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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: 109 - (29/06/06)

There is no doubt what is the big issue before the Croats today- the looming prospect of entry into the European Union (EU).
Croatia is fortunate in having plenty of champions among existing EU members. The Germans, Austrians and Dutch, who often take their holidays on Croatia's beautiful coastline, are positive in support of the idea, without any of the reservations they have about admitting Turkey.

Dutch PM: Croatia's EU Entry Should Not Be Linked With EU Constitution, Turkey
There is no connection between the ongoing debate in the European Union about an EU constitution and Croatia's membership of the bloc, just as there is no connection between talks on Turkey's and Croatia's membership since they are two separate issues, Dutch Prime Minister, Jan Peter Balkenende, said during an official visit to Zagreb on June 21st. 
"I want to be absolutely clear - there is no connection between the debate on the constitution and Croatia's EU membership. It is up to Croatia to meet the set criteria and if it does, it will become a member," said Balkenende, the first Dutch PM ever to visit Croatia.
There is no connection between debates on Turkey's and Croatia's EU membership either. Those are two separate paths where fair play must be respected - fair procedure and the fulfilment of relevant criteria, Balkenende said after meeting his Croatian counterpart Ivo Sanader.
He went on to say that Croatia had done a lot, but added that it must meet all criteria, including reform of the judiciary and the fight against corruption. He added that he was confident that Croatia was going in a direction that would lead it to EU membership.
Many possibilities lie ahead for Croatia, as well as many responsibilities, particularly regarding the region, the Dutch PM said, adding that Croatia had a very important role in cooperation regarding the future of former Yugoslav countries.
Croatian PM Sanader said that Balkenende's visit was a big step in the development of overall relations between Croatia and the Netherlands.
Croatia is particularly interested in developing economic cooperation with the Netherlands, which is the fifth or sixth biggest investor in Croatia, Sanader said, recalling joint projects on the island of Korcula and in the eastern town of Beli Manastir.
The PM informed his guest that Croatia would be very active in the neighbourhood and recalled that the country was chairing the Southeast European Cooperation Process (SEECP). He added that there was a plan for the SEECP to assume, in cooperation with the European Commission and the chairman of the Stability Pact for Southeastern Europe, Erhard Busek, some responsibilities of the Stability Pact, which is nearing completion due to political relations. Sanader also recalled the transformation of the Central European Free Trade Agreement (CEFTA) in line with Croatia's proposal that it expand to Southeast European countries and Moldova. If everything goes as planned, CEFTA is expected to start operating according to the new amendment as of October.
"We care about permanent political stability in our neighbourhood because we do not want to join the EU and NATO with unresolved problems in the region," Sanader said, adding that Croatia would make progress exclusively according to individual achievements.
The Dutch PM recalled having visited Croatia as a young tourist and added that he would recommend to everyone to visit the country. "You have a beautiful country with a wonderful environment which is very attractive to tourists," Balkenende said, adding that returning tourists were proof of positive developments.

Croatian premier to visit Belgrade in July
Serbia has the top priority for Croatia among former Yugoslav states. It is imperative to maintain good relations between these two former adversaries in the tragic wars of the early and mid 1990s.
Premier Sanader and Serbian Prime Minister, Vojislav Koštunica, will be opening a border crossing in Bajkovo on July 13th, which was built with the help of the European Commission. European Union Enlargement Commissioner, Olli Rehn, is expected to be in attendance as well.
This will be Sanader's second official visit to Belgrade since Koštunica made a trip to Zagreb. Some of the most important issues between Serbia and Croatia are the missing persons cases that remain after the war, economic cooperation, and the exchange of experiences regarding Euro-Atlantic integration and association. 
The two prime ministers reached an agreement during Koštunica's visit that the two would be meeting on a more regular basis, because it is very important for the region for Croatia and Serbia to maintain good relations, especially in the light of the independence of Montenegro.

Economy-overview 
Just before entry into the EU, it is advisable for the Croats to take stock, to assess what they have achieved so far in their economy and what remains to be done. Before the dissolution of Yugoslavia, the Republic of Croatia, after Slovenia, was the most prosperous and industrialized area with a per capita output perhaps one-third above the Yugoslav average. 
The economy emerged from a mild recession in 2000 with tourism, banking, and public investments leading the way. Unemployment remains high, at about 18%, with structural factors slowing its decline. While macroeconomic stabilization has largely been achieved, structural reforms lag because of deep resistance on the part of the public and lack of strong support from politicians. 
Growth, while impressive at about 3% to 4% for the last several years, has been stimulated, in part, through high fiscal deficits and rapid credit growth. The EU accession process should accelerate fiscal and structural reform. 

President Gives Reception For Statehood Day, calling for further restructuring of the economy
President Stjepan Mesic on June 21st gave a reception at his office on the occasion of Statehood Day, observed on June 25th, for senior state officials, representatives of the legislative, executive and judicial authorities, religious dignitaries, and representatives of the diplomatic corps in Croatia. 
Among those in attendance were Prime Minister, Sanader and Deputy Parliament Speaker, Mato Arlovic.
"I expect the state authorities to be more active in restructuring the economy and to create conditions for the increase of the annual Gross Domestic Product to five per cent and more. This is a condition for increasing employment and the standard of living," Mesic said in his address.
He underlined that 25th June 1991, when the Croatian parliament adopted a declaration proclaiming Croatia's sovereignty and independence, was one of the most important dates in Croatian history.
Mesic said the 15th anniversary of that date was being celebrated alongside anniversaries of the creation of the Croatian army and the first Homeland War victories. He thanked everyone who had taken part in the defence and liberation of independent Croatia.
"This year's celebration is taking place also in the year in which we actually began negotiations on future membership of the European Union."
Mesic said the negotiations called for legislative adjustments, home and foreign policy tasks and reforms of the judiciary, health and education.
The president said Croatia had made significant headway which he expected to be acknowledged by Euro-Atlantic structures. He added, however, that EU and NATO membership was not only a political decision but also a matter concerning all citizens.
Mesic said that due to poor demographic trends, an active population and family policy should be one of the main concerns of the current and every future Croatian government.
"The tasks are many, but we do not have a right to exhaustion, apathy or indifference," said the president, adding that the successes of the past 15 years were indeed historic. "Therefore, I look upon the future with optimism, I believe in the success of our endeavours," he told the 200 gathered at the reception.

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FOREIGN INVESTMENTS

EBRD signs 57 investments, 65% in private sector 


In 2005, the European Bank for Reconstruction and Development (EBRD) signed 57 investments in Croatia, totalling almost 1.3 billion Euro, which helped generate an additional 2.6 billion Euro from other sources. A total of 65 per cent of investments are in the private sector, the news portal reporter.gr reported.
The EBRD signed two new projects in 2005: A 26.5 million Euro loan to the Port Authority of Dubrovnik for the reconstruction of a port and a 10 million Euro loan to the municipal water company in Karlovac for the construction of a waste-water treatment plant and extension of the existing sewerage network. The EBRD's priorities for Croatia are to continue developing infrastructure operations, in particular to co-finance with EU mechanisms to reach small municipalities, support local companies in their regional expansion and support development at the local level. Other priorities include working with foreign investors and the government to overcome barriers to investment flows, supporting medium-sized investment initiatives to help create much needed support the on-going privatisation process of utilities and other majority state-owned companies and further increasing long-term financial resources to the financial sector for on-lending to micro and small enterprises and for financing the tourism sector.

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FOREIGN LOANS

WB grants 25.5m Euro loan for agriculture programme

The Croatian government announced that it received a 25.5 million Euro loan from the World Bank for implementing an agricultural cohesion project and a four million Euro grant by the Dutch government in technical aid for the project and to increase competitiveness in the field, the website reporter.gr said recently.
The agricultural project will help achieve objectives concerning the adjustment of Croatia's legislation to the European Union's, and raising competitiveness in Croatia's agriculture sector, said World Bank Country Director for Croatia, Anand Seth, who signed the agreement with Croatian Finance Minister, Ivan Suker.
By granting this loan, the World Bank has confirmed its reputation as "the strongest financial institution in Croatia," Suker said, adding that the loan is to be paid over a 15-year period with a five-year grace period, and with a 3.25 per cent interest rate.
Croatian Agriculture Minister, Petar Cobankovic, said the project would help the rural sector integrate in the EU market. He also said that reforms were being implemented so as to raise the competitiveness of Croatia's agriculture.

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FOREIGN RELATIONS

US Vice President Cheney visits Croatia

US Vice President, Dick Cheney, remarked that Americans are greatly impressed with Croatia's recent progress. He was in Dubrovnik to attend the US-Adriatic Charter meeting, where he met with Croatian Prime Minister, Ivo Sanader, Albanian Prime Minister, Sali Berisha, and Macedonian prime Minister, Vlado Buckovski, New Europe reported.
Americans are "tremendously impressed with Croatia's progress over the past few years," Southeast European Times cited Cheney as saying at the meeting. "We are strongly supportive of Croatia becoming a full member of the trans-Atlantic community, in terms of working with NATO and the EU."
Cheney also held talks with Croatian President, Stjepan Mesic, about the planned further deployment of Croatian soldiers on international peacekeeping missions.
The two discussed bilateral ties and Croatia's reform efforts on its path toward NATO, news reports said. "We understand the desire to join NATO and the European Community," Southeast European Times quoted Cheney as saying.
The US Vice President's visit took place under unprecedented security levels that irritated many Croats. During his tour of the historical old town of Dubrovnik, a large number of popular tourist attractions were closed down to tourists from all over the world. Also all cruise ships were ordered to remain at a distance of 200 metres from the city for the weekend.

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TELECOMMUNICATIONS

Mobile phone networks grow, landline use shrinks 

Croats have spent 57.1 per cent more time talking into their mobile phones in the first-quarter of 2006 than in the corresponding period last year, but 12.5 per cent less into the fixed telephones, the business magazine Banka, reported recently.
The 59.6 per cent growth in local and 4.2 per cent in international calls over the mobile network has led to the overall decline in use of Croatia's fixed-line network, it said, quoting the national statistical bureau. The growth was largely attributable to the arrival of the third mobile operator on the Croatian market and the subsequent battle of prices, the report said. A particularly sharp growth was recorded in the relatively new service of multi-media messaging (MMS); Croats have sent 124 per cent more of them in the first three months of 2006 than in 2005.

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