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What Kind of Growth, What Kind of Degrowth: The Case of Croatia Reconsidered

In the debate / 20/11/2012

Looking beyond growth/degrowth, what sort of economic and political changes are required in Croatia to bring about both an equitable and sustainable economy?Commentators from the think-tank Group 22 respond to Igor Matutinovic’s article from the 3rd edition of the Journal ‘Beyond growth/degrowth’.

Author

Mladen Domazet Vladimir Cvijanovic Danijela Dolenec Mladen Domazet is an expert on education and sustainability initiatives,Vladimir Cvijanović has edited a book series on socio-economic perspectives in Southern Eastern Europe and Danijela Dolenec is a critical scholar writing about democratisation and sustainability. Collectively they are members of Group 22, an ecological-left think-tank based in the Balkans.

Mladen Domazet is an expert on education and sustainability initiatives,Vladimir Cvijanović has edited a book series on socio-economic perspectives in Southern Eastern Europe and Danijela Dolenec is a critical scholar writing about democratisation and sustainability. Collectively they are members of  Group 22, an ecological-left think-tank based in the Balkans. 

From a global perspective, Croatia is too small to have a significant economic, political or environmental impact for better or for worse. This argument is often used to suggest how it makes no sense for such a small country to pursue deep adjustments necessary to align human societies with natural environmental limits. This perspective is understandable, but wrong. First of all, however small, every society is a moral participant in the joint pursuit of human development and security. If we know that the current development model is untenable, we have an obligation to act upon this knowledge irrespective of short-term calculations regarding its overall effects. Secondly, if countries like Croatia can demonstrate that they can actively pursue a sustainable path of development, rather than simply drift along the global currents, this provides a strong inspirational impetus to communities around the world to pursue alternative development trajectories. In this respect, Croatia’s size is its advantage; being comparable in size to a larger European city means that the country’s political community faces fewer obstacles in terms of both political mobilisation for an alternative developmental project, as well as in activating resources and capacities for its economic transformation. Instead of acquiescing to its historically passive role, Croatia should take on the challenge of actively pursuing a developmental strategy which acknowledges that its current development model is contributing to an inevitable collapse of the material base of human life on the planet. Thirdly, advocating that Croatia should use up the available time before this imminent collapse by continuing to pursue a growth economy is morally unacceptable. A global environmental and economic collapse will unavoidably hurt the most vulnerable social groups most, and many Croatian citizens are directly exposed to that threat.

Continuing to pursue growth therefore cannot be justified on the grounds that there is a need to strengthen the social fabric before addressing the unsustainability of the current development model, as Matutinović suggests. This is a strategy which risks buying time only for the privileged since it considers the plausibility of eventual degrowth within a context of preserving existing economic institutions which are structurally dependent on striving for unlimited growth. A transformative degrowth strategy cannot be pursued within the current capitalist mode of production, to which growth is an inherent component. Pursuing a degrowth strategy implies radical changes in the basic institutions of property and work, to name only a few (Kallis 2011). Analogously, pursuing a degrowth strategy does not mean a GDP drop in a growth-oriented economy, since that simply leads to unemployment and other socially adverse consequences. Instead, a degrowth strategy implies a structured process of socially sustainable and equitable reduction in the amount of materials and energy that a society extracts, processes, and eventually returns to the environment as waste (ibid.). While it would inevitably reduce overall income and material comforts for many, it should not produce welfare loss for most.

Croatia’s recent history suggests a high likelihood that freeing up Croatia’s underutilised renewable resources (forestry, food production and renewable energy generation) in the current institutional and socio-economic setting would result in their corruptive misuse, as well as in further concentration of markets. This scepticism is due to prevalence of crony (Franičević, 2002) and clientelistic (Stubbs and Zrinščak, 2011; Cvijanović and Redžepagić, 2011) capitalism in present-day Croatia, which has resulted neither in economic growth required to catch-up with the more developed EU members nor in the comprehensive rise in welfare.

Can Croatia afford more work and more consumption of the kind it has enjoyed over its 20 year history?

In the twenty years of its capitalist development, Croatia has barely managed to surpass its 1990 GDP levels. However, acknowledging the difference between economic growth and development, we look at developmental indices instead, which offer a more comprehensive insight into societal wellbeing. In Croatia, the Human Development Index (HDI) value has remained more or less constant over the 20 year period. A combination of GDP with literacy, life-expectancy, expected years of education for children, and availability of education and healthcare has neither risen nor dropped significantly throughout the observed time period. However, income inequality has risen over this period (UNDP 2010, 2011). When compared to the EU regarding income inequality (measured either by the GINI index or the quintile share ratio) Croatia exhibits higher inequality than the EU27 average (CBS, 2011). Similarly, the most recent data on poverty reveal Croatia to be among the top 5 European countries with the highest proportions of population at risk of poverty (ibid.). Furthermore, in this period Croatia’s biocapacity has dropped while its ecological footprint (EF) has increased (Šimleša, 2010). Though until recently Croatia was relatively well positioned on the Happy Planet Index[1] that captures the trade-off between material development and social wellbeing, the most recent data positions Croatia at the European average, but without the average European GDP per capita and purchasing power (GfK, 2012). In other words, the transformation into a capitalist economy has brought no visible gains to Croatian society, while decreasing its social and environmental wellbeing.

We agree with Matutinović (2012) that Croatia has potential in ecological food production, the usage of forests and electricity production from renewable sources such as wind and sunlight, but we assert that it is crucial to debate an overall economic model within which these resources would be put to use. The previous 20 years of economic ‘development’ in Croatia clearly demonstrate that by simply harnessing these resources within current economic institutions will likely not lead to improved social wellbeing. A change in economic and political institutions is needed that would stimulate societal development. This we primarily see as greater self-sufficiency in terms of locally sustainable food production and distribution, and energy generation. The strategic aims should primarily be the maintenance and rise in HDI absolute value, a reduction of the ecological footprint (which some countries have successfully initiated without industrial collapse or drastic economic transition), and an eventual reversal of the worsening HPI position. An example of such practice could be a small residential community that cooperatively manages part of its energy generation from renewable sources. If not only efficiency of resource-use is stressed but also efficiency of socio-economic structures, i.e. a different organisation of human interaction in the objective of social welfare, advances can be achieved in waste management (avoiding penalties along the lines Poland and Italy now pay in the EU) and transport as well. Surpluses generated within such communities can be directed into further flourishing rather than mere material consumption of the said communities.

The bottom line is that there is space in Croatian society, both within its social structure and material resources, for a multi-linear exploration of deeper transformative strategies for the future. At the very least, we need parallel explorations that include both efficiency of resource use and the transformation of economic and political institutions aiming towards a process of structured degrowth.

The need for democratic deliberation over future development

Matters of economic growth are not just a question of objective environmental limits, historical perspectives or theoretical expectations, but are crucially a matter of populations’ awareness and expectations. While it is true that only 2% of the Croatian population prioritises environmental protection above issues such as poverty, economy, and healthcare, over 30% do not agree (and a further 25% is open to persuasion) that we worry too much about the environment and too little about current prices and jobs (Domazet, Dolenec and Ančić, 2012). There is also some room for optimism in the finding according to which 40% of the population thinks that protecting current climatic conditions should take priority over economic growth and over 50% stating that Croatia is doing too little for environmental protection on a global scale. It seems that structured degrowth might be an option for Croatia’s citizens – if successfully communicated as a developmental strategy rather than as plain material impoverishment. The importance of publicly deliberating and communicating the idea of structured degrowth as a planned downsizing of select factors with the aim of maintaining welfare is further strengthened by the finding according to which 60% of the population are unwilling to accept a reduction in living standards, and over 50% are unwilling to cut back on driving a car for environmental reasons (ibid).

This is the most worrying aspect of the recent study of public opinion in Croatia regarding environmental issues. Croatia’s citizens seem largely unaware of the costs of material development, as well as their rights and responsibilities in governing those costs and that development. Just like in other countries, the level of awareness regarding the incompatibility of the current economic system with environmental limits is related to socio-economic status and level of education – which reinforces the need for redistributive policies. An increasingly socially stratified society has little chance of engaging in a democratic debate about alternative developmental trajectories (Sandel 2012). Instead, people live in disassociated realities, each tending to themselves within an oppressive zero-sum worldview.

In order to counteract this dystopian reality, degrowth strategies of selective downsizing should rely on redistribution of resources within existing society, as well as between present and future generations (Latouche, 2009). This cannot be achieved by markets, even with well-intended regulation, for they maximise rapid switches rather than gradual adaptation – and they favour the ‘haves’ over the ‘have nots’. There is, instead, an urgent need for a broad-based process of democratic deliberation over the future trajectory of development. Without it, the Croatian population will, together with the rest of Europe, zombie march into the global crash of the human growth aspiration and the ecosystems that support us.

Sources

Croatian Bureau of Statistics (CBS) (2011). ‘Release 14.1.2′, available at www.dzs.hr
Cvijanović, V. and D. Redžepagić (2011), ‘From Political Capitalism to Clientelist Capitalism? The Case of Croatia’, The Proceedings of Rijeka Faculty of Economics – Journal of Economics and Business 29(2): 355-372.
Domazet, M., Dolenec, D. and Ančić, B. (2012), We Need to Change: Mapping Croatia’s potential for sustainable development, Zagreb: Heinrich Böll Stiftung. 
Franičević, V. (2002), ‘Politička i moralna ekonomija u prvom desetljeću tranzicije u Hrvatskoj’, Politička misao, 39(1): 3-34.
GfK GeoMarketing GmbH (2102), ‘Where in Europe do the wealthy live?.’ Press Release, October 30, 2012. 
Kallis, G. (2011). ‘In defence of degrowth’, Ecological Economics, Vol.70, pp. 873-880
Latouche, S. (2009). Farewell to Growth, London: Polity Press
Matutinović, I. (2012), ‘De-Growth: Can Croatia Afford Less Work And Less Consumption?’, Green European Journal
Sandel, M. (2012). What Money Can’t Buy: The Moral Limits of Markets, New York: Farrar, Straus and Giroux
Stubbs, P. and S. Zrinščak (2011) ‘Rethinking Clientelism, Governance and Citizenship in Social Welfare: the case of Croatia’, presented at ESPAnet Conference, Valencia, 8-10 September 2011.
Šimleša, D. (2010). Ekološki otisak: kako je razvoj zgazio održivost. Zagreb: Institut Pilar i TIM press d.o.o.
UNDP (2010). Human Development Report 2010, New York: UNDP.
UNDP (2011). Human Development Report 2011, New York: UNDP.

 


[1] Data available at www.happyplanetindex.org

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