Zagreb, 18/06/2019 - Two new OECD reports on Croatia — a review of investment policy review and a review of regulatory reform — were presented in Zagreb today at a launch event in the presence of Zdravka Bušić, State Secretary at the Ministry of Foreign and European Affairs, and Darko Horvat, Minister of Economy, Entrepreneurship and Crafts.

These reports provide targeted recommendations that will help the Croatian government to enhance the benefits of its strategic position and reform programme. They are the result ofa comprehensive two-year process of research, analysis and dialogue conducted by the OECD in co-operation with the Ministry of Economy, Entrepreneurship and Crafts and the Ministry of Foreign and European Affairs, other state administration bodies, the private sector and social partners.

The Regulatory Policy Review of Croatia assesses Croatia’s regulatory management capacity by taking stock of regulatory policies, institutions and tools for designing and implementing laws and regulations, including administrative simplification policies, ex ante and ex post evaluation of regulations, stakeholder engagement practices, multi-level government arrangements and tax regimes for small businesses.  

The review finds that Croatia has made great strides in strengthening its regulatory policy framework. For example, stakeholder engagement via the e-consultation platform e-Savjetovanja is common practice and RIA starts relatively early in the process and looks at a wide variety of impacts. Challenges remain, however, to ensure that regulatory management tools like RIA are used effectively and both primary and secondary legislation are targeted. Croatia would benefit from further strengthening analytical capacities in GLO and line ministries and should establish targeted ex-post evaluations of regulations to make sure they achieve the intended policy objectives.  

The Investment Policy Review of Croatia provides Croatia with a systematic approach to investment climate reforms by using the OECD Policy Framework for Investment’s well-tested methodology. It was prepared in response to Croatia’s interest in adhering to the OECD Declaration on International Investment and Multinational Enterprises.

The report encourages Croatia to:

•    Simplify the establishment and licensing procedures for business
•    Develop a more consistent institutional and policy framework for investment promotion
•    Further reduce opportunities for corruption and strengthen the performance of the judiciary

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. The government recognises these challenges and as part of its commitment, is engaged in further reforms to improve the business environment, attract foreign investors, and reap the benefits of openness and globalisation.

“Through our co-operation with 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. 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. The OECD reviews of investment and regulatory policies and the accompanying recommendations are a logical continuation of our current efforts to reduce the administrative burden on the economy and to strengthen the investment climate. Therefore, we proceed on in a positive atmosphere of the current GDP growth by 3.9 per cent, and for the third consecutive year a reduction of public debt ", said Darko Horvat, Minister of Economy, Entrepreneurship and Crafts.

“The OECD Investment Policy Review of Croatia was presented to the public on 18June 18th 2019. The OECD and Croatian experts successfully cooperated on this project, coordinated by the Ministry of Foreign and European Affairs, for two years. The project was carried out in the context of Croatia’s request to adhere to the OECD Declaration on international investment and multinational enterprises with the main goal of improving the investment climate in Croatia, and making  the country more attractive to foreign investments”, said Zdravka Bušić, State Secretary at the Ministry of Foreign and European Affairs.

“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.”

Both reviews were funded by the Structural Reform Support Service (SRSS) totaling EUR 575 000. "The European Commission strongly supports OECD work in improving overall economic performance of the countries throughout the world, and especially so in Croatia. The main priority of the Commission is jobs, growth and investments, and today's discussion is therefore very relevant. Just two weeks ago, the European Commission issued European Semester spring package with recommendation for all Member States to advance sustainable and inclusive growth. Today's reports show, again, that it is impossible to achieve growth without comprehensive set of structural reforms, in this case – reforms to enhance the investment capacity. This is beneficial for all, primarily for the Croatian citizens“, said Branko Baričević, Head of the Commission representation in Zagreb.



***

The launch event was organised by the Organization for Economic Co-operation and Development (OECD), the Ministry of Economy, Entrepreneurship and Crafts and the Ministry of Foreign and European Affairs.

Additional information:

OECD Investment Policy Reviews
http://www.oecd.org/investment/countryreviews.htm

OECD Investment Policy Review of Croatia
http://www.oecd.org/investment/oecd-investment-policy-reviews-croatia-2019-2bf079ba-en.htm

OECD Regulatory Policy Reviews
https://www.oecd-ilibrary.org/governance/oecd-reviews-of-regulatory-reform_19900481