The Necessity of Using Foreign Capital in the Croatian Economy

Abstract

Croatia, like most developing countries, is facing a shortage of capital for its economic development. Acceptance of foreign capital in the national economy should be regulated by legislative and economic regulations that would allow its unobstructed acceptance. In this process, it should be taken into account that investments should be pointed in the most favourable direction in order to encourage social development, but also ensure profit to potential investors. Foreign capital in the Croatian economy can operate in several directions: as international public capital, capital of international institutions, state capital, private capital, while in practice, there are also other forms of capital. In the present social moment, in terms of economic and legal insecurity in the country and high level of corruption, serious foreign public and private capital primarily shows interest in investing in major infrastructure facilities such as roads, ports, tourist facilities, and other facilities, and seeks to provide direct protection of the state. Croatian businessmen at lower levels of development as well as various entrepreneurs who would like to incorporate foreign capital in their business activities should make sure to use this capital in the realisation of the planned social development, and avoid foreign venture capital in the process. They should primarily demand legislation from the state that would provide them with legal and financial security of their investments. Investment experts recommend services of internationally acclaimed and reputable businesses that should be used to make investments in the country.

DOI: 10.5901/mjss.2015.v6n2s5p55