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Croatia
>> Regional Overview >> Croatia Overview
Previous Years' Activities
2002, 2001, 2000, 1999, 1998, 1997
Last updated: 30
(text taken from the FY 2003 Congressional Budget Justification)
THE DEVELOPMENT CHALLENGE: Croatia's reform-oriented coalition government, now nearly two years old, has held together through difficult political and economic challenges in 2001, but faces potentially greater perils in the second half of its mandate. The U.S. Government is the primary source of technical advice to the Government of Croatia (GOC) on economic reform and strengthening of democratic institutions. The United States continues to influence and leverage commitments that further U.S. policy goals -- including implementation of the Dayton Agreement, cooperation on war crimes prosecution, stabilization and economic recovery of the Balkan region, and integration of the former Yugoslav countries with Europe. The U.S. commitment to assist Croatia's transition - which began in earnest only with the elections of early 2000, owing to the 10-year delay of war and Tudjman-led stagnation - is seen here as critical to its success. Continuing the U.S. Government's support for these processes will be essential to helping Croatia endure not only the typical "transition backlash", but also a detectable resurgence of nationalist sentiment led by the former ruling party as a result of the GOC's commitment to its international responsibilities to the International Criminal Tribunal on former Yugoslavia (ICTY). The moral suasion of the international community, led by the United States, continues to be critical for keeping Croatia on track in meeting its Dayton and Erdut commitments, including the continued improvement of ICTY cooperation.
The GOC's record on internal post-war recovery shows mixed results and reflects a continuing need for U.S. and other international pressure and support. The GOC's commitment to a real reform agenda has changed dramatically since the 2000 elections, but implementation still requires vigilance and resources. It has boldly pledged to complete all property restitution by the end of 2002 and reconstruction of war-damaged homes and infrastructure in 2003 but lacks the funds to accomplish these goals. Additionally, the number of refugee returns in 2001 is down nearly 25% from 2000, due primarily to the fact that few Croatian Serb returnees have benefited from government assistance to date in resolving shelter and property issues. Failure of the Croatian Parliament to adopt timely legislation that would facilitate repossession of minority returnees' homes has had a dampening effect on refugee return. Lack of employment opportunity and the fear of arrest for war crimes also negatively impact the return process. Croatia is still plagued by a high unemployment rate (22%) and low competitive capacity in international markets. The growth of public debt is worrisome, and the implementation of much needed economic reforms is proceeding too slowly. Foreign investment remains low because of slow privatization and various administrative barriers. Furthermore, there is a need for increased efforts against corruption through more effective application of the rule of law, particularly improvement in the court system.
THE USAID PROGRAM:
FY 2002 Estimate: $44,000,000 FY 2003 Request: $30,000,000 The USAID assistance program is aimed to help Croatia continue progress toward a prominent place within the community of democratic and market-oriented nations, and to become a force for stability, peace, cooperation and prosperity throughout Southeast Europe. Stronger economic and political institutions and social stability in Croatia will further peace and stability throughout the region. The USAID assistance program is structured around four Strategic Objectives as described in the Program Data Sheets.
Several new and follow-on AEEB-funded economic activities that were launched during FY 2001 addressing privatization, enterprise promotion, international competitiveness, energy restructuring, banking supervision and commercial law reform will continue to be supported in FY 2002 and FY 2003. AEEB-funded democratization efforts support civil society organizations, independent media, political parties and elections, local government capacity-building, and judicial reform. A second-generation NGO capacity-building program is being launched early in FY 2002. Commitment to the continued return and reintegration of war-affected populations will be supported through two programs involving infrastructure reconstruction and economic revitalization of the war-affected regions. The infrastructure component of USAID's refugee return and reintegration program will peak in 2002. A recently introduced social transition program addressing pension reform, strengthening of democratic labor organizations, supporting tripartite dialogue on social issues related to labor, business and government, and community-based health care will continue in FY 2002 and 2003.
FY 2003 will witness the completion of the USAID's infrastructure reconstruction activities in the war-affected areas. Continued efforts to spur economic revitalization in these regions will be needed to address the more difficult economic devastation left by the war. A new agribusiness component in USAID's economic portfolio will be in its initial stages. Assistance to private enterprise promotion, local government reform and the tripartite dialogue between government, business and the unions will continue.
OTHER PROGRAM ELEMENTS: USAID's Regional Infrastructure Program (RIP) provides assistance to targeted Croatian cities in developing private sector participation in the provision of local utility services, with the prospects of attracting private investment to finance required capital improvements to local infrastructure such as water facilities. USAID's EcoLinks Program, the Eurasian-American Partnership for Environmentally Sustainable Economies, links businesses, local governments and associations in Croatia with counterparts in the U.S. or other countries in the region to promote market-based solutions to environmental problems with market-based solutions.
OTHER DONORS: The U.S. Government and the European Union (EU) are the principal donors in Croatia, although the EU has yet to begin to deliver broad-based Community Assistance for Reconstruction, Development, and Stabilization (CARDS) assistance. The International Monetary Fund (IMF) and the World Bank are the primary multilateral lenders. USAID is coordinating with the World Bank on an automation project on commercial law and on pension reform. USAID coordinates democracy and refugee reintegration assistance with the EU, United Nations High Commissioner for Refugee (UNHCR), the Council of Europe, Office of Security and Cooperation in Europe (OSCE), and other bilateral donors, including British, Norwegian, Dutch, German, Swedish and Canadian governments as well as with the Department of State's Bureau for Population, Refugees and Migration. Major private donors include the Open Society Institute and the C.S. Mott Foundation.
Program Data Sheets
- 160-0130 Growth of a Dynamic, Competitive Private Sector
- 160-0210 More Effective Citizen Participation and Improved Governance
- 160-0310 Accelerated Return and Sustainable Reintegration of War-Affected Populations
- 160-0340 Mitigation of Adverse Social Conditions and Trends
- 160-0420 Cross-Cutting
Country Background Information Resources
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Last Updated on: May 29, 2002 |
