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CROATIA



REPUBLICAN REFERENCE

Area (sq.km)
56,400

Population
4,334,142

Capital 
Zagreb

Currency 
Kuna

President 
Stipe Mesic

Private sector
% of GDP 
55%

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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. 

Update No: 068 - (01/01/03)

The Croatians are looking to find new economic partners near and far afield. These range from Balkan neighbours to Asian giants the other side of the world. 

Slovenia the ally
The nearest and most suitable model for Croatia is Slovenia, the Switzerland of the former Yugoslav Federation. With the highest standard of living in the former communist world, a GDP per capita of US$16,200 and an excellent location athwart the Alps, Slovenia is the luckiest of its kind.
Croatia can aspire to emulate it in much slower stages. With GDP per capita barely more than a third of Slovenia's and more extensive borders with the rest of former Yugoslavia, Croatia got sucked into wars with Serbians on the Serb-Croat border and in Bosnia.
Its dictator, Franjo Tudjman, was as obnoxious as Milosevic, with a corrupt regime. But he died in December 1999, giving Croatia a headstart over Serbia in modernising itself.
Zagreb and Ljubljana are concentrating on building up stronger relations, although mutual trade at US$1.2bn annually is already high. The foreign ministers of the two countries, Croatia's Tonina Picula and Slovenia's Dimitry Rubel, met in Bled, Slovenia's superb lakeside resort, in late October. They have agreed to meet every two months henceforward, as befits close neighbours with plenty to settle in the way of border disputes, problems of double taxation, customs dues and the like, indeed a score of quandaries.
The one area where both can excel in future is tourism, Bled being one of many spectacular locations of the two states in the Alps and the northern Balkan plain. The Slovenes are beginning to make foreign direct investment in the Balkans and Croatia is an auspicious place to start.

Asia is beckoning
Croatia's president, Stipe Mesic, is as adventurous and far-ranging in his foreign travels as his predecessor was stay-at-home, perfectly normal in a dictator.
Mesic visited China earlier this year and met top ministers and officials to discuss boosting Chinese-Croat relations. Chinese vice-premier Li Lanqing repaid the visit by coming to Zagreb in late November, greatly gratifying the Croats at a time when the transition from Jiang to Ho was under way in the leadership.
Mesic made an extended trip recently to the Indian sub-continent, visiting both India and Sri Lanka. In early November Mesic held talks with Indian leaders, including prime minister Atal Bihari Vajpayee. A wide range of agricultural issues were discussed with Croatia to provide a mix of machinery.
The trade will be facilitated by credits from the Export Credit Guarantee Corp. of India and the Croatian Bank for Reconstruction and Development (HBOR), which signed a memorandum of understanding during the visit.
Mesic pointed out to Indian businessmen that Croatia could become a gateway for them to the entire Balkans and beyond, using Croatian free trade zones as marketing and distribution centres for Europe. This is all very much putting down a marker for the future, as Croatian-Indian trade is a mere US$21m per annum at present.
The same holds true of relations between Croatia and Sri Lanka. The two countries have one thing in common; they are in their different ways very beautiful. But this makes them rivals, albeit distant, in the tourist field for Europeans and Americans. Nevertheless, ways of extending trade and contacts are to be explored.

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MINERALS & METALS

Croatian PM: Events at Sisak Ironworks hamper search for strategic partner


Prime Minister Ivica Racan said on 25th November that recent events in Sisak's Ironworks made it difficult to find a strategic partner for the bankrupt company, HINA News Agency has reported. 
"Certain people there act as though the strategic partner has been secured and that the Ironworks' future is ensured, which is not something the government decides on, but the market," Racan told reporters prior to a session of his Social Democratic Party's presidency.
The PM said there were strategic partners who were interested in the company but declined to reveal them until the government thoroughly evaluated each offer.
The problem for the government, he explained, is if the search for the strategic partner takes a year and if workers demand the payment of wages for that period. "There is no money and the only possibility is increasing the budgetary deficit by 2-3bn (kuna), bringing inflation," Racan said.
He added the Ironworks in Sisak was a test of the government's commitment as well as of that of citizens for market economy.

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TELECOMMUNICATIONS

Croatia's largest mobile operator signs with Euronet for ATM recharge services 

Euronet Worldwide, Inc., a leading provider of secure electronic financial transaction solutions, and Hrvatski Telekom (HT) have announced a Euronet ATM Recharge agreement, enabling HT's Simpa prepaid customers to purchase airtime at ATMs owned by Raiffeisenbank and Splitska Banka in Croatia. Euronet has long-standing relationships with these banks, Business Wire has reported. 
With more than 1.1 million total customers and 910,000 prepaid users, HT is the largest mobile operator in the Croatian market. Deutsche Telekom owns 51 per cent of Hrvatski Telekom. The mobile operator is also the second of a total of two providers in Croatia to offer Euronet ATM Recharge services. Through this agreement, Euronet Worldwide gives customers the ability to purchase prepaid airtime at 180 ATMs. 
"By using Euronet ATM Recharge solution, we can offer our customers added convenience and establish an economical and efficient distribution method," said Georg Muendl, HT CMO Mobile. "Incorporating ATM recharge in our prepaid program includes expanding this service to ATMs operated by other banks using Euronet's processing centre. This expansion enables even more subscribers to use this convenient solution." 
Customers with HT Simpa prepaid service can purchase vouchers at Raiffeisenbank and Splitska Banka bank-branded ATMs throughout the country, allowing them to recharge their mobile phone accounts. Customers' bank accounts are then debited for the amount of the voucher. 
"Establishing a partnership with Hrvatski Telekom enables us to offer recharge services to more than 1.7 million prepaid users through the country's only two carriers, Hrvatski Telekom and VIPnet," said Michael J. Brown, Euronet Worldwide chairman and CEO. "Providing Hrvatski Telekom with innovative solutions is just one example of how Euronet provides its clients with financial transaction services." 
Euronet ATM Recharge is one of several recharge options available from Euronet. Euronet Recharge solutions have been deployed by both mobile operators and financial institutions throughout Europe, Middle East, Asia and the Americas, using touchpoints such as POS devices, ATMs and mobile phones. These comprehensive airtime recharge outsourcing solutions are processed through the Euronet Operating Centre in Budapest, Hungary. 

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TOURISM

Croatia returns with new image 

Croatia looks set to be Europe's hottest new tourism destination with 20 UK tour operators, including Abercrombie and Kent and Simply Travel, starting to sell holidays there in 2003, Tom Templeton wrote in The Observer newspaper. Once a mecca for low-cost package holidays when it was part of the former Yugoslavia, the country is reinventing itself as an upmarket destination. 
Joze Lozic, of the Croatian Tourist Board, says the aim is to ensure the country maintains its old Mediterranean style. "Croatia was a package-holiday 'sun, sea and sand' destination in the 1960s, Seventies and Eighties. We will not build any more hotels, we will not return to our previous 'mass market' incarnation."
For the height of luxury, top hotel group Aman resorts is revamping the Hotel Excelsior for a summer 2004 reopening. 
"Croatia is one of the very few places left on the Continent whose coastline and country remains unspoiled by overbuilding and intensive tourism," says a spokesperson for the group. 

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