IN DEVELOPMENT B ASED ON AGRICULTURE AND TOURISM A MISTAKE - EXPERIENCES OF PERIPHERAL EU COUNTRIES

The notion of development primarily based on tourism and agriculture still dominates the Croatian public. Author does not dispute that both industries (especially tourism) have their proper place in the industrial structure as a result of given, mainly geographic factors. The analysis of Greek experience, since Greece practice the mentioned model, and its comparison to the experiences of Portugal and Ireland (keeping in mind the specific characteristics of each country) demonstrate the inferiority of the model. It specifically limits the efficient use of developmental and structural fundaments of EU, which can play an important role in generating growth. Agriculture, being an industry with under-average productivity, cannot be considered a development-generating industry. After the accelerated grovvth in the primary phases of development, the productivity in tourist sector reaches its limit. Thus tourism cannot fulfill the criteria for development-generating activity, which is the above-average or fast grovvth in productivity. The alternative lies in the new industrial policy. Liberated from the historical baggage of the central planning, it should rely on the experiences of the peripheral countries of EU in attracting high-tech sector. The author stipulates a variety of measures pertaining to education and taxes that could help formulate such a policy. This approach does not exclude the macroeconomic policy directed at improving competitiveness of the present low-tech industrial structure in order to prevent the collapse of employment. For a small, open economy the parallel grovvth of both sectors is possible.