Croatia is well positioned within the world trading system, says the report entitled "From Disintegration to Reintegration: Eastern Europe and the Former Soviet Union in International Trade".
Croatia is in a good position and has been making significant progress not only in reform and trade liberalisation as a member of the World Trade Organisation, but has also been working on a series of behind-the-border reforms, the lead author of the report, Harry Broadman, said at a press conference.
He stressed the importance of energy market reform, including the privatisation of the Hrvatska Elektroprivreda power company and the INA oil company, as well as the reform of public spending and the introduction of greater fiscal discipline.
I am optimistic that if Croatia continues its reforms, particularly behind-the-border ones, and if it continues to observe public spending restrictions, it can be a crown jewel in Southeastern Europe, Broadman said.
Broadman said that the World Bank supported the proposal made by the European Commission last week that the existing bilateral free trade agreements between the five countries covered by the Stabilisation and Association Process (Albania, Bosnia and Herzegovina, Croatia, Macedonia, and Serbia and Montenegro) should be replaced by a single agreement on a Western Balkans free trade zone.
It is one of the initiatives in which the World Bank has been involved together with the European Union and on which it has been working with Croatian authorities and other countries in Southeastern Europe in order to help them streamline a series of bilateral free trade agreements into a harmonised, single free trade zone, he said.
Creation of a free trade zone that would remove obstacles to investment and trade would be an important step forward, he added.
The World Bank report concluded that most of the 27 countries of Eastern Europe and the former Soviet Union, which formed an isolated trading block during communism, were benefitting from their reintegration into the world trading system.