CROATIA

General

Before the dissolution of Yugoslavia, the Republic of Croatia, after Slovenia, was the most prosperous and industrialised area, with a per capita output perhaps one-third above the Yugoslav average.Croatia faces considerable economic problems stemming from: the legacy of longtime communist mismanagement of the economy; damage during the internecine fighting to bridges, factories, power lines, buildings, and houses: the large refugee and displaced population, both Croation and Bosnian; and the disruption of economic ties. Western aid and investment, especially in the tourist and oil industries, would help restore the economy.
The government has been successful in some reform efforts - partially macro economic stabilisation policies - and it has normalised relationships with its creditors. Yet it still is struggling with privatisation of large state enterprises and with bank reform.
In 1998, Croatia made progress in reducing its current account deficit to about 8% of GDP from 12% the previous year. Economic growth continues to lag, however, and growing levels of inter-enterprise debt plague the domestic economy. Four commercial banks were put under governmental control and a major conglomerate is teetering on collapse.

Police