Croatia: Cranking up Demographic Panic

The demographic panic that the Croatian President Kolinda Grabar Kitarovic has on Tuesday 17 April 2018 injected with a new, curious and cranked up alarmist notch in the coastal town on Sibenik leaves a sour taste of the absurd, of hollow political point-scoring, and I certainly cannot see the logic nor much justification for it; particularly as the demographic problem has existed during all of her mandate as president so far. It is a given and an indisputable fact that preserving jobs as well as creating new ones is in the heart of the healing a badly ailing demographic picture of a country. Loss of jobs, loss of job prospects are a main cause of Croatia’s brain drain and young or working-age people leaving the country in droves in search of a productive life abroad where they find work.

So why would the President, in the same breath, commend the government on its actions to save tens of thousands jobs through saving from bankruptcy one of the largest employers in the country (Agrokor) and then criticise the same government for not having concrete measures to save the ailing demographic state the country is in when in fact measures undertaken regarding saving Agrokor fall within the realm of saving the demography!? Some 80,000 people have left Croatia during the past year in search for a better life, in search for jobs, but saving jobs in effect stops or reverses the exodus.

Although government extraordinary intervention into Agrokor affairs is seen as an unpopular and suspicious choice (as possible means to bury any corruption that may have occurred and lead to Agrokor’s financial demise) its saving of jobs has been recognised by the president. But Kolinda Grabar Kitarovic fails to see that this extraordinary intervention by the government could in fact be placed as a part of the very “concrete action plan” (for demographics) she has called for!

“The government had started extraordinary measures because of Agrokor and that must be commended, but 80,000 people had left Croatia last year. Are these not extraordinary measures? There is no more time. We need a concrete action plan and that is why I am calling upon the Parliament and the Government to dedicate themselves to this question,” she said.

Grabar Kitarovic would have scored more points among the people had she recognised and acknowledged the fact that saving jobs, in general, is a part of the demographic battles that include the prevention of more people leaving the country due to job losses. This way she appears to have only achieved in these words an unspoken reiteration of the fact that “not all is well” in the relationship between the President and the Government(led by Andrej Plenkovic).

Today’s demographic changes require adjustment, not running-in-the-streets panic such as has been happening in Croatia. The prophets of demographic doom appear at almost every political gathering, warning that only a few years from now, states or nations will no longer have a majority of “their own people”, that the ratio of employed to the retired will not be able to sustain pension costs, health care costs and other state welfare financial burdens dressed-up as entitlements and drawn from the shrinking tax revenue. Europe’s welfare states, including Croatia, are fiscally unsustainable, with permanent under-funding built into the very structure of the welfare state itself.

Instead of cranking up the panic about demographics – often experienced as nebulous and not part of everyday life – the panic should move into the grounds of jobs creation, investments and better government incentives and financial assistance for business creation.

Population or demographic policies are alive in Croatia as they are in any other country. They obviously need a shift in focus overall and in desperate need of new ideas and programs and this appears to be a recognised fact by Croatia’s government itself. Minister for demography, family and social policy, Nada Murganic, wasted no time in replying to president Grabar Kitarovic’s criticism on the matter of demographic policy and said that “it’s easier to criticise than to take on responsibility”.

“Until the arrival of this government nobody mentioned such a catastrophic demographic situation, which did not arise in 2016, or in 2017 nor in 2018, it arose much earlier. This government is undertaking measures that are in line with the program devised by demographers …” minister Murganic said, inviting all people of good will to come forth with concrete suggestions and engage with their efforts in improving the demographic situation.

While pronatalist social environment with its vocal resurgence through a number of successful public efforts that have aimed to preserve the definition of family, to reject the Istanbul Convention etc. and various government measures to help boost birth-rate (e.g. financial incentives for having children, increased child-care facilities etc.) contain the element of boosting a demographic profile in favour of future work force these measures are nowhere near adequate to reverse the population decline and projections of it.

The creation of a more attractive business environment has the pivotal role in improving demographics as better earning power and opportunities have the capacity of influencing family size (which has shrunk in number of children born to a family) and slowing down brain drain or exodus of employable people. Implementing the right financial reforms and policies that eliminate unnecessary regulation, bureaucracy, and corruption—all of which raise the cost of doing business and are the unfortunate heritage of the satiated and inflexible public administration system that still continues despite the fact that country exited from communist Yugoslavia almost thirty years ago —will aid in creating a more attractive business atmosphere, increase investment, boost financial contribution from the sizeable Croatian diaspora, and foster growth.

To achieve growth for job creation, nations should focus on business reforms in the sectors that have the potential to create large numbers of jobs. The experience throughout the world has shown that an explicit jobs strategy that encourages growth in labour-intensive sectors can have significant and positive results.

Ina Vukic