THE CROATIAN economy ranked 60th out of 63 analyzed economies in this year's competitiveness ranking of the Institute for Management Development (IMD) from Lausanne. Croatia is ranked at the same place as last year, reports the National Competitiveness Council (NCC).

The IMD's competitiveness ranking is based on 255 criteria, 163 of which relate to statistical indicators, and 92 to a survey of businessmen's opinions. The survey was conducted in February, March, and April of 2020, and it is based on available statistics for 2019.

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Health, environment, and prices are Croatia's strengths, while the labor market and business management are its weak points

Croatia's position at the level of 20 competitiveness indices indicates good ranking in the areas of international trade, price levels, health, and the environment, as well as education (19th-40th place in the ranking). Its competitiveness in the area of foreign investment is also relatively good.

Croatia has great problems and potential for change in ten of the 20 indices, being at the very bottom (63rd place in the ranking) in three areas: the labor market, business management, as well as attitudes and values.

On the other hand, Croatia is not at the bottom (52nd - 55th place in the ranking) in the three areas that are often cited as priorities for reforms (tax policy, institutional framework, and technological infrastructure).

Among the areas that are not in the increased focus of the development policy, NCC points out very poor competitiveness in the areas of scientific and basic infrastructure.

"Our position on the competitiveness scale has not changed, which means that we are stagnating. However, events during the pandemic and global expectations in the post-pandemic period might accelerate much-needed structural changes. We have proven many times that we deal with difficult situations better than with normal situations, and there is now widespread awareness of the need for profound change, so I believe that, as a society, we can review existing paradigms and accelerate the implementation of new ones," said NCC President Ivica Mudrinic.

Public administration and territorial organization reform is one of the challenges that Croatia is facing

One of the challenges for Croatia in 2020 is the public administration and territorial state organization reform, as well as the digitalization of public administration and its services; there is also the strengthening of the sectors important for self-sufficiency in terms of national security, primarily the food, medicine, and public health sectors; the strengthening of private sector investments through venture capital funds, business angels and crowdfunding; the judicial reform and the implementation of the "Triple Helix" concept, the cooperation between the academic, business and government sectors when it comes to the strengthening of innovation and competitiveness.

According to surveyed businessmen, the most favorable indicators of Croatian competitiveness are skilled labor, reliable infrastructure, high level of education, cost competitiveness, and access to financing, while the worst rated indicators are effective legal environment, government capacity, stability and predictability of policies, competitive tax system, and a business-friendly environment.

Singapore remains in first place

This year's results confirm the dominant influence of certain factors on the high ranking of countries. This applies in particular to international trade and investments, employment, openness of the society, measures related to political stability, and social and gender equality. In addition, health and education system efficiency factors, along with environmental protection, play a crucial role in competitiveness trends.

Singapore is in first place this year as well. The second country on the competitiveness scale is Denmark, followed by Switzerland, the Netherlands, Hong Kong, Sweden, Norway, Canada, and the United States.

The countries surrounding Croatia, new EU members, have varying results. In addition to Croatia, the Czech Republic (33rd), Hungary (47th), and Bulgaria (48th) also remained in the same position as last year, while Poland (39th), Romania (51st) and Slovakia (57th) dropped in the rankings. Only Slovenia (35th) improved its position by two places.