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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: 102- (27/10/05)

Into the EU?
The decision by the European Union to open full membership talks with Turkey in early October is a momentous one for the whole Balkans, particularly so for Croatia, for long the frontier between Christian Europe and the Ottoman empire. 
For how could the EU refuse the same to countries that were once ruled by the Sublime Porte in Istanbul, all indisputably on European soil, while only 5% of Turkey is, and, with the exception of Albania, are all Christian by religion, which the Turks are notoriously not? 

Austrian objections overcome for now
This is especially true in the light of how a diplomatic impasse over Turkish entry was avoided. Austria relaxed its opposition to full membership by the Muslim state when it was agreed that talks could start immediately with Croatia, which it once ruled in its Austro-Hungarian empire.
"We are at a difficult stage in these negotiations," said Jack Straw, the British foreign secretary, who was leading the talks, after his first morning conversation with Ursula Plassnik, the Austrian foreign minister. "I can't say what the outcome will be." His gloom was a result of the demands by Austria's conservative government, reflecting widespread reservations in Austria about bringing Turkey into the EU. 
The mood surrounding the Turkey talks brightened considerably after the pronouncement by Carla Del Ponte, chief prosecutor for the United Nations international war crimes tribunal, said for the first time that Croatia was "cooperating fully" in catching Ante Gotovina, a fugitive indicted as a war criminal. Austria is a strong supporter of Croatia's own bid to join the EU, and Del Ponte's report opens the prospect for Croatia's membership negotiations to start soon. 
This change of stance is the more remarkable in that Gotivina is still very much at large. A declaration of intent to cooperate is the essential point.

Croatia targets EU accession by 2009 
Croatia's parliament on October 14th set 2009 as the year in which the former Yugoslav republic should enter the European Union. The parliament urged the government to complete the EU membership talks 'within a time frame that would enable Croatian citizens to participate in the next elections for the European parliament in 2009', reports AFX News Limited.
The motion, backed by 95 deputies in the 152-seat parliament, was part of a resolution on Croatia's strategy on its EU accession negotiations. It was opposed by only one of the members present. 
The statement also said periods of transition should be obtained in the course of talks concerning agriculture, shipbuilding, the environment and real estate. 

The Vienna-Zagreb Axis
Why is Austria demanding EU accession for Croatia? And why is it set against that of Turkey? "If you consider which region is most important for Austria and the Austrians, it can only be the West Balkans", said Ursula Plassnik, the Austrian foreign minister, about her foreign policy priorities in an interview with Kurier newspaper in April 2005the CafeBabel website reported.
Even back then she was proud that it was down to her work that the EU had not completely dropped talks with Croatia - despite the latter's perceived failure to cooperate over the war criminal General Gotovina: "I see this is as part of our work as neighbours. That is how neighbourliness should be. In this region, Austria has an enormous amount of credibility and trust. We must do justice to that." But it's not only about credibility; trust and the sentiments shaped by history have helped to sweeten the friendship between Vienna and Agram, as Zagreb is known in the Austrian lexicon. Economic arguments also have an important role to play. 
Number 1 investor Peter Zöllner, the director of the National Bank of Austria, confirmed the key role of the Alpine state in central and south-eastern Europe during the presentation of the UNCTAD World Investment Report in September: As in Slovenia and Bulgaria, Austria is the largest foreign investor in Croatia, with 220m euros going to Croatia in 2004. Between 1993 and 2003, Austria invested a total of 2.1bn euros in Croatia. The Austrian economy therefore accounts for just over 30% of foreign investment. 
Exports to the former province of the Austro-Hungarian Empire are also striking: in 2003, the one billion euro mark was passed. What's more, Austria's image received a healthy boost in the Croatian media following it support of Croatia's accession, which can only improve Austria's position in its post-Habsburg business relationships. Even in terms of tourism, Croatia has become more important for Austria than Turkey. Whereas during the Balkan war Austrian holidaymakers saw Croatia as a place to avoid, Turkey has now taken on this dubious honour, not least due to the fear of terror attacks. According to estimates by the Vienna Institute for Tourism and Leisure Research, Croatia is now just behind Italy and Greece as the number 3 holiday destination, pushing Turkey into fourth place.
A larger market - but not for Austria's Turkish export industry which may be anything but happy with the comments of the foreign minister, but Turkey is, on the whole, far less important for Austria than Croatia. In contrast to Germany, Austria does not have any significant economic links to Turkey. Although exports to Turkey have increased in recent years, from 620m euros in 2003 to 790m euros in the following year, Turkey has roughly the same export value for Austria as Finland. Even though the accession of both countries would be welcome from an economic point of view, the people remain sceptical - the most recent Eurobarometer survey shows that just 10% are in favour of Turkey's accession, compared to 45% who support EU membership for the Adriatic state.

Austria plans conference on Balkans in 2006 - Fischer
Austria plans on holding a conference on the Balkans in the first half of 2006, when it takes over the presidency of the European Union, President Heinz Fischer said in Zagreb on October 15th. Speaking at the final press conference of Central European presidents at the end of the two-day Croatia Summit 2005, Fischer said the summit had proved that other countries in the region were also interested in European integration. He said the summit had been very successful and an opportunity for presidents of Central European countries to get to know each other better. 
"Croatia is developing very positively," said Klaus Mangold, executive advisor of the president of Daimler Chrysler AG and chairman of the German Committee on Eastern European Economic Relations. He was speaking on behalf of a European business delegation which attended the summit. "We concluded that Croatia is developing very positively and the European economy advocates that it become a member of the EU as soon as possible, he said, adding that everything would be done to support Croatia so that its entry negotiations did not last too long." Mangold said that today the summit focused on economic issues and that it was clearly said that nobody in the European economy advocated unbridled capitalism. "We always try to find a balanced way between what the world economy makes us do in terms of competition and the social acceptability of a process in which the people in Europe will feel good, he said. We feel there can be no employment or social peace in Europe without growth, which is common to both politics and the economy and a fact we highly appreciate," Mangold added. "The European business delegation represents EUR400 billion in turnover and 1.6 billion employees," he said. 
Croatian President Stjepan Mesic said an important topic of all talks during the summit had been the challenge represented by globalisation and how to deal with its consequences. Albanian President Alfred Moisiu said the debate on economic issues had been very important because one could not aspire to progress without a developed economy or prospects of economic development. Asked about the final status of Kosovo, he said the population of Kosovo wanted independence. "The will of the people of Kosovo is independence and we are convinced that only this will bring about peace and stability in the region," Moisiu said, adding that Kosovo must become part of the integration process because it was the only way to turn toward a peaceful future. 
Macedonian President Branko Crvenkovski said the launching of EU entry negotiations was a historic moment for Croatia and a big encouragement to Macedonia and the entire region because it was clear that the enlargement process was not stopped. The project of European unification is so important that regardless of all controversies and disputes, it must be completed successfully, he said, voicing hope that at next year's summit of Central European presidents in Bulgaria, Macedonia would enjoy EU candidate status. 
Bosnia and Herzegovina President Ivo Miro Jovic said the Zagreb summit would support his country's attempts to adopt EU standards and that it had demonstrated that the EU was open for all who organised their country in accordance with principles valid in Europe. 
The heads of states who attended the summit unanimously assessed it as very successful and well-organised. Tight security measures were taken for the event, causing major traffic gridlocks around Zagreb's Westin hotel and at the airport.

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EU MEMBERSHIP

EU membership talks to boost investments 


The launch of EU membership talks should give an impulse to foreign investments in Croatia, according to analysts from the Hypo Alpe-Adria-Bank, ANSAmed reported on October 6.
The Austrian bank's group of experts claims that Croatia's GDP could register a four percent annual growth thanks to the 'greenfield' investments and the possibility to attract pre-accession funds. The EU funding should also speed up the reforms in the country especially in the fields of healthcare and the judicial system, a fact that would encourage foreign investments.

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FOREIGN RELATIONS

Croatia, Iran target stronger relations 

Croatian and Iranian parliamentary friendship groups convened in Tehran recently, Majlis Media Department reported. 
The Iranian head of Iran, Croatia Parliamentary Friendship Group, Ali Riaz, said the two sides held a good meeting. "The talks form the basis of further bolstering of the bilateral relations," he explained. Riaz also commended Zagreb for its support of Tehran's position in acquiring peaceful nuclear technology. Riaz added the two nations have many historic and cultural commonalities which pave the way for closer relations in other areas. 
The Croatian head of Iran-Croatia Parliamentary Group, Shamso Tanakovic, referred to Iran's importance for his country's government and people who are keen on closer ties with Tehran, according to the report.

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