FOREIGN DIRECT INVESTMENTS IN CROATIA REACH 4.8 BILLION

ZAGREB, Sept 27 (Hina) - Foreign direct investment (FDI) flows in Croatia from 1993 to the end of the first quarter of 2001 amounted 4.8 billion US dollars, and the bulk of them were great privatisation projects.#L# Contrary to Hungary, the Czech Republic or Estonia and some other central and eastern European countries which were successful in the attraction of foreign capital, Croatia entered this process with delay owing to the war in the early 1990s, said the National Bank's (HNB) Deputy Governor, Boris Vujcic, during a presentation of the UNCTAD's annual 'World Investment Report 2001', this week in Zagreb. Until 1995 there was virtually no direct foreign investment (FDI) in Croatia. Upon the creation of favourable political conditions foreign financiers began investing in this country. The investment primarily referred to great privatisation projects such as the ownership transformation of a leading Croatian pharmaceutical company 'Pliva', the Zagrebacka Banka and later the Croatian Telekom (Hrvatski Telekom or HT). The largest annual amount of foreign investment, which totalled 1.5 billion dollars, was registered during the first stage of the HT privatisation in 1999. According to the Croatian central bank's figures, foreigners invested 924.5 million in Croatia in 2000, and most of this money went into the banking sector. At the beginning of the last year, the privatisation of the Privredna Banka Zagreb was completed and another two banks - Splitska and Rijecka - were privatised as well. Since 1993, the telecommunications have accounted for 23.18 percent of foreign investments, and this sector has been followed by the banking which has attracted 20.53 percent of foreign investments and the pharmaceutical industry (18.85 percent). In the first three months of 2001, foreign direct investments came to 65.1 million dollars. Of it, 29 million was capital investment. The investment was diversified in different sectors, Vujcic said. According to the HNB's data, in that period the investment into the press publishing accounted for 17.74 percent of the entire amount, the real estate accounted for 15.41 percent, the sector of the production of crude oil and gas 14.61 percent and seaborne transport 11.86 percent. During the presentation of UNCTAD (UN Conference on Trade and Development) report, some differences in the figures from the report and those given by the Croatian central bank were shown. According to UNCTAD, Croatia received 899 million US dollars through investments, while statistical figures of the HNB show the amount higher by some 25 million. Professor Branko Vukmir pointed out that the UNCTAD report placed Croatia in an illogical group called developing Europe covering the countries in the area of the former Yugoslavia plus Malta. In such standings Croatia was the first, while Malta with 639 million of foreign direct investments (FDI) was the second. They are followed by Slovenia (181 million), Macedonia (170 million), Bosnia-Herzegovina (117 million) and after a long time the Federal Republic of Yugoslavia was also listed with 29 million. Croatian experts maintain that their homeland should be cited at the list of central and eastern European countries where FDI flows came to 25 billion dollars last year. According to UNCTAD's report Poland was the leading attracting 10 billion dollars of foreign investments in 2000. The second-ranked was the Czech Republic with 4.5 billion of FDI, Russia (2.7 billion), Slovakia (two billion) and Bulgaria (one billion). Under the classification according to the FDI per capita, Croatia was cited among the second group. The first group consisted of Hungary, the Czech Republic and Estonia with between 1,300 and 1,800 dollars per capita. Croatia shares the group with Poland and Latvia with over 800 dollars of the FDI per capita, the HNB's Deputy Governor Vujcic said. (hina) ms