Date: 2001-2005

The Competitiveness Initiative, managed and staffed by Nathan Associates and partner J.E. Austin Associates, was praised in the May 14th edition of Poslovni Tjednik, a Croatian business weekly, for “achieving what certain governmental or business institutions haven’t been able to achieve in years.” Following is a translation of the article:

The Americans might even prove useful

Miodrag Šajatovic

As a result of Minister Cacic’s alleged huge sin of revealing that a successful media campaign for road construction activities was partially funded by monetary investments from the USA, it is no longer wise to praise projects financed through American (para)governmental institutions in Croatia. Despite the risks, however, it is excellent that the American institution, USAID, continues to sponsor “The Croatian Competitiveness Initiative” project after the second media workshop on the issue of competitiveness, held on Brijuni last weekend.

Representatives of the American consulting firms Nathan Associates and J.E. Austin visited various Croatian business newspapers’ editors three years ago, announcing they would found institutions and programs to “promote dialogue between the private and public sectors” to make Croatia an important player in global competition. It all seemed just another familiar story: consultants would snatch money from USAID, hold several conferences, draft documents, and everything would be lost in a governmental maze or a labyrinth of domestic business associations.

But the project indeed seems promising. Some fifteen business executives (Covic, Lukovic, Mudrinic, Marinac, Adrovic, Radman, Vedriš…) are seriously involved in the Business Competitiveness Council. The National Competitiveness Council, including not only businessmen but also representatives from the Government, unions, and academia, is active.

Amazingly, the Competitiveness Initiative has managed to achieve what certain governmental or business institutions haven’t been able to achieve in years. Having sold a similar project in some tens of countries, the consultants managed to eliminate distrust between the business world, the Government, unions, and academia.

For example, the creation of “clusters,” which unite Croatian manufacturers to produce quality brands and increase exports, was talked about for years. “Cluster” became discredited by its constant (verbal) use. But the Competitiveness Initiative recently completed competitiveness strategies for the wood and tourism industries after only several months.

And the strategies are not only declaratory, but concrete and fed by an unimaginable amount of courage in Croatian terms. Goals have been quantified and, amazingly, have precise implementation deadlines.

The public is amazed by the wood industry cluster’s goal of increasing the manufacture of furniture in Croatia by 20 times by the year 2010, and of tripling the number of employees in the sector, from 12.500 to 40.000. Those avoiding public disclosure of business objectives are already maliciously awaiting the downfall of these ambitious plans. But, if the engaged parties manage to survive, it would be an excellent incentive for all who would like to do something concrete, not merely declaratory.

The tourism development strategy, which sets a goal of tripling consumption per guest, is similar. The force underlying this strategy is an association of small domestic hoteliers, who wish to become competitive with foreign players.

The Competitiveness Initiative could be particularly important as a test for leading Croatian businessmen, who will have to prove whether they can act as an establishment that can help Croatia move in the right direction, or whether they can only do good business in the companies they head while in their free time lecturing ministers on what should be done.

The first big test will be the announced publication of the first annual Croatian Competitiveness Report at the end of May. There has almost been no independent research in recent years that objectively analyzes Croatia’s catastrophic export-results.

The Croatian Competitiveness Initiative seems like a light at the end of a tunnel. If even this recipe doesn’t prove fruitful in galvanizing the future creators of economic policy (through different macroeconomic policy), Croatia will indeed be condemned to suffer painful lessons like those already suffered by Turkey and Argentina.