engleski

Croatia's export orientation in transition

In the process of economic transition, an important place is taken by the changes which should influence Croatia's better fitting in the world economic flows. However, the deficit in the foreign trade balance of payments seems to have become almost an anavoidable, negative syndrom of Croatian economy in transition. The expansion of export is, no doubt, functionally connected to the development of export abilities of Croatian economy because the latent growth of import dependency of Croatian economy (as a whole and in particular segments of production), sharpens the problem of the foreign trade balance of payments deficit. The aim of this paper is to show the basic characteristics of Croatian economy's import and export goods flows in the pre-transitional and transitional period (the periods of the eighties and the nineties are compared). What is shown is the following: the most important system changes influencing the actual structure of the flows of goods, the characteristics of Croatian goods exchange development on the aggregate level and regional and manufacturing structure of foreign trade relations. The nature and influence of Croatian economy's specialization in the international division of labour are the object of this research. The work indicates the domestic economy's sectors which were the agents of export expansion as well as the ways of long-term restructuring of our country's export comparative ability in the context of modern economic trends in the international division of labour. The average coefficient of goods concentration of Croatia's export in the 1976-1996 period is 26.571226. The coefficients of goods concentration of Croatian export show that the goods concentration was reduced in the 1976-96 period. The Cxj coefficient fell from 28.76917 in 1976 to 24.15866 in 1996. The transitional period from 1990 till 1996 was characterized by a much weaker goods concentration of export than the eighties which were characterized by the so called economy by agreement, which tells us that the export of goods in the transitional period became even more diversified. It is assumed that a higher concentration of export follows a higher geographic export concentration. In fact, in the case of Croatia, there is a strong coorelation between these two indicators. The calculated coefficient of coorelation of export goods concentration and export geographic concentration for the Republic of Croatia was 0.99969 in the period from 1976 till 1996. The said relative indicator tells us that there is an extremely high degree of positive coorelation between goods and geographic concentration of Croatian export. This link is logical and is based on the fact that Croatian national economy spreads its trade transactions with the world as much as it spreads the spectrum of its export supply. Hypothetically speaking, the greater the diversification of production or the higher the level of economic industrial development of a country, the more diverse the sale directions of goods in the international exchange. Due to the complex transitional problems in Eastern European countries (from the end of 1989 till 1992), the recession caused the decline of import of Croatian products on the markets of the so called second Europe. Thus Croatia's export to those countries reached its minimum in 1992. The decline of economic activities of Eastern European economies had a bad impact on most Croatian exporters. So Croatia started looking for a way out on the markets of the European Union. What came as a consequence was a substitution of Croatia's strong export orientation towards the markets of Eastern Europaena clearing-scheme markets in the eighties towards the markets of developed European countries. This indirectly influenced the improvement of "conditions of demand" (according to Porter's modern theory of a country's competitive advantage) as an element of a national economy's competitive ability. Croatia's export to the European Union has been over 50% in the last years. The tendency to increase intrasectoral specialization has been present and very much felt in the last few years. It is obvious that this phenomenon, due to the ever increasing orientation of the country' s exporters towards the developed countries of Europe, corresponds to the modern gloabalizing movements since the classical paradigm of export - import flows on basis of countries' inner-industrial division of labour is increasingly suppressed, in favour of the exchange of the so called substitute goods. Four activities, which participated with the average portion in Croatia's overall export up to one quarter (to be more precise - 24.48%) in the 1976-96 period were: production and processing of tobacco ; manufacturing leather footwear and other leather goods ; manufacturing final wooden products, and shipbuilding. The exporters of these products influenced, with a distinctive degree of being above average, the estimated RCI indicator (86.5%). On the other hand, the importance of those four activities distinctively outstrips a rather fragmented validity of other export activities in Croatia's export expansion. Although the influence of shipbuilding from the viewpoint of the relative export's ratio in the country's overall structure of export was the most intensive, tobacco processing with a relatively low export ratio in the overall structure of export, leads in the estimated RCI indicator. The RCI indicator detects, in a relative sense, the character of production specialization of individual activities within the given industrial structure of a country. The 1993-1994 and 1996-1997 periods show that Croatia was a net creditor to foreign subjects (which is definitely not good for a small country). Since the kuna's rigid exchange rate and the substantial balance of payments deficit in 1998, combined with the chronic underemployment of real and human resources, by definition causes a further decline of general employment and since there are further cases of suppressing "potential competitive advantages", which makes the export expansion impossible, it is most probable that the settlement of the general balance of payments will have te be achieved through the policy of a single devaluation. This is even more so since in 1997 the negative portion in the current transfer balance in GDP was a high 12.6%, and there is a tendency to a further deterioration of that indicator.

export; concentration; export orientation; balance of payments

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