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CROATIA





In-depth Business Intelligence 

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)

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REPUBLICAN REFERENCE

Area (sq.km)
56,542

Population
4,422,248

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. 
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: 087- (27/07/04)

EU ahoy
In Brussels on June 18th the leaders of the EU invited Croatia to enter negotiations to join the union: a big victory for Ivo Sanader, a prime minister only six months in office, and one which sets an example to the rest of the war-ravaged western Balkans - Serbia, Bosnia, Macedonia, Montenegro, Kosovo and Albania, who can all aspire to enter.
After years of having their EU ambitions blocked the Croats are being invited in because their government is surrendering war crimes suspects to the international tribunal in The Hague and, finally, letting ethnic Serbs return to their homes and property. 
"We're not pretending there are not any problems," the Croatian foreign minister, Miomir Zuzul, said."But we are a government looking forward to EU and Nato membership and the sooner we leave behind the wounds of the past, the better it will be for everybody."
Sanader said that the European Union would open accession talks with Zagreb by March 2005. "Based on all talks that I have held with my counterparts the accession talks should start at the beginning of 2005 and not later than March," Sanader told reporters. 
In April, the European Commission, the EU's executive arm, recommended Croatia be granted formal EU candidate status. Croatia is keen to meet the criteria for EU membership by 2007, along with Bulgaria and Romania. 

Ongoing reform and cooperation
The EU's decision on Croatia's candidacy for membership is the result of Zagreb's current implementation of domestic reforms and, more particularly, its change in attitude towards the Yugoslavia Tribunal in The Hague.
Previously, the relationship between the two was difficult to say the least. But the new centre-right government of Sanader has changed that, as Foreign Minister Zuzul told Radio Netherlands: "I think the last couple of months, since our new government, we established good working relations with the chief prosecutor and we really cooperated very well. We are continuing the cooperation, and I think the results are very much evident".

Cooperation with Brussels and The Hague
Political preconditions set by Brussels for Croatia's EU bid include the return of ethnic Serbs who fled the country during and after the 1991-95 Serbo-Croatian war, reform of the judiciary and full cooperation with the UN war crimes court at The Hague. 
Sanader's conservative government facilitated the surrender of eight war crimes indictees to the UN court earlier this year. But, Brussels insists that the case of fugitive general Ante Gotovina should be solved as soon as possible.
Under the current government of Prime Minister Sanader, eight Croatian and Bosnian Croat suspects have handed themselves in voluntarily to the Yugoslavia Tribunal. At the same time, Croatia has made a start on reforming its own judicial system with a view to trying alleged war criminals at home. The tribunal itself would be prepared to transfer certain cases to the jurisdiction of the Croatian courts. This is an issue which Mr Zuzul recently discussed with Carla del Ponte, the tribunal's chief prosecutor. "We discussed how they can help us to prepare Croatian tribunals to prosecute the cases in the future, because the tribunal [in The Hague] has to finish its job relatively soon."
The tribunal is, for example, examining whether ex-Croatian general Mirko Norac might stand trial in Croatia itself. That won't be an easy task for Croatia given that a large part of the country's population is opposed to his facing prosecution at all. To many Croats, he is one of several folk heroes who defended the country during the war.

Respect for minorities
Another test Croatia faces in proving its readiness for EU membership concerns its treatment of minorities. One of the basic conditions set by the EU in what are known as the Copenhagen criteria is that a - candidate - member state must respect the rights of its minorities. And, according to Mr Zuzul, that is now absolutely the case in his country: 
"We have minority rules which are recognised by everyone among the best in the world. But it is more than that. We try to create an atmosphere where all people in Croatia should feel well. And I'm proud to say we are doing very well it that direction. The best proof for that is that our government is supported by all minority-representatives in the Croatian parliament."

Serb refugees
However, the international community is still calling on Zagreb to do more to make it facilitate the return to Croatia of the minority Serb population. The conflict of the 1990s saw some 300,000 ethnic Serbs flee the country. So far, more than a third of this group has already returned. Most of the refugees come from the Karjina region in the southwest of the country. One of the main practical problems in terms of their return is housing. Many of their former homes are now occupied by Croats who fled Bosnia. The housing issue is further compounded by the fact that there are hardly any jobs for them.

Into the third millenium
Miomir Zuzul describes Croatia's path to EU membership as 'the project of the millennium'. It's a project that will take time to complete, because democracy doesn't take root overnight. However, he isn't talking about Croatia alone, but all the countries that once made up Yugoslavia: "I do believe that one day they will also become members of the European Union. The process of unification can't be completed as long as those countries are not also members. We can't imagine Europe that has a hole in the middle of its stomach."
Croatia looks set to be the first nation to step in to fill that hole, and it hopes that, in doing so, it will set an example for the rest of the region.

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CONSTRUCTION

Croatia and Italy unveil Ancona-Zadra bridge project

The "sensational project of the future," which would join the west and east coast of the Adriatic Sea between Italian Ancona and Croatian Zadra was presented at the Polytechnical University in Ancona recently, New Europe reported.
The bridge would be 120km long and have an average height of 40m, the largest in the world, and its construction would cost €20bn. The project with the slogan "From A to Z" (from Ankona to Zadra) was signed by Studio Romanis of the famous Italian architect Giorgio de Romanis and it was displayed for the first time, in its unfinished form, at the international congress Structure ISEC 2002, when it had aroused great interest.
The bridge would be, according to the Italian newspaper Mesaggero, self-financed from road tolls, at an average cost of €100 for cargo trucks. It would last 120 years, and it would be paid for within 25 years. About 200 trains would pass daily in both directions, and the highway would have a capacity of 80m vehicles per year.
The total price includes the grounding of the bridge on the shore, a 20km supplement section on the Croatian islands and land buildings in order to solve the problems of impact on the environment. The bridge would also house, other than roads and railway tracks, telecommunication connections, gas pipelines, petroleum pipelines and all would be incorporated in the existing road and power corridors of Italy and Croatia.
Europe would receive a new transportation-fuel-telecommunication highway East-West, which would bypass the overloaded Venice-Trst centre and, annually, from road traffic alone, about €55bn would be saved, taking into account the minimal four hours saved for 20m commercial and 30m private vehicles. The project's technical name is "Bow and Arrow" because the horizontal, self-standing structure is in one block, 250-metre long, and the column in the shape of an arrow is realised in two parts. The energy of the sun, wind and sea waves would be used for interior and exterior lighting, traffic signs, buildings, the temperature of the road surface, airing out and drying of parts of the bridge that are most susceptible to corrosion, ice and humidity.

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EU ACCESSION

EU to open membership talks with Croatia in 2005

European Union leaders were expected recently to agree to open membership negotiations with Croatia next year but are demanding Zagreb make improvements in several key policy areas, according to a draft communiqué released at a summit being held in Brussels, New Europe reported.
Talks for Croatian European Union (EU) membership will begin "early" in 2005, said the statement, adding that Croatia needs to make additional efforts in a series of areas before it can be admitted to the 25-nation bloc. These include: Improving minority rights, improving the right of return for refugees, reform of its judiciary, boosting cooperation in the Balkans, taking stronger steps to fight corruption. EU leaders were also expected to underline that Croatia needs to maintain full cooperation with the International Tribunal for War Crimes in former Yugoslavia (ICTY) in The Hague. Croatia hopes to join the EU with Romania and Bulgaria which are expected to become members in 2007. 
Slovenia is so far the only state from former Yugoslavia to become an EU member. It joined the bloc in a group of 10 other mainly east European states on May 1st. Macedonia has also applied to join the EU but is not expected to become a member in the near future.

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FOREIGN LOANS & AID

EU grants Croatia funds to meet entry requirements

The European Commission has granted Croatia 76 million euros within the CARDS [Community Assistance for Reconstruction, Development and Stabilization] programme for 2004 as support for reform and modernization processes in the country, the European Commission's delegation in Croatia said in a statement, HINA News Agency reported. 
According to the statement, the European Council granted Croatia candidate status at its session on 17th and 18th June, and the country will start using pre-accession instruments in 2005.
The statement says that the priorities of the CARDS programme are the strengthening of democracy and the rule of law, for which 17.5 million euros has been earmarked, economic and social growth (17.75 million euros), better functioning of the judiciary and police (21.85 million euros), the reform of the public administration (15.1 million euros) and the protection of the environment and natural resources (3.8 million euros).
As part of democratic stabilization, funds will also be granted for the return of refugees, the encouragement of return in the war-struck areas, and the promotion of social and economic revitalisation. 

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TRANSPORT

Croatia ends Zagreb-Rijeka highway project

Croatian construction companies on June 23rd completed the final section of the highway linking capital Zagreb and the biggest Adriatic seaport of Rijeka, dpa reported. 
The construction of the 13.8km-long Vrbovsko-Bosiljevo section means the completion of the entire, 146.5km highway from Zagreb to Rijeka. The road was officially opened by the Prime Minister Ivo Sanader, who said that this was an event of "extraordinary importance as the old dream of connecting Rijeka and Zagreb had come true." The highway is seen as very important for Croatia as it significantly shortens the journey between Zagreb and Rijeka, from 3 hours to only 1.5 hours. Also, the road will be important for Croatian tourism, as most foreign tourists arrive in Croatia by car. It was completed just before the beginning of the main tourist season. The toll for the entire highway for cars is 56 Croatian kunas (around €7.5).

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