II. Country Assessment--Croatia


U.S. Government Assistance to Eastern Europe under the Support for East European Democracy (SEED) Act
Bureau of European and Eurasian Affairs
January 2004
Report

Map of CroatiaArea: 56,542 sq km, slightly smaller than West Virginia
Population: 4,422,248 (2003 est.)
Annual Inflation: 2.2% (2002 est.)
Population Growth Rate: 0.31 (2003 est.)
Gross Domestic Product (GDP): $38.9 billion (purchasing power parity, 2002 est.)
Life Expectancy: male - 70.76 years; female - 78.2 years (2003 est.)
GDP Per Capita: $8,800 (purchasing power parity, 2002 est.)
Infant Mortality: 6.92/1,000 live births (2003 est.) 
Real Annual GDP Growth: 5.2% (2002 est.)

U.S. STRATEGIC INTERESTS

Croatia's SEED assistance program continues to be an integral tool in achieving the goals embodied in the Embassy's Mission Performance Plan (MPP). SEED assistance resources enable the U.S. to support and, in some cases, accelerate Croatia's successful transition from communism and the legacy of ethnic war -- a critical ingredient for the U.S. Balkan policy goal of regional stability. SEED programs are aimed at ensuring that Croatia develops a fully democratic society and productive market-oriented economy that will serve as a cornerstone for peace and stability in Southeastern Europe, while promoting Croatia's aspirations for membership in NATO and the EU. SEED assistance also enables the Embassy to engage Croatia on important U.S. foreign policy concerns, such as trafficking in persons, professionalizing the police force, and combating international crime.

OVERVIEW OF U.S. GOVERNMENT ASSISTANCE

In FY 2003, the U.S. Government (USG) provided an estimated $37.0 million in assistance to Croatia:

  • $10.38 million in democratic reform programs (including Public Diplomacy exchange programs);

  • $13.66 million in economic and social-sector reform programs;

  • $12.05 million in security, regional stability and law enforcement programs; and

  • $0.68 million in cross-sectoral and other programs.

In FY 2003, a total of 41 Croatians traveled to the U.S. on USG-funded exchange programs.


U.S. ASSISTANCE PRIORITIES


Democratic Reform: In FY 2003, U.S. assistance focused on giving citizens a greater voice in shaping their government and in helping political leaders understand the issues most important to citizens. This assistance was particularly critical during the campaign for parliamentary elections held in November 2003. U.S. assistance shaped the debate through extensive public polls, which -- when made public -- helped bring all of Croatia's mainstream political leaders to acknowledge the broad consensus for continued integration into Euro-Atlantic institutions. Other U.S. assistance priorities in 2003 included support to local governments that served to enhance their skills in financial and asset management, local economic development, and citizen participation in local affairs. Support to the NGO sector continued to strengthen the capacity of Croatia's non-profit organizations to improve their financial sustainability through training and technical assistance.

Economic and Social Sector Programs: In FY 2003, the overarching objective of USG assistance in the economic sector was the growth of a dynamic, competitive private sector that can generate employment and higher incomes for more Croatians. The USG's economic program is addressing this goal in three ways: first, SEED-funded programs are assisting Croatian small and medium enterprises, to acquire the skills, tools, financing, and services needed for them to compete in local, regional, and global markets. Second, programs are working directly with farmers, producer organizations, and processors to increase the local consumption of domestically produced agriculture products and to raise the competitiveness of the Croatian agricultural sector. Third, the USG, together with the World Bank, is improving the investment climate by accelerating the privatization process, supporting the development of a competitive and well-regulated energy sector, and promoting interregional energy-sharing agreements between Croatia and its neighbors. The USG's priorities in the social sector included public awareness activities to combat trafficking in persons and increase the understanding of HIV/AIDS and the stigma brought upon its victims. The USG's successful efforts to establish a comprehensive pension program will soon be completed.

Security, Regional Stability, and Law Enforcement: In FY 2003, U.S. assistance sought to bring Croatia nearer to integration into Euro-Atlantic institutions and to encourage closer relations with its neighbors in the region. During FY 2003, U.S. security-related assistance improved the Croatian forces' ability to participate in international peace support operations and advanced Croatia's progress toward meeting NATO membership criteria. U.S. assistance is also directed to helping Croatia improve control of its borders, to prevent the flow of weapons of mass destruction and other illicit trafficking. Since long-term regional stability will depend also on permanently solving unresolved issues resulting from nearly a decade of ethnic war in the Balkans, the USG provided targeted assistance to help rebuild communities where refugees were returning and to support economic activities for the returnees. Law enforcement assistance focused on developing self-sustaining systems for professional training, performance monitoring, and ethical standards enforcement within the police and State Prosecutor's office.

SECTORAL ASSESSMENTS


Democratic Reform

Overview: In FY 2003, Croatia made significant but uneven progress toward meeting Western democratic standards; it still lags behind Northern Tier states on all major reform indicators. Preparations for a general election to succeed Croatia's first post-Tudjman government were transparent and accorded with democratic standards. OSCE judged that these preparations were "fundamentally improved" to a degree that short-term international monitors were not required to ensure proper conduct of the election. Election monitoring was conducted instead by political parties themselves and by highly professional local NGO monitors. Parliamentary elections took place in an orderly manner, which the OSCE determined was "generally in line" with Western standards, with no significant irregularities reported.

Major political parties competed for votes in a contest entirely devoid of nationalist rhetoric. All declared that progress toward membership in the EU and NATO was their overriding foreign policy goal, and that they were willing to make the necessary domestic political sacrifices to achieve them.

The next Croatian government coming to power in January 2004 will be led by the HDZ, the same political party which voters rejected in the January 2000 elections. During nearly four years in opposition, the HDZ went through significant internal changes, which its leaders claim have transformed it into a responsible, democratic party capable of continuing reform efforts in Croatia. These assertions will now be tested. The Embassy will be to press for consolidation of reforms and seek to convince the new government that it is in its interest to continue to work toward building Croatia's civil society.

Key Issues and USG Assistance: USG resources are strengthening Croatia's democratic institutions through a comprehensive development assistance program that includes strengthening political parties and the legislature, judicial reform, NGO and civil society development, and local government reform.

U.S. assistance in political processes will continue to be essential to further the consolidation of democratic reforms. Focus will shift from work with political parties to work with institutions, particularly with the new parliament. U.S. assistance will also be directed toward the shortcomings identified in the OSCE assessment of the November 23 election: improving the legislative framework for elections, improving access to voting for refugees, and increased transparency of campaign spending.

Judicial reform continues to lag behind other areas of democratic development. Inefficient courts and outdated, often contradictory legislation led to huge case backlogs, predominantly in civil courts. Lack of progress in judicial reform is hampering Croatia's economic development; civil cases can take years to come to trial.

The USG, European Commission, World Bank and Government of Croatia (GOC), reached agreement on a standardized, court-case management software platform that will be implemented in courts countrywide by 2005. The new system will improve judicial efficiency and significantly reduce GOC costs. The agreement demonstrated how collaboration among donors was able to break through GOC inertia to spark a real step forward toward improved judicial efficiency.

USG efforts to improve the legal environment for Croatia's non-profit sector achieved remarkable results during FY 2003. The USAID-funded International Center for Not-For-Profit Law (ICNL) provided a full range of legal, structural, and organizational advice to the Government Office for Cooperation with NGOs that resulted in the enactment of new laws on Humanitarian Assistance and the National Foundation for Civil Society, as well as a decree on the Distribution of the Lottery Proceeds to NGOs. USAID's NGO Support Program (CroNGO) engaged citizens around the country, as well as making stronger, more professional organizations to take the leading role in advocating for delivering services to those disenfranchised sectors of society, including HIV/AIDS and trafficking victims, the elderly, and the disabled. Over 123 new community projects reached every county of Croatia and mobilized more than 16,000 citizens in 2003, bringing long-needed change and improvement to communities.

The SEED-funded Local Government Reform Program (LGRP) has been instrumental in strengthening the capacity of over 400 of Croatia's 567 local governments that were ill prepared to take on the new, increased responsibilities devolved from the central government in 2001. Technical assistance modules in financial and asset management, local economic development, and citizen participation in local affairs have provided local governments with valuable tools as they begin to manage their own affairs. As a result of this program, cities have adopted asset management reforms leading to increased revenues from assets that had never been used for income. For example, the mayor of one of LGRP's partner cities, Varazdin, noted to the city council that the asset management effort the city had undertaken resulted in savings or additional revenues of about $3.4 million, or about 20 percent of the city's budget.

The Embassy's Public Affairs Section administered 16 Democracy Commission grants, three International Visitor projects, three Ron Brown Fellowships and six media/journalism projects in FY 2003. The Democracy Commission grants in this area were aimed at supporting democratic initiatives, media reform, the reintegration of refugees, and the promotion and protection of human rights. Specific projects included promotion of youth volunteerism and leadership, ethnic tolerance, NGO capacity building, investigative journalism, and community self-development and sustainability.

In FY 2004, Croatia's SEED assistance in the democracy sector will expand its efforts in local government reform to include 65 new cities and municipalities. Efforts to improve the capacity of the NGO sector will continue.


Economic and Social Sector Reform

Overview: Croatia's economy has undergone a remarkable transition over the last few years, especially in terms of achieving macroeconomic stability. With macroeconomic reforms locked in, Croatia's GDP grew at a 3.8 percent rate in 2001 and at 5.2 percent in 2002. In FY 2003, Croatia' GDPs is expected to grow at 4.5 percent. Tight monetary policy and increased competition have helped keep inflation at a low 1.7, 2.3 and 3 percent for the last three years. Economic growth has been driven by a recovery of the tourist sector from the travails of the 1990's; strong government investment, especially in roads; and a boom in consumer spending. The latter was fueled by the injection of foreign capital into the almost completely privatized banking sector and low tariffs. Unemployment decreased to 14.1 percent (ILO methodology) for the first half of 2003, down from 15.2 percent for the first half of 2002, and 16.0 percent for all of 2001. While no official statistics are available, a significant portion of the labor force remains underemployed in the heavily subsidized and yet-to-be-privatized state-owned industries that include shipyards and agrokombinats. The eventual transition of these industries through bankruptcy or restructuring could slow the decrease in the unemployment rate.

Key Issues and USG Assistance: The USG supported the 5,000-member Croatia Employers Association (HUP) in establishing the Association for Management Consultants (AMC) in order to ensure quality standards for consultants. The AMC now has over 100 individual and firm members. USAID technical assistance was instrumental in the AMC's development of internationally accredited standardization programs for International Standards Organization and Hazard Analysis of Critical Control Points (HACCP). As the EU requires these standards, SMEs that receive accreditation in these programs will be better able to meet EU criteria for export purposes. Over 200 trainees from more than 100 firms in the AMC have participated in these courses, enabling them to deliver valuable business development services to a wide range of Croatian businesses. Training recipients have secured more than 300 paid contracts from interested local businesses representing more than �1 million of revenue.

USAID's new Agribusiness Competitiveness Enhancement (ACE) program helped a major fresh produce supplier to meet the strict quality standards of the U.S. military. As a result of two successful test shipments, the distributor recently received a standing order for weekly shipments of produce to support U.S. forces in Kosovo that is expected to bring in more than �600,000 in revenues over the next year. Equally important, results of the program will enable Croatian agribusinesses to prepare for the daunting challenge of competing directly with heavily subsidized EU agriculture.

SEED-funded technical assistance played a key role in Croatia's progress toward the restructuring of its power sector. Croatia's geographic position and technical capability make it the leading actor in regional electricity interconnections, and it is pursuing the development of a Regional Electricity Market in Southeast Europe. Technical assistance provided by USAID has enabled the Croatian Energy Regulatory Council to assert its strong role.

Privatization remains critical for increasing the private sector share of the economy and reducing the level of cash subsidies for state-owned-industries that continue to heavily burden the Croatian Treasury. USG assistance was pivotal in 2002 to reducing the Croatian Privatization Fund's (CPF) portfolio of companies that remain to be privatized from 1,900 to 1,100. However, political differences among GOC coalition partners derailed the government's privatization program and almost brought it to a complete halt, in January of 2003. As a result, the Embassy severely restricted expenditures by the implementing contractor supporting CPF processes, primarily by reducing staffing levels to a bare minimum. Engagement with the (new) GOC will resume, should the environment become more favorable.

The Public Affairs Section supported one grant and two Ron Brown MBA Fellowships aimed at the economic sector, assisting Croatians to start and improve small businesses. Results of the small business program include plans to establish a sister-city relationship between Miami and Rijeka and continuing contacts between the Croatians and the International Business Incubator in San Jose, CA.

The U.S. Treasury budget assistance mission to the Ministry of Finance (MOF) focuses on improving the process of preparing, presenting, and executing the budget, assisting the MOF with the requests of the international financial institutions (IFIs), and training MOF staff in all aspects of the budget process. Intra- and inter-ministerial turf battles have diminished the effectiveness of this assistance. Treasury also finances a program of intermittent assistance in the area of tax auditing and collection. While receptivity has been generally good, further progress on public administration reform would help increase the effectiveness of this (and other) assistance.

The Embassy's public education program on pension reform enabled the GOC to win essential popular support for this reform. Pension reform is considered one of the GOC's most successful transition activities. The popular support the program it garnered was pivotal in the GOC's ability to implement its Tier I and Tier II pension fund programs and has set the stage to roll out its 401k-like pension fund program early in 2004.

Media campaigns and journalist training focused on changing perceptions and resulted in increased knowledge of the effects of trafficking in persons from a baseline of 45.5 percent to 80.3 percent. The Public Affairs Section administered two International Visitor (IV) projects focused on assisting women entrepreneurs, increasing the knowledge base on biotechnology, and supporting efforts to combat trafficking in persons. Democracy Commission grants aimed at drug/alcohol abuse prevention, environmental protection, and assisting the Roma population. The Roma programs have assisted in the founding of a kindergarten for Roma children that teaches basic Croatian and helps prepare them for entry into the Croatian school system.

In FY 2004, Croatia's SEED assistance in the economic sector will expand its efforts in the agribusiness program to economically distressed areas, including Croatia's war-affected regions, with new project activities focused on increasing employment and incomes.

Security, Regional Stability, and Law Enforcement

Overview: Croatia's continued progress toward integration into regional and Euro-Atlantic security institutions and developing positive relations with other states in Southeast Europe is essential to achieving the U.S. goal of improving regional security in the Balkans. Croatia has the potential to become a strong regional leader on security issues, and U.S. assistance is directed toward achieving that goal. Croatia made significant progress in FY 2003 toward meeting the criteria for NATO membership. The GOC tackled the politically sensitive issues of restructuring the Defense Ministry and downsizing the armed forces and is on track to meet downsizing goals set in its NATO Membership Action Plan. Croatia's defense planning documents show that the GOC no longer sees a strategic threat from any of its neighbors, but the structure of its armed forces is still adapting to this change. Croatia participates in a number of international peace support operations and deployed a platoon of highly professional military police to assist international efforts in Afghanistan.

Croatia made important, if uneven, progress in building cooperative relationships with its neighbors in the region. Relations with Serbia and Montenegro are moving toward normalization. In FY 2003, Croatia reached agreement with Serbia and Montenegro to bring the UN Observer Mission in Prevlaka to an end, reached a provisional agreement temporarily lifting visa requirements, and implemented a free trade agreement. Relations with Bosnian Croats became more transparent, and the GOC continued to support international community efforts to build state institutions in Bosnia. Relations with Slovenia are generally good, but several irritants -- like a dispute over a maritime border and Croatia's unilateral declaration of an Exclusive Economic Zone -- remain unresolved.

Progress toward reintegrating those members of Croatia's ethnic Serb minority displaced by the war was uneven and disappointing. Although the GOC announced a series of measures aimed at encouraging the return of refugees and the restitution of their property, implementation lagged far behind expectations. One bright spot was the passage of the Constitutional Law on National Minorities, which gave minorities a new level of representation at both locally and nationally.

Key Issues and USG Assistance: Croatia's ability to train its forces to meet NATO standards is limited due to budget constraints, and the armed forces lost an important resource in U.S. International Military Education and Training (IMET) funding when it chose not to sign an "Article 98" agreement to prevent the transfer of U.S. citizens to the International Criminal Court. FMF and IMET funding was suspended in July 2003, in accordance with the American Servicemembers Protection Act (ASPA). Before this cutoff, the USG had provided $750,000 in FY 2003 IMET funds to train 28 members of Croatia's armed forces and $5.5 million in FMF funds to purchase VHF radios to enhance NATO interoperability.

Croatia took steps to improve its export control regime and works cooperatively with the U.S. and other states in the region to interdict trade in narcotics and to protect against proliferation of weapons of mass destruction. Early in FY 2003, Croatia -- in cooperation with the U.S. -- tracked and then seized the suspect vessel MV Boka Star, which had an illicit cargo of explosives and rocket propellant, reportedly destined for a state of concern in the Mideast. In mid 2003, Croatian authorities worked with the U.S. Drug Enforcement Agency to track and seize a shipment of 350 kilograms of cocaine from South America. While the Boka Star and cocaine seizures were clear successes, outdated legislation, unclear lines of authority, lack of expert personnel, and insufficient resources prevent Croatia from maintaining full control over its borders. New U.S. Export Control/Border Security (EXBS) assistance, combined with assistance from other donors, including from the EU, is addressing this shortcoming.

The SEED program has been actively engaged in improving the living environment in 10 municipalities in Croatia's war-affected area in order to promote the sustainable return of refugees and stability in the region. USAID's Community Infrastructure Program (CIRP) and Economic and Community Revitalization Activity (ECRA) have been successful in encouraging refugee returns and improvement in the overall economic conditions in the regions.

CIRP's infrastructure program has completed nearly 100 projects. The remaining projects are in the final implementation phase and were completed in CY 2003, at which time the project will close. CIRP restored eight community centers, 14 schools, five kindergartens, a health clinic, two roads, as well as renovating and rehabilitating water and electrical facilities, to the benefit of 55,000 people (about 18,000 families) in 144 communities. Completed water and electric projects provided over 2,500 new or repairedconnections to public utilities.

As of September 2003, ECRA activities had created employment for 716 people, generated 163 new contracts worth almost $1 million for assisted enterprises, and leveraged close to $500,000 of funding from other sources, including commercial bank loans. Almost 10,500 people of all ethnic groups have participated in ECRA-assisted community activities, and over 8,000 people received legal assistance, of which 45 percent had their cases resolved.

Croatia made significant strides in improving the professional capabilities and performance of its law enforcement organizations in FY03. The Department of State/INL administered SEED funding to support two projects in Croatia: the Department of Justice, Office of Overseas Prosecutorial Development, Assistance and Training (DOJ/OPDAT) Resident Legal Advisor (RLA) and the Department of Justice, International Criminal Investigative Training Assistance Program (DOJ/ICITAP) Police Reform and Professionalization project. Using technical guidance and material support received under the DOJ/OPDAT program, the State Prosecutor's office developed and distributed its first-ever professional handbook to guide prosecutors in the conduct of their duties from evidence collection and investigation to case preparation and trial court conduct. Also under OPDAT guidance, the State Prosecutor's office developed its first code of professional ethics. The true measure of the success of these programs is that both the manual and the code are accepted and used as homegrown products and are already serving as models for similar efforts in the prosecutors' offices of neighboring states.

In the fall of 2003, the Police Academy enrolled its first class of police officers in a completely revamped nine-month professional training course developed with the assistance of the SEED-funded ICITAP program. These officers will graduate to probationary status and will receive six additional months of supervised field training, also created under the ICITAP program. The Ministry of Internal Affairs developed a new police policy and procedures field guide with ICITAP assistance in FY 2003. Pending final approval, 25,000 copies of the field guide will be distributed, and ICITAP will provide user training in early FY 2004.

In FY 2003, Croatia began to develop the capacity to prosecute war crimes domestically, and a series of new laws was passed. These laws updated court procedures and the criminal code, and created special war crimes courts, making it possible for prosecutors to move cases away from politically charged regions. However, at year's end, the Constitutional Court invalidated all of the amendments to the penal code. While this should not impact the GOC's cooperation with the International Criminal Tribunal for Yugoslavia (ICTY), it may complicate Croatia's ability to take over criminal cases initiated by Tribunal as called for in the ICTY completion strategy. The new government will have to reintroduce these changes in order to bring the criminal code into line with the EU aquis.

The Embassy's Public Affairs Section administered two International Visitor grants, involving 11 individuals, which focused on protective service issues and on combating corruption and organized crime. The prosecutors who participated in the combating organized crime group returned with a commitment to apply what they learned during their trip, despite the financial and legislative constraints they face in Croatia. They are sharing their new knowledge with their colleagues, through presentations and publications of the State Attorney's Office.

COUNTRY PERFORMANCE MEASURES

Economic Policy Reforms and Democratic Freedoms in Croatia, 1991-2002
 
Chart shows Economic Policy Reforms and Democratic Freedoms in Croatia, 1991-2002


Ratings based on a 1 to 5 scale, with 5 representing the most advanced. 
Sources: EBRD, Transition Report 2003 (November 2003); Freedom House, Freedom in the World 2003 (2003); and (various years).

Economic Structure and Human Development in Croatia, 1991-2002

Chart shows Economic Structure and Human Development in Croatia, 1991-2002

The Human Development Index (HDI) is based on three indicators: longevity, as measured by life expectancy; educational attainment, as measured by a combination of adult literacy and combined primary, secondary and tertiary enrollment ratios; and standard of living, as measured by real per capita GDP ($PPP).  The HDI ranges from 0 to 1, with higher values representing greater human development.  UNDP, Human Development Report 2003 (July 2003), and previous editions; EBRD, Transition Report 2003 (November 2003), and previous editions.

MEASURES OF PROGRAM EFFECTIVENESS IN FY 2003

DEMOCRATIC REFORM


Performance Indicator: Electoral Process. Source: (Freedom House, OSCE)

FY 2002 Baseline FY 2003 Target FY 2003 Actual
3.25 2.5 3.25

FY 2003 Results: OSCE's Office for Democratic Institutions and Human Rights determined in September that the democratic environment in Croatia had changed so fundamentally that it would not deploy short-term international observers to monitor parliamentary elections scheduled for November and would rely instead on local media, NGO, and political party monitoring. OSCE concluded that the November 23 parliamentary elections were "conducted generally in line with OSCE commitments and international standards for democratic elections." Croatia's political parties continued to develop, and by the end of FY 2003 had generally aligned themselves with the various European political movements. Ethnic nationalism ceased to be a defining issue in Croatian politics. Shortcomings identified in the OSCE assessment include improving the legislative framework for elections, improving access to voting for refugees, and increased transparency of campaign spending.

Performance Indicator: Improved rating of Croatia on the NGO Sustainability Index-Legal Framework

2002 Baseline FY 2003 Target FY 2003 Actual
2.8 2.5 2.7

FY 2003 Results: The target for this year has not been met, as the actual rating for legal environment is 2.7, or lower than the planned target of 2.5. However, a comparison of the 2003 scoring with that of 2002 indicates that steady progress has been achieved. This is due to the recent enactment of new laws on humanitarian assistance, the National Foundation for Development of Civil Society, and the Decree on Distribution of the Lottery Proceeds. Although the GOC has been committed to support NGOs, changes were still slow regarding tax issues and the foundation law, which still provides restrictive conditions for the registration of organizations.

ECONOMIC AND SOCIAL REFORM

Performance Indicator: Increased private sector share of employment (Source: Croatian Bureau of Statistics)

FY 2002 Baseline FY 2003 Target FY 2003 Actual
56.6% 58.0% 61%

FY 2003 Results: The selected indicator exceeded the performance target for the year. The target was 58 percent, while the actual private sector share of employment reached 61 percent, indicating a positive trend in the growth and expansion of Croatia's private sector. This is due in part to an improved and expanding SME sector.

Performance Indicator: Number of entities tendered at Croatian Privatization Fund (CPF) (Source: CPF)

FY 2002 Baseline FY 2003 Target FY 2003 Actual
348 150 35

FY 2003 Results: Performance in the privatization area did not reach targets, due mainly to political infighting within the ruling coalition. The GOC's privatization program was halted in 2003 and failed to gain any significant traction with the approach of the national elections. The Embassy took restricted managerial steps to scale back assistance in this area. With signs of some renewal of political will to move forward in recent months, the Embassy stands ready to engage the newly elected government in continuing its privatization program.

Performance Indicator: National Action Plan to combat Trafficking in Persons (TIP) (Source: GOC)

2002 Baseline FY 2003 Target FY 2003 Actual
  • No national TIP coordinator.

  • No National Action Plan (NAP).
  • National coordinator appointed by GOC.

  • NAP finalized that defines and establishes GOC's TIP strategy.

  • Draft legislation on TIP passed by Sabor.
  • National Coordinator appointed by the GOC

  • National Action Plan finalized and adopted
TIP legislation passed by the Croatian Parliament

FY 2003 Results: The position of the National Coordinator in the National Committee was created and is held by the Head of the Office for Human Rights. The incumbent has a leading co-coordinating and operative role in the work of the National Committee. The National Action Plan was finalized and adopted by the GOC, in November 2002, and broadly defines the government's TIP strategy and activities. Legislation on trafficking, in particular TIP provisions in the Penal Code entitled Human Trafficking and Slavery, was adopted by the Parliament, in July 2003. However, in December 2003, the Constitutional Court invalidated the amendments of the penal code, including the TIP provision.

SECURITY, REGIONAL STABILITY, AND LAW ENFORCEMENT

Performance Indicator: NATO Integration and Defense Reform (Source: NATO)

FY 2002 Baseline FY 2003 Target FY 2003 Actual
  • Croatia enters MAP.

  • Participation in NATO programs.

  • Defense restructuring begins.
  • First ANP review of Croatia.

  • Military downsizing begins. Increased participation in NATO programs.

  • Encourage cooperation with other NATO aspirants.
  • NATO's Political Committee positively assesses Croatia's first ANP.

  • Defense Ministry meets interim Military downsizing goals.

  • Croatia signs "Adriatic Charter" with the U.S. and other NATO aspirants to enhance regional cooperation toward NATO membership.

FY 2003 Results: Croatia made good progress toward NATO membership, exceeding the U.S. targets for FY 2003 in some areas. Restructuring of the Defense Ministry is well underway, and the politically sensitive task of military downsizing is on track. Croatia completed its first annual cycle in NATO's Membership Action Plan and participated in a number of NATO-sponsored exercises. In March 2003, Croatia joined with Macedonia and Albania to sign the U.S.-Adriatic Charter, a political commitment of NATO's three continuing aspirants, to work together toward NATO membership.

Performance Indicator: Restructuring of police force/improvement of police training. (Source: GOC)

 

FY 2002 Baseline FY 2003 Target FY 2003 Actual
  • Ministry of Interior accepts U.S. concept of police modernization.

  • IC coordination on police issues begins.

  • Police downsizing of 15 percent completed as planned.
  • Police school restructured.

  • New police SOPs developed.

  • Pilot field training officer program launched.
  • Police school restructured and first training class enrolled.

  • Field training set for this class when it graduates in 04.

  • New police SOPs developed.

FY 2003 Results: After a long gestation period, the Police Academy launched a new basic school for police officers, in the fall of 2003, based on Western models of training for police in a democracy. Initial train-the-trainer courses for field training officers have begun, to prepare a cadre of 330 training officers to work with graduates of the new basic police school when they begin probationary field training in late spring 2004. The new police standard operating procedures have been developed and, pending final approval, will be distributed in pocket manual form to every Croatian police officer in spring 2004.


FY 2003 Support For East European Democracy (SEED)
Funds Budgeted for Assistance To:

Croatia (In millions $, as of 12/31/03)

USAID - Democratic Reform $5.14
USAID - Economic Prosperity & Security $11.20
USAID - Humanitarian Response $5.84 
USAID - Social Sector Reform $3.11
USAID - Special/Cross-Cutting $0.69
USAID Total:
$25.98

State - DRL/Int'l Commission Missing Persons $1.00 
State - ECA Exchange Programs $0.78 
State - EUR Democracy Programs $0.08 
State - EUR Public Diplomacy $0.33 
State - IIP Public Diplomacy $0.05 
State - INL Law Enforcement Activities $0.65
U.S. Department of State Total:
$2.88

Broadcasting Board of Governors - Public Diplomacy $0.05 
DHS/Customs - Law Enforcement Activities $0.35 
U.S. Department of Treasury - Advisors $0.75
Other Agencies Total: $1.15

GRAND TOTAL: $30.00



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