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| ], president of Croatia during the ] process.]] | |||
| '''Privatization in Croatia''' refers to political and economic reforms which resulted in the ] of state-owned assets in ], immediately after the ]. Most privatization took place in the 1990s, during the presidency of ] and the rule of his party ] (HDZ). |
'''Privatization in Croatia''' refers to political and economic reforms which resulted in the ] of state-owned assets in ], immediately after the ]. Most privatization took place in the 1990s, during the presidency of ] and the rule of his party ] (HDZ). Some aspects of the privatization process are still seen as controversial as the political and economic turmoil, coupled with the events of the simultaneous ], are thought to have led to a degree of ], which plunged the country into an ] immediately after it declared independence in 1991. | ||
| == Events == | == Events == | ||
| At the time Croatia gained independence, its ] (and the whole ]) was in the middle of recession. As a result of the ] that started in 1991, infrastructure sustained massive damage, especially the revenue-rich tourism industry. ] and transformation from a ] to a ] was thus slow and unsteady, largely as a result of public mistrust when many state-owned companies were sold to politically well-connected at below-market prices. With the end of the war, Croatia's economy recovered moderately, but corruption, cronyism, and a general lack of transparency stymied economic reforms and foreign investment. <ref>International Business Publications: , p. 22</ref><ref>Istvan Benczes:, Central European University Press, 2014, p. 203</ref> | |||
| After the collapse of ], President ] of the ] ({{lang-hr|Hrvatska Demokratska Zajednica}}, HDZ) initiated the process of ] and de-] in Croatia. However, this was far from transparent and fully legal. The inefficiency and slowness of the new government's legal system, as well as the wider context of the ], caused numerous incidents known collectively in Croatia as the "Privatization Robbery" (''{{lang|hr|privatizacijska pljačka}}''). ] was endemic, with the President deciding on a concept of "200 families" that would control all property in Croatia.<ref>{{cite web|url=http://www.nacional.hr/clanak/63969/ivic-pasalic-tajni-ortak-hypo-banke|language=Croatian|publisher=]|title=Ivić Pašalić tajni ortak Hypo banke|trans_title=Ivić Pašalić is a silent partner of Hypo Banka|author=Berislav Jelinić|quote=Polovinom 90-ih Tuđman je odobrio projekt Ivića Pašalića baziran na Tuđmanovoj ideji o 200 obitelji koje bi vladale hrvatskom imovinom|date=3 August 2009|accessdate=23 July 2012|archivedate=23 July 2012|deadurl=no|archiveurl=http://www.webcitation.org/69NVrINZv}}</ref> | |||
| Primary methods of privatization in Croatia were ], while secondary methods were vouchers. In 1991 private sector share in GDP was 25% and in employment 22%.<ref>Saul Estrin: ''The Impact of Privatization in Transition Economies'', London School of Economics and Political Science, 2007, p. 18-19</ref> The method of privatization contributed to the increase of state ownership because the unsold shares were transferred to state funds. In 1999 the private sector share in GDP reached 60%, which was significantly lower than in other former socialist countries.<ref>Istvan Benczes:, Central European University Press, 2014, p. 205-206</ref> The government retained 1-30% shareholdings in privatised firms in 33,4% of firms, and above 30% in 7,6% firms, much higher than other countries.<ref>Saul Estrin: ''The Impact of Privatization in Transition Economies'', London School of Economics and Political Science, 2007, p. 20</ref> | |||
| During this period many influential individuals, with the backing of the authorities, acquired state-owned property and companies at extremely low prices, afterwards selling them off piecemeal to the highest bidder for much larger sums. This proved very lucrative for the new owners, but in the vast majority of cases, this sell-off (along with the separation from previously-secured Yugoslav ]s) also directly caused the ] of these successful companies, resulting in the ] of thousands and thousands of citizens - a problem with which Croatia still struggles to this day. | |||
| The privatization of large government-owned companies was practically halted during the war and in the years immediately following the conclusion of peace. As of 2000, roughly 70% of Croatia's major companies were still state-owned, including water, electricity, oil, transportation, telecommunications, and tourism.<ref>, p. 473</ref> | |||
| It is also beyond doubt that numerous shadowy figures who moved close to Tuđman, the centre of power in Croatian society, profited from this enormously, having amassed wealth with suspicious celerity. Although this phenomenon is common to the chaotic reforms that took place in most post-communist societies (the best example being Russia with her "oligarchs"), the majority of Croats are of the opinion that Tuđman could and should have prevented at least a part of these malfeasances because nothing similar took place in ] which, like Croatia, achieved independence from Yugoslavia. The most common allegations that have emerged point to the likelihood that Tuđman personally profited. | |||
| {| class="wikitable" | |||
| Franjo Tuđman's son ] occupied the position of Chief of the HIS, the Croatian secret service, during the time of his father's presidency <ref name="un_footnotes">{{cite web |year=2007 |url = http://www.un.org/icty/blaskic/appeal/jugement/foot.htm|title = blaskic Footnotes|publisher = pub| accessdate = 2007-09-26 | language=French | last= |quote=701 - Rapport des services croates de renseignement (« HIS ») daté du 21 mars 1994, signé par le directeur du HIS, Miroslav Tudman, et adressé à Franjo Tudman. |archiveurl = http://web.archive.org/web/20080303070245/http://www.un.org/icty/blaskic/appeal/jugement/foot.htm <!-- Bot retrieved archive --> |archivedate = 2008-03-03}}</ref> and in second half of the 1990s (Franjo Tuđman's second tenure), his grandchild, ], became the owner of Kaptol Bank and emigrated from Croatia to ] after his grandfather's death. He returned only in 2005 to launch the information security consulting company Kvadra Savjetovanje. | |||
| |- | |||
| !Year|| GDP Growth<ref></ref> || Deficit/Surplus* || Debt to GDP || Privatization revenues* | |||
| Franjo Tuđman is often accused of having acquired his personal property by dishonest means.<ref name="name">{{cite web |date=2001-11-29|url = http://www.aimpress.ch/dyn/dos/archive/data/2001/11029-dose-01-03.htm|title = CORRUPTION, CROATIA'S TRAGEDY|publisher = | accessdate = 2007-09-26 | last=Ivica Djikic (AIM Zagreb) |quote=}}</ref> | |||
| |- | |||
| |1994|| 5,9% || 1,8% || 22,20% || | |||
| |- | |||
| |1995|| 6,8% || -0,7% || 19,30% || 0,9% | |||
| |- | |||
| |1996|| 5,9% || -0,4% || 28,50% || 1,4% | |||
| |- | |||
| |1997|| 6,6% || -1,2% || 27,30% || 2,0% | |||
| |- | |||
| |1998|| 1,9% || 0,5% || 26,20% || 3,6% | |||
| |- | |||
| |1999|| -0,9% || -2,2% || 28,50% || 8,2% | |||
| |- | |||
| |2000|| 3,8% || -5,0% || 34,30% || 10,2% | |||
| |- | |||
| |2001|| 3,4% || -3,2% || 35,20% || 13,5% | |||
| |- | |||
| |2002|| 5,2% || -2,6% || 34,80% || 15,8% | |||
| |- | |||
| |colspan="5" |*<small>Including capital revenues</small> <br>*<small>cumulative, in % of GDP</small> | |||
| |} | |||
| == See also == | == See also == | ||
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Privatization in Croatia refers to political and economic reforms which resulted in the privatization of state-owned assets in Croatia, immediately after the breakup of Yugoslavia. Most privatization took place in the 1990s, during the presidency of Franjo Tuđman and the rule of his party Croatian Democratic Union (HDZ). Some aspects of the privatization process are still seen as controversial as the political and economic turmoil, coupled with the events of the simultaneous 1991–95 independence war, are thought to have led to a degree of criminal activity, which plunged the country into an economic depression immediately after it declared independence in 1991.
Events
At the time Croatia gained independence, its economy (and the whole Yugoslavian economy) was in the middle of recession. As a result of the war that started in 1991, infrastructure sustained massive damage, especially the revenue-rich tourism industry. Privatization and transformation from a planned economy to a market economy was thus slow and unsteady, largely as a result of public mistrust when many state-owned companies were sold to politically well-connected at below-market prices. With the end of the war, Croatia's economy recovered moderately, but corruption, cronyism, and a general lack of transparency stymied economic reforms and foreign investment.
Primary methods of privatization in Croatia were management employee buyouts, while secondary methods were vouchers. In 1991 private sector share in GDP was 25% and in employment 22%. The method of privatization contributed to the increase of state ownership because the unsold shares were transferred to state funds. In 1999 the private sector share in GDP reached 60%, which was significantly lower than in other former socialist countries. The government retained 1-30% shareholdings in privatised firms in 33,4% of firms, and above 30% in 7,6% firms, much higher than other countries.
The privatization of large government-owned companies was practically halted during the war and in the years immediately following the conclusion of peace. As of 2000, roughly 70% of Croatia's major companies were still state-owned, including water, electricity, oil, transportation, telecommunications, and tourism.
| Year | GDP Growth | Deficit/Surplus* | Debt to GDP | Privatization revenues* |
|---|---|---|---|---|
| 1994 | 5,9% | 1,8% | 22,20% | |
| 1995 | 6,8% | -0,7% | 19,30% | 0,9% |
| 1996 | 5,9% | -0,4% | 28,50% | 1,4% |
| 1997 | 6,6% | -1,2% | 27,30% | 2,0% |
| 1998 | 1,9% | 0,5% | 26,20% | 3,6% |
| 1999 | -0,9% | -2,2% | 28,50% | 8,2% |
| 2000 | 3,8% | -5,0% | 34,30% | 10,2% |
| 2001 | 3,4% | -3,2% | 35,20% | 13,5% |
| 2002 | 5,2% | -2,6% | 34,80% | 15,8% |
| *Including capital revenues *cumulative, in % of GDP | ||||
See also
References
- International Business Publications: Croatia Investment and Trade Laws and Regulations Handbook, p. 22
- Istvan Benczes:Deficit and Debt in Transition: The Political Economy of Public Finances in Central and Eastern Europe, Central European University Press, 2014, p. 203
- Saul Estrin: The Impact of Privatization in Transition Economies, London School of Economics and Political Science, 2007, p. 18-19
- Istvan Benczes:Deficit and Debt in Transition: The Political Economy of Public Finances in Central and Eastern Europe, Central European University Press, 2014, p. 205-206
- Saul Estrin: The Impact of Privatization in Transition Economies, London School of Economics and Political Science, 2007, p. 20
- Eastern Europe: An Introduction to the People, Land, and Culture, p. 473
- National Accounts Main Aggregates Database