Privatization in Croatia

Privatization in Croatia refers to political and economic reforms which include the privatization of state-owned assets in Croatia . Privatization started in the late 1980s under the Yugoslav Prime Minister Ante Marković and took place in the 1990s after the breakup of Yugoslavia , during the presidency of Franjo Tuđman and the rule of his party Croatian Democratic Union (HDZ), and continued in the 2000s with the privatization of large state enterprises. Many aspects of the privatization process are still controversial as the political and economic turmoil, coupled with the events of the simultaneous 1991-95 independence war, are thought to have a degree of criminal activity . 

Early privatization

The privatization process in the former Yugoslavia is an initiative of the Yugoslav Prime Minister Ante Marković . ^[1] In 1990 he introduced a privatization program, privatization program, primarily through internal share-holding schemes, initially not tradeable in the stock exchange. ^[2] This meant that the law put an emphasis on „insider“ privatization to company managers and managers, to whom the shares could be offered at a discount. Yugoslav authorities used the term „property transformation“ when referring to the process of transforming public ownership into private hands. ^[1]

Separate privatization laws in individual republics. ^{[1] [ when? ]} SR Croatia REPLACED the federal law is privatization with icts own privatization law in April 1991. The new law Stipulated compulsory privatization and the elimination of public ownership, while publicly owned enterprises Were to be Transformed into joint stock or limited liability companies. ^[3] These new laws in Croatia and Slovenia have been interpreted as tacit nationalization, a tendency of both governments to first re-nationalize public property in order to later proceed with privatization. ^[4]

At the time Croatia gained independence, its economy , and the Yugoslav economy , was in the middle of recession. As a result of the 1991-95 war , infrastructure sustained massive damage, especially the income-rich tourism industry. Privatization and transformation from a planned economy to a market economy was thus slow and unsteady. ^[5]

Main events

During the course of the Croatian Democratic Union (HDZ), Croatia initiated its privatization program in 1992. Privatization of the Pension Fund and the Disability Insurance Fund, both controlled by the state. ^[6] Privatization often involved additional managers close to HDZ, or even the party’s leading members, ^[7] a trend which discouraged foreign investors. ^[6] The state also took full ownership of over 100 large companies and appointed new managers there, who were also often members of the ruling party.^[3]

With the end of the war in 1995, Croatia’s economy was restored moderately, but corruption, cronyism, and a general lack of transparency stymied economic reforms and foreign investment, accompanied by public distrust when many state-owned companies were sold to politically well-connected people at ⁵ , ^[5] [8] all of which were common to the post-communist transition economies . ^[9]

Primary method of privatization in Croatia was buyout employee management , while the method was privatization . In 1991 the private sector’s share of GDP was 25 percent, and its share of employment was 22 percent. ^[10] The method of privatization contributed to the increase of state ownership In 1999, the highest share of GDP in 60 percent, which was significantly lower compared to other socialist countries. ^[11] The government retained 1-30% shareholdings in privatized firms in 33.4% of firms, and above 30% in 7.6% firms, much higher than other countries. ^[12]

In 1995 a Ministry of Privatization was established with Ivan Penić as its first minister. ^[3] The privatization program is criticized by Croatian economists who characterized it as crony capitalism . The ruling party was particularly criticized for transferring enterprises to a group of privileged owners connected to the party. ^[13] Croatian president Franjo Tuđman was also a target of critics and allegations of nepotism and the likelihood that he personally profited. An statement statement statement about about about about about about about about about about about 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200đđđđđđđđđđđđđđ ^[14]

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 percent of Croatia’s major companies were still state-owned, including water, electricity, oil, transportation, telecommunications, and tourism. ^[15]

year	GDP Growth [16]	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 income * cumulative, in% of GDP

In popular culture

Croatian documentary series Gazda ( The Boss ) covers the privatization and rise of controversial tycoons during the 1990’s Croatia. ^[17] [18]

See also

• Franjo Tuđman
• History of Croatia
• Croatian War of Independence
• Economy of Croatia
• Miroslav Kutle

References