Over the past decade, Croatia has shown noteworthy economic resilience, navigating a rapidly evolving global environment. To maintain this progress and solid growth, the country needs to tackle four main development challenges. These include: low private sector dynamism, productivity, and investment; rapid demographic change leading to labor and skill shortages while straining social service delivery; environmental sustainability and disaster and climate vulnerabilities, and institutional gaps and inefficiencies in the public sector. The Government of Croatia has requested continued, selective World Bank Group support and advice to help the country advance policy reforms and public sector investments that will help to unlock private and public capital and catalyze private sector solutions.
The five-year Country Partnership Framework (CPF) for Croatia focuses on job creation as a driver of sustainable, resilient and inclusive economic growth. The strategy aims to support Croatia’s efforts to boost investment, foster innovation, and enhance environmental resilience while strengthening institutions for better service delivery to businesses and citizens.
The CPF will center on helping Croatia achieve two broad outcomes.
First, the CPF aims to help Croatia increase investment and create more productive jobs. This involves nurturing innovation, building skills for tomorrow’s economy, and creating an environment where the private sector can grow and people can thrive. In order to achieve this outcome, this CPF will aim to spur investment in more innovative and higher value-added sectors reliant on higher-skilled labor, including through an improved business environment and services, proactive mobilization of foreign and domestic direct investment, deeper diffusion of existing technologies, and better alignment of skills and labor with the economy’s needs. Activities will focus on modernizing public service delivery, strengthening private sector innovation and scaling up innovative investment, and better aligning skills and labor market needs.
Second, the strategy embraces Croatia’s natural assets and focuses on protecting them for generations to come by strengthening Croatia’s environmental resilience and sustainability. The CPF will support the country’s transition to a greener economy by helping to make the energy and maritime transport sectors more sustainable, cost efficient, and accessible for both people and businesses. Additionally, it will enhance Croatia’s resilience to climate by strengthening disaster response capacities.
The CPF will also deepen the partnership with Croatia to increase the country’s role as a source of knowledge and experience on complex development issues, with a focus on global challenges. Aligned with national strategies, the CPF is informed by extensive diagnostics and consultations with local stakeholders, including the government, private sector, civil society, think tanks, academia, media, and development partners.
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