Green Transition

The Prospects for a Green Economy in Croatia

Croatia became the 28th Member State of the European Union on 1 July 2013, in the middle of the biggest crisis 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-communist countries joined in 2004, there is a real question mark about what membership will mean for Croatia and what Croatia will mean, if anything, for the EU.

Croatia is a small state, so that the total population of the EU 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 some of 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 European Union will emerge in the future and how the new hegemonic austerity politics of the core Member States, in alliance with DG Economics and Finance, the IMF, the ECB, and others, will impact on Croatia. In the fifth year of a deep recession, the fear is often expressed that Croatia will not receive the boost in foreign direct investment which EU membership is meant to bring, will fail to implement structural reforms, and may be 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 the environmental and social dimensions. Whilst the Europe 2020 strategy still talks of growth and jobs as central to the European project, the insistence on sustainable and inclusive growth does, at least, offer a potential space for a different model of development than the current neo-liberal orthodoxy. The political prospects 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 projects combined with an attack on both organised labour and the poor and excluded. A progressive Minister of the Environment was dismissed from the Government early on, and has now left the SDP in protest over its environmental policies; and the Minister of Social Affairs and Youth appears focused on rooting out supposed 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 three key 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% in 2011 and which the Government expects to rise only to 59% by 2020, making it the least ambitious target of all the Member States and condemning Croatia to fall further behind the EU average and much behind the overal EU target of 75%. The crisis has hit employment hard in Croatia, particularly amongst young people, with Eurostat figures showing an unemployment rate for the 15-24 age group at 51.6% in March 2013, doubling in less than four years. In terms of the share of renewable energy in gross final energy consumption, Croatia is performing better than the EU average at 15.7% in 2011 compared to the EU-27 at 13.0%, and may even be on track to meet the 20% target by 2020. In 2010 its primary energy consumption was 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 that Croatia managed to reduce emissions only by 0.9% between 1990 and 2008. The EEA also suggests that climate 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 Croatian economy.

 

Building the Case for a New Model

There is an opportunity, however small, to seize on Croatia’s EU memberships as a moment to transform the growth paradigm and to think about the development of a more sustainable and inclusive eco-social policy. It is too easy to forget, in the midst of a long depression, that the ‘golden years’ of growth from 2000 to 2007 were largely jobless, unsustainable, import-seeking, and consumption maximising. The crisis which 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 desired employer is the state or the local municipal authorities. The challenge is to build a political case for ‘green jobs’, i.e. low-carbon, low-energy, low raw material jobs and jobs which protect and restore eco- systems and bio diversity and/or minimise the production of waste and pollution. Croatia could seize the opportunity to 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 be turned into a comparative advantage in a region with perhaps both the most intact, and therefore most vulnerable, eco-system in wider Europe? Why not become leaders in ecological food production, forest preservation, 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 and redistributive eco-social policies which, in Ian Gough’s words, “can achieve ecologically beneficial and socially just impacts promoting new patterns of production, consumption and investment, changing producer 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 figures suggesting, for example, that the Gini coefficient of income inequality was 0.31 in 2011. More worrying are regional inequalities and demographic changes which suggest that the younger, better educated, population has 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, not based 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 attempted in The Green New Deal, is needed. This has to combine sustainable production with new forms of taxation and 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 climate change, migration, the oppression of minorities, erosion of meaningful participation, the rise of gendered transnational care chains, and so on. The 2008 Green Vision for a Social Europe also, rightly, emphasised the importance of Services of General Interest and the need to fight against so-called ‘trade creep’ where the creation of free markets in services is fuelling the privatisation and commercialisation of essential services, including health and education. Croatia needs a political alliance, including reinvigorated social movements, which can articulate a set of winnable demands around social and environmental justice, including the importance of public space and decommodification, as a plausible counter-narrative to austerity and an unachievable and unsustainable growth paradigm. EU membership may make it easier for these social forces to make alliances, and become more aware of trans-national connections on these questions.

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