Analysis

EU and OECD welcome Croatian regulatory reform, but challenges remain

The European Commission and the Organisation for Economic Co-operation and Development (OECD) have welcomed Croatia’s strides towards strengthening its regulatory policy framework, thus attracting investments. Challenges remain, however, to ensure that regulatory management tools are used effectively, and both primary and secondary legislation are targeted.

“Croatia has made important progress in improving its policies for the benefit of its people,” said Antonio Gomes, deputy director at the OECD. “The two reports on investment policy and regulatory reform, prepared through close co-operation with the government of Croatia and co-funded by the EU, show Croatia’s commitment to build an environment that attracts investment, promotes domestic private sector development, encourages responsible business conduct and allows for a whole-of-government approach to transparent and evidence-based regulatory policy. There are of course obstacles and delays, but our experience is that persistence always work. The swift implementation of the policy recommendations made in both reviews will further ensure Croatia’s sustainable and inclusive economic growth.”

The OECD encourages Croatia to simplify the establishment and licensing procedures for business, to develop a more consistent institutional and policy framework for investment promotion and to further reduce opportunities for corruption and strengthen the performance of the judiciary.

“Through our co-operation with the OECD, we have identified our strengths, but also the challenges we face in the context of our efforts to further strengthen the business environment and competitiveness,” commented Darko Horvat, minister of economy, entrepreneurship and crafts.

In particular, the government will need to increase domestic entrepreneurship, strengthen competitiveness, clarify its strategies for attracting investments that can support economic diversification, further promote responsible business conduct, and prove to investors that the institutional and regulatory system is transparent and accountable.

“By participating in such professional and comprehensive reviews, we gain knowledge for improving our regulatory policy system in order to create better regulations for all Croatian citizens and to meet preconditions for attracting foreign investment in the Croatian economy. Therefore, we proceed in a positive atmosphere of GDP growth at 3.9 per cent, and for the third consecutive year a reduction in public debt,” Mr Horvat added.