First Property Croatia

Croatia aims to crown 15 years of economic and social progress by joining the European Union (EU), but to do so, it will need to bolster economic competitiveness, ensuring Croatians enjoy sustainable improvements in their quality of life.International Bank For Reconstruction and Developemnt (IBRD) is helping the government invest in trade infrastructure, such as the port of Rijeka, and in research and development initiatives, and is helping cut red tape, such as the time it takes to register property. IBRD support is also benefitting a wide range of social projects, ranging from more energy-efficient schools to the removal of land mines.  77,400 Croatians directly benefit from projects to rebuild lives and livelihoods in underdeveloped and war-affected areas
 

Croatia achieved impressive economic and social progress over the last 15 years. Prior to the onset of the global financial crisis, the Croatian economy grew at a healthy 4-5 percent annually. Incomes doubled, and economic and social opportunities dramatically improved. Croatia’s per capita income reached about 63 percent of the EU average, and EU membership is well within reach. Croatia’s overarching priority is to enter the EU with a competitive and growing economy and the institutional capacity to meet the demands of membership. To achieve this, several challenges need to be overcome, including completing Croatia’s transition to a market economy with a focus on private sector growth, fostering greater competitiveness, and achieving convergence with EU income levels, in a way that improves the quality of life for all Croatians, and that is fiscally, socially and environmentally sustainable. The priorities set forth are proving to be more challenging in the current global setting and given the impact of the global crisis on Croatia.

IBRD has been focusing its assistance on helping Croatia prepare for successful EU integration by raising the competitiveness of the economy through investments in major trading routes such as the Port of Rijeka, promoting research and development (R&D), and commercialization of research, as well as assisting the authorities in mitigating the impact of the global economic crisis. It is also assisting with the revitalization of war-affected areas through job creation and mine clearing, improvements in the quality of lives of vulnerable groups, and the protection of the environment and promotion of energy efficient solutions. All of these efforts have the aim of helping Croatia enter the EU as prepared as possible.
 

Since 1993, IBRD has supported 43 operations with a total value of close to $3 billion, and approved 52 grants with a total value of $70 million. In January 2010, IBRD approved a EUR 200 million to support the government’s efforts to mitigate the impact of the global financial crisis. IBRD also supported exports and jobs during the crisis through a EUR 100 million Export Finance Intermediation Loan that helped expand and ensure a steady flow of credit to private businesses.

Croatia has maintained macroeconomic stability, further strengthened the financial sector, and protected the most vulnerable groups of society, assisted by timely budget support from IBRD. About 1,200 new jobs have been created in underdeveloped and war-affected areas across the country, rebuilding lives and livelihoods. Some 13 sq km of mine-contaminated land have been cleared, allowing people to safely use their land without fearing for their lives or property. New and innovative social services programs have helped 3,400 elderly, disabled people and children-at-risk reintegrate into society rather than be institutionalized.
Three-shift schools are being eliminated, improving the quality of education, through the construction or renovation of schools throughout Croatia – with 19 completed, 19 ongoing and another 30 schools slated for construction, as of September 2009. Learning is more effective and fun in over 600 primary and secondary schools which received laboratory equipment, musical instruments, sports equipment, audio-visual equipment and furniture. More than 50 schools across the country have introduced energy efficient lighting, heating and thermal insulation.

The Port of Rijeka has become a more attractive trading route and a desirable port of call for many shipping companies, at the same time increasing the tourism potential of the city of Rijeka through IBRD-supported investments through the construction of a new passenger terminal and the adjoining breakwater, which is now an attractive promenade for tourists and locals alike. Since 2004, the backlog of property registration has been reduced by over 70 percent, making it much easier for businesses and individuals to buy  and register property, creating a better business climate. New mortgages are registered within six days nationwide as compared to within 40 days in 2003. An IBRD-supported Unity Knowledge Fund is backing 55 R&D projects with Croatian companies and institutions, through collaboration with the diaspora in the fields of scientific and technology projects. Over 80 science and research institutes, and more than 200 researchers, from Croatia and abroad are working on joint projects.
 

Cooperation with the World Bank (International Bank for Reconstruction and Development) is of exceptional importance and we value the Bank’s support from the very beginning of this cooperation and the very first approved project – the Emergency Reconstruction Project, as it duly recognized the specific need of the Republic of Croatia and adapted its instruments accordingly. It remains so today, when Croatia is at the doorstep of the European Union. 

 

Despite Croatia’s relatively high income level, access to EU funds and the forthcoming EU membership, there is a clear demand for IBRD’s assistance in the years to come. Operations are under preparation in the areas of port development, irrigation and nature protection, with two operations in an advanced stage of preparation in the areas of the judiciary and disaster management. There have also been requests for additional financing or follow-up operations for projects which are close to completion, indicating the authorities’ satisfaction with IBRD’s contribution to the development efforts of Croatia and appreciation of IBRD expertise.