TUDJMAN ADDRESSES OPENING OF ZAGREB INTERNATIONAL TRADE FAIR (2)

ZAGREB, Sept 15 (Hina) - Peace time is ahead of us and it enables us to dedicate ourselves full-force to economic and cultural development, and to the improvement of the well-being of Croatia's residents, Croatian President Franjo Tudjman said in the continuation of his address at the opening of the autumn international trade fair in Zagreb on Monday. Our priorities in the forthcoming period are to reconstruct the country and help all displaced persons to return to their homes. The key and lasting goal of the development of Croatian economy is the realization of a long-term high growth rate. We must learn to live in a world characterised by world economy globalization, the dominance of knowledge as a development factor, and a high rate of uncertainty. The globalization of world economy does not bring only big market advantages, Tudjman said. It can be a threat to the keeping of economic identity and national interests, especially in small countries, on account of ambitions big powers have to impose their will, based on dubious universal and liberal-socialist views. This, Tudjman said, is opposed by another present-day factor, i.e. aspiration towards national individualizing, which requires us to join world trends in an organized way, and not spontaneously. Bearing all this in mind, we must, in creating and enforcing the economic development policy in the forthcoming period, pay special attention to providing proper decisions on the strategy of Croatia's overall development. We must focus on the amount and areas of investments, stimulate saving, see to the unfavourable demographic and unemployment situation, increase the efficacy of the state's new role, create a climate for entrepreneurship, open to the world, and improve administration at all levels. Of primary importance for economic development is taking care of moral social values, especially through fighting monopoly and all forms of abuse, especially corruption and failure to fulfil duties to the state. Croatia, Tudjman said, has designated strategies for the development of areas like the infrastructure, the demographic revival, the development of its islands and areas of special government care, and strategies for urban development. Now is the time to work out an integral and long-term development strategy. Since the amount of investments and saving depends to a significant degree on stability, not only economic but political as well, the stabilization policy has no alternative. In the future we shall have to significantly increase the amount and efficacy of investments, with special attention on investing in people, i.e. science and education since, Tudjman said, only a scientific and technological development can ensure the most dynamic and best growth. Domestic saving must be stimulated by all means, with special focus on attracting savings of Croats living abroad. The impending reform of the pension system and the introduction of various forms of special-purpose saving will have a positive effect on increasing the population's saving. The employment growth rate could in the following medium term period be about three percent, alongside an estimated gross national product growth rate between six and seven percent, and a three percent production growth rate. This, Tudjman said, means that between 40,000 and 50,000 new jobs could be offered, thus reducing the present unemployment by half by the year 2000. The unemployment issues will also be solved through measures aimed at increasing regional and professional labour mobility. The state's new role in economy must be determined in the shortest time possible. The state must withdraw as much as possible from its owner and entrepreneurial function, and aim its activity at a macro-economic policy, at determining a development strategy, especially economic and social policy, the legal protection of economic subjects, especially creditors. However, Tudjman said, the state cannot renounce its responsibility towards an overall economic and cultural development and national security. The state will retain its important role in fighting monopoly, corruption and illegal economy. But, since the state itself is the biggest monopolist in every country, here as well, we must establish a more complete democratic control over the activities of its systems. The state administration has to become cheaper and more effective, Tudjman said. The share of public expenditure in the gross national product should be reduced by five percent by the year 2000, and by 35 percent in the next five years. The organization of the state treasury must ensure rationalization and a more cost- effective public expenditure. You could see, Tudjman went on in his address at the trade fair, that we are determined in taking concrete steps for the prevention of all forms of corruption in public enterprise and state administration. The public will soon be informed about further steps in relation to this matter. Tudjman appealed to all businessmen and residents of Croatia to assist the authorities in fighting these evils. The efficacy of the state and the whole public sector can and must be increased via a partial privatization of public enterprise, fully, in absence of national and state interest, or wisely and partially, where required by strategic interest. All this in order to achieve better business, and to introduce competitiveness where possible, as in banks, the telecommunications sector, the Croatian Power Supply Industry and the Croatian Oil Industry, and via legal definitions of ownership rights, those of the state as well. The successful functioning and dynamic development of Croatia's economy will in the future depend significantly on the situation in the entrepreneurial climate and the behaviour of entrepreneurs, businessmen, etc. Tudjman also pointed out the importance of training managers. Croatia must be more determined and stronger in opening to the world and surviving on the world market. Of special interest for Croatia, Tudjman said, are connections with European countries, especially the Bosnian Federation. While opening to the world, we must simultaneously be careful to protect our economic development and national interest. The experience of other countries cautions us that only the increase of export ensures long-term economic growth. Therefore, Tudjman said, increase of export is our imperative in the forthcoming period. The import's growth rate must in the forthcoming medium term tread the level of the gross national product rate. We can increase export by making competitiveness on the domestic market stronger through further liberalization. Export cannot be increased artificially, through devaluation, additional customs duties and similar non-market measures. The state must stimulate the increase of export by reducing tax burdens, through investments in high technology, and by providing conditions for bigger and more direct foreign investments. The latter, Tudjman said, provided many economies with necessary means, new technologies, and other requisites for higher export (Ireland, the Czech Republic). We must also join economic integrations as soon as possible which is a necessary precondition to increase export and economic growth, Tudjman said. We must therefore join the CEFTA and the World Trade Organization, and sign an agreement with the European Union, the Croatian President concluded at his address at the opening of the autumn international trade fair. (hina) ha jn 151855 MET sep 97