% of GDP
a free service
In 1918, the Croats, Serbs, and Slovenes formed a kingdom known after 1929 as Yugoslavia. Following World War II, Yugoslavia became an independent communist
state under the strong hand of Marshal TITO. Although Croatia declared its independence from Yugoslavia in 1991, it took four years of sporadic, but often
bitter, fighting before occupying Serb armies were mostly cleared from Croatian lands. Under UN supervision the last Serb-held enclave in eastern Slavonia was
returned to Croatia in 1998.
Update No: 059
The economy in Croatia has been faring rather well, with solid growth over the last two years, GDP rising 3.7% in 2000 and 4.2% in 2001.Inflation has come
down, being only 2.8% on an annual basis in 2001. The reform process is well under way with international approval
But there are naturally appalling problems, notably a very high unemployment rate of over 20%. This means certain regions have horrendous unemployment, well
over one third being out of work.
The Croats had a difficult time in the1990s, a war with the Serbs and an appalling hangover of cronyism and dictatorship from the days of the former
Yugoslavia. The economy fared badly. By sharing out state-owned assets and trading licences among its supporters the regime stifled investment, notably from
abroad. But things are now looking up.
The key event was the death of Franjo Tudjman, the president, as if on cue to greet a new millennium, in December 1999. That cleared the way for a long
overdue overhaul of the Croatian polity, without which none of the progress of the last two years would have been possible.
Elections were held in early 2000.Stipe Mesic won the presidency and Ivica Racan the premiership. Racan began a series of wide-ranging reforms.
The government has privatised key sectors and established 11 free trade zones. The country is after all potentially a tourist paradise on the Adriatic Sea
with one of the best climates in the world. Its central location in the northern Balkans makes it the natural gateway to the whole region. Foreign investors
have entered in droves, their sum total of commitment now reaching US$4.2bn. That is the Croats best hope; to become the best entrée into the Balkans.
Croatia Airlines now an Aerospace client
Shannon Aerospace, which carried out its first maintenance check on the airline's A320, has predicted a long-term relationship with Croatia Airlines. "In
the face of the current economic difficulties with tough negotiations and stiff competition, we are proud to win this contract," stated Martin Kaiser, chief
executive at Shannon Aerospace, New Europe has reported.
The Croatian Airline has now joined the Shannon Aerospace customer base along with customers such as AirOne, SAS, Air France, Volare, LT, Transavia, Alitalia,
Lauda, Lufthansa and Swissair. "Croatia Airlines along with many other national carriers, have been faced with additional costs and in choosing Shannon
Aerospace for our heavy maintenance check we know that our budget will be met," commented Roman Gebauer, vice president, maintenance and engineering Croatia
Croatian INA oil company to sell White Nights oilfields in Siberia
The Croatian Oil Company (INA) confirmed on 19th February that it was closing down the White Nights oilfields in west Siberia after Russia's Sibneftprovod
blocked access to an oil pipeline linking the fields with the terminal on the Black Sea, and was resuming talks on their sale, HINA News Agency has
Due to the oil pipeline blockade and insufficient container capacity in the fields, INA was forced to stop production and started closing the oilfields.
The media have quoted Russian sources as saying the oil pipeline was closed because INA was not fulfilling its obligations from the contract on the purchase
of the oilfields.
Officials responded by saying the Russian company was only looking for reasons to worsen INA's position in negotiations on the sale of White Nights.
They also claim that business problems in the Russian Federation were not only affecting INA but other foreign companies as well.
"There are a dozen strong, rich Russian oil companies which, like other multinational companies in the world, do not hesitate to use pressure when dealing
with smaller independent producers in order to take them over and strengthen their position on the Russian oil market. Another problem with White Nights is
that it is not a vertically integrated company and does not have guaranteed crude oil sales on Russian territory but directly depends on offer and demand
every month. It is a fact that White Nights is a member of an association of small oil producers in the Russian Federation but that is an increasingly
unreliable institution," INA officials say.
These are the reasons which made INA decide several months ago to sell White Nights, which proved to be anything but an easy and short process.
The media have been speculating that INA is negotiating the sale of White Nights with Slavneft, but the possibility of negotiations with other interested
buyers is not excluded due to an unsatisfactory price and some other elements of a possible contract.
INA bought the oilfields White Nights in late 1998 at a price of US$18m.
INVESTMENT BACKGROUND REPORTS
Our analysts and editorial staff have many years experience in analysing and reporting events in these nations. This knowledge is available
in the form of geopolitical and/or economic country reports on any individual or grouping of countries. Such reports may be bespoke to the specification of
clients or by access to one of our existing specialised reports.
For further information email:
Considering an investment or a trip to any newnation? First order our Investment Pack which will give you by e-mail the last three monthly
newnation reports and the complete worldaudit democracy check for the low price of US$12. The print-out would be a good companion to take with you. Having
read it, you might even decide not to go!
To order please click here:
Investment background report