Setting the scene

Croatia achieved its independence from the federal state of Yugoslavia at its collapse in 1991. Until the Dayton Peace Accords in 1995, the country was embroiled in an increasingly bitter ethnic war with the Serbs.

The establishment of a shakey peace has finally allowed Croatia to look to a more stable future. According to the European Bank for Reconstruction and Development (EBRD), the re-building has begun. At the onset of independence the economy contracted by 14 per cent; in 1996 it was expected to expand by five per cent. But even expansion on this scale will leave the economy around 85 per cent smaller than it was in 1989.

According to the country's President, Franjo Tudjman, Croatia has "firmly committed itself to an open market economy, to the building of a democratic political system, to the rule of law and to the welfare of its citizens". But Croatia's transition from Communism to a free-market, pluralist democracy has only just begun: large public companies such as the Croatian Post and Telephone System (HPT), Croatian Railways and Croatian Forests, remain in Government hands. But, although Croatian commentators fear that their leaders' will to accelerate the reform process - both politically and economically - is in doubt, the country has made progress.

Prices and exchange rates have stabilised, the decline in industrial production has begun to rise, negotiations with the Paris and London clubs of international creditors have been completed and restructuring has begun. The Government is keen to attract foreign investment: according to the Investment Promotion Agency, total foreign investment in 1994 came to just under DM160 million, compared with DM26 million in 1992. So far over 2,500 firms have been privatised, attracting 650,000 shareholders. Revenues have exceeded nine billion kuna.

Interview with President Franjo Tudjman
Achieving a lasting peace

Interview with Borislav Skegro, Deputy Prime Minister and Minister of Finance
Interview conducted by Nikola Jelic

Dr Evan Kraft, Visiting Scholar at the National Bank of Croatia
Bank rehabilitation: do bankers sleep at night?

Marinka Papuga, Chair, Zagreb Stock Exchange
Developing Croatia's financial system

Vanja Kalogjera and Tatjana Bozic, Executive Director and Project Manager, Marketing Department, Croatian Investment Promotion Agency
Foreign direct investment in Croatia

Why invest in Yugoslavia?
Borislav Milacic, Minister of Finance, Republic of Serbia - Yugoslavia

Foreign Investment in the Republic of Croatia
Nenad Porges MSc, Minister of Economy