FREE GEOPOLITICAL NEWSLETTER

 

For current reports go to EASY FINDER

CROATIA



 
Key Economic Data 
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 22,421 20,300 19,000 63
         
GNI per capita
 US $ 4,640 4,550 4,600 70
Ranking is given out of 208 nations - (data from the World Bank)

REPUBLICAN REFERENCE

Area (sq.km)
56,400

Population
4,334,142

Capital 
Zagreb

Currency 
Kuna

President 
Stipe Mesic

Private sector
% of GDP 
55%

  

Background:
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. 
The government, like so many regimes in Croatian history, sees the salvation of the country in an integration into larger structures outside. The two most important are of course the EU and NATO. Croatia formally requested to join the EU on February 25th, 2003, despite being warned by various Brussels officials that its bid was too early. It is now agreed on all sides that entry into the EU is realistic after all for 2007. 
Croatia was cold-shouldered from being even a Partner for Peace of NATO in the 1990s with Tudjman in charge and Croatian war criminals at large. Many of these have now been handed over with the full cooperation of the government with the Hague authorities. NATO entry within a few years is on the cards. Croatia is at last coming in from the cold. 
The Croats are a people with a long past, that is profoundly marking their present and future. But of abiding significance is their mountainous and hilly geography, which has, moreover, changed, albeit slowly, during the centuries. In particular it underwent a long process of deforestation, which left many uplands bare.
They are situated in a vulnerable location, on the threshold of the Balkans, yet betwixt central and eastern Europe. They have consequently had to accommodate themselves to a whole series of more powerful peoples for a while, often lasting centuries. This can help explain their eagerness to surrender sovereignty today. 
Yet their location gave them great opportunities as well, notably for sea-faring across the Adriatic and into the Mediterranean. But for this they needed timber to build boats. Hence the deforestation and the longer run tribulations of the countryside.
After peacefully migrating from Ukraine and settling in modern Croatia in the sixth century, the Croats enjoyed a period of self-rule. But the incursion of Magyars in the ninth century in central Europe changed everything. In 1091 the Croats agreed to submit themselves to Hungarian authority under the Pacta Conventa. By the mid-1400s fear of Ottoman encroachment led the Croatian Assembly to invite the Hapsburgs, under Archduke Ferdinand, in to assume control and responsibility for Croatia. After various vicissitudes Croatia became largely free of Turkish rule by the 18th century. In 1868 Croatia regained domestic autonomy, but significantly under Hungarian authority.
It became absorbed into Yugoslavia after the First World War, but broke away in the Second World War under the Ustase who collaborated with Germans, the most discreditable episode in Croatian history. But the Partisan leader himself was a Croat, Marshall Tito, who proceeded to found the Federal Socialist Republic of Yugoslavia after the war. Croatia became a relatively successful part of the federation, the one communist polity that allowed its citizens to leave freely and could thus be justly called a socialist country, rather than a socialist prison.
In 1990 Croatia held its first multi-party elections, in which long-time nationalist Franjo Tudjman was elected president. Independence was declared next year, which triggered off a four-year war with Belgrade. In December 1995 Croatia signed the Dayton Accord and agreed to the return of all refugees.
The death of Tudjman in December 1999 was a blessing, allowing Croatia to enter the new decade, century and millennium with a clean slate. A new president and coalition government, under a new premier, have been able to pursue national reconciliation, democratization, regional cooperation and refugee returns.

Update No: 079 - (01/12/03)

The Croats are doing better in the 2000s than they did in the 1990s. The incubus of a retrogressive nationalist regime was removed by the death of Franjo Tudjman in December 1999, just in time for a new start in the new millennium.

Popular president, but not so popular premier
The new president, now in harness for nearly four years, is Stipe Mesic He was the last occupant of the revolving Yugoslav presidency, a fact to which Milosevic strongly objected. He has the right enemies and was the ideal person to lead a delegation of reconciliation to Serbia recently.
The presidency is largely a ceremonial job. The real decisions are taken by the premier. For the duration of the 2000s it was Ivica Racan, who now looks certain to be ousted.
The party of Tudjman, the Croatian Democratic Union (HDZ), ruled throughout the 1990s, but lost power to the Social Democrats in early 2000. Elections to parliament were held on November 23rd, which were expected to be very close. The full results will not be known for some time, but initial returns give the edge decisively to the HDZ. 

EU candidacy on the way
Victory for the HDZ undoubtedly sets back Croatia's chances of joining the EU soon, to which it made a formal application for membership in February in 2003 in Athens, when fellow Balkan state, Greece, held the revolving presidency. Racan said Zagreb would have fewer chances of joining because HDZ would be less keen on co-operating with the International Criminal Tribunal for the former Yugoslavia (ICTY). Successful co-operation with the ICTY is the most important condition of EU membership, he added.
One fugitive war crimes suspect sought by the ITCY is General Ante Gotovina. He is not at large in Croatia, according to the government. But the ITCY is convinced he is. Like Karadzic and Mladic in Serbia or Serbian Bosnia, he is probably being protected by security forces still loyal to the old regime. One person keen to see a HDZ victory at the polls is undoubtedly General Gotovina.
The British and others have made the case of Gotovina the precondition of membership. Racan visited London in late September for talks with Tony Blair. He also made an answer to 4,000 questions on the country's legislation, economy and political system to Brussels. The questionnaire had been brought to Zagreb personally by EU President Romano Prodi in July, testifying to the real interest of Brussels in clinching EU adhesion for Croatia.
The likely new government of HDZ will be led by its leader, Ivo Sanader, who has done his utmost to give his party a makeover from the old days. He has moved it forwards on Europe, into which he wants Croatia integrated, and tried to put the cronyism of the Tudjman years behind it. He has expelled nationalist extremists from the party and said that he will pursue moderate policies from a mainstream European conservative perspective. Dissatisfaction with a large national debt, social hardship and high unemployment of officially 22%, but actually, according to the unions, over 30%, led to the triumph of the centre-right party.

Tourism up
One success story in Croatia is a surge in tourism, the largest foreign currency earner for the republic. Its scenery and coastline, dotted by many islands, are spectacular. By no means all the old architecture was destroyed in the war. 
Around 7.3m foreign tourists visited Croatia in the first nine months of this year, 6% more than the same period last year, Deutsche-Presse Agentur (dpa) reported recently, citing figures released by the Central Bureau for Statistics (DZS).
According to DZS, foreign tourists accounted for 89.5% of all visitors and 40.06% of all overnight stays, which is 4% more than in 2002.
Most of the foreign visitors came from Germany (26.4%), followed by Italians (13%) and Slovenes (12.9%), the DZS said. Also, Croatia saw 1.2m or 7% more domestic tourists this year, accounting for 4.72m of overnight stays, which is an increase of 6% to last year. Croatian Tourism Minister, Pace Zupan Ruskovic, said it was the tourism industry's best year since 1991, before war broke out, decimating the sector.

Croatia in the Council of Europe 
Croatia was one of the countries chosen for a series of media-related events in November. The Council of Europe organised the events in the framework of the Stability Pact for South-Eastern Europe.
Zagreb hosted a roundtable discussion on media concentrations. It also hosted a number of other Council-scheduled activities. Europe is keen to see Zagreb become a regional centre, which it is richly qualified to do.

« Top

ENERGY

Kiev and Zagreb discuss Druzhba-Adria integration

Ukrainian Energy Minister, Serhy Yermilov, and Vesna Trnokop-Tanta, president of the Croatian company JANAF, met in Kiev recently to discuss the integration of the Druzhba and Adria pipelines, the Ukrainian Fuel and Energy Ministry said on its official web site, New Europe reported. The ministry said that during the meeting the JANAF president announced that Croatia has already invested funds in the project, but a decision on further financing is being delayed by the fact that participants have not ratified the project, including Ukraine (Ukraine, Russia and Belarus have signed a cooperation agreement for the Druzhba-Adria project).
Yermilov said that the Ukrainian government has approved a draft law on the ratification of the agreement and has sent it to parliament.
"We consider the project to integrate these pipelines to be a priority and expect that parliament will reach the necessary decision in the near future," he said.
The parliamentary committee for the fuel and energy complex and nuclear policy and safety recommended to parliament to ratify the cooperation agreement for the integration of the Druzhba and Adria pipelines.
The Druzhba-Adria project involves the creation of an export route for oil from Russia, and possibly from the Commonwealth of Independent States to the world market, including the North American market, via the deep-water port of Omisalj, bypassing the Bosporus and the Dardanelles. It is planned to gradually load and increase the existing pipeline capacities (by 5, 10 and 15 million tonnes per annum).
The total length of the route exceeds 3,000km. Russia, Croatia, Ukraine, Belarus, Slovakia and Hungary signed an agreement on the unification of the Druzhba and Adria pipeline systems in December 2002 for 10 years, with the possibility of being extended.
The authorised organisation from Russia for the project is Transneft, Belarus - Gomel-transneft-Druzhba, Hungary - MOL, Slovakia - Transpetrol, Ukriane - Ukrtransnafta, and Croatia - JAANAF. Transneft is the single operator for the present project.

Croatia, World Bank sign accords for energy efficiency project

The Croatian Finance Ministry, the HEP power supply company, and the Croatian Bank for Reconstruction and Development (HBOR) signed on 10th November with the International Bank for Reconstruction and Development (IBRD) agreements on bank guarantees, a loan and a deed of donation for a US$12m energy efficiency project, HINA News Agency has reported. 
The US$7m agreement on bank guarantees and the deed of donation of the World Bank was signed by Finance Minister Mato Crkvenac and the head of the World Bank's regional office in Zagreb, Anand Seth.
The 4.4m Euro loan agreement was signed on behalf of the HEP by a management board member, Darko Belic, and on behalf of the HBOR, by director Anton Kovacev.
The purpose of the energy efficiency project is saving electrical and thermal energy, reducing energy costs, energy import, and the pollution of environment. The project enables the setting up of a new main development agency to deal with energy efficiency projects in the HEP.
Apart from the funds ensured with the agreements that were signed on 10th November, commercial banks and users are expected to secure another US$27.8m, to be provided in the course of implementation of the project. 

« Top

FOREIGN ECONOMIC RELATIONS

Croatian and Italian finance ministries sign cooperation agreement

Croatia's Assistant Finance Minister, Tihomir Domazet, and Italy's Assistant Finance and Economy Minister, Fabrizio Barca, on 4th November signed an agreement on cooperation between the two ministries HINA News Agency. 
The agreement makes it possible for Croatia to use cohesion and pre-accession funds of the European Union, although the country is not yet an official applicant for EU membership.
The document offers possibilities for closer cooperation of Croatian regions with Italian, and represents Italy's concrete assistance to Croatia on its path towards the EU, Domazet said after the signing of the deal.
Under the agreement, Italy will provide one million Ruro and Croatia its experts and technical support to joint projects in which the Croatian areas of Moslavina, Zumberak and Gorski Kotar will be connected with three Italian regions through development programmes.
According to the Croatian finance minister, projects will be oriented towards job creation and the development of the manufacturing industry, tourism, environment protection, infrastructure etc.

« Top

TELECOMMUNICATIONS

Croatian ministry revokes fixed telephony licence granted to company

The minister of maritime affairs, transport and communications, Roland Zuvanic, signed a decision on 31st October revoking the decision of the Telecommunications Council of 20th October to grant the Zagreb-based firm Divan d.o.o. a licence to operate a fixed telephony service, his ministry said in a statement, HINA News Agency has reported. 
The licence was revoked after it was found that "the council violated several provisions of both the old and the new Telecommunications Act, which took effect on 7th August this year," the statement said.
The statement announced that the necessary rules for the allocation of fixed telephony licences would be in place by the end of November, and that the ministry would "provide the Divan firm with all the necessary assistance to win in a legal way a licence to provide telecommunications services."

« Top

 

CUSTOMISED REPORTS

 

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:
reports@newnations.com

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

« Top

« Back

 


 
Published by 
International Industrial Information Ltd.
PO Box 12 Monmouth 
United Kingdom NP25 3UW 
Fax: UK +44 (0)1600 890774
enquiries@newnations.com