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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)

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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: 085- (01/06/04)

The Croatian Democratic Union (HDZ) governed Croatia throughout the 1990s, but lost power to the Social Democrats in early 2000.FranjoTudjman, their talisman, died in December 1999, as if on cue a new government came in, but without his kudos. The new dispensation has not brought a new millennium. 
After the failure of the left-wingers in the last three years, HDZ is now back in office with a vengeance, being clearly ahead in the 150-seat parliament. As the largest party represented it has a decisive edge in forming a coalition government.

Croat-Serb co-alescence
The key to stability in the Balkans is good relations between the Croats and the Serbs. They are both well aware of this.
Croatian Prime Minister, Ivo Sanader, and Serbian Deputy Premier, Miroljub Labus, who met in Zagreb recently, agreed that their countries' relations were crucial for Balkans stability. "Relations between Croatia and Serbia are of great importance to central and southeast Europe," Sanader said after the meeting.
Labus said that Serbia "is watching with pleasure how Sanader is running the policy towards the Zagreb's European Union membership minorities related issues and neighbours," adding, "the stability of southeast Europe depends on the Zagreb-Belgrade axis. No one from the outside should tell us how to regulate our relations."
Croatia and Serbia, who fought each other in the 1990s when Zagreb broke away from Yugoslavia to become independent, are now working on improving their relations. Topics on the agenda include political and economic issues and the fate of persons missing since the end of the 1990s war.
"We discussed the very painful issue of some 1,200 missing persons and agreed that the issues relating to the war should be resolved as soon as possible," Sanader said. The Croatian premier also said that Zagreb and Belgrade have plans to replace armed forces controlling the frontier with the border police.
Meanwhile, Minister for Agriculture, Forestry and Water Resources Management, Ivana Dulic Markovic, of Serbia and, Petar Cobankovic, of Croatia agreed in Novi Sad that the strengthening of bilateral relations, as well as economic cooperation between the two countries, are of mutual interest. Delegations of the agriculture ministries of Serbia and Croatia met at the 71st International Agriculture Fair and discussed modalities for implementing the free trade agreement between the two countries which should take effect on July 1st this year.

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EU ACCESSION

Premier says Croatia is "ready" to start EU entry talks in June

Launching a fast economic growth, encouraging exports and production, creating new jobs and ensuring social justice are the key challenges Croatia has to respond to as part of efforts to draw closer to the European Union, President Stjepan Mesic, said at Entrepreneurs Day, HINA News Agency reported.
This year's event, which was organized by the Croatian Employers Association, focused on the development of Croatian economy according to EU standards. Apart from Mesic, speeches were delivered by Prime Minister, Ivo Sanader, Deputy PM, Andrija Hebrang, and several relevant ministers. Mesic said that after receiving a positive opinion on its EU membership application, Croatia now needed to define a convergence strategy, a strategy of drawing closer to the Union.
The new development model which will bring Croatia closer to the EU has to rely on export and production, the president said, underlining the significance of increasing competitiveness.
Mesic stressed that annual economic growth rates must exceed 5 per cent and that export growth rates must be even higher. He expects the government and business people to make concrete measures to encourage exports and revive the industry, notably high technology production.
PM Sanader reiterated that Croatia expected the European Council to grant it official EU candidate status and decide about the start of negotiations in June. "Croatia is ready for that. We are also willing to make sacrifices," he said, underlining the importance of a national consensus on these issues.
Sanader also stressed the importance of the tripartite relations in the Economic and Social Council as well as the need for the academic community to take part in them.
Supporting entrepreneurs, the PM said that politics could open doors but that the rest was up to business people. 
Deputy PM Hebrang stressed the importance of the entrepreneurial climate for activating domestic and attracting foreign capital. He said the government's projects were aimed at helping large companies and encouraging small and medium-size enterprise.
Hebrang highlighted the importance of expansion in the economy and announced privatisation would be expedited.

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FOREIGN ECONOMIC RELATIONS

Croatian president receives Oman's economy minister, urges cooperation

Croatian President, Stjepan Mesic, on May 4th met for talks, Oman's Economy Minister, Ahmad Makki, the president's office said in a statement, HINA News Agency reported.
Minister Makki conveyed to President Mesic a message from Oman's Sultan thanking Mesic for his hospitality during the Sultan's visit to Dubrovnik last year and his invitation for Mesic to visit Oman. President Mesic invited the Sultan to visit Croatia.
Makki said that the two countries had great potential for economic cooperation, which was not sufficiently exploited.
Although its strategic goal is to join the European Union, Croatia also wants to cooperate with other friendly countries and promote cooperation with Oman, especially in tourism and the production of healthy food. The two countries are drawing up an agreement on the avoidance of double taxation to promote economic cooperation, the statement said.

Croatia wants to continue economic cooperation with Kosovo - official

Croatia wants to continue cooperating with Kosovo regardless of the March riots, the head of the Croatian Chamber of Economy, Nadan Vidosevic, said after talks with Kosovo Parliament Speaker, Nexhat Daci, and Prime Minister, Bajram Rexhepi, in Pristina recently, HINA News Agency reported. 
"We are looking forward to the continuation of the privatisation process in Kosovo so that Croatian companies could start making investments," Vidosevic said.
He added that during the talks with his hosts he also spoke about Croatia's experience in privatisation and welcomed the efforts Kosovo's government was making to accelerate that process.
Vidosevic also met representatives of Kosovo's Chamber of Economy and held a lecture on the process of transition in Croatia. There are 70 Croatian companies operating in Kosovo.

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FOREIGN LOANS

Croatia, World Bank complete talks on loan for pollution project

Representatives of the World Bank, Croatia's Ministry of the Sea, Tourism, Transport and Development and Croatian Waters have successfully completed negotiations on a 40 million euro World Bank loan for a project aimed at controlling the pollution of coastal cities, the bank's Zagreb office said, HINA News Agency reported.
The current wastewater management is not satisfactory, with water pollution representing a problem for many cities along the coast as less than 12 per cent of wastewater is purified. The aim of the project is to improve the quality of the Adriatic seawater in accordance with European Union provisions concerning environmental protection, and thus boost tourism.
The project, likely to include Krk, Opatija, Biograd, Zadar and Rijeka, has been supported by the government's recently drawn up national environmental protection activity plan.
The World Bank has funded 22 projects in Croatia since 1993 with more than US$1.2bn.

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TELECOMMUNICATIONS

Podravka-Telecom-Darko deal on 

Marinac, president of Podravka's management board, and Ivica Mudrinic, president of Croatian Telecom's management board, recently presented the contract of business cooperation in the field of telecommunications services that are tailored to Podravka's needs, New Europe reported recently. 
This new partnership is a direct outcome of the companies' successful cooperation in the past, particularly as Podravka was the first user of Croatian Telecom's services: the mobile VPN service and the Internet-based international VPN. The new framework contract of cooperation encompasses a range of Croatian Telecom's and HT mobile's fixed and mobile telephone and Internet services.

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TOURISM

Tourism boosts Croatia's image, better things to come

Following the Balkan conflicts of the 1990s, Croatia turned to tourism to build a new, positive image, Deutsche Presse-Agentur (dpa) reported recently.
Within a relatively short time, the country has succeeded in boosting its reputation as an attractive place to visit and do business. This year, Croatia is expecting a 3% to 5% increase in the number of hotel stays, a figure which is expected to improve the tourist industry's financial results by as much as 10%.
Croatia will likely attract visitors despite the continued impact of the terrorist threat on the European tourist industry in general. Experts say, however, that Croatia must build on the successes achieved so far. One method is through effective advertising, including the creation of a recognisable slogan that will 'brand' the country worldwide. An oft-cited model is Spain, which after the death of Franco in 1975, undertook to end its international isolation. It waged an aggressive campaign based on the slogan "Everything under the Sun."
As a young democratic country, Croatia today is facing similar challenges.
Meanwhile, officials stress the need to ensure that the country has the facilities and services needed to accommodate an influx of visitors. Tourism Minister, Bozidar Kalmeta, has expressed dissatisfaction with the level of preparations in some Croatian communities, resulting from work delays. At the same time, the government is addressing the problem of uncontrolled shoreline construction and encroachment on the seashore. Illegal construction has burgeoned - a problem resulting from the desire to make a quick buck without adequate investment, authorities say.
East West Communications President, Thomas Cromwell, believes image building has had a major impact on the ability of countries to succeed in the international arena. However, he cautioned, "tourism is only one of the areas a country needs to develop, and this is only one of the sectors which will benefit from image improvement." As Croatia continues to bolster its image through its developing tourist industry, analysts say successes in foreign policy - such as the recent, favourable report by the European Commission - will help boost tourism.

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