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(E) International Leaders Summit, Zagreb, Croatia - 2005 Brief Report
By Nenad N. Bach | Published  08/5/2005 | Business | Unrated
(E) International Leaders Summit, Zagreb, Croatia - 2005 Brief Report


Pro-Growth Economic Policies Presented


Adriatic Institute for Public Policy to Croatia’s Government Leaders

The second International Leaders Summit (ILS) was jointly organized by Adriatic Institute for Public Policy, Croatia’s first independent free market think tank, The Stockholm Network, UK, and World Development and Empowerment, USA, through a partnering endeavor with Amcham Croatia. The second ILS took place on June 1 and 2 at The Regent Esplanade Zagreb in Croatia, focusing on “Economic Growth - Advocating Free Market Reforms.” Following the summit, the Adriatic Institute for Public Policy presented strategic pro-growth economic policies to Croatia’s leaders at a time when there is a lack of economic initiatives or specific market reforms championed by the Croatian government. The contributors of the strategic economic policies included The Adriatic Institute for Public Policy and ILS Board of Advisors, successful world-renowned economic reformers, experts and international business and media communications leaders that met together at the second ILS in Zagreb.

Implementing the “Flat Tax”: 15-15-15 tax rate for Croatia as proposed by the Adriatic Institute and supported by Dr. Alvin Rabushka, the Father of the Flat Tax. The proposed flat tax of 15 % would be applied to personal, corporate and VAT. A lower rate for Croatia is presented due to the increasing regional competition of Romania’s 16% flat tax rate, Serbia’s 14% rate along with flat tax proposals recommended by Bulgarian and Slovenian authorities.

Pension Reform based on the “individual savings account” of Chile’s Social Security Model as proposed by Dr. Jose Piñera. The successful pension reform applied in Chile has become a generator of economic growth through the investment of pension funds in its own economy.

Rapid Privatization of state owned companies in an ethical and transparent manner. As long as a company is owned 1% by the government, it is not privatized.
Selling real estate and entities tied to the tourism sector with the proposed Croatian government model of "public private partnerships" which invites corruption.
Large state owned companies including shipbuilding, railway and other manufacturing loss making companies should be sold immediately.
State owned companies should be sold to through the model presented by ILS Speaker and Economist Robert Anderson:
Offer to sell 100 % of state-owned company in a competitive auction
Open to all investors – domestic and foreign on equal terms
No conditions on how the new owner may operate the company
Select the winning bidder who offers the highest cash
Not permit highly leveraged sales

Deregulation and eliminate state management and ownership in the economy. Setting up the rules and getting out of the way so businesses can prosper and create jobs.
Strengthening the rule of law, the protection of property rights and an emphasis on combating corruption. Progress has been made through the leadership of Croatia’s Minister of Justice, Mrs. Vesna Škare-Ožbolt, Croatia’s bold justice reformer. However, an emphasis on the protection of property rights - a foundational step must be embraced by the Government, parliament, and enforced by local governments in Croatia.
Labor law reform -- adopting Dr. Piñera’s call for flexible labor law similar to the Chilean and Slovakian model. Slovakia has the second most flexible labor market right after Hong Kong.
Advancing free trade, economic freedom and prosperity –
§ Create open markets by dismantling customs and quotas
§ Eliminate government controls – which reduces corruption
§ Open to foreign direct investments

Role of Citizens in a Free Market Economy:

The two roles of individual citizens in a “Free Market Economy”:
Citizens as taxpayers who create the government and decide what the legitimate functions of the government are including - defense, judiciary, law enforcement, protection of property rights, upholding the rule of law, adjudicating disputes, enforcing contracts and setting the rules for economic policy to reach higher rates of sustainable economic growth.
Citizens as main performers and bearers of economic activity (instead of the government) for which economic freedom is essential.

“Economic freedom is an essential requisite for political freedom and as Dr. Friedman says, the combination of economic and political power in the same hands is a sure recipe for tyranny, said,” Natasha Srdo?, President and co-founder, Adriatic Institute for Public Policy. “In order to achieve higher economic growth, reduce unemployment and improve the standards of living for individual Croatian citizens, it is urgent to have government perform the legitimate functions of the government, and get the government out of the economy so that the government expenditures fall from existing 55% of GDP to preferably 25% of GDP.”

The Adriatic Institute for Public Policy and its leadership have duly noted that the Croatian government has neglected its core functions evidenced by over 40% of its involvement in the Croatian economy. These trends supported by the government have suppressed economic freedom and individual initiative in Croatia - an essential prerequisite for political freedom. Croatia cannot be called a free market economy with government expenditures reaching 55% of the GDP.

“Croatia’s leaders can no longer delay implementing free market reforms. In the last seventeen months, the government has not introduced one major economic reform,” said Joel Anand Samy co-founder of the ILS and Adriatic Institute for Public Policy and president of WDE. “In three days, the newly formed government of Romania introduced the flat tax of 16% and other key reforms and Slovakia passed a package of reforms that have led to economic growth. Croatia’s leaders have an opportunity to seize the moment, implement free market reforms and advance economic freedom that lead to prosperity and economic growth.”

Second International Leaders Summit Speakers:

Damir Polan?ec, Deputy Prime Minister, Croatia
Vesna Škare-Ožbolt, Minister of Justice, Croatia participated at the Second ILS representing the Croatian cabinet leadership.
Dr. Alvin Rabushka, Senior Fellow, Hoover Institution, Stanford University, "Father of the Flat Tax", Former Adviser to President Reagan, USA
Dr. José Piñera, Former Minister Labor and Social Security of Chile, Distinguished Senior Fellow, Cato Institute and President of International Center for Social Security, Chile
Dr. Daniel Mitchell, Senior Fellow, Chief Tax Policy and Economy Expert, The Heritage Foundation, USA
Jaroslaw Neneman, Deputy Finance Minister, Poland
Peter Jungen, Chairman, Peter Jungen Holding GmbH, President European Enterprise Institute, Co-President SME Union and Chairman Economic Policy Council of European People's Party (EPP), Germany
Matthew Bishop, Business Editor, The Economist, UK.
John Willman, Chief Leader Writer and Associate Editor, Financial Times, UK
Goran Gazivoda, Deputy CEO, HVB Splitska Banka d.d., Croatia
Dr. Mico Mrkai?, Chief Economist and President, Government's Strategic Council for Economic Development, Slovenia
Matthew Kaminski, Deputy Editorial Page Editor of The Wall Street Journal Europe, France
Martin Summers, International Social Accountability Manager, Corporate and Regulatory Affairs, British American Tobacco, UK
Matt D. Sertic, President/CEO, Applied Ceramics, USA
Dr. Gunther Fehlingher, Chairman, Europeans for Tax Reform (ETR), Austria
James Carter*, Deputy Assistant Secretary for Economic Policy, US Department of Treasury, Washington, DC, USA (Mr. Carter's presentation was delivered by Dr. Daniel Mitchell at the summit)

ILS Strategic Sessions covered the following relevant issues:

Tax Reform, Simplification and Competition: The Case for the Flat Tax
Chaired by Dr. Alvin Rabushka:
The Flat Tax Movement: Estonia, Slovakia and Romania
The Flat Tax - Gaining Momentum: Croatia, Czech Republic, Hungary and Poland

Pension Reform - Creating An Ownership Society
Chaired by Dr. José Piñera, Former Minister Labor and Social Security of Chile, Distinguished Senior Fellow, Cato Institute and President of International Center for Social Security

Advancing Economic Freedom and Prosperity
Co-chaired by Dr. Daniel Mitchell, Senior Fellow, Chief Tax Policy and Economy Expert at the Heritage Foundation, Washington, DC, USA and John Willman, Chief Leader Writer and Associate Editor, Financial Times, UK. ILS Strategic Sessions focusing on pro-growth solutions included:

The Rule of Law: Judicial Reforms, Combating Corruption and the Protection of Property Rights
Privatization and Deregulation
Labor Law Reform
Advocating Principles of Private Enterprise

The Second International Leaders Summit was a joint initiative of the Adriatic Institute for Public Policy, The Stockholm Network (UK), and World Development and Empowerment (USA). ILS Strategic Partners included HVB Splitska Banka, British American Tobacco, Applied Ceramics, Letica Corporation, Amcham, Vjesnik, The Regent Esplanade Zagreb, Croatian Airlines, Hertz, Makol Marketing, FedEx-Rhea Express, Utilis - IT Partner, Radio 101, HUP - Croatian Employers Association, BCBN, Croata-Potomac, Spiller Farmer Ltd., Hauska and Partner, Grand Villa Argentina and HP.

The impactful media coverage began with a one-hour prime time program featuring ILS speakers and Adriatic Institute’s Advisory Board Members – Dr. Alvin Rabushka, Dr. Jose Piñera and Dr. Daniel Mitchell on HRT1’s “Otvoreno” program. The second ILS media coverage to date includes The Wall Street Journal, Nova TV, OTV, RTL Croatia, Radio 101, HRT Radio, Obitleljski Radio, Voice of America, HINA, Vjesnik, Poslovni Dnevnik, Vecernji list, Jutarnji list, Slobodna dalmacija, Novi list, Fokus, Slovenia’s Finance magazine and new media – Croatia Biz/Poslovni Forum, Index HR and international new media and websites hosted by the Croatian diaspora as well as the international free market think tank network in Europe, Latin America and USA.


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