According to the World Competitiveness Rankings by the Institute for Management Development (IMD) from Lausuanne, Switzerland, Croatia ranks 60th among 63 economies analysed, the National Competitiveness Council (NVK) said on Tuesday.
The IMD World Competitiveness Ranking is based on 255 criteria, with 163 relating to statistical indicators and 92 based on comprehensive research and feedback from the business community. The survey of businesses was conducted in February, March and April 2020 while statistical data refers to 2019.
The IMD competitiveness yearbook reports on how well a country manages its resources and competencies in order to create long-term added value.
IMD’s methodology is based on four categories of competitiveness: economic performance, government efficiency, business efficiency and infrastructure, using 20 indices, five for each factor.
Health, environment and prices among Croatia’s strengths, labour market and management among weaknesses
A detailed analysis of Croatia’s position shows good ranking in the areas of international trade, prices, health and environment, and education (ranking between 19th and 40th places). It also ranked fairly well on international investment.
Croatia is seen to have a lot of problems with its potential for change in 10 out of 20 indices and ranks at the bottom of the ladder (63rd) in three areas: labour market, management practices, and attitudes and values.
On the other hand, in three areas that are often referred to as a priority for reforms (tax policy, institutional framework and technological infrastructure), Croatia is not at the bottom of the list and ranks between 52nd and 55th places.
NVK underscored that areas that are not in particular focus in development policies include scientific and basic infrastructure.
“Events during the pandemic and global expectations in the post-pandemic period provide hope that necessary structural changes could accelerate. We seem to fare better in difficult times than in peace time which we have shown several times while awareness of the need for comprehensive changes is all the more present, and I believe that society will review the existing paradigms and accelerate the implementation of new ones,” NVK president Ivica Mudrinic said.
Challenges include reforming public administration and territorial organisation
Challenges facing Croatia in 2020 include reforming public administration and the territorial organisation of the country along with digitising public administration and its services; strengthening those sectors that are significant for self-sufficiency regarding national security, primarily the food, medicines and public health sectors; strengthening investments by the private sector through capital risk funds, business angels and crowdfunding; reforming the judiciary and establishing cooperation between the academic, business and government sectors to strengthen innovativeness and competitiveness.
The survey conducted among businesses indicates that the most favourable indicator of Croatia’s competitiveness is its qualified labour force, reliable infrastructure, high level of education, price competitiveness, access to financing, while the downside is legislation efficiency, government capabilities, stability and foreseeable policies, tax policy and business -friendly environment.
