The effects of chosen governmental financial policy measures aimed at croatian islands' economic sustainability enhancement with special stress on tourism

Abstract

In line with the normative frame, the majority of Croatian islands are accounted as areas with unfavourable business/economic environments. The pronounced depopulation is viewed as a result of the inexistence of an economic base necessary for keeping the population on islands. Sustainable development, however, presumes not only environmental and socio-cultural sustainability but an economic one as well. Economic sustainability, viewed from a business operations perspective, calls for using resources in a way that enables the business to function over a number of years, while consistently returning a profit. On a state, regional and local level, numerous measures of economic development stimulation for island economies have been introduced so far. They are, to a large extent, aimed at financial support of island-based business subjects. Such policy comes from the assumption that the island business environment is more hostile compared to that of the mainland and consequently the access to financial sources unfavourable. The main goal of this article is to analyze the effects of some governmental economic policy measures aimed at island economy stimulation dominantly through the non refundable forms of financial assistance and credit lines with favourable/stimulating conditions. The results are valuable in determining which economic activities have been the objects of entrepreneurial interest on Croatian islands as well as for revealing the effects of these policy measures. As such, it creates a valuable base for possible policy adjustments aimed at enhancement of the overall economic sustainability of Croatian islands. © 2012 WIT Press.