INVESTMENT AGENCIES: Are They a “Lame Duck” or Will They be Empowered?
At the first government cabinet session of 2013, a new government investment body was established – Investment Coordination (IC). The IC will be headed by Branko Grcic (SDP), Deputy Prime Minister and Minister of Regional Development and EU Funds; Grcic described the IC as a new government body that will be a crucial to reviving the Croatia’s paralysed economy.
The IC will be made up of 3 working groups: public investment, headed by Transport Minister Sinisa Hajdas Doncic (SDP); private sector investment, headed by Economy Minister Ivan Vrdoljak (HNS); EU funds, headed by Deputy Regional Development and EU Funds Minister Jaksa Puljiz. The working groups are made up of representatives of ministries, state agencies, state-owned companies, and other state institutions; each working group is made up of 17-22 representatives.
During most of 2012, the government established and funded new investment promotion agencies, including the establishment of an organisational structure and personnel for these agencies. These agencies include: the Investment Promotion Agency (AIK), headed by Damir Novinic; Center for Monitoring the Energy Sector and Investments (CEI), headed by Dragan Marcinko; HAMAG Invest, headed by Darko Liovic.
With the establishment of the IC, these agencies’ authority is minimised and reduced to administrative bodies for the IC, which is contrary to the initial objective and rationale for their establishment.
The establishment of the government cabinet level IC immediately places upon itself the political and operational responsibility of realising investment, hence authority and responsibility over investments, which simultaneously relieves the agencies of any real authority and responsibility. The cost of operations for these new agencies that have been reduced to administrative bodies has remained the same, with 2013 budgetary allocations being: AIK (€2.4 million) and HAMAG Invest (€14.8 million). The cost of operations for CEI is unknown.
Given that the responsibility for economic policy, investments, and the energy sector was previously under the authority of former Deputy Prime Minister Radimir Cacic (HNS), the establishment of the IC can also be viewed as an organisational mechanism for Prime Minister Milanovic (SDP) to take over direct control of economic policy from his coalition partner, the HNS.
It appears that these new agencies are in for a “lame duck” transition period in Q1/Q2 2013.