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The Prospects for a Green Economy in Croatia Paul Stubbs

The Prospects for a Green Economy in Croatia Paul Stubbs

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Published by Paul Stubbs
Article in the Green European Journal, 1 July 2013
Article in the Green European Journal, 1 July 2013

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Categories:Types, Research
Published by: Paul Stubbs on Jul 02, 2013
Copyright:Attribution Non-commercial


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The prospects for a green economy in Croatia
In the debate/ 01/07/2013Can Croatia’s entry to the European Union create an opportunity to change the country’s economic andecological paradigms? For Paul Stubbs, that potential exists, but will only succeed if new political alliancesare created that bring together a broad range of social movements.
Paul Stubbsis a Senior Research Fellow at the Institute of Economics (Zagreb). He holds of PhD from the University of Bath (UK) and is widely published on the topic of social policy in theBalkans.Croatia became the 28th Member State of the European Union on 1 July 2013, in the middle of the biggestcrisis the EU has faced in its lifetime. Instead of the optimism of most previous waves of enlargement:notably when Spain and Portugal emerged from dictatorships and joined in 1986, and 8 post-communistcountries joined in 2004, there is a real question mark about what membership will mean for Croatia andwhat Croatia will mean, if anything, for the EU. Croatia is a small state, so that the total population of theEU will grow by less than 1%. The concern is less about the idea, most forcefully expressed in the case of Bulgaria and Romania in 2007, that a country is joining which is not ready for membership, although someof that is in the air not least around the vexed questions of corruption, human rights, and lack of enthuiasm for key reforms. Instead, the uncertainty appears to be more focused on what kind of EuropeanUnion will emerge in the future and how the new hegemonic austerity politics of the core Member States, inalliance with DG Economics and Finance, the IMF, the ECB, and others, will impact on Croatia. In the fifthyear of a deep recession, the fear is often expressed that Croatia will not receive the boost in foreigndirect investment which EU membership is meant to bring, will fail to implement structural reforms, and maybe targeted for disciplinary austerity much as many of her Southern European neighbours have recently.
A space for alternatives
Much less often discussed is the balance between the economic aspects of membership and theenvironmental and social dimensions. Whilst the Europe 2020 strategy still talks of growth and jobs ascentral to the European project, the insistence on sustainable and inclusive growth does, at least, offer apotential space for a different model of development than the current neo-liberal orthodoxy. The politicalprospects for this in Croatia are not good: the new ruling coalition, led by a Social Democractic Party,appears intent on maintaining many aspects of the clientelistic foundations of its right-wing predecessor,hoping for a model of recovery which relies on a combination of (often state-driven) infrastructure projectscombined with an attack on both organised labour and the poor and excluded. A progressive Minister of theEnvironment was dismissed from the Government early on, and has now left the SDP inprotest over itsenvironmental policies; and the Minister of Social Affairs and Youth appears focused on rooting outsupposed benefit fraud amongst recipients of state social assistance, forgetting that a much bigger problem is the huge numbers of poor people who do not receive the benefit.
Renewables as a bright spot
Croatia enters the EU with the fifth highest level of poverty and social exclusion of the 28 member states:a total of 1.38 million people or 32.7% of the Croatian population was at risk on at least one of the threekey indicators (relative poverty, severe material deprivation, low work intensity) in 2011 (the last year for which statistics are avilable). Only Bulgaria (49.1%), Latvia (40.4%), Romania (40.3%), and Lithuania (33.4%)had higher rates. Croatia’s target is to reduce this by 100,000 by 2020, a target as lacking in ambition as it
is lacking in substance. A similarly depressing figure concerns the employment rate, which stood at 57% in2011 and which the Government expects to rise only to 59% by 2020, making it the least ambitious targetof all the Member States and condemning Croatia to fall further behind the EU average and much behindthe overal EU target of 75%. The crisis has hit employment hard in Croatia, particularly amongst youngpeople, with Eurstat figures showing an unemployment rate for the 15-24 age group at 51.6% in March2013, doubling in less than four years. In terms of the share of renewable energy in gross final energyconsumption, Croatia is performing better than the EU average at 15.7% in 2011 compared to the EU-27 at13.0%, and may even be on track to meet the 20% target by 2020. In 2010 its primary energy consumptionwas 96.8% of its level in 2005, although this is more a result of the crisis than any effective policies.Croatia does not appear in EU data for greenhouse gas emissions, although EEA figures suggest thatCroatia managed to reduce emissions only by 0.9% between 1990 and 2008. The EEA also suggests thatclimate change is particularly worrying in Croatia since it will mainly affect agriculture, fisheries, hydropower and tourism, sectors which employ about 600,000 people and constitute a quarter of the Croatianeconomy.
Building the case for a new model
There is an opportunity, however small, to seize on Croatia’s EU memberships as a moment to transformthe growth paradigm and to think about the development of a more sustainable and inclusive eco-socialpolicy. It is too easy to forget, in the midst of a long depression, that the ‘golden years’ of growth from2000 to 2007 were largely jobless, unsustainable, import-seeking, and consumption maximising. The crisiswhich followed has had, and continues to have, a severe and structural impact on unemployment,decimation of industrial production and, by implication, further contributing to a view that the most desiredemployer is the state or the local municipal authorities. The challenge is to build a political case for ‘greenobs’, i.e. low-carbon, low-energy, low raw material jobs and jobs which protect and restore eco- systemsand bio diversity and/or minimise the production of waste and pollution. Croatia could seize the opportunityto reward early adopters of green technology within a much more ambitious programme of support for Corporate Social Responsibility and social enterprises. Can the decimations of deindustrialisation beturned into a comparative advantage in a region with perhaps both the most intact, and therefore mostvulnerable, eco-system in wider Europe? Why not become leaders in ecological food production, forestpreservation, electricity production from wind and sunlight and, of course, sustainable tourism? All of this is important, in and of itself, but what is needed more than ever are new kinds of sustainable andredistributive eco-social policies which, in Ian Gough’s words, “can achieve ecologically beneficial andsocially just impacts promoting new patterns of production, consumption and investment, changingproducer and consumer behaviour while improving well-being, and ensuring a fairer distribution of power and resources”. Inequality in Croatia is more dramatic than tends to be shown by raw aggregate figuressuggesting, for example, that the Gini coefficient of income inequality was 0.31 in 2011. More worrying areregional inequalities and demographic changes which suggest that the younger, better educated, populationhas tended to move away from rural areas and move to large cities. Whilst the likely impact of ‘brain drain’out of Croatia proper cannot be forecast with certainty, its impact will probably be less than the decline of rural, isolated, and war affected areas. It is precisely in these areas that a new kind of regeneration, notbased on traditional models of competitiveness and efficiency, can be envisaged.Nothing short of an holistic re-linkage of the economic, the ecological and the social, much as is attemptedin TheGreen New Deal, is needed. This has to combine sustainable production with new forms of taxationand revenue raising, to make possible real and meaningful redistribution plus innovative responses to so-called new risks which render nation-state traditional welfare state solutions sub-optimal: such as climatechange, migration, the oppression of minorities, erosion of meaningful participation, the rise of genderedtransnational care chains, and so on. The 2008 Green Vision for a Social Europe also, rightly, emphasisedthe importance of Services of General Interest and the need to fight against so-called ‘trade creep’ wherethe creation of free markets in services is fuelling the privatisation and commercialisation of essentialservices, including health and education. Croatia needs a political alliance, including reinvigorated socialmovements, which can articulate a set of winnable demands around social and environmental justice,

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