CONTENT
NATO/EU membership will solidify Croatia's historic
links with the West
President
Stjepan Mesic:
Signaling a maturation of Croatian democracy
Zagreb
as a destination:
Croatia's capital should not be overlooked
A
nation resolved to overcomeits tough heritage
Privatized
tourism industry will become engine of growth for Croatia
Croatia's
best lobbyist: its US Ambassador
Croatia's
resilient economy continues to grow
Ron
Brown credited for introducing US business to Croatia
Chemical
warfare conventions changed over fertilizer plant attacks
Film
and television producer Vladimir Kraljevic symbolizes worldwide success
of Croatian-Americans
What's
it like to visit Croatia?
State
of Minnesota develops close relationship with Croatia
Esplanade
hotel captures history and spirit of Zagreb
Spread
the word:
Croatia is an extraordinarily safe place to visit
Mega-Yachts:
the biggest status symbols in the world
Croatia
Airlines:
Creating a national identity during war and peace
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Croatia’s
resilient economy continues to grow
By Ivica Kresic
In spite of a worldwide
economic slowdown, the Croatian economy will record a 4% rate of growth
for the year 2001. This welcome news follows a 4% rate of growth last
year and sets the stage for an economy that is expected to increase another
4% in 2002.
Several factors account
for the resiliency of the Croatian economy. Tourism, a major source of
income, rebounded strongly in 2000 (35% over 1999 levels), and 2001 will
top that by additional 10-15%. In addition, the country joined the World
Trade Organization last year, with the corresponding benefits of more
transparency and increased competition. On October 26, 2001, Croatia will
sign the Stabilization and Accession Agreement with the European Union-
the first step toward its economic and political integration with the
most developed part of the Continent.
The Croatian economy
contracted sharply in the early 1990's, hit by the double whammy of the
collapse of its socialist economy (the heavy industrial sector in particular)
and the war against Milosevic-supported local Serbs. Since 1993, however,
Croatia has sported one of the highest growth rates of any transitional
country of Central and Eastern Europe, the most stable floating exchange
rate and the lowest inflation rate.
On January 3, 2000,
the Croatian electorate turned the page in the country's brief history
by endorsing a democratic, free-market coalition government. Despite initial
caution and strong opposition by various special interests, the government
has embarked on an ambitious program of structural reforms that are necessary
to lay down conditions for sustainable long-term development. Among the
most important are reforming and partially privatizing social security
and health-care systems, increasing the flexibility of labor markets and
reducing taxes on labor and capital, restructuring and privatizing large
state-owned companies, reducing subsidies, improving the efficiency of
the court system, and digitizing commercial court and land registries.
These measures are expected to draw significant amounts of foreign direct
investment, necessary, in particular, for improving the country's export
potential.
As a consequence
of the political uncertainties during the 1990's, Croatia has fallen behind
other transition country leaders in attracting foreign capital. The Croatian
government is hoping that the reform measures, along with the nation’s
highly educated population and the country's strategic geographic location
linking Central and Southeast Europe, will make Croatia more appealing
to international private investors. The efforts are beginning to bear
fruit - last month, a major Italian apparel company made public its plans
for significant investment in the country, and a few more announcements
are expected by the end of the year.
Barring a major reversal
in the resolve for economic reforms, this small, beautiful country of
4.5 million people possesses all the prerequisites to become one of the
star economic achievers of transitional Europe.
Kresic, a native of Sisak Croatia, graduated from the University of Chicago and has a Master of Economics degree from Yale. He currently resides in Zagreb where he works as an advisor to the Deputy Prime Minister for Economic Affairs. For further info: ikresic@yahoo.com.
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