STABILITY INDEX RANKS CROATIA LOWER DUE TO DISPUTE WITH SLOVENIA

ZAGREB, Sept 23 (Hina) - The LEGSI index, which gauges the political stability of countries in transition, their potential and resistance to internal crises, dropped by one point for Croatia in September and amounts to 56. #L# The chief reason for the drop is the border dispute with Slovenia in Piran Bay, Eurasia Group and Lehman Brothers consultants say in their regular monthly report, the Croatian Employers' Association said on Monday. The Piran Bay issue could negatively affect stability in the mid- term, says the report. Other negative factors are the privatisation process in Adriatic Club International, specifically the antagonism of political options which the consultants believe are trying to gain control of the company. This case cannot have a significant impact on Croatia's entire economy but might undermine the government's efficiency and relations within the ruling coalition, the report says. The LEGSI index was positively affected by progress in the settlement of a border dispute with Bosnia-Herzegovina, the continuation of the government's restrictive policy in public spending, and the successful curbing of inflation despite an increase in the prices of energy sources. In September Croatia was ranked ninth on the LEGSI index of monitored countries, after Hungary, Poland, Mexico, Bulgaria, South Africa, Thailand, Brazil, and the Philippines. Behind Croatia are Russia, Egypt, Venezuela, Turkey, Colombia, Argentina, Uzbekistan, Indonesia, Ukraine, Azerbaijan, and Nigeria. The LEGSI stability index is measured by the US consulting company Euroasia Group in cooperation with the Lehman Brothers investment bank. The index estimates the political and economic moves of governments and their image in the domestic and international public, and the principal events in the social, security and economic spheres in the monitored period. (hina) ha sb