ZAGREB, July 25 (Hina) - Despite the domestic economy's proclaimed orientation towards export, stagnation in this field is constant in foreign trade, reads a Croatian Chamber of Commerce (HGK) document about the current situation in
Croatia's economy, released on Thursday.
ZAGREB, July 25 (Hina) - Despite the domestic economy's proclaimed
orientation towards export, stagnation in this field is constant in
foreign trade, reads a Croatian Chamber of Commerce (HGK) document
about the current situation in Croatia's economy, released on
Thursday. #L#
The total trade between Croatia and the world in 2001, compared to
1994, marks an increase of 38 percent. In that period, however,
export increased by a mere 5.8 percent, while import increased by
63.5 percent. This means that in 2001 the share of export in foreign
trade was a mere 33 percent, as against 44 percent in 1994, the HGK
cautioned.
The share of Croatian products imported by the European Union (EU)
was decreased from 0.37 percent in 1995 to 0.27 percent last year.
The poor state in Croatian export is also visible in data about its
share in Gross Domestic Product (GDP) when compared to data in other
EU countries and transition countries in central and eastern
Europe.
Observed more specifically, the level of Croatia's export last year
slightly exceeded US$1,000 per capita. At the same time, in
Slovakia this was US$2,300, in Hungary and the Czech Republic
around US$3,000, while in Slovenia export was realised to an amount
of US$4,600 per capita.
Croatian export comes off even worse if compared to data as to its
coverage of import in other countries in the region. Since 1995,
Croatia marks the lowest coverage of import with export, with the
exception of Yugoslavia.
The HGK document notes numerous reasons for the stagnation in
Croatian export, ranging from war destruction and political
isolation during the 1990s to disordered financial, judicial and
administrative systems, the problem of privatisation, the high
costs of labour, insufficient institutional support for export,
and lack of motivation in the macroeconomic policy, particularly
the currency exchange rate.
HGK analysts stress that an overrated kuna discourages export,
while at the same time encouraging import. The HGK refers to current
currency policies as the "killer of export".
Changes in the currency exchange policy in fact, HGK analysts
believe, can be the basis to overcome the existing state. The HGK
document does not recommend the devaluation of an over rated kuna
but instead a gradual depreciation, over a minimum of three years.
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