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CROATIA

NEWS REPORT



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: 091- (26/11/04)

Mesic Leads Croatia's Presidential Race
Incumbent Stjepan Mesic is the frontrunner in Croatia's presidential election, according to a poll by Nacional. 52.8 per cent of respondents would vote for the Croatian People's Party (HNS) candidate.
In February 2000, Mesic defeated Drazen Budisa of the Croatian Social Liberal Party (HSLS) in a run-off.
Deputy prime minister Jadranka Kosor of the Croatian Democratic Union (HDZ) is second with 16.9 per cent. In November 2003, Croatians renewed their House of Representatives. Ivo Sanader of the HDZ formed a coalition government with the Democratic Centre (DC).
The list of presidential candidates also includes Slaven Letica of the Croatian Right's Party (HSP). Football coach Miroslav Blazevic-who led the Croatian national team to a third-place finish in the France 1998 World Cup-is said to be considering a run as well.
The president is largely considered as a ceremonial dignitary in Croatia, but is the commander of chief of the armed forces, oversees both foreign policy and intelligence services, and confirms the prime minister designate after the parliamentary elections.
The election is scheduled for Jan. 2, 2005. Croatia became an official candidate for European Union (EU) membership in June. 

Outing the spooks
A massive mystique surrounds the question of British intelligence operations in central Europe and the Balkans. The British are still widely regarded as the most scheming and duplicitous adepts of the art of espionage. The exploits of Philby, Burgess and Maclean have become legendary. Sir Fitzroy Maclean, Churchill's emissary to Tito in the war, is seen as a sort of spook, although he was in fact an accredited brigadier and military envoy, not least because he is thought to have been seen by Ian Fleming as a prototype for James Bond.
Over the last few weeks newspapers in Croatia, Serbia and Bosnia-Herzegovina have been exposing the identities of several British MI6 intelligence agents operating in the Balkans.
The most important agent is, they say, Anthony Monckton, who was based in the British embassy in Belgrade and was regarded as "the uncrowned king of the intelligence agencies" in the Balkans. He is credited with several coups, above all organising the kidnap of former Yugoslav President Slobodan Milosevic to the International Criminal Tribunal for the former Yugoslavia (ICTY) at The Hague in 2001.
Other agents named include Gareth Lungley, first secretary for political affairs at the British Embassy in the Croatian capital Zagreb, Christopher Looms an ICTY employee, Julian Braithwaite, Information Director to Paddy Ashdown, who is the High Representative for Bosnia, and Alistair Sommerlad stationed at the British Embassy in the Bosnian capital Sarajevo.
The names were leaked after a major restructuring of intelligence agencies in the Balkans. A number of agents were sidelined or fired-including Franjo Turek, director of the Croatian counter-intelligence agency POA (Protu-obavjestajne agencije) and Zeljko Bagic, national security advisor to the Croatian President Stipe Mesic. They have been quick to take their revenge.
Monckton was first publicly identified as an MI6 officer based in Zagreb in a list of 116 alleged MI6 agents that surfaced on the internet. The British Labour government's then-foreign secretary, Robin Cook, declared the list to be the work of former MI6 agent Richard Tomlinson. However, Tomlinson has repeatedly denied that he had anything to do with the publication of the list.
The book Requiem for a State Secret published in February 2004 by Zoran Mijatovic, former deputy head of the Serbian intelligence agency DB, alleged that Monckton was Britain's leading agent in the Balkans. Mijatovic, who retired soon after Milosevic's downfall, blames Monckton and MI6 for interfering in the restructuring of the DB and lobbying against his reappointment.
Monckton's name did not reach a wider audience until the Belgrade newspaper Nedeljni Telegraf-publishers of Mijatovic's book-disclosed it in an article on August 11 2004.
In the article Serbian intelligence officials criticise Monckton for being inept or interfering, giving as examples his inquiries into the assassination of Serbian Prime Minister Zoran Djindjic last year, spying for Ashdown in Bosnia, not warning about the pogrom against Serbs in Kosovo in March 2004 and blackmailing Milo Djukanovic, the prime minister of Montenegro, to persuade him to back down on his demands for independence from Serbia.
A few days later the Croatian weekly Nacional also identified Monckton, but added the names of the other alleged MI6 agents-claiming they were part of a "one-year intelligence and media operation by British spies stationed in Zagreb, Belgrade and Sarajevo" directed "against the security of the Republic of Croatia, or rather the final phase of weakening that system and removing those people who protected the system from the infiltration of foreign agents, such as former POA director Franjo Turek and Zeljko Bagic, former presidential advisor."
Another POA agent, Damir Jukica, told Nacional that he was fired earlier this year for criticising MI6 influence. He said MI6 "as all other foreign agents and their associates, would not have harmed Croatia if they had only worked in the areas where the interests of both countries overlap" and accused the organisation of "seriously compromising Croatian state interests."
Jukica said he would have found MI6's activities acceptable if Croatia had "become a British colony or if we had been given status similar to Bosnia, where an international protectorate is in effect."
Even in Bosnia objections to MI6 spying operations appeared in the weekly paper Slobodna Bosna. It complained that following Ashdown's appointment as High Representative, the country had been "transformed into a British intelligence protectorate and a base for the activities of British agents in neighbouring countries."
According to Slobodna Bosna in 2002, Ashdown sacked Munir Alibabic, director of Bosnian intelligence FOSS (Federalne obavjestajno-sigurnosne sluzbe) after he complained about the infiltration of British spies into FOSS and was replaced with Ivan Vuksic. The paper says MI6 used FOSS to spy on investigators for the ICTY and Ashdown's US deputy, Donald Hayes.
In June 2004, FOSS was merged with the intelligence service of Republika Srpska, forming the Bosnian Intelligence-Security Agency (OSA) with the loss of approximately 130 Bosniak OSA employees in what is described as a "purification" process by the OSA's new director Almir Dzuvo.
More recently, the Serbian magazine Ekstra Magazin (September 26, 2004) concluded, "The West Balkans region is becoming the polygon for winning predominance between intelligence agencies from the US and Great Britain." The magazine claimed that after European troops (EUFOR) take over from multinational troops (SFOR) in Bosnia, the US plans to use the new NATO centre in Sarajevo where 600 civilians work on intelligence "to pushback the influence of other networks."
The British press has either not reported the events in the Balkans, or tried to limit the damage blaming the revelations on "vengeful Serbs" (the Times, August 15, 2004), "rogue elements in the Croatian, Serbian and Bosnian security services who don't want the Balkans cleaned up" (the Guardian August 27, 2004) or "disgruntled local intelligence services" (Daily Telegraph, September 27, 2004).
They do not want to jeopardise the national interests of the UK that according to the Guardian, has been "particularly active in the Balkans on the intelligence front."
MI6's over-riding objective, it is said, is to protect and promote British economic and political interests in the face of greater economic penetration by its rivals. The Croatian Embassy in the US reports, for example, that the US, Germany and Austria each invested approximately one billion US dollars in Croatia between 1993-2000, whilst Britain invested only US$102 million.
Another major concern is Britain's international credibility; Prime Minister Tony Blair has promoted the ICTY as an expression of his so-called ethical foreign policy. However, the tribunal is beset with problems.
None of the charges of organising genocide-for which the western powers demanded military intervention-have been proved so far. Instead Milosevic has successfully used the tribunal to indict the Western powers for their own role in the break-up of the former Yugoslavia. The US administration has insisted that the ICTY prosecution complete all its cases by 2008 and all appeals by 2010 and yet the three most-wanted suspects-Croatian General Ante Gotovina and Bosnian Serb leaders Ratko Mladic and Radovan Karadzic-are still fugitives years after their indictments. An additional blow for the prosecution is the recent reduction of the 45 year sentence given to Bosnian Croat general Tihomir Blaskic to nine years and his imminent release from prison.
Whatever the claims, counter claims, black propaganda or misinformation that run through the MI6 spying scandal one thing is clear. Compliant governments of nominally different political persuasions in the Balkans are following the line laid down by western financial and political institutions and the intelligence agencies must be made to do likewise, in the view of the western powers.

Does Exposure mean Checkmate
A Croatian Democratic Union (HDZ) government headed by Prime Minister Ivo Sanader came to power in December 2003. The HDZ was founded by the nationalist, racist and anti-Semite Franjo Tudjman in 1989, the year he became president of the Yugoslav Republic of Croatia. With the collapse of the Soviet Union, the western powers lost interest in the unity of Yugoslavia which they had viewed as a bulwark against Soviet expansion and came to regard Yugoslavia's old, centralised state structure as an obstacle to the privatisation of state-owned industry and the penetration of western capital.
The German government and later the US and other European governments pushed for the rapid recognition of Croatia after Tudjman announced the country's independence in 1991. Tudjman became a western ally in limiting Serbia's influence in the Balkans and received support from the US and Germany in the 1992-1995 civil war in Bosnia, enabling him to conquer large sections of northwest Bosnia, driving out hundreds of thousands of ethnic Serbs, living there. The ICTY have indicted General Gotovina for "command responsibility" for war crimes carried out at this time.
The HDZ was in power throughout this period, losing elections to a Social Democratic-led coalition in 2000. When Sanader's HDZ regained power last year, unemployment stood at 18 percent, average family income remained at $100 a week and the public debt had soared. During the election campaign Sanader claimed to be remoulding the HDZ as a German Christian Democrat type party and offered voters a signed "Guarantee Card" promising tax cuts, increased economic growth, living standards and employment and accession to the European Union and NATO. Some HDZ politicians suggested a referendum would be held on whether Gotovina should hand himself over to the ICTY.
The European Union and the IMF are now demanding further cuts to social benefits and economic liberalisation in return for more loans. The government must drop promised increases in pensions, wages and allowances to disabled war veterans, increase utility prices, reduce labour legislation, rapidly privatise remaining state companies and lift barriers on imports of agricultural products from the EU.
Since coming to power Sanader has declared he will fully cooperate with the ICTY as demanded by the EU. He arranged the surrender to the tribunal of six Bosnian Croat leaders of Herzegovina-Bosnia, a region that attempted to secede from Bosnia in 1992 and two generals Ivan Cermak and Mladen Markac.
He used the evidence of former Croatian police chief Ranko Ostojic that "the police would have long ago arrested General Gotovina, but was being obstructed by the counterintelligence agency and the Office of the President" to begin his purge of the POA.
Soon after, Sanader apparently gave MI6 freedom to roam throughout Croatia for two months in order to track down Gotovina. He told new POA chief Josko Podbevsek to provide the agency with two offices and the names of Gotovina's associates and allow MI6 to bring in three surveillance vans to discover the location of mobile phones and then track them by satellite. It is said the scope of the operation was so large that even Sanader and President Mesic were cautious about using their mobile phones.
With MI6 granted free access to Croatia, both ICTY Chief Prosecutor Carla del Ponte and British Minister for Europe Dennis MacShane optimistically announced Gotovina would be in custody by the end of June 2004. MacShane added that the UK would withdraw its objections to plans for Croatia's EU membership in 2007 saying, "Gotovina no longer remains an obstacle. Croatia can start accession talks."
Instead Gotovina remains at large and MI6 operations in the Balkans have been exposed.
Many leading members of the HDZ and army officers consider Gotovina a national hero and are increasingly bitter at Sanader's cooperation with the ICTY. The EU's attempts to make Croatian membership of the organisation conditional on compliance with the ICTY and further economic restructuring is backfiring. A poll by the Institutit Puls polling agency shows support for the EU has fallen from 72 percent in January to 49 percent now.

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FOREIGN ECONOMIC COOPERATION

Croatian minister, Chinese official discuss trade cooperation

A Croatian delegation headed by the minister of the economy, labour and entrepreneurship, Branko Vukelic, recently visited Shanghai, China's most important business and trade centre, the Economy Ministry said in a statement, HINA News Agency reported.
On the third day of his official visit to China, Vukelic met the president of the Shanghai Council for the Promotion of International Trade, Cen Furong, and the vice-president of the Chinese People's Political Consultation Conference, Song Yiqiao. 
Vukelic mentioned successful cooperation between Zagreb and Shanghai, which will celebrate 25 years of friendly relations in 2005. 
Cen Furong said that the cooperation could be enhanced by China using Croatian ports for the transport of its goods to countries in the region and by Chinese firms investing in the Croatian economy.
The Croatian delegation ended its visit following a tour of the Jin Qiao export production zone, a part of the Pudong industrial development zone where some 500 foreign firms are present, the statement said.

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FOREIGN RELATIONS

Croatia, Serbia PMs vow to settle outstanding issues

Croatia and Serbia are determined to settle their outstanding issues - and some agreements the two sides are negotiating could be ready by November, Croatian Premier, Ivo Sanader, said in Thessalonica, Greece on October 21st, after talks with his Serbian counterpart, Vojislav Kostunica, Deutsche Presse-Agentur (dpa) reported recently. 
"We are determined to settle outstanding issues, primarily humanitarian ones, bilaterally," Sanader said, announcing he would visit Belgrade officially for the first time in November.
"The normalisation of relations between Croatia and Serbia and Montenegro has no alternative. The wounds from the past definitely have to be healed but, without forgetting the past, we must focus on the future," Sanader said.
Sanader and Kostunica met for the first time in Thessalonica, where they attended the eighth dialogue between the Orthodox Church and European People's Parties (Christian Democrats). The Croatian premier announced that an agreement on the protection of national minorities would be signed during his Belgrade visit, saying: "It would be a big step forward in bilateral relations."
In Belgrade, the two leaders discussed issues for protecting minorities within their populations, unsolved border issues, refugee return and restitution of property, and economic cooperation. The visit of Sanader that is to take place in November will be the first meeting of the two countries' representatives at prime minister level.
Zagreb and Belgrade, former foes that fought each other when Croatia broke away from Yugoslavia in 1991 to become independent, have been working on normalisation of their relations.
However, there are many outstanding issues that burden their relations, including refugees, missing persons, war crimes and return of property, according to dpa.

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