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CROATIA



 
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)

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REPUBLICAN REFERENCE

Area (sq.km)
56,542

Population
4,422,248

Capital 
Zagreb

Currency 
Kuna

President 
Stipe Mesic

Private sector
% of GDP 
55%

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Background:
In 1918, the Croats, Serbs, and Slovenes formed a kingdom known after 1929 as Yugoslavia. Following World War II, Yugoslavia became an independent communist state under the strong hand of Marshal TITO. Although Croatia declared its independence from Yugoslavia in 1991, it took four years of sporadic, but often bitter, fighting before occupying Serb armies were mostly cleared from Croatian lands. Under UN supervision the last Serb-held enclave in eastern Slavonia was returned to Croatia in 1998. 
The government, like so many regimes in Croatian history, sees the salvation of the country in an integration into larger structures outside. The two most important are of course the EU and NATO. Croatia formally requested to join the EU on February 25th, 2003, despite being warned by various Brussels officials that its bid was too early. It is now agreed on all sides that entry into the EU is realistic after all for 2007. 
Croatia was cold-shouldered from being even a Partner for Peace of NATO in the 1990s with Tudjman in charge and Croatian war criminals at large. Many of these have now been handed over with the full cooperation of the government with the Hague authorities. NATO entry within a few years is on the cards. Croatia is at last coming in from the cold. 
The Croats are a people with a long past, that is profoundly marking their present and future. But of abiding significance is their mountainous and hilly geography, which has, moreover, changed, albeit slowly, during the centuries. In particular it underwent a long process of deforestation, which left many uplands bare.
They are situated in a vulnerable location, on the threshold of the Balkans, yet betwixt central and eastern Europe. They have consequently had to accommodate themselves to a whole series of more powerful peoples for a while, often lasting centuries. This can help explain their eagerness to surrender sovereignty today. 
Yet their location gave them great opportunities as well, notably for sea-faring across the Adriatic and into the Mediterranean. But for this they needed timber to build boats. Hence the deforestation and the longer run tribulations of the countryside.
After peacefully migrating from Ukraine and settling in modern Croatia in the sixth century, the Croats enjoyed a period of self-rule. But the incursion of Magyars in the ninth century in central Europe changed everything. In 1091 the Croats agreed to submit themselves to Hungarian authority under the Pacta Conventa. By the mid-1400s fear of Ottoman encroachment led the Croatian Assembly to invite the Hapsburgs, under Archduke Ferdinand, in to assume control and responsibility for Croatia. After various vicissitudes Croatia became largely free of Turkish rule by the 18th century. In 1868 Croatia regained domestic autonomy, but significantly under Hungarian authority.
It became absorbed into Yugoslavia after the First World War, but broke away in the Second World War under the Ustase who collaborated with Germans, the most discreditable episode in Croatian history. But the Partisan leader himself was a Croat, Marshall Tito, who proceeded to found the Federal Socialist Republic of Yugoslavia after the war. Croatia became a relatively successful part of the federation, the one communist polity that allowed its citizens to leave freely and could thus be justly called a socialist country, rather than a socialist prison.
In 1990 Croatia held its first multi-party elections, in which long-time nationalist Franjo Tudjman was elected president. Independence was declared next year, which triggered off a four-year war with Belgrade. In December 1995 Croatia signed the Dayton Accord and agreed to the return of all refugees.
The death of Tudjman in December 1999 was a blessing, allowing Croatia to enter the new decade, century and millennium with a clean slate. A new president and coalition government, under a new premier, have been able to pursue national reconciliation, democratization, regional cooperation and refugee returns.

Update No: 084 - (29/04/04)

The Croats are adjusting themselves to a new government they elected in at the end of last year. Elections to parliament were held on November 23rd, which were expected to be very close. In fact they were clear cut.
The party of FranjoTudjman, the Croatian Democratic Union (HDZ), ruled throughout the 1990s, but lost power to the Social Democrats in early 2000. It is now back in office with a vengeance, being clearly ahead in the 150-seat parliament. As the largest party represented it has a decisive edge in forming a coalition government.
Ivo Sanader, the leader of the HDZ, has negotiated sufficient support in parliament for his coalition government, ousting the Social Democrats under former premier Ivica Racan. The HDZ won 66 seats in the parliamentary elections. Sanader said his party had also secured the backing of another 11 lawmakers from ethnic minorities and small right-wing parties, giving his coalition a majority in the 140-seat chamber. Racan and his previous Social Democrat coalition secured just 66.
With a mere 60 percent of the 4.3 million people eligible to vote actually casting a ballot, voter turnout was at its lowest in a decade. The low turnout was seen as a bonus for the right wing, which has a stronger tradition of motivated and disciplined voting.

New stance on war crimes key to EU hopes
The Croats are acutely aware that they have not been included in the latest enlargement of the EU. They definitely want to be in the next round of accession, likely in 2007.
The key to their hopes here will be if they comply with the requirements of the war crimes tribunal in the Hague. That is a precondition Brussels is laying down as crucial. If Croatia continues to hand over suspected war criminals to the Hague, it could start negotiations before the end of the year. The country of 4.7 million hopes to join the EU by 2007. Croatian Foreign Minister Miomir Zuzul calls EU accession Croatia's top priority.
In 1992-96 Croatia suffered terribly in the former Yugoslavia's wars of secession. But in 2001 it became the third former Yugoslav republic to sign a stabilization and association agreement with the EU, just after Macedonia.
Brussels has now singled out Croatia as the next key former Yugoslav republic to join the EU.Slovenia is joining now with the Visegrad four and the Baltic states, plus Cyprus and Malta. Gunter Verheugen, the EU commissioner for enlargement, sees the adhesion of Croatia as vital to the consolidation of democracy in the whole Balkan region.
The existence of a HDZ government is a test of democracy. Premier Sanander is well aware of this and is striving to demonstrate Croatia's democratic credentials. Six Bosnian Croats were handed over to the court in early April, although General Ante Gotovina, a major suspect, remains at large.

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FOREIGN ECONOMIC COOPERATION

European development bank delegation visits Croatia to oversee projects

A delegation of the Board of Directors of the European Bank for Reconstruction and Development (EBRD), which was on an official visit to Croatia, recently held talks with representatives of Croatia's ministries of finance and the economy and the Croatian National Bank (HNB), HINA News Agency reported.
So far, the EBRD has secured over 1.2 billion euros for more than 60 projects in Croatia, whose value is 3.42 billion euros. The projects include 20 credit lines for small and medium-sized businesses, house building, local infrastructure, and tourism.
According to previous announcements from the EBRD, this financial institution is planning to invest between 150 and 200 million euros annually in Croatia.
The head of the EBRD delegation, Gerd Saupe, said the basic purpose of the visit was to become acquainted with the progress Croatia had made so far. He went on to say that the EBRD was willing to finance infrastructure projects and advocate a more active role of the private sector in the projects.

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PHARMACEUTICALS

Phoenix goes for double takeover in Croatia

The Mannheim-based Phoenix, Europe's second pharmaceutical company, has made one step forward in strengthening its market position in wholesale pharmaceuticals in Central and Eastern Europe with the acquisition of two Croatian pharmaceutical wholesale companies, New Europe reported recently.
Phoenix bought a 95% in Croatia's second largest wholesale pharmaceutical company, the listed Zagreb-based public limited company Farmacija, with 16% of the local market. Its turnover for 2003 totalled €114m. The second purchase targeted Medifarm Velebit, company enjoying a 9% share.
In 2003 Medifarm Velebit turned over as much as €74m. Together, the acquired companies employ a staff of about 400. The Cartel Office has already consented to both takeovers. No details on the purchase price has been revealed. Stjepan Talan, former managing director of Medifarm Velebit, was appointed as head of the management board. The acquisitions in Croatia round off the market position in this region.
The two Croatian pharmaceutical wholesalers cover the entire market in Croatia from eight distribution centres. Croatia has a population of 4.5m, with 890 pharmacies spread over the country. Phoenix supplies not only pharmacies but also hospitals in Croatia.
In 2003 a total of €1.8bn was available for public health care expenditure, accounting for roughly 15% of Croatia's national budget. According to Phoenix CEO, Dr Bernd Scheifele, "Phoenix has been successful in these markets for years. We are confident that our commitment in Croatia will develop well. The prospects in Croatia are promising. In the past, the market growth amounted to 8%. We expect that this is an indication of the ongoing trend for the next few years, as well," he said.
Phoenix operates in 19 countries and provides medicines for more than 50,000 pharmacies throughout Europe from outlets located in the Czech Republic, Hungary, Poland and, as of December 2003, in Slovakia. The company has a total staff in excess of 17,000 employed in its 136 distribution centres. The company posted revenues worth €15.3bn in the 2002-2003 financial year. Phoenix is not listed on the stock exchange and ranks among the top 15 biggest, privately-owned companies in Europe.

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