europe, its vast potential in port facilities, an excellent highway network and the envisioned development of the existing railways, Croatia has all the prerequisites to serve as a gateway to the markets not only in the region of South East Europe but also much further afield.

According to the recently published Newsweek’s list of the world’s best countries to live in, Croatia was ranked 28th, leaving eight Member States of the European Union behind and confirming Croatia’s status as that of a stable, prosperous and prospective country.

Croatia’s GDP per capita of 10.300 EUR/14.000 USD, amounts to 64% of the EU’s average and puts Croatia ahead of seven EU Member States.

I have no doubt that these figures will further improve in the times to come.

And I sincerely hope that the development of economic ties between Croatia and Great Britain will play an important role in this regard.

Unfortunately our trade exchange has significantly decreased, in part as a consequence of the global economic crisis.

Great Britain is the 12th largest foreign investor and the 13th largest destination of Croatian investment.

Great Britain remains a very important partner for Croatia which is why I believe we should improve these numbers and further deepen our cooperation in all areas of mutual interest.

The areas covered by the previously mentioned Croatian Government’s investment cycle coincide to a great extent with those identified to be of particular interest to the business community of Great Britain.

To this end, I would like to point to some indicators of the potential to be realized in various sectors.

The success of Croatia’s tourist industry is easily measurable.

While in 2009 the tourist sector was in decline both on the global and European levels, Croatia experienced an upwards trend, which led to 2010 being the most successful tourist season so far.

In the first eight months of 2010, 8.2 million tourists visited Croatia, which is an increase of three percent. 

In this context it is also worth mentioning that over 180.000 came from Great Britain alone.

Although steadily increasing year after year, Croatia’s tourist sector still has tremendous scope for further growth.    

Great possibilities in several fields stem from Croatia’s abundance in natural resources, be it water, wind, forests or unpolluted land.

Therefore, renewable energy, wood industry, water management or food industry, especially in the domain of organic and bio-products, can be deemed as highly profitable sectors.

The cooperation in these segments can be realized both through investment and the transfer of know-how.

And finally, as Croatia streamlines its efforts to base its prosperity on being a knowledge-based society, we see room for improvement of our cooperation in the fields of science, communication and information technology, biotechnology and education.

Ladies and Gentlemen,

In my address today I have brushed upon some of the dimensions through which the cooperation between Croatia and Great Britain can reach new heights.

I hope that the information which we have prepared for you will give you a more detailed overview of how to do business in Croatia.

We are offering a selection of projects for which we hope that they can attract your attention as potential investors.   

The time which remains of this gathering allows us to address the questions you might have at this point.

Before we turn to them, I want to stress that you will always find a reliable partner and an open door in the Ministry of Foreign Affairs and European Integration, the Croatian Embassy in London and me personally.

Let me thank you all once again for affording me this opportunity to address you today and for taking part at this Roundtable.

I hope that our next meeting will be in Croatia, where I am looking forward to welcoming you, Lord Mayor, together with the representatives of the British business community.

Thank you very much for your attention!