The American Chamber of Commerce (AmCham) in Croatia on Thursday presented eight recommendations for improving the business climate and encouraging investment growth in Croatia to attract foreign investments and facilitate doing business for domestic entrepreneurs in order to increase employment, exports, economic competitiveness, GDP and living standards.
Nearly 10 percent of Croatian companies are owned by foreigners but they generate 25 percent of all investments in the country and over one third of all exports, said Andrea Doko Jelusic, AmCham Executive Director.
It is necessary to define a policy to attract foreign direct investments as a long term state priority, focusing on comparative advantages such as Croatia's geographical position, educated work force and a solid infrastructure, she said.
AmCham President Berislav Horvat said it was also necessary to improve the general conditions of doing business by improving the efficiency of public administration, for example by introducing one stop shops for investors, and by improving the efficiency of the justice system. First and foremost, however, it is necessary to ensure the predictability of the regulatory framework, he added.
As for human resources, AmCham recommends aligning job demand and supply through cooperation between the education system and employers and the government. AmCham also recommends making an investment map of human resources by region and a bigger focus on practical training, notably in tourism and information technology as the most propulsive sectors.
Horvat said the tax system had been mainly used as a short term solution for gaps caused by the failure to carry out structural reforms, whereas it should be regulated on the principles of stability, consistency and predictability. It is imperative to rationalise parafiscal levies and provide tax breaks for the economy, clearly define and strictly punish tax evasion and fraud, he added.
One of the recommendations refers to the efficiency and alignment of public procurement, which AmCham says can be achieved by opting for the most cost-effective and not cheapest offer. In health care, AmCham recommends opening the medical insurance market, optimising spending and equalising VAT for all medication and medical supplies.
The aim of the reforms should be ensuring economic growth which will be ecologically sustainable in the long term through greater energy efficiency and the use of renewables, AmCham recommends.