ZAGREB FAIR BUSINESS CLUB DEBATES TIMBER INDUSTRY

ZAGREB, Oct 16 (Hina) - The economic and structural problems of industrial wood-processing in Croatia were discussed at the Zagreb Fair on Wednesday as part of the 29th International Furniture, Interior Decoration and Supporting Industry Fair, "Ambienta". #L# The discussion was held as part of the Business Club, a traditional meeting of businessmen and representatives of the government. The economic situation in the wood and timber industry is at its lowest ebb, said Ferdinand Laufer, the director of the Croatiadrvo trade association, one of the event's organisers. Last year, for the first time ever, the import of timber products exceeded export, Laufer said, stating that the wood and timber industry had been registering losses for the past decade, while the number of employees was halved to 22,000. The export of timber products last year amounted to US$325.3 million, while import reached US$345.8 million, said Laufer. The wood and timber industry cannot expect an increase in government incentives, but the government can help through indirect ones, such as more favourable loans via the Croatian Bank for Reconstruction and Development or the transfer of some costs to Croatian Forests, said Deputy Prime Minister Slavko Linic. Direct incentives for the wood and timber industry would result in intervention on export markets, where Croatia is indebted, as those countries would end up financially assisting the direct competitors of their own manufacturers, said Linic. Only tourism and agriculture will continue receiving direct incentives, he reiterated. Wood and timber exporters criticised the fact that the domestic currency's exchange rate was overvalued, which made export more expensive. Linic said he no longer felt like answering always the same questions. "This Government does not intend to change the exchange rate policy, and this has been known for three years already," he said, adding that businessmen should make do within those frameworks. The only possible solution is a new government which would be willing to set the exchange rate of the kuna, Linic said. (hina) ha sb