(The Croatian version of this article ran in today's Jutarnji List, Croatia's largest daily newspaper.)
An Expat in Zagreb
By Roger Malone
During
Croatia’s presidential campaign, I couldn’t look at Ivan Sinčić without seeing
Seneca Crane, the creepy game master in the first Hunger Games movie. They are
both bearded showmen who manipulate reality.
Fortunately, I don’t think Sinčić can conjure up a pack of
bloodthirsty wild dogs to bring his show to a spectacular end. Instead, he has
to conjure up a populist image of a world where loans are forgiven and newly
printed money falls from heaven like gumdrops.
The populists’ appeal is easy to understand. Croatia has
suffered six years of economic malaise, and its economy is 12 percent smaller
now than it was in 2008. Politicians are not ready to join together to start a
recovery that will create jobs and lead to sustainable public financing. A
fresh, young voice ready to break the rules can be very tempting. As an added
bonus, he’ll stick it to those evil corporations.
But the rise of a populist movement that offers the wrong
easy answers to a difficult reality will only delay Croatia’s recovery further.
Economic rules are not broken with impunity. Print more money
to cover government debt, and you get soaring inflation and a central bank that
finds it more difficult to keep the kuna stable against the euro. Let the kuna
devalue, and every import from iPhones to cheddar cheese will cost more. Also,
most mortgages in Croatia are linked to the euro, the wailing when those
payments rise will make the Swiss franc-loan protests seem like tea parties in
comparison.
You can just forgive all private loans. Good for me, of
course, but not so good for anyone who needs a mortgage or a car loan anytime
soon. Why would any bank offer credit in Croatia if it can’t get its money
back? It is a personal tragedy when someone loses their home because they can’t
meet their mortgage payments. It is much more tragic to deny a generation
access to mortgages and loans because of an ill-conceived populist act. Human
walls and activists detained by police make good press, but little else.
For perhaps 17 minutes, I thought there might be a sinister
plan behind this populist rhetoric. The economic ramifications are so apparent,
the only true purpose of such a platform must be the utter destruction of the
Croatian economy. That makes a certain amount of perverted sense: Croatia’s
economy is like a beautiful, but derelict house. The supports have been buckling
for more than six years, and the owners have done little to fix it. Populist
policies amount to setting the house on fire. Then, perhaps, someone will call
in the fire department, in this case the International Monetary Fund, to save
the house. The harsh measures needed to keep the house from burning to the
ground could be blamed on the IMF, and everyone would carry on under the new
regimen.
The populists are not that clever, though, and that’s the
scary part, especially if they can carry their momentum into this year’s
parliamentary elections.
Populist political movements rely on emotions for support.
They feed on public dissatisfaction and point to a common enemy as the cause of
the problems. The scapegoats for most major populist parties in Europe are immigrants
– especially eastern Europeans – but for Sinčić and his followers, it’s the capitalists.
Excessive capitalists are indeed evil. Over the past decades
they have developed a cult of greed with no room for social or community
responsibility. Driven by personal greed, they brought down the global economy
in 2008. On a smaller scale, they care little about worker conditions, the
environment, or the future. And governments
everywhere have failed in controlling these excesses.
But to label all capitalists as evil, as the populists
imply, is like saying all Muslims are terrorists. It sounds good and strikes a
populist chord, but both assertions are blatantly and absolutely false.
Capitalists built today’s modern economies from Beijing to London, largely by
balancing profits with social responsibility. As with all systems, there has
always been sickening outliers, but these are countered by people like Henry
Ford and Bill Gates, capitalists who understand the importance of community.
And credit – that wicked weapon wielded by these capitalists – is a cornerstone
of economic growth. I suspect if Sinčić lent someone his beard trimmer, even he
would want it back eventually.
By presenting capitalists as the bogeymen responsible for
all of Croatia’s problems, Sinčić and his populist movement distract the
country from the real work of fixing the economy. The 16 percent who supported
his crash-and-burn agenda underline the urgency of solving these problems, not
the solutions themselves. There is still time to let the economy grow before
Croatia really has to worry about excessive capitalism.
