2012年-世界发展银行全球_Croatia_-_Policy_Notes___A_Strategy_for_Smart_Sustainable_and_Inclusive_Growth_119页_3mb

Summary of Report No. 66673-HR: Croatia - A Strategy for Smart, Sustainable and Inclusive Growth

Core Content

This World Bank report outlines a strategic approach for Croatia to achieve smart, sustainable, and inclusive growth as it prepares for EU membership. It emphasizes the need for fiscal consolidation, structural reforms, and maximizing the benefits of EU membership to improve economic performance and competitiveness.

Main Objectives

1. Inform the new Croatian government's economic strategy.
2. Contribute to Croatia's policy dialogue.
3. Support Croatia's transition to EU membership and alignment with the Europe 2020 Strategy.

Key Challenges

• High unemployment and low GDP growth.
• Persistent macroeconomic imbalances due to past pro-cyclical fiscal policies and weak competitiveness.
• High public debt (60% of GDP) and external debt that equals GDP.
• Large informal economy (15% of GDP) and weak tax compliance (second highest in the EU10).
• Structural inefficiencies in public spending, including high subsidies, public sector wage bill, and pension costs.
• Limited access to EU Structural Funds and the challenge of effective absorption.
• Need for private sector-led growth and reforms in public administration and governance.

Main Views and Recommendations

1. Fiscal Consolidation

• Urgent priority: Croatia needs to consolidate its fiscal position to ensure macroeconomic stability and long-term sustainability.
• Expenditure-based consolidation: Due to the fragile state of the economy, reducing public spending and creating fiscal buffers is more feasible than increasing taxes.
• Target: Achieve a balanced budget over the business cycle by reducing spending and increasing tax compliance by over 5 percentage points of GDP.
• Fiscal space: Necessary for co-financing EU-funded projects, which will increase significantly upon EU accession.
• Public spending rationalization: Focus on areas such as subsidies, public sector wages, and pension costs.
  • Subsidies (railways, shipyards, agriculture): 2.4% of GDP, five times the EU15 average.
  • Public sector wage bill: 10.6% of GDP.
  • Privileged pensions: 1.9% of GDP.
• Social safety nets: Should be more targeted and efficient, focusing on "needs" rather than "entitlements".
• Stability and Growth Pact: Croatia must prepare to meet the EU's fiscal requirements to avoid being subject to the Excessive Deficit Procedure.

2. Incomplete Structural Reform Agenda

• Priority: Completing the unfinished structural reforms to shift from demand-driven to productivity-based growth.
• Areas for reform:
  • Product market regulation: Improve efficiency and reduce barriers for private sector growth.
  • Public administration reform: Strengthen the rule of law, reduce bureaucracy, and improve transparency.
  • Labor market reforms: Increase labor force participation and address skill mismatches.
  • Education system reform: Make it more responsive to labor market needs.
  • Social protection reform: Incentivize work and improve efficiency.
• Private sector potential: Croatia has a large number of state-owned companies (over 800) that could attract private investment.
• Innovation and productivity: Croatia is lagging behind in knowledge-based development and needs to enhance innovation and productivity.

3. Maximizing EU Membership Benefits

• EU Structural and Cohesion Funds: Will exceed €1.5 billion annually upon accession, but Croatia must prepare to absorb these funds effectively.
• EU contributions: Croatia will have to contribute about €680 million annually to the EU budget.
• Strategic challenge: Avoid becoming a net contributor by creating fiscal space and improving governance.
• Infrastructure modernization: Necessary to become a regional logistics and distribution hub.
  • Railways: Need operational and financial reforms.
  • Energy: Must comply with EU environmental and energy standards.
  • Information Technology (IT): Should be modernized to support growth.
• Environmental and climate change: Croatia must reduce the environmental footprint of agriculture and comply with EU regulations.
• EU alignment: Croatia must adopt the Europe 2020 Strategy, focusing on employment, innovation, education, and social inclusion.

Key Information

• Current fiscal deficit: Close to 6% of GDP when off-budget spending is included.
• Public debt: Approaches 60% of GDP, above the statutory limit.
• EU accession: Croatia will become the 28th EU member in 2013.
• EU Structural Funds: Expected to increase sevenfold compared to current levels.
• Fiscal space: Needed to co-finance EU projects and support growth.
• EU contributions: Annual payments of €680 million.
• Private sector growth: Requires a favorable investment climate, reduced red tape, and stronger rule of law.
• Health and pension systems: Need reform to ensure sustainability and efficiency.
• Social protection: Should be more targeted and efficient to support the vulnerable and improve labor participation.
• EU 2020 Strategy: Croatia must meet national targets in employment, innovation, education, and climate/energy.

Conclusion

This report provides a comprehensive strategy for Croatia to achieve smart, sustainable, and inclusive growth. It highlights the need for fiscal consolidation, structural reforms, and effective utilization of EU Structural Funds. The World Bank Group is committed to supporting Croatia in this transition through policy dialogue, technical assistance, and financial instruments. The strategy aims to improve economic competitiveness, social cohesion, and long-term fiscal sustainability.