EXPERTS AND UNIONS: 1999 WILL BE VERY DIFFICULT FOR CROATIA

ZAGREB, Dec 1 (Hina) - According to all indicators, the year 1999 will also be very difficult for Croatia; it will not be possible to sustain the status quo in its economic and social policies and the resolution of the crisis will hinge on an alternative economic policy, prominent economists and union representatives said at a round table in Zagreb on Tuesday. The meeting was dedicated to the measures for Croatia's economic development and resolution of social problems. The bloated budget is hindering progress, the monetary policy and banking system are unhealthy and taxes in 1999 will be raised again, Dr Guste Santini, one of participants, said. Croatia has no more foreign currency reserves. They have been used since September by the Croatian National Bank (HNB) for bolstering of the kuna in the situation of illiquidity of the banks, Santini said. That means that the exchange rate of kuna is being stabilised artificially, he added. The current rate of economic growth of four per cent of Gross Domestic Product does not stimulate growth but generates unemployment, deficit of the balance of payments, foreign and internal debt and illiquidity, Dr Vladimir Veselica said. Croatia needs a 10-12 per cent GDP growth rate which can be accomplished only by setting the development and investment cycles in motion. According to the president of the Alliance of Independent Unions of Croatia, Davor Juric, the unemployment rate in the manufacturing sector has exceeded 40 per cent. If employees who are working without pay were added to that figure, the rate would be close to 50 per cent. Juric believes that Croatia is becoming less a country in transition and more a country in recession. Today's round table was organised by the Association of Croatian Workers' Unions, with the aim of thrashing requests that will be presented to the Government imminently, the Association's president Boris Kunst said. (hina) mm rml