REGIONAL ASPECT OF STRATEGY OF RECOVERY AND FURTHER DEVELOPMENT OF CROATIAN ECONOMY

The final thesis is that global Croatian strategy of economic development must involve inter-regional dimension in such a way to:(1) Provide a set of macroeconomic level based policies which act integrally in Croatian economic space; to this is nowadays oriented budget and public funds policy which ensures integrity of functioning of government employment, infrastructure, government administration, health care, education and science, security and country defense; inter-regional aspect of functioning of these activities denotes regional structuring of current and investment demand which influence preferentially local and national economic activities in the sense of amortization the recession characteristics of economic development of particular region, but to the certain level. (2)Provide functioning of monetary, banking and financial system, money and capital market, in such a way that they act integrally at Croatian unique economic territory; this should be dominant criterion in the stage of recovery of economy, in the phase of improving its competitiveness as preparation for European integration systems; in this stage this supports comparative advantages both at the level of country and at the inter-regional level; for this is appropriate currency exchange rate policy with larger “depreciation distance” opposite to so-called long-term balanced real rate of exchange; in additional phase “of full employment” it will be stronger the application of exchange rate policy with smaller depreciation distance and stronger integration activity oriented to European unique market already at regional and inter-regional level; in nowadays circumstances of labour non-mobility and inadequate capital mobility in a country, but from abroad to the country as well, Croatian economic space disintegrates by policy of exaggerated appreciation of national currency, recession is supported, foreign indebtedness increases, and labour force mobility is unidirectional and of transoceanic character; untill adequate level of competitiveness and full employment is reached, liberalization of foreign-trade system is sufficient for maintenance of competitive environment at global domestic and inter-regional market; liberalization of balance of payment capital account of a country must only by stages follow financial system liberalization and the process of reaching full employment and competitiveness.