Croatia Sustainability Issues

The critical environmental and sustainability issues of Croatia:

  1. Case backlogs

In terms of perceived independence of courts and judges among the general public, judiciary in Croatia scored worst among the European Union member states, given that 42% of those polled in the country believe that the situation concerning the independence of the judiciary is fairly bad and 34% say it is very bad. A mere 4% believe that the perceived independence of the judicial system is very good and 14% believe that it is fairly good.

Respondents said that the main reason for this situation is interference or pressure from government and politicians (68%), and interference or pressure from economic or other specific interests (62%), whereas 42% think that the status and position of judges do not sufficiently guarantee their independence. In terms of the number of judges per 100 000 inhabitants, Croatia had 43.2 judges in 2017, as against 42.8 judges in 2010.

The country has made progress in reducing the length of proceedings and the backlog of cases, but sees around 1.25 million new court cases annually, in a country with only around four million inhabitants.

 

  1. Corruption

Corruption remains a problem in Croatia and the country is considered as one of the 13 most corrupt EU states. Each year, according to a report of the Greens in the EU Parliament, Croatia loses more than €8.5 billion ($9.35 billion) or some 13.5% of the country’s GDP to corruption. 

In 2017, the EU narrowly escaped ‘Greece 2.0’ in Croatia, where the country’s biggest multi-billion Euro company, Agrokor, received a government bailout to avert collapse, which accounted for some 15% of Croatian GDP.

Assessing measures taken by Croatia to implement recommendations that had been made in 2014, the Council of Europe’s Group of States against Corruption (GRECO) regrets that its recommendation to the Croatian Parliament to adopt a code of conduct for its members still has not been realized. The country’s “Anticorruption Strategy 2015-2020” set the last quarter of 2015 as a deadline to adopt such a code, but the draft is lingering in Parliament.

The public and political parties blame the country’s ruling party, the HDZ, the conservative Croatian Democratic Union, which has been in power for 15 of the last 23 years since the end of the Croatian war of independence from socialist Yugoslavia.

 

  1. Uneven Development

Croatia’s economy is recovering from the severe effects of the global financial crisis, with growth averaging around 3 percent over the past three years. However, Croatia’s institutional challenges are evident in its uneven pattern of development. The country has not fully diversified its sources of growth, relying heavily on tourism, making it increasingly critical that Croatia prioritize actions now to improve its long-term growth potential. 

The share of industry exports in total Croatian exports is among the lowest within the new EU member states. Eurostat states that Croatia was among the countries with the largest decline in industrial production last year. Comparing year to year (December 2018/December 2017) it was down 6.6 percent.

The Croatian Employers’ Association score which measures the implementation of reforms in twelve key areas puts the Republic of Croatia at the very bottom of the European Union, indicating that the country is lagging behind in terms of business and investment climate.

 

  1. Government Debt and Poverty

Croatia’s public debt reached HRK 297.1 billion at the end of July 2019, up by 11 billion kuna or 3.8% from the end of 2018, and the increase was due to the issue of a €1.5 billion euro bond in June to secure funds for the repayment of a bond maturing in November.  The collapse of the economy started after the collapse of socialism, when Croatia went through a process of transition to a market-based economy in the 1990s, but its economy suffered badly during the Croatian War of Independence. After the war the economy began to improve, before the financial crisis of 2007–2008. While the debt ratio has been improving since 2014, central government spending outweighs government revenues by a considerable margin. This will ensure that foreign debt will continue to burden Croatian citizens in the foreseeable future, as the debt makes government spending on health care and pensions fiscally unsustainable. 

Croatia still has no strategy on welfare housing or homelessness, or solutions for sustainable food banks, which are some of the recommendations for eliminating the problems citizens are faced with. One in four people over 65, is at risk of poverty. Last December, nearly 250,000 pensioners, i.e. over one in five, received monthly pensions below 1,600 kuna. When the national debt peaked in 2014, about 2.6 million Croatian children were living in destitution. This high rate of poverty could also mean having limited access to education and health services, job prospects, water and sanitation infrastructure, and beyond.

 

  1. Demographic Decline and Emigration

The average age of the total population of Croatia is 43.4 years, making it one of the oldest nations in Europe. The age group to 19 years accounted for only 19.6 % of the total population. Croatian women have an average of 1.44 children, which is not only below the 2.1 needed for replacing a country’s population, but the second-lowest of all the seven post-Yugoslav states. This is because, in Croatia hundreds of thousands of women work in badly paid and insecure jobs in retail. If they have a baby, the likelihood is that their jobs will not be there when they return, so many do not, especially after a first child.

According to a population estimate made by the national statistical office (DZS), Croatia had 4,087,843 residents in the mid-2018, which was a decrease of 0.9%, or by 36,688 fewer residents, compared to the estimate for the year before.  Croatia is still one of five EU countries with the highest youth unemployment rates. The high emigration rates are not only due to economic problems; social factors are significant too, from disappointment with the level of corruption to a perception that a better future lies elsewhere. 

The consequences of mass emigration, coupled with declining birth rates, are increasingly visible each new school year. In 2018, six primary schools closed due to a lack of pupils, while 117 had no new students.