CHAMBER OF ECONOMY CHAIRMAN SAYS ECONOMIC SITUATION IN CROATIA SERIOUS

ZAGREB, May 13 (Hina) - The economic situation in Croatia is serious not just because of the level of the foreign debt or the foreign trade deficit, but most of all because of their trends, Chairman of the Chamber of the Economy (HGK) Nadan Vidosevic said at a session of the Chamber's Assembly on Thursday.#L# Over the last ten years or so exports have been stagnating, wages have increased twofold and economic growth has been financed through foreign borrowing. Croatia would not have been able to function without increasing the foreign debt by two to three billion dollars annually, Vidosevic said. He added that exports were now close to levels reached ten years ago, and expressed his concern over the export structure since Croatia was now exporting four times fewer products. "This kind of situation requires a completely new industrial policy. The new system should provide full support to small and medium-sized businesses, but should also ensure preservation of large companies and promote cooperation between small and large businesses," the HGK Chairman said. "Ireland and Finland are often cited as positive examples of success, but it is forgotten that those countries took decades to carry out comprehensive reforms and become rich and developed. Macroeconomic indicators show that the Croatian economy is stable, but stability has never, in any aspect, been the basis of growth and development," he added. The head of the HGK Macroeconomic Analysis Department, Jasna Belosevic-Matic, said that positive economic indicators did not necessarily result in substantial steps forward in society. She cited the unemployment rate, which she said stood at 19.1 per cent at the beginning of the year as it had the year before. Belosevic-Matic said that a continuous fall in the number of the employed, particularly in the manufacturing industry, was worrying. (Hina) vm