ZAGREB FAIR HOSTS CROATIAN ECONOMIC FORUM

ZAGREB, Sept 17 (Hina) - Croatia is interested to conclude an agreement on free trade with Yugoslavia and, hopefully, negotiations will be conducted and completed successfully, Prime Minister Ivica Racan said on Tuesday responding to questions by businessmen at the Croatian Economic Forum. #L# In his introductory speech at the traditional encounter of the government and businessmen within the Zagreb International Autumn Fair, Racan stressed that investments into the infrastructure was a pre-condition to economic development, direct investments and incentives to regional development. Racan presented investment plans in the power sector, road construction, the railways, reconstruction of war devastated regions, and social incentives for housing. Responding to questions from businessmen, Reconstruction Minister Radimir Cacic pointed out that Croatia would have to set aside two percent of its GDP for road construction. Deputy Prime Minister Slavko Linic agreed how at the moment, very little was being invested into education and more into road construction. Funding the education sector from foreign accumulations is not usual and also depends directly on how much is saved on welfare, reforms in the defence and security systems, Linic said. Minister Cacic added that a great deal needed to be done in the education sector because Croatia has seven percent of highly educated people, while the EU has 20 percent. Prime Minister Racan stressed that the problem of unemployment was being solved on several levels, including changes in the model of registration, the opening of private employment agencies, changes to laws on contributions. The fact is that the number of unemployed is decreasing and this trend should continue, Racan said. He pointed, however, to the paradox of having unqualified workers in road construction earning 4,500 kuna per month, while qualified workers earn up to 7,000- 9,000 kuna in addition to accommodation and food. There are, however, not enough workers and foreigners need to be brought in. Asked why, except for shipbuilding, industries such as textile or leather factories are not subsidised, Linic said the government was in fact subsidising poor work in shipbuilding, i.e. shipbuilders are being given subsidies for their lack of work. He added that subsidies like this cannot be given to the textile industry because they cannot compete on the world market. Businessmen were interested in the current relations with Slovenia, particularly with reference to Croatian savings accounts in Ljubljana Bank. This problem cannot be resolved as a package deal, said PM Racan. The solution to the issue of state borders with Slovenia will create the space to resolve other vital issues in relations with Slovenia - the Krsko nuclear power plant, Ljubljanska Bank, motorways connecting Croatia to the EU through Slovenia, Racan said. Deputy PM Linic told businessmen that this and next year there would be no major changes in the Croatian currency exchange rate policy. He said that the ministries of justice and environmental protection had formulated priorities in regulating land books, particularly in areas attractive to investors. These priorities should be completed in the next three years, partially through loans from the World Bank, he said. Racan confirmed the arrival of businessmen from Argentina interested in taking over the management some airports. The state has a 55 percent ownership in airports. During talks with businessmen, Economy Minister Ljubo Jurcic announced that an agency or institute for industrial development would be founded. Tourism Minister Pave Zupan-Ruskovic announced favourable loans for investments into loans for small hotels, apartment buildings and other similar tourist facilities. (hina) sp/ha sb