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CROATIA





In-depth Business Intelligence 

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 28,322 22,421 20,300 61
         
GNI per capita
 US $ 5,350 4,640 4,550 70
Ranking is given out of 208 nations - (data from the World Bank)

Books on Croatia

REPUBLICAN REFERENCE

Area (sq.km)
56,542

Population
4,496,869

Capital 
Zagreb

Currency 
Kuna

President 
Stipe Mesic

Private sector
% of GDP 
55%


Update No: 096- (26/04/05)

The aftermath of communism
After the death of Tito and with the fall of communism throughout eastern Europe, the Yugoslav federation began to crumble. Croatia held its first multi-party elections since World War II in 1990. Long-time Croatian nationalist Franjo Tudjman was elected President, and one year later, Croatians declared independence from Yugoslavia. Conflict between Serbs and Croats in Croatia escalated, and one month after Croatia declared independence, civil war erupted. 
The United Nations mediated a cease-fire in January 1992, but hostilities resumed the next year when Croatia fought to regain one-third of the territory lost the previous year. A second cease-fire was enacted in May 1993, followed by a joint declaration the next January between Croatia and Yugoslavia. However, in September 1993, the Croatian Army led an offensive against the Serb-held Republic of Krajina. A third cease-fire was called in March 1994, but it, too, was broken in May and August 1995 after Croatian forces regained large portions of Krajina, prompting an exodus of Serbs from this area. In November 1995, Croatia agreed to peacefully reintegrate Eastern Slavonia, Baranja, and Western Dirmium under terms of the Erdut Agreement. In December 1995, Croatia signed the Dayton peace agreement, committing itself to a permanent cease-fire and the return of all refugees. 

Into a new post-Tudjman epoch
The death of President Tudjman in December 1999, followed by the election of a coalition government and President in early 2000, brought significant changes to Croatia. The government, under the leadership of Prime Minister Racan, progressed in implementation of the Dayton Peace Accords, regional cooperation, refugee returns, national reconciliation, and democratisation. The change at the top enabled Croatia to move on. Tudjman, regarded by many as the 'father of his country' was ruthless, untrustworthy and worse. The western powers felt quite unable to work with him. Croatia then had no chance of gaining admission to the EU, whereas now they should one day make it - it is as simple and yet as difficult, as is explained below. 
On November 23, 2003, national elections were held for Parliament. The new government, headed by Prime Minister Ivo Sanader, took office in December 2003. The Sanader government has continued to build upon the changes first set forth under the Racan government. Presidential elections were held in January 2005. President Mesic was re-elected to a second term in office, defeating HDZ candidate Jadranka Kosor in two rounds of balloting. The inauguration of President Mesic was on February 18th, 2005. 
The Croatian Parliament, also known as the Sabor, became a unicameral body after its upper house (Chamber of Counties) was eliminated by constitutional amendment in March 2001. The remaining body, the Chamber of Representatives, consists of 151 members who serve 4-year terms elected by direct vote. The Sabor meets twice a year--from January 15 to July 15 and from September 15 to December 15. 
The powers of the legislature include enactment and amendment of the constitution, passage of laws, adoption of the state budget, declarations of war and peace, alteration of the boundaries of the republic, and carrying out elections and appointments to office. During the parliamentary elections of January 2000, six parties united to form a coalition government--Social Democratic Party of Croatia (SDP), Croatian Social Liberal Party (HSLS), Croatian Peasant Party (HSS), Istrian Democratic Assembly (IDS), Liberal Party (LS), and Croatian People's Party (HNS). The IDS left the coalition in June 2001. In July 2002, the HSLS left the coalition, after which it split into two parties, Libra and the HSLS. Libra remained in the coalition. As a result of the parliamentary elections in November 2003, a minority coalition government led by the HDZ was formed. 

New foreign minister
On January 4, 2005, Foreign Minister Miomir Zuzul tendered his resignation to Prime Minister Ivo Sanader. European Integration Minister Kolinda Grabar-Kitarovic became Foreign Minister on February 17, 2005. The Ministries of Foreign Affairs and European Integration were merged under her leadership, emphasising the pro-EU orientation of Croatia's foreign policy. In addition, Damir Polancec was named Deputy Prime Minister for Economic Affairs and Neven Ljubicic replaced Andrija Hebrang as Minister of Health. 
The president is the head of state and is elected by direct popular vote for a term of 5 years. The president is limited to serving no more than two terms. In addition to being the commander in chief, the president appoints the prime minister and cabinet members with the consent of Parliament. Following the death of President Tudjman, the powers of the presidency were curtailed and greater responsibility was vested in Parliament. 
The prime minister, who is nominated by the president, assumes office following a parliamentary vote of confidence in the new government. The prime minister and government are responsible for proposing legislation and a budget, executing the laws, and guiding the foreign and internal policies of the republic. 

The EU beckons 
Croatia hopes to begin membership talks by the end of June and join the European Union (EU) by the end of the decade. 
The European Commission, however, on April 25th reiterated that Croatia could not hope to start EU entry talks until Zagreb gives full cooperation with war crimes prosecutors. EU officials downplayed hopes of a breakthrough at the talks, which come after the EU refused to start the talks in March due to Zagreb's lack of cooperation in finding a key Croatian war crimes suspect. 
"There has been some slight progress but nothing substantial" in the hunt for fugitive general Ante Gotovina, one EU official told AFP, requesting anonymity. Gotovina is charged by the UN war crimes court in the Dutch city for alleged war crimes against ethnic Serbs at the end of 1991-95 Serbo-Croatian war. Zagreb has insisted it has no knowledge of his whereabouts. 
EU foreign policy chief Javier Solana said it was "fundamental" that Croatia help ensure the capture of Gotovina and his transfer to the International Criminal Tribunal for ex-Yugloslavia (ICTY). "We are going to talk to them very frankly, to see how things are moving," Solana said on arrival at a meeting of EU foreign ministers in Luxembourg, expected to meet with a Croatia delegation. 
The EU refused in March to start planned entry talks with Croatia after Carla del Ponte, chief prosecutor of the Hague-based ICTY, said she was not receiving full cooperation from Zagreb in the hunt for Gotovina. Del Ponte has been invited to the Luxembourg meeting, but there have been few signs that she will change her verdict that Zagreb is doing enough to help her. "We would like very much to move the process forward. But we need ... full cooperation" from Zagreb with the ICTY, said Solana. "Cooperation with the tribunal is fundamental. The objective is clear, that Gotovina is in The Hague," he added. 
There have been few signs of progress since last month on the Gotovina issue -- although Croatia's president has said that Zagreb had asked Israel to extradite a tycoon, suspected of being a supporter of Gotovina. The Croatian government has identified Hrvoje Petrac as a key assistant to Gotovina, President Stipe Mesic said, as well as that Stanko Banic, a Mesic stalwart, accused Transport and Tourism Minister Bozidar Kalmeta of being part of a support network helping Gotovina. 
Banic, who was at the time director of a shipping company based in the coastal town of Zadar, said that Kalmeta, then the town's mayor, asked him to finance Gotovina and his family. The Croatian minister denied the allegations, calling it politically motivated ahead of local elections next month. "This is clearly a well-organized and timed action ahead of local polls aimed at discrediting me," Kalmeta said.

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FOREIGN TRADE

Croatia targets Chinese deals

Croatia is number four with a 1.5% share in China's ship-building project, Bloomberg News Agency reported recently.
The director of Shanghai-based Shanghai Waigapqiep Shipbuilding company said that they are building ships now that they could only have dreamt of five years ago. With leading yards worldwide at full capacity until 2008, China's rise in market share has come at the expense of such publicity traded ship-builders as south Korea's Hyundai Heavy Industries Co and Japan's Mitsui Engineering and Shipbuilding Co. China, the world's number three shipbuilder, raised its share of new orders by 2% to 17% last year and won its first contract to build liquefied gas tankers.

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FOREIGN LOANS

World Bank grants Croatia 46m-dollar loan

The World Bank recently granted Croatia a US$45.68m loan for the project aimed at economic and social reconstruction, the Bank said in a statement, HINA News Agency said. 
The loan is earmarked for the reconstruction of the war-struck and insufficiently developed areas of Croatia, which is part of Croatia's efforts aimed at joining the EU, the Word Bank said. The loan is to be paid back in 15 years with a five-year grace period.

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TELECOMMUNICATIONS

IskonInternet gains concession

The Croatian Telecommunications Agency granted a fixed telephony concession to IskonInternet on March 25th, hrt.com reported.
The services provided by the IskonInternet cover more than 7,000 companies in Croatia and 100,000 private users. This company is the leader in Croatia. The company said the concession enabled it to offer services via the fixed telephony network, excluding the use of the radio frequency spectrum. IskonInternet will provide internet services to consumers all over Croatia. The concession was granted on the national level for a period of 30 years. IskonInternet said it would be ready to offer services within a couple of months.

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TOURISM

Croatia hotel business grows

Tourism businesses are expanding in Croatia rapidly, Interfax News Agency reported. Hotels in Croatia are now being revamped as a result. A well-known tourist destination, a renewed international airport, a famous Summer Festival clean water, a marina for sailing boats, a famous port of call for hundreds of cruising ships, has a real potential to become a destination for golf tourist and players. A total hotel capacity of 2,000 beds exists in the three and four star hotels in Dubrovnik. The tourist hotel group, Babin Kuk of Dubrovnik, has decided to invest into the modernisation and restructuring of its five star hotel Plakir. Twenty five million Euro will be invested in this project. The reopening of this hotel is expected to take place in April 2007.

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