Meeting G2.1 conclusions
One of the objectives of the conference was the creation of the virtual Chamber of Commerce at HGK with one member of MEETING G2.1 organization. Meetings will be held monthly and the work of the Chamber will be followed-up.
Another objective of the conference was the founding of the Croatia Business Club, in which the Executive Board wwould be composed of three members of the MEETING G2.1 organization representatives, but each one of the 17 countries which had their representatives at the MEETING G2.1 will also have their representatives at CBC.
1. Safety of the investment.
In the protection of investments we surely emphasize the problem of the judiciary,lengthy proceedings and actually very bad legal protection of the investor due the slow judicial process. Namely, after 4-5 years the other party frequently does not exist any more and one cannot be refunded. Law experts in Croatia confirm what MEETING G2.1 participants consider, that the quality of the court work has deteriorated, which in the first place includes the giving of judgement. A transparent system of the judges’ responsibility for poor work should be established, but without meddling into the independence of judiciary authorities and the freedom of judges’ work.
2. Labor Law.
The labor legislation is still rigid and the investor must know, for example, that lay-off is strictly limited and regulated. With respect to the income tax, there is a very low treshold of the highest rate of progressive taxation, that of 40%. There should be a more complacent labor law for small business entrepreneurs of up to 15 employees. The system of sick leave has extremely bad impact on the operations of small employers as they are charged for the cost of the first 42 days, and workers are often in conjunction with family doctors, therefore it is easy to get a written justification for absence from work, especially in the field of psychological problems (so-called F diagnosis). This problem can be solved in two ways, one is an effective system of rapid monitoring of each sick leave which should not have many exceptions for the doctor regarding the expected sick leave for a specific diagnosis, and the second way is that all the cost of the sick leave be immediately charged to the Health Insurance Institution, so that the state itself should be interested in controlling and limiting sick leave.
In our country education is factual, which proved to be insufficiently effective. It would be useful to exit the continental type of education and meet the needs of the practice – current education produces people who can solve a task in the frame of something already known, but an effort should be made to educata people who would break down the boundaries and give new ideas. In any case much more practice should be included in the education system and make the education system more flexible towards the needs of the society and current economy models . The focus of education must be on creativity and search for the best solution, rather than to develop the ability of excellent eidetic replication of mere facts.
4. Legal framework
It is necessary to simplify the legal framework – administration, seal, permits… The obstacles which investors consider the biggest are the following: (i) the frequency of changes in tax policies, (ii) lengthy administration of justice, (iii) inconsistent interpretation of regulations, (iv) short deadlines for adjustment and (v) excess of regulations. The conclusion is to let the people work , and not to limit them with bureaucratic obstacles and difficulties, and therefore all unnecessary barriers should be abolished. Public service and administration must be a quick service, while now it is slow and hostile to users. It would be convenient to investigate why measures such as HITROREZ, whose objectives were to reduce bureaucracy, have not fully succeeded, and to continue where such measures were stopped, but only once the identified errors have been eliminated.
5. Building permit
Building permit in one day is a good model, but it is not yet used in full. The right approach should be that each investor has a meeting with all the corresponding authorities at once and then, after that, building permit is obtained in one day. Perhaps we can say that this an excellent and inspiring example but, unfortunately, this is not the practice. Disorganized land registry and cadaster should be a priority for the new Administration.
NEXT MEETING G2.2:
• Participants suggested workshops by sectors, and many document samples for the preparation of investments, with the purpose to stimulate the preparation of investment project and to produce documentation.
• When we discussed innovations, we concluded that Croatia must offer investors more than other competitive countries, but not only in terms of financial benefits. For disruptive innovations, investors’ corporative culture and the attitude of those making the decisions are more important.
• There are numerous success examples for attracting investments, we are learning from Irland and Israel.
• It is very important that Croats living outside RC be connected with each other, not only with the Croats in the homeland. We wish to strenghten our impact on the Office for Croats outside Republic of Croatia and on Matica Iseljenika around the world, and to connect more strongly with the emmigration Congress and Croatian World Congress, in order to achieve synergy through the cultural, ethnological and business cooperation.
• We welcome the inititiative of representatives from South America in relation to the founding of South American Chamber next year. We have received invitation to the constituent conference in Bolivia in April 2016.
• We especially emphasize the importance of continuity of these meetings and initiatives for Croats outside RC, now we must continue with big steps, not small steps, because until now we have lost a lot of time without results.
• Next MEETING G.2.2 will be held in 2016, and the exact date will be determined on the basis of a survey among this year’s participants. All participant countries will be informed on time about the details.
• And we finally conclude that Croatia lacks general social concensus on the vision of what type of Croatia we desire in a long-term future. We have many strategies, but we have neither vision nor objective.