OPATIJA HOSTS INT. CONFERENCE ON BANKING, ENTREPRENEURSHIP

OPATIJA, Oct 18 (Hina) - Croatia has recorded the highest decline in industrial production of all Central and Eastern Europe countries, with Gross Domestic Product (GDP) at 80 percent of the pre-war level, a presidential adviser has said. Compared to some developed European countries, Croatia's 3-3.5 percent GDP growth rate is relatively high albeit insufficient for a significant headway, the presidential economy adviser, Dubravko Radosevic, said in Opatija on Thursday. He was speaking at the three-day Sixth International Conference on Banking and Entrepreneurship, which tackles the strategic challenges of Croatia's banking, financial and economic system in globalisation. Illustrating the dire situation of the national economy, Radosevic mentioned a $11.5 billion external debt that tripled in the last decade, budgetary deficits, and export that was twice lower than import. Radosevic said foreign investments, which are not low compared to other transition countries, were mostly not directed into production. Foreigners have invested their money in banks, telecommunications, and trade. Instead of increasing employment, these profit-aimed investments are decreasing it, he said. According to Branimir Lokin, a Chamber of Commerce analyst, investments are the crucial issue of the national economy, but are completely obstructed. Free funds are available in citizens' savings but the banking sector, owing to its comfort and sundry interests, is not willing to place them into production, he said. Lokin maintains Croatia needs to stress the production-consumption balance and economic growth, and the philosophy of investing over the currently dominant one of stabilisation, which is turning into unlimited spending. (hina) ha sb