PRESIDENT TUDJMAN ADDRESSES PARLIAMENT ON STATE OF NATION SHORTENED VERSION

SHORTENED VERSION ( Editorial: --> 7494 ) ZAGREB, Jan 27 (Hina) - Croatian President Franjo Tudjman on Tuesday submitted a report on the state of the nation in 1997 before both houses of the Croatian National Parliament. Present at the session were the highest-ranking officials of the executive and judicial authorities, the Catholic Church and other religious communities in Croatia, the diplomatic corps, senior representatives of scientific institutions, the Croatian army, local authorities and cultural and public institutions. "Last year, 1997, and the very beginning of 1998 have been marked by the full achievement of the fundamental goal of Croatian national and State policy - full sovereignty throughout the territory of the State," Tudjman said at the beginning of his report. He recalled that the mandate of the UN Transitional Administration for Eastern Slavonia, Baranja and Western Sirmium (UNTAES) had ended on 15 January 1998, seven years to the date of the diplomatic recognition of Croatia's sovereignty. Tudjman stressed that after 15 January 1998, Croatia entered a new era. He called on all factors in the country to exert efforts towards further democratic development of society and the state, towards the strengthening of all aspects of the rule of law, the protection of freedoms and rights of every person and citizen and, lastly, and of exceptional importance at this moment, towards the planned creation of the system of the social state and social justice. The first task was the consistent implementation of the state policy with which we had, with the cooperation of the UNTAES and the local Serb population, achieved the peaceful reintegration of the Croatian Danube River region, Tudjman said. The total state authority and local government must ensure a prompt return of displaced persons and the establishment of normal life as soon as possible in the fields of economics, culture and society, within the framework of the overall Croatian system. President Tudjman stressed that the Croatian government had to undertake purposeful steps to ensure international help for the reconstruction of Vukovar and other devastated areas, and for the help to be used not only for reconstruction, but also for further economic growth. Tudjman stressed that through its responsible conduct towards the resolving of the crisis in the region of the former Yugoslavia, especially in Bosnia-Herzegovina, and through the peaceful reintegration of the Croatian Danubian region, Croatia had reaffirmed its role of serious collocutor and irreplaceable factor. The world had to be convinced that Croatia was the key country for ensuring peace and security of the international order in this part of Europe, Tudjman said. As the primary tasks of Croatian foreign policy, Tudjman cited the completion of the normalisation of relations with FR Yugoslavia, based on mutual recognition and respect of territorial integrity. "If the relations are to be normalised consistently and fully, the Federal Republic of Yugoslavia ought to accept a bilateral agreement regarding Prevlaka as a security and not territorial issue. Croatia cannot agree to an extension of the monitoring mission and if no agreement is reached within the next few months, Croatia will terminate the monitoring mission and request international arbitration, because this hinders economic life and development of tourism," Tudjman said. "Similarly, Croatia will more energetically request both the FRY and international factors to finally resolve the issue of succession following the disintegration of the former Socialist Federal Republic of Yugoslavia." "In Bosnia-Herzegovina, where international forces continue to be present, we should sustain our active support to the peace process, while safeguarding our state-national interests, on the basis of the Washington and Dayton Agreements intended to assure a truly constituent and equal position to the Croatian people. The negotiations regarding the establishment of special relations with the Federation of Bosnia-Herzegovina and the Inter-State Council for Cooperation with Bosnia and Herzegovina ought to be completed as soon as possible," he said. "As far as the substance of the special relations is concerned, we have pointed out that they ought to be developed gradually and with due recognition of concrete circumstances and overall interests. The solution with regard to the use of the Port of Ploce, traffic facilities, etc., will be possible only within such a context, and not by singling out specific problems and interests. "The arrangement agreed with representatives of Bosnia- Herzegovina regarding the construction of the Zagreb-Bihac-Drvar- Dubrovnik highway, with branch-offs to Split, Ploce and Sarajevo, can be considered to constitute a major positive step in that respect," Tudjman said. "In relation to current integration trends in Europe, and to decisions regarding the expansion of Euro-Atlantic institutions, Croatia should put every possible effort into becoming an integral part of such developments as soon and as extensively as possible. "We should stimulate the conclusion of the agreement on cooperation with the European Union, or, even better, of the agreement on associated relations. "Many international representatives have reiterated their position that Croatia meets all the requirements for admission to the Partnership for Peace (programme), and to the Euro-Atlantic Cooperation Council. One should intensify negotiations regarding the admission to the World Trade Organisation and the OECD, and negotiations with all CEFTA countries, with respect to the conclusion of bilateral agreements on free trade zones, such as the one already signed with Slovenia and arranged with Slovakia, and with respect to membership in CEFTA. An analogous agreement has also been signed with Macedonia. "Croatia’s chairmanship in the Central European Initiative is an outstanding occasion for expanding the country’s relations and approaching European integration trends. "In order to be as efficient as possible in this regard, I would consider it appropriate to have a special Government member in charge of speeding up this process and coordination with European integrations," Tudjman said. He added that Croatia had to develop the closest relations with all its neighbours. "We ought to strive to resolve as soon as possible all open issues with Slovenia, in the interest of both countries, and long-standing discussions on the matter have been under way. If no bilateral agreement is reached with regard to unresolved matters, we may request international arbitration," he said. Speaking about the need to ensure a long-term economic development, Tudjman stressed the necessity for further realisation of social and economic stability, for stimulation of domestic savings, and domestic and foreign investments, especially in new technologies. He said that the process of privatisation had to be carried out more decisively, and that the gradual privatisation of public companies had to commence. One of the key issues was the stimulation of exports and employment by reducing taxes and levies from salaries, and perhaps with temporary tax relief for newly employed trainees, Tudjman said. He said that the Law on Value Added Tax (VAT) had to be implemented consistently and if necessary, possible amendments to it passed. Tudjman also spoke about the need of restructuring and strengthening the banking system. He stressed that necessary steps needed to be taken to remove the backlog of cases in courts, describing as very important the need for the government to ensure a rise in salaries in the state administration and judiciary, culture, science and education through an agreement with unions. Resolutions on peace-time organisation, restructuring and modernisation of Croatian armed forces should be adopted. My repeated message to this Parliament and the public about the necessity of further building of a democratic Croatia as a true country of social justice remains the programme of the state leadership, Tudjman said, stressing that the Croatian government had to as soon as possible work out the programme in detail this year, and to exercise authority on all levels. Tudjman spoke extensively about the domestic democratic and legal order, adding that in this report too, he had to say that despite steps in the positive direction, the situation in the judiciary, especially in the court system, still was not satisfactory. "I thus consider it my constitutional duty to request of all bodies and officials in the court authority, and of the government within its jurisdiction, to take determined steps so that all backlog cases are resolved within two years at the most and to that the timeliness of decisions of all bodies of the court authority is ensured," Tudjman said. He said he had to agree with the criticism of numerous citizens who were pointing out to him on a daily basis the ineffectiveness and all the red tape in the work of the state administration. Croatia needed the least possible state administration, equipped with modern working equipment, Tudjman said and repeated requests from last year's report about the necessity of decentralising public services, especially in health, social welfare, education and ecology. Speaking about achievements in the economy, Tudjman said that last year had been very successful. Croatia had achieved the highest Gross Domestic Product (GDP) growth rate and the lowest inflation rate among all countries in transition. Especially encouraging was the growth of industrial production which has been ongoing for more than two years. Stressing that resolving the unemployment problem was of utmost importance, Tudjman said that the government was preparing a comprehensive programme which would significantly alleviate the problem, and which should be completed by 1 May this year. Most pensions were at an unacceptably low level, and everything should be undertaken for them to increase consistently with available state resources, which, Tudjman stressed, should be achieved through a decisive reorganisation of both the Pension Fund and the Pension Scheme. Tudjman said that economic growth could be realistically expected to at least reach last year's level. To that aim, stimulation must be ensured for small-scale businesses, and support provided to those Croatian companies and concerns whose products and successful management were compatible with foreign competition. "It is our prime interest to open up to the world as much as possible. Of course, we have to do it with deliberation, keeping in mind the preservation of economic identity and the protection of national interests," Tudjman said. "Demanding tasks set before the Croatian education system is not achievable without satisfied education personnel, teachers and professors, so we have to try and raise their salaries to a level worthy of their education and the responsible job they perform," Tudjman said. In the fields of science, technology and higher education, social and humanistic sciences should be a priority, and in culture, the restoration of historic monuments destroyed in the Homeland War. Speaking about the health system, Tudjman described as necessary solidarity at the level of basic health protection on the one hand, and on the other, personal investment of individuals into health, with a choice among several forms of health insurance. Tudjman stressed the need for a more decisive continuation of the national reconciliation policy. The establishment of a prosperous, social and legal state is the obligation of not only the authority and its organs, but of all Croatian people, Tudjman concluded. (hina) lm jn mm 272021 MET jan 98