Croatia  

The Croatian economy has an unemployment rate of almost 11%, but workers have access to a large amount of physical capital, boosting productivity. Inflation is 2.9%, the domestic savings rate is 24% of GDP, and household expenditure is equivalent to 23% of GDP, indicating a stable domestic market. The proportion of non-performing loans and the interest margin spread are both low, reflecting a relatively efficient banking sector. Foreign direct investment equals 10% of Croatia’s GDP, ranking the country in the top 20, worldwide, but the value of exports as a capacity to import is low, indicating weak terms of trade. Croatia also has minimal dependence on raw material exports.

In order to start a new business in Croatia, entrepreneurs are required to undertake 10 formal procedures. This is a moderate barrier to entry by international standards, and over 10,000 new businesses were registered in 2007. Croatia enjoys decent levels of internet security and connectivity with approximately 48 secure servers per one million people. The effect of this connectivity is felt even more through adequate access to personal computers, at 18 units per 100 people. The importance of innovation is evident throughout the economy via decent levels of R&D expenditure, which result in ICT and high-tech exports accounting for 5% and 10% of manufactured exports, respectively. Croatia ranks within the top 40 on almost all measures of entrepreneurship and the same is true for commercialisation of innovation illustrated by royalty receipts. Value added in the services industry accounts for 61% of GDP, highlighting Croatia’s post-industrial status.

Both political and civil rights in Croatia are universal, with citizens having the freedom to participate and influence the result of the electoral process. The presence of checks and balances provides significant restraints on the power of the executive and prevents arbitrary decision making. These are complemented by additional rules and regulations that ensure free and fair election of the executive. Elections for the legislative branch are also characterised by strongly democratic processes and full political competition. In Croatia, the judiciary operates independently of the executive branch in order to prevent a conflict of interest. However, the Croatian government has been subject to a regime change within the last 10 years, raising the issue of political stability.

While a primary school enrolment rate of 90% falls below international standards, a low rate of 17 students to one teacher puts the country in the top third, worldwide. Secondary and tertiary enrolment rates are similarly only average at 89% and 46%, respectively. There are 102 girls for every 100 boys enrolled in Croatian schools. Levels of secondary education amongst workers are among the top 15 globally, at an average of 5.7 years per pupil, while average tertiary levels of schooling per worker are also high at 4.1 years. Government spending on education in Croatia is at just over $4,000 per student in primary and secondary schooling.

Access to healthcare professionals and other facilities is above average, with 25 doctors and 55 hospital beds per 10,000 people, ranking Croatia 31st and 24th, respectively. Similarly, a high 99% of Croatians benefit from access to improved sanitation facilities and 81% are satisfied with their water quality.* While infant mortality is low at six deaths per 1,000 capita and health-adjusted life expectancy is high at 67 years, 7% of the population remains undernourished, a high value for European standards. Further, only four in five people claim satisfaction with their health, and approximately one-quarter report experiencing pain and health problems.* In the same vein, only three in five individuals are well rested, ranking Croatia 93rd on this variable.*

Croatia has significant security challenges related to refugees and internally displaced individuals, and group grievances that are related to ethnic or social groups feeling they have been discriminated against. There are also some problems related to human flight and government engagement in political violence against citizens. Contrastingly, the numbers of homicides and reported assaults or muggings are relatively low, with approximately 19 reported murders per one million people and just 9% of Croatians reporting having been assaulted or mugged.* Only 6% of Croatians reported stolen property in 2008, making Croatia the fifth most secure nation with respect to this variable.* This relative security leads to high perceptions of personal safety as 78% report feeling safe walking in their area at night.*

Rule of law is only moderately enforced in Croatia, with some instances of uneven enforcement or individuals who consider themselves above the law. Regulatory quality for commercial businesses is, however, slightly stronger, as is the quality and effectiveness of bureaucracy, ranking Croatia above the global average on all three variables. In Croatia, while political participation remains fair and free, only onethird of the population approves of the courts and only four out of 10 consider elections to be honest.* Furthermore, more than 93% of individuals perceive the government and local businesses to be corrupt, placing Croatia amongst the bottom 15 countries. Croatians, however, have more confidence in their military, with an approval rating of 83%.*

Croatian citizens have unconstrained freedom to practise their religious beliefs, speak freely without fear of government censorship, and travel freely within and out of their own country. Despite this, only two-thirds of the population are satisfied with their freedom to choose what they want to do with their lives, placing Croatia in the bottom third, globally.* Croatia is a tolerant nation, with acceptance of immigrants at 68% and tolerance for minorities even higher at 78%.*

Most Croatians report that friends are important and 91% feel they can rely on their family and friends in times of need.* However, trust does not expand much beyond the circle of family and friends, as only a quarter of those asked felt they could trust their fellow citizens. Despite very high rates of religious membership, other organisational affiliations perform poorly. While 55% are part of religious organisations, 22% are members of sport groups, and only 5% are associated with environmental groups. A quarter of Croatians donate to charity, while slightly more than one-third claim to have helped a stranger in the month leading up to the survey in 2008.* However, a low volunteering rate of 6% places Croatia in the bottom five percentile with regards to this variable.*

* Data taken from the Gallup World Poll

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