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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)

Books on Croatia

REPUBLICAN REFERENCE

Area (sq.km)
56,542

Population
4,422,248

Capital 
Zagreb

Currency 
Kuna

President 
Stipe Mesic

Private sector
% of GDP 
55%

 

Update No: 090- (27/10/04)

Looming presidential elections; maverick candidates abound
The incumbent president, Stjepan Mesic, is highly likely to win imminent elections for his office. But he is facing competition from mavericks outside the normal domestic political arena.
One of them is more used to a very different sort of arena. Former Croatia soccer coach Miroslav Blazevic, who led the Balkan country to third place at the 1998 World Cup, is planning to run for president in elections due by February, but which might be held as early as December 21st.
"Certain people have convinced me to run for the presidency, since they believe I could win," Blazevic -- nicknamed 'Ciro' -- told the Jutarnji List daily. "They told me that I was the only one who can beat (President) Mesic."
The date for the elections is not yet fixed but they are due to be held by February, when Mesic's five-year term expires. Mesic has said he would run for a second term.
Blazevic claimed he could get the 10,000 signatures required to list as an independent candidate "in 24 hours." "I only need an announcer at the Zagreb stadium to say that Ciro needs 10,000 signatures," he said.
The 68-year-old, who recently recovered from prostate surgery, is currently coaching Croatian first division side Varteks Varazdin.
Yet another outsider is a Minnesota man who fled Eastern Europe more than 30 years ago and found success as a businessman there 
Boris Miksic returned to his Croatian birthplace recently to begin his campaign to lead the developing Balkan country, even though few think he'll make any impression on voters there. Journalist Slaven Jelenovic, the managing editor of a Croatian news agency, gives Miksic little chance of success.
But Miksic can't forget a conversation he had with former Gov. Rudy Perpich, the son of an immigrant Croatian who spent his final years promoting trade relationships between the new country -- part of the former Yugoslavia -- and Minnesota.
"Perpich was a really close friend," Miksic said. "Right before he died, he said to me, 'You know, Boris, one day you need to run for president of Croatia.'
"That stayed in my mind, but I wasn't ready for it for a long time," Miksic told the Star Tribune of Minneapolis in an interview before he left the country. "Then last year, I was looking at all the political parties over there, how it's a country in transition that needs focus, and I decided it was time for me to go back."
Jelenovic said few people know anything about Miksic, who is 55.
"The current president has such a high approval rating that no one from the current political scene, never mind an outsider, can pose a serious threat to his re-election," he said.
Even so, Zbigniew Bochniarz, senior fellow and director of the Centre for Nations in Transition at the Humphrey Institute, said he wouldn't write off the candidacy. He points to other naturalized Americans who "went home" and won high positions in such new democracies as Lithuania and Latvia. "These societies are tremendously open to embracing these people," said Bochniarz.
"They need now to really strengthen their economy, and with his American experience he would bring a lot of good ideas about tolerance and multiculturalism to that part of the world," he said. "This is something that might work. It could be a good match."
According to recent polls, President Stjepan Mesic is the most popular politician in the country. He is credited with reducing the powers of the presidency, investigating illegal activities by the previous regime and preparing the way for Croatia to join the European Union in 2007 and NATO sometime later.
Boris Miksic, who has received 1 per cent to 2 per cent support in recent polls, said Croatia needs to break out of a cycle of left-right politics involving leaders bound to old parties and old traditions.
"We need new faces, new ideas," he said. "We need people who are independent thinkers who have succeeded in life and proven themselves in business or science."

Solana calls Croatia, Slovenia to solve border row through dialogue
Slovenia and Croatia declared independence from the former Yugoslavia in 1991 but have been unable to agree on their common border ever since. In particular there is a dispute about the Piran Bay area, the main outlet of Slovenia to the sea.
Slovenia, which gained membership of the EU last May, could theoretically prevent Croatia from becoming a member of the bloc, as the support of all the EU's 25 states is required for the approval of new members. Croatia is expected to start formal negotiations for membership next year, with a view to entering the EU in 2007. 
But the dispute between Slovenia and Croatia reflects issues left over from the break-up of Yugoslavia that continue to hinder relations between all of the former socialist state's six republics. Slovenia is in dispute with Croatia over access to international waters and over two small stretches of land, one near the Slovenian town of Piran and the other at the country's southeastern border with Croatia, near Zagreb. Croatia claims most of the territorial waters along Slovenia's coast, effectively denying it full access to international waters. An accord was signed by the two countries in 2001, but Croatia has since declined to ratify it. The issue heated up when Croatian border guards arrested a group of men in a 'provocation' led by a member of the Slovenian Parliament, Janez Podobnik of the opposition Slovenian People's Party, in the disputed Piran Bay area after they refused to show their identity cards. The arrests were filmed by a television crew and broadcast on Slovenian television the same evening.
EU foreign policy chief Javier Solana on 5 October urged Croatia and Slovenia to solve their border row through dialogue. "It should be solved in the spirit of Europe. That is the spirit of dialogue, negotiations, the spirit which is the opposite of violence," Solana told journalists after meeting Croatian Prime Minister Ivo Sanader in Zaghreb. 
The neighbouring states reached an agreement on the disputed Piran Bay area in 2001, but the deal was widely unpopular in Croatia and Zagreb never ratified it, even though Croatia has an extremely long coastline and several deep water ports, whilst Slovenia has a minute littoral and one small port at Piran

Croatia ready to start accession talks with EU: commissioner
The European Union's enlargement commissioner Guenter Verheugen said on 13 October that Croatia is fully prepared for the start of accession talks with the EU due early next year. 
"Croatia is not only sufficiently, but extraordinarily well prepared for beginning ... negotiations," Verheugen said at a press conference after meeting Prime Minister Sanader. 
Sanader reiterated the country's goal to fulfil all membership criteria by the end of 2007. "It is the ambition of this government to conclude talks with the European Commission in 2007, and than it will be up to the EU to decide on the date of accession," he said. 
Verheugen's two-day visit came as the UN war crimes chief prosecutor Carla Del Ponte renewed pressure on the Balkans country to detain fugitive general Ante Gotovina, whose case has previously hampered Zagreb's EU bid. Del Ponte urged the Croatian authorities to detain Gotovina, as she attended an EU foreign ministers' meeting. 
Verheugen said he received assurances from the government that it would do everything possible to bring Gotovina to justice. "I have no doubt that Croatia will do its best to fulfil that condition, but the country cannot do more than is possible," Verheugen said, adding that "if he (Gotovina) is not in Croatia it might be difficult for the prime minister to arrest him." Croatian authorities say the 49-year-old retired general has fled the country. 
Full cooperation with the Hague tribunal is a key political condition Croatia has to fulfil before joining the bloc, along with the return of ethnic Serbs who fled the country during the 1991-95 Serbo-Croatian conflict and regional cooperation. 
The International Criminal Tribunal for the former Yugoslavia charged him three years ago with war crimes against ethnic Serbs during the war. 
Croatia was granted official EU candidate status in June. 

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ENERGY

Croatian oil major discovers oil, in addition to gas, in Syria

In addition to large quantities of gas, INA [Croatian oil industry] has also found considerable quantities of oil in Syria. The discovered gas fields are larger than expected and so far registered with the Syrian Ministry of Oil and Mineral Materials, Vjesnik reported.
Large quantities of oil have been discovered within the scope of the new research at the Jihar field in Hayan block, for which INA has a 100 per cent concession. INA experts expect daily production of about 500 tonnes at the Jihar-2 well alone, and they estimate that, on the basis of the research conducted so far, there could be several million cubic metres of oil in the Jihar field.
According to them [INA experts], in addition to the oil in the Jihar field, the volume of gas discovered is at least 50 per cent higher than expected and registered with the Syrian Ministry. This will all considerably increase the value of INA's concession at the Hayan block as well as the expected profit, which INA experts have so far estimated at about 50 million dollars. 

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EU ENTRY

Poland backs Croatia's EU drive

Poland wants to see Croatia in the European Union and NATO, President Alexander Kwasniewski said following official talks with visiting Croatian President, Stjepan Mesic, Deutsche Presse-Agentur (DPA) reported. 
"Poland is prepared to provide far reaching political support and to share its experience in legislative and economic transformation as well as negotiations and initial experiences following EU entry," Kwasniewski said. Mesic thanked Kwasniewski for Poland's "strong support" for what he termed Croatia's "strategic goals." Croatia is expected to begin accession talks with the EU early next year and hopes to join the bloc in 2007 when it is on track to admit Bulgaria and Romania.

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FINANCIAL NEWS

Croatia attracts US$548m in foreign investments in first half of 2004

Croatia attracted US$547.8m in foreign investments in the first half of 2004, according to figures from the Croatian National Bank released recently, HINA News Agency reported.
The first six months of this year saw a fall in direct investments compared to the same period last year when they totalled about US$990m. 
The head of the central bank's Statistics Department, Igor Jemric, recently explained that this was the result of the fact that reinvested profits had a substantial share in last year's overall foreign investments.
Although the largest portion of the foreign investments in the first half of this year, notably US$266.2m, also accounted for reinvested profits, this amount was considerably smaller than at the same time last year when the retained profit was US$657.2m. 
Owner investments yielded US$213.5m, mostly in the trade sector. In the first half of this year 37.5 per cent of owner investments accounted for non-specialised retail shops, 12.7 per cent for non-specialised wholesale of food, and 8.7 per cent for wholesale of pharmaceutical products. 
Most direct foreign investments came from Austria (28.9 per cent), Germany (22.5 per cent), Italy (10.8 per cent) and Luxembourg (10.1 per cent). Austria and Germany have been the leading investors in Croatia over the past ten and a half years. 
Of the total of US$10.1bn in direct foreign investments in Croatia since 1993, 25.7 per cent have come from Austria, 20.7 per cent from Germany, 14.7 per cent from the United States, 6 per cent from Hungary, 5.8 per cent from Luxembourg and 5.7 per cent from Italy. Those were mostly owner investments, totalling US$6.4bn, made during the privatisation period. 
Most of the direct owner investments were made in the telecommunications sector (20.9 per cent), the banking sector (19.6 per cent), the pharmaceutical industry (11.3 per cent), petroleum production (7.8 per cent), cement production (3.3 per cent), hotels and motels (3 per cent) and trade (about 3 per cent). 
Over the last ten and a half years, Croatian companies have invested US$1.2bn, of which 32.3 per cent in Switzerland, 16.5 per cent in Bosnia-Herzegovina, 12.8 per cent in Poland and 9.9 per cent in Serbia and Montenegro. Most of the investments abroad (US$1.1bn) accounted for owner investments, and 56 per cent of owner investments accounted for the pharmaceutical industry.

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FOREIGN ECONOMIC RELATIONS

Croatia, Iran sign memorandum on economic cooperation

Croatian Economy, Labour and Entrepreneurship Minister, Branko Vukelic, recently received Iranian Minister of Cooperatives, Ali Sufi, Vukelic's ministry said, HINA News Agency reported. 
Vukelic and Sufi signed a memorandum on cooperation between the two ministries.
Vukelic said Croatia-Iran trade had gone up in the first six months of this year, but added not all possibilities for improving economic cooperation had been exploited.
Vukelic and Sufi expressed the two countries' interest in cooperating in shipbuilding and infrastructure projects, as well as in making Croatian ports, notably Rijeka, Iran's gateway to Central and East Europe.

Croatia, Morocco sign investment stimulation treaty

Croatia and Morocco signed a treaty on the mutual stimulation and protection of investments, which ended the visit of a Croatian economic delegation to that country, the Croatian Economy Ministry said recently, HINA News Agency reported.
The Croatian delegation, led by State Secretary for the Economy, Vladimir Vrankovic, held talks with officials of Morocco's ministries of industry and trade, foreign affairs, finance and foreign trade. Both sides expressed a wish to improve economic cooperation.
Talks were also held between representatives of Croatian and Moroccan companies, as well as with Morocco's state-owned companies in the road-building, rail and energy sectors. An agreement worth 3.5m euros was signed with Moroccan state television.
An agreement was also signed between the Croatian Bank for Reconstruction and Development and the Moroccan Export Insurance Agency.

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FOREIGN RELATIONS

Better Israel-Croatia ties

Israel is to improve relations with Croatia, by appointing a resident ambassador for the first time since establishing diplomatic relations seven years ago, the Israeli Foreign Ministry said recently. Ministry spokesman, David Saranga, said that since ties were established in September 1997, Israel had been represented in Croatia by a non-resident ambassador based in Austria, New Europe reported.
"We are going to open an embassy in Zagreb and appoint a resident ambassador in the near future," Saranga said. In the 1990s, Israel accused Croatia's then-President Franjo Tudjman of generating nationalism reminiscent of World War II, when about 30,000 Jews perished in concentration camps run by Croatia's Nazi puppet state.

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TELECOMMUNICATIONS

Another T-Mobile re-branding

Croatia's Hrvatski Telekom (HT) will be re-branded as T-Hrvatski Telekom, or T-HT, New Europe reported recently. 
At the same time, two separate brand segments will be formed: T-Com for fixed-line and online and T-Mobile. The re-branding was announced at a Zagreb press conference by T-HT CEO, Ivica Mudrinic, and a Deutsche Telekom board member. The latter emphasised that, "a strong brand is of decisive importance for the further development of the market and the positioning of HT as a leading provider in future competition."

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