Tourism And Commerce As Development Drivers Of Eastern Croatia

The economic development of the Republic of Croatia is currently at a standstill as a result of the global economic crisis. Although the effects of the crisis are most visible in the financial sector, it is essentially a structural crisis and the result of the transition from industrial economy to the new information age. Under the influence of globalization on the one hand and the development and application of the ICT on the other hand, the Western World has experienced a major decline in employment opportunities. Consequently, the consumption potential of the population dropped, causing economic stagnation. Today, primarily due to relatively expensive labour, this part of the world is practically unsuitable for any kind of agricultural and industrial production because it is not profitable. In pursuit of low farm product prices characteristic of modern times, almost entire agricultural production is sustained on mass production and the redirection of resources through the system of incentives and subsidies. The industrial production has not fared much better. It does not come as a surprise then that many industries are trying to survive through assistance system similar to the one used for agriculture. Shipbuilding and automotive industry in some countries are good examples of this. In the current situation, neither agriculture, nor large parts of the industrial production are able to survive without government intervention and assistance from profitable sectors. If we take into account that in order to be competitive in the global market, besides having quality products it is necessary to have an adequate quantity of products and competitive prices, a legitimate question arises as to whether the Western World has industrial products that are able to meet these criteria. If it does not, or if it does not have them in sufficient quantities, it is necessary to identify parts of the economic system that are cost-effective and provide for the survival of modern society. The economic situation in the Republic of Croatia, in particular in eastern Croatia, is much more difficult. It is obvious that, in terms of agricultural and industrial production, eastern Croatia is not competitive in the global market so the question arises as to which economic sectors can provide for economic development.