ZAGREB, Feb 2(Hina) - The strengthening of the judiciary and public administration and the acceleration of the privatisation process, particularly in the power sector, with the aim of creating conditions for a more competitive
environment, are key challenges which Croatia has to face in the continuation of transition, according to the European Bank for Reconstruction and Development's Transition Report 2003.
ZAGREB, Feb 2(Hina) - The strengthening of the judiciary and public
administration and the acceleration of the privatisation process,
particularly in the power sector, with the aim of creating conditions
for a more competitive environment, are key challenges which Croatia
has to face in the continuation of transition, according to the
European Bank for Reconstruction and Development's Transition Report
2003.#L#
The report, which covers the economy and investments in central and
south-eastern European countries and countries established after the
disintegration of the former Soviet Union, was presented in Zagreb on
Monday.
Croatia made headway in the transition process in 2003, according to
economic indicators, such as a low inflation rate as the proof of a
successful monetary policy and a stable rate of economic growth, said
Maria Vagliasindi from the Office of the EBRD's Chief Economist.
Vagliasindi said that Croatia's economic growth had fragile
foundations, as it was based primarily on strong consumers' spending,
while the impact of investments was still relatively low. The positive
exceptions are the privatisation of the INA national oil company and
investments in road infrastructure, Vagliasindi added.
EBRD analysts believe that Croatia is using only some 40 percent of
its real foreign trade potential. Vagliasindi said that bilateral
agreements on free trade were not sufficient and that a broader
regional free trade zone was necessary to improve the country's
foreign trade position.
Compared to countries from the report which are not candidates for
admission into the European Union, Croatia has made the greatest
progress in transition and also has positive outlooks regarding the
continuation of economic growth. The rate is projected to be 4.5
percent in 2004 with the maintenance of monetary stability, i.e. the
inflation rate is likely to be 2.5 percent.
Regarding the budgetary deficit criterion, Croatia, as many other
transition countries, has not met the Maastricht criteria, namely its
budgetary deficit exceeds three percent of the GDP.
Commenting on the political environment, a senior EBRD political
advisor, Chris Cviic, said that for Croatia this indicator was
positive, which was the result of permanent efforts of the former and
new authorities. Therefore, Croatia enjoys the image of a politically
stable country.
The new government's political orientations are mainly known, but the
international community, including the EBRD, is waiting for the Ivo
Sanader Cabinet to clearly state its priorities, initiatives and
objectives in the economic sector, Cviic added.
(Hina) ms sb