Motivated and solidly paid people can make it so that we do better, so we must invest in the development of human resources, President Zoran Milanovic said on Wednesday, addressing the Big Plans Day conference, organised by the Lider business weekly.

Speaking of the proclaimed need to boost productivity, Milanovic wondered how it could be even measured in Croatia, which he said was a very service-based economy, adding that he was suspicious of many statistics, including those on productivity which rank Croatia second to last in the EU after Bulgaria.

Productivity should increase and in the long term it is almost everything, he said.

As for EU funds, Milanovic said Croatia would receive a lot of money from the NextGenerationEU instrument, intended for boosting recovery and resilience after the COVID crisis, also because it was among the least developed member states.

He said that Croatia was absorbing too little from EU funds.

“But let’s say if the government had put a little more effort into it, so as to get a little more. That’s the task of all tasks for this generation,” he added.

The state is expensive and in order for Croatia to have as much as possible left for development and buying what is necessary, fighter jets for example, every euro made available by the EU must be utilised, he said, adding that for every euro that was not utilised, someone should be held to account.

Milanovic said that in the first eight years of membership, “we did not do a very good job and were slow in settling in,” taking from EU funds HRK 43 billion more than paying. But that’s eight years or HRK 5 billion annually, he added.

“When one takes away the money for agriculture, which is helicopter money and a welcome social fund, that’s a little over HRK 2 billion, which is one-fifth of Zagreb’s budget. That’s little, too little. I want more… Only then will we have justified the decision to submit to the will of others for the next few decades.”

Croatia doing okay in overcoming crisis, credit to the government

The president said that for now Croatia was doing “okay” in overcoming the crisis and gave credit to the government for all it had done, which he said would have a certain effect on fiscal positions. But there was no other way, he added.

The COVID crisis is not a financial crisis nor a demand crisis but it is becoming a supply crisis because supply chains have been disrupted, the president said.

The situation in Croatia could be better and some sectors have recovered quickly, first and foremost tourism, he said, but added that he hoped structural funds would be utilised for the big infrastructure such as railways and bridges, projects which he said were not easy to prepare.

“In these eight years we realised in those things only 30% of the money that was at our disposal. That’s not enough.”

The president said Croatia could look at its tourist industry as a competitive advantage, but added that it was also at risk of giving in to complacency and consequently lagging economically.

Croatia’s location, its good road connectivity and the fact that some of the richest regions in the world are customer markets for Croatia are luck, “God gave us that,” he said, adding that a large part of Croatia lived off rent, “generously untaxed at that.”