CRO PRIVATISATION MINISTER ADDRESSES DUBROVNIK CONFERENCE

DUBROVNIK, Oct 26 (Hina) - Croatian Privatisation Minister Milan Kovac on Monday spoke about the course of the privatisation process in Croatia at the Conference on Privatisation in Countries in Transition, which is being held in Dubrovnik. Of the 2,817 former socially-owned companies in Croatia, 2,553 have been privatised so far, with their capital amounting to US$14 billion. Small shareholders, some 660,000 of them, purchased shares at a discount, amounting to US$5.8 billion. Homeland War invalids and families of killed Croatian soldiers were allocated almost five million shares in 700 joint stock companies, with the nominal value of US$250 million. A total of 226,000 war victims participated in the process of voucher privatisation (completed at the end of September), gaining shares with the nominal value of about US$2.2 billion, Kovac said. Croatian companies had entered the process of privatisation burdened with numerous economic and social problems. Many companies had outdated technology and managing structures which were not used to the market economy. Another problem was surplus workers. This is why companies had to undergo financial restructuring and recapitalisation along with privatisation, while some of them went bankrupt, Kovac said. Croatia had a clear privatisation model which did not allow the sale of shares through direct agreement, he added commenting on the criticism of the privatisation process. All shares had been sold publicly, on the stock market or through invitation of bids, which was also public, he said. The process of transformation and privatisation of socially-owned companies has almost been completed, the Privatisation Minister said announcing the privatisation of public companies and banks. Every public company - Croatian Oil Industry (INA), Croatian Power Supply (HEP) or Croatian Post and Telecommunications (HPT)- will be privatised in line with special laws, which are yet to be adopted. All limiting factors taken into account, we can be satisfied with the privatisation process in Croatia, said Finance Minister Borislav Skegro. The main limiting factors were great expectations as regards the financial effects of the privatisation process, which proved wrong. War and its consequences had slowed down the arrival of foreign capital, and the country experienced a transition crisis at the same time the privatisation process was underway, he said. The Finance Minister pointed out the importance of macroeconomic stability. Following a five-year stabilisation programme, Croatia has an enviable level of macroeconomic stability, which shows itself in the stable exchange rate, balanced budget and healthy finances, Skegro noted. Deputy Foreign Minister Ivo Sanader spoke about the economic and political relations between Croatia and other countries. He estimated that the process of globalisation called for Croatia's joining European and trans-atlantic associations. An important step in those integration processes is Croatia's admission into the World Trade Organisation (WTO), which could be expected next year, Sanader said. (hina) rml / jfk