Area: 56,542 sq km, slightly smaller than West Virginia
Population: 4,496,869 (2004 est.)
Annual Inflation: 1.8% (2004 est.)
Population Growth Rate: -0.02% (2004 est.)
Gross Domestic Product (GDP): $47.05 billion (purchasing power parity, 2004 est.)
Life Expectancy: Male: 70.21 years; Female: 78.29 years
GDP Per Capita: $10,600 (2004 est.) (purchasing power parity, 2004 est.)
Infant Mortality: 6.96/1,000 live births (2004 est.)
Real Annual GDP Growth: 4.3% (2004 est.)
U.S. STRATEGIC INTERESTS
The best way to ensure lasting peace and economic prosperity in South Central Europe is to tie countries like Croatia so firmly into the web of Euro-Atlantic institutions and values that every citizen sees the benefit. SEED assistance program priorities are therefore inseparable from the Embassy's Mission Performance Plan (MPP) goals: to promote economic, political, and cultural changes within Croatia, so that it becomes a force for regional stability. Croatia's integration into regional and Euro-Atlantic institutions is well underway, but far from complete. Having been invited to prepare for accession to the European Union (EU), the Government of Croatia (GOC) recognizes that its most difficult economic and democratic reform challenges still lie ahead. Croatia faces budgetary, historical, and administrative obstacles in its path to NATO membership as well. SEED assistance can play an important role in consolidating what has been achieved thus far and in facilitating further reforms.
OVERVIEW OF U.S. GOVERNMENT ASSISTANCE
In FY 2004, the U.S. Government (USG) provided an estimated $28.89 million in assistance to Croatia:
In addition, in FY 2004, a total of 130 Croatians traveled to the U.S. on USG-funded exchange programs.
U.S. ASSISTANCE PRIORITIES
Democratic Reform: In FY 2004, the Embassy continued its efforts to support a broad range of democratic institutions focused on improving good governance and civil society, with the aim of moving Croatia closer to Western levels of democratic freedoms and closing its civil society performance gaps. U.S assistance priorities included strengthening Croatia's local government sector by addressing the most urgent needs of cities, towns, and municipalities, as they assume greater responsibilities in the management of budgets, culture, health, and education. Ongoing support to Croatia's non-governmental organization (NGO) sector continued to strengthen the capacity of indigenous NGOs to improve their financial sustainability through technical assistance and training. These are the two areas where USG assistance can build grassroots demand for continuing democratic reform and ensure that deeply rooted and sustainable reforms are in place by the time SEED assistance phases out.
Economic and Social Sector Programs: The overarching objective of USG assistance in the economic sector in FY 2004 was to generate employment and higher incomes for more Croatians by spurring the growth of a dynamic, competitive private sector. Through training and technical assistance, the USG's economic program is addressing this goal in several ways. First, SEED-funded programs are assisting Croatian small and medium enterprises (SMEs) 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 agricultural sector in order to meet the pressures of competition with heavily subsidized EU agriculture. Third, the USG, together with the World Bank and the International Monetary Fund (IMF), is improving economic governance by assisting the GOC better to manage its huge portfolio of government debt and continue the difficult privatization process. Finally, Croatia's SEED assistance programs are supporting the development of a competitive, well-regulated energy sector that participates in a regional power market with its neighbors in Southeast Europe and with the greater European power market. In the social sector arena, the USG continued to engage the GOC on trafficking-in-persons (TIP) issues. The SEED-funded public education program worked with the NGO and public sectors to help raise awareness among the public, the media, and policy-makers about the harm trafficking in persons is causing Croatia and throughout the region.
Security, Regional Stability, and Law Enforcement: In FY 2004, U.S. assistance continued to focus on moving Croatia toward integration into Euro-Atlantic institutions and to encourage closer relations with its neighbors in the region. U.S. security-related assistance improved the ability of Croatian forces to participate in international peace support operations and advanced Croatia's progress toward meeting the criteria for NATO membership. U.S. assistance is also directed to helping Croatia improve control of its borders in order to prevent the flow of weapons of mass destruction, contraband, and trafficked persons. Since long-term regional stability will also depend on the permanent resolution of unresolved issues resulting from nearly a decade of ethnic conflict in the Balkans, the USG targeted assistance to help rebuild communities where refugees were returning and to support economic activities for the returnees. The U.S. also provided funds for humanitarian de-mining of war-affected areas, which remains a significant problem for the security and economic development of those communities. Law enforcement assistance focused on developing self-sustaining systems for increasingly advanced professional training, performance monitoring, and ethical standards enforcement in the police and State Prosecutor's office.
Democratic Reform
In FY 2004, Croatia made significant, if uneven, progress toward meeting Western democratic standards, though it still lags behind Northern Tier states on all major reform indicators. The November 2003 parliamentary elections took place in a manner that the OSCE determined was "generally in line" with Western standards, and no significant irregularities were reported. Major political parties competed for votes in a contest devoid of nationalist rhetoric. The most significant indicator of progress in the electoral process was that, for the first time since independence, the OSCE deemed international observers unnecessary for a Croatian national election.
The current GOC came to power in January 2004, and is led by the Croatian Democratic Union (HDZ), the same political party which voters rejected in the January 2000 elections for its corrupt, nationalist policies that had led to Croatia's isolation. The HDZ has demonstrated, however, that the internal reform that it underwent during four years in opposition was genuine. During its first year in power, the HDZ has surprised critics with its unwavering pro-integration and pro-reform policies. The government achieved EU candidacy status in June 2004, and has been a leader in regional cooperation and reconciliation. Some hardliners, however, remain in HDZ leadership circles. While their views are becoming less relevant within the party, international pressure remains a key element in keeping this government on track.
Croatia's democratic transition continues to lag behind that of Northern Tier states, especially in the rule of law, public governance, and corruption areas. There have been significant improvements, however, since 2000 in local governance, civil society, and free and fair elections. During FY 2004, SEED funds supported Croatia's democratic institutions through a comprehensive development assistance program that included NGO and civil society development, local government reform, and support to political parties.
USAID's Local Government Reform Program (LGRP) provided directly to 47 local governments technical assistance packages in basic public administration management that included financial and asset management, local economic development, improved and transparent procurement practices, performance monitoring, e-government, and citizen participation in local affairs. As a result, half of these local governments have initiated transparent practices that involve citizen participation. In addition, municipalities and cities have adopted asset management reforms leading to increased revenues from assets that had never been used for income. The City Council of Karlovac, a large city, approved the adoption of the city's asset management plan that has identified the disposition of over 1,500 assets and stands either to save or earn the city about 15 percent of its annual budget. Around 25 cities have adopted the budget-in-brief module that transparently outlines their revenues and expenditures to garner support from the local citizenry on fiscal decision-making. The LGRP coordinates its program closely with the EU's regional economic development program. A recent competitive program using public administration "Best Practices" was jointly designed by the EU, the Council of Europe, and USAID and was submitted to the GOC for roll out.
The SEED-funded NGO Capacity Program (CroNGO) has strengthened intermediate support organizations that provide training and technical support to local NGOs, develop individual NGOs' service capacity through small grants, and create networks among grassroots organizations and local governments. CroNGO implemented 221 community development projects that mobilized more than 62,000 citizens to participate in project activities benefiting 37,000 of Croatia's most vulnerable citizens. Participating NGOs have received about $1.3 million in community contributions to mobilize citizen participation in the community building, economic development, environmental protection, and social services areas. USAID improved the professionalism and capacity of 12 leading sectoral NGOs, enabling them to provide broader support services to grassroots groups and networks, through grants, training, and technical assistance.
SEED assistance for political polling, party campaign preparations, voter education, and local monitoring contributed significantly to what the OSCE described as "free and fair elections," which took place in November 2003. Leading political party platforms focused on economic issues, EU accession, and NATO membership, as opposed to the nationalistic rhetoric that tainted previous Croatian election campaigns. Through its implementing partners, USAID reached out to local council members to help them define their legislative and representational roles, constituent outreach, and party caucus development. In addition, an assessment of the USG's contribution to educating voters found that an additional 10 percent of the electorate voted due to SEED-funded get-out-the-vote activities involving women's NGOs and labor unions, and to the national election-oriented organization, GONG. Based on the success of these elections, no further assistance will be required for political party development or polling.
The U.S. Embassy's Public Affairs Section Office awarded 17 Democracy Commission grants, a five-person International Visitor project, and three Ron Brown Fellowships. Democracy Commission grants support the development of Croatia's NGO community, with a focus on democratic initiatives, promoting civil society standards and values, the reintegration of refugees, and the promotion and protection of human rights. During FY 2004, specific grants included promotion of volunteerism, development of youth initiatives and leadership skills, ethnic tolerance, NGO capacity building, and community self-development and sustainability. Two English Language Fellows participate in English teaching projects at the Universities of Rijeka and Osijek, and played a significant role throughout Croatia in furthering the goal of mutual understanding between Americans and Croatians and fostering a better understanding of the USG's motivation in promoting democratic values. The Public Affairs Office also supported a Student Information Center in Zagreb further to develop student advising capacity to encourage study in the U.S. Croatian journalists are mostly young (under 35 years of age), with little academic or professional training. The norm is sloppy reporting and a lack of fact checking, follow-up stories, multiple-sourcing, corrections, and real investigative journalism. In response, SEED has funded 10 training programs focused on building more responsible, independent media that adhere to professional journalistic standards.
Economic and Social Sector Reform
Croatia's economy has undergone a remarkable transition over the last few years, especially in achieving macroeconomic stability. With macroeconomic reforms making progress, Croatia's GDP grew by 5.3 percent in 2002, and 4.3 percent in 2003. For FY 2004, Croatia's GDP is expected to increase to nearly 4 percent, and growth should be even higher in 2005. Tight monetary policy and increased competition have helped keep inflation below 3 percent for the last two years. Economic growth has been driven by the tourist sector's recovery from the travails of the 1990s; strong GOC investment, especially in roads; and a boom in consumer spending. The latter was fueled by low tariffs and the injection of foreign capital into the almost completely privatized banking sector. Unemployment decreased to 13.8 percent (ILO methodology) for the first half of 2004, down from 14.1 percent for the first half of 2003. 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.
After making significant progress in reducing the budget deficit in the early 2000s, the previous government left a 2003 deficit of 6.3 percent, derailing Croatia's Stand-by Arrangement (SBA) with the IMF. The new government negotiated a new SBA with ambitious deficit targets for 2004 (4.5 percent) and 2005 (3.7 percent), and adopted a medium-term plan with the goal of reducing the budget deficit to less than 3 percent by 2007. With EU Accession negotiations slated to begin in early 2005, Croatia has committed to making difficult but necessary reforms to improve the judicial system, enhance the business environment, reform subsidies, and build administrative capacity throughout the public sector.
The SEED-funded Agribusiness Competitiveness Enhancement (ACE) program is rebuilding the market linkages in the agriculture sector from on-farm producers to final markets that had disintegrated in the break-up of Yugoslavia. Partnerships were formed with some of the country's largest food processors in the dairy, horticulture, and swine sectors, and now the focus is on assisting producers to improve their production practices to enable their higher-quality, lower-cost outputs to meet the processors' requirements. For example, a pilot project with a major regional tomato and food processor resulted in a 43 percent drop in water usage and a 21 percent increase in yields, resulting in 28 percent more revenue for the farmer. Replication of this model to an estimated 100 farmers next year is expected to generate about $200,000 in additional revenue.
In cooperation with LURA, Croatia's largest dairy, USAID worked with two pilot groups of dairy farmers to increase the quantity and quality of milk they deliver to LURA. As a result, one pilot coop group with 182 dairy farmers raised its 2004 production by 1,416 metric tons and increased its EU-quality milk by 30 percent. The better quality and increased quantity led to over $500,000 in higher revenue for the farmers in the cooperative.
A USAID-negotiated $10 million Development Credit Authority (DCA) guarantee with a commercial bank led to progress toward addressing one of the major constraints to growth in the agriculture sector, access to credit for investment. The results have been immediate -- because the USG is sharing the risk with the bank, the bank is now offering credit with much more reasonable collateral requirements that the farmers can meet. The program is expected to generate $10 million in new credit to about 130 farmers over the next few years.
Through the Raising Incomes in Economically Distressed Areas (RIEDA) program, the USG aims to create 2,000 sustainable jobs in Croatia's war-affected region. In FY 2004, 188 such jobs were created and overall on-farm incomes increased for many others. For example, SEED-funded technical assistance to members of one strawberry farmer co-op resulted in greater strawberry plantings amounting to a 10 percent growth in the planted area at the national level, creating enough income for 35 farmer members to become sustainably employed. Other programs contributing to job growth include production assistance to dairy and honey producers and business management capacity support to 18 agribusiness cooperatives and associations.
The recent historic reconnection of the Balkan and European energy grids, after extensive reconstruction of war-damaged infrastructure, highlights Croatia's key role in the EU and Stability Pact-led creation of a regional electricity market. A regional approach to energy supply offers significant advantages in terms of improved utilization of existing supply and production capacities, as well as optimizing future investments. USAID strongly supports this process through direct assistance to Croatia's national energy regulator (CERC) to ensure that the energy market can be opened in a transparent, regulated fashion, according to regional timetables. Through SEED-funded partnership agreements, several useful U.S. exchange visits took place in FY 2004, including high-level officials of Croatia's national power utility, CERC, commissioners and staff of the New York Public Service Commission, and the Ohio-based American Electric Power utility.
In January 2004, a joint World Bank-IMF report identified significant shortcomings in Croatia's debt management operations in the Ministry of Finance (MOF). At the request of the Deputy Minister of Finance, USAID debt management experts led a collaborative World Bank/IMF/EU/MOF review of GOC debt management practices and functions, and developed a comprehensive plan for improvements. The result was a remarkable consensus, both within the Ministry of Finance and among the donors, in terms of a strategy for implementing a new (international standard) debt management system and an agreement on the reforms required for organizational structures and business practices.
The U.S. Treasury budget assistance mission to the MOF focuses on improving the process of preparing, presenting, and executing the budget, assisting the Ministry with the requests by the international financial institutions, and training Ministry staff in all aspects of the budget process. Receptivity has generally been good; further progress on public administration reform would help increase the effectiveness of this (and other) assistance. Specific progress was made in several areas in 2004 in preparing a budget manual, creating an expanded set of budget monitoring reports produced on a more timely basis, developing prototype budget pages which comply with the needs of the EU acquis, preparing a set of procedures for master data management, assisting in defining the needs for budget preparation software, and successful completing of budget analysis training for the macroeconomics and budget preparation staff.
Privatization has continued to move forward but at a slower than expected pace, and GOC commitment to it is somewhat in question. In FY 2004, 21 entities were tendered and seven were sold, producing about $42 million in proceeds and over $92 million in investment commitments. USAID coordinated with the World Bank and IMF during their broader negotiations with the GOC regarding the terms of the World Bank's Structural Adjustment Loan (SAL) and the IMF's Stand-by Credit arrangement. Both of these agreements commit the GOC to tendering three to five companies per month.
The National Coordinator for the National Committee to Combat Trafficking in Persons was appointed. The incumbent, the Head of the Office for Human Rights, has a leading co-coordinating and operative role in the National Committee's work. With USG assistance a working group was formed in July 2004 to draft a new national action plan that was provided to the GOC with concrete recommendations and an operational plan for 2005-2008. The GOC is expected to approve the plan by January 2005. Parliament also adopted amendments to the Penal Code entitled Human Trafficking and Slavery, which took effect in October 2004.
Through USAID/IOM funding, the Ministry of Education is conducting ongoing teacher and student training throughout Croatia on victim identification and prevention. The Ministry also designed a TIP education module to be added to the high school curriculum. The Ministry of Health has provided training for selected medical staff on TIP identification and treatment.
Security, Regional Stability, and Law Enforcement
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 2004 toward meeting NATO membership criteria, with NATO assessing Croatia's Annual National Plan as its best ever. The GOC continued the politically sensitive restructuring of the Ministry of Defense by reducing Armed Forces personnel and is on track to meet the downsizing goals set in its NATO Membership Action Plan. According to Croatia's defense planning documents, the GOC no longer sees a strategic threat from any of its neighbors, and its armed forces structure is adapting accordingly. Croatia participates in several international peace support operations and continued to deploy a platoon of highly professional military police to Afghanistan.
Croatia made important progress in building cooperative relationships with its neighbors in the region. Relations with Serbia and Montenegro are moving toward normalization, as President Mesic and Prime Minister Sanader both made symbolically important, first-ever official visits to Belgrade in 2004. In November, the Prime Ministers of the two countries signed an agreement facilitating reconciliation through the protection of ethnic minorities, expediting cooperation on missing persons, and exchanging information about mine-infested areas. Relations with Bosnian Croats became more transparent, and the GOC continued to support international efforts to build state institutions in Bosnia and Herzegovina. Relations with Slovenia are generally good. While several irritants, like a dispute over a maritime border and Croatia's unilateral declaration of an Exclusive Economic Zone, remain unresolved, there are signs that these could be remedied through arbitration.
Progress toward reintegrating the ethnic Serb minority displaced by the war was significant, particularly in the reconstruction and repossession of illegally occupied homes. The GOC signed an agreement with the ethnic Serb party committing to resolve refugee return issues, including property reconstruction and repossession assistance. In March, the GOC established a commission to expedite implementation of the agreement, and the Croatian Serb party has been largely satisfied with progress made to date.
Croatia's ability to train its armed forces to meet NATO standards remained limited due to budget constraints and the loss of U.S. International Military Education and Training (IMET) and Foreign Military Financing (FMF) funding, in accordance with the American Servicemembers' Protection Act (ASPA). However, the U.S. Department of Defense continued to provide other engagement activities not restricted under ASPA. This included 20 bilateral events conducted under the Joint Contact Team and State Partnership Programs, several Partnership for Peace exercises and seminars, resident courses and seminars provided by the George C. Marshall European Center for Security Studies, bilateral and multilateral exercises sponsored by the U.S. European Command, and humanitarian assistance projects.
Croatia took steps to improve its export control regime, using U.S. Export Control and Related Border Security (EXBS) assistance to draft and implement a new export control law on dual-use goods. Croatia continues to improve cooperation with the U.S. and other states in the region to interdict trade in narcotics and protect against the proliferation of weapons of mass destruction. In FY 2004, the GOC received EXBS-funded training in maritime port security assessment, which it then implemented to make Croatian ports fully compliant with stricter international security norms. Considerable training and equipping of border police remains to be implemented, but the GOC has developed a comprehensive strategic plan, in partnership with German and Slovenian experts under the EU Community Assistance for Reconstruction, Development and Stabilization (CARDS) Border Police twinning program. U.S. assistance to the border police under EXBS, the Justice Department's International Criminal Investigative Training Assistance Program (DOJ/ICITAP), and Department of Energy programs are designed in harmony with this strategic plan and fills urgent gaps not covered by other donors.
FY 2004 marked the successful completion of two SEED-funded programs that have been 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) achieved significant results in encouraging refugee returns and improving the overall economic conditions in the war-affected regions.
Over the past three years, CIRP completed 100 infrastructure projects. The restoration of eight community centers, 14 schools, four kindergartens, a health clinic, a library, three multipurpose and green markets, two livestock markets, two roads, and the renovation and rehabilitation of water and electrical facilities has benefited over 55,000 people (about 18,000 families) in 144 communities. Water projects included the reconstruction of nine pump stations, five water reservoirs, and the rehabilitation of 14 local water supply networks with 50 km of pipelines, resulting in the reconnection of more than 5, 000 people to water supply systems. Electricity projects included the restoration of 143 km of medium voltage lines, 165 km of low voltage networks, 81 distribution stations, and improved power in 84 villages, with more than 26,000 beneficiaries.
ECRA activities created employment for 1,902 people, generated 325 new contracts worth around $2.2 million for assisted enterprises, and leveraged close to $500,000 of funding from other sources, including commercial bank loans. Nearly 17,000 people of all ethnic groups have participated in 315 ECRA-assisted community activities, and 9,952 people received legal assistance, of which 51 percent had their cases resolved. ECRA also was responsible for the reconstruction of 100 severely damaged homes and influenced 584 returnees to come back through its cross-border activities.
Additional USG support to Croatia's war-affected regions in FY 2004 included the disbursement of about $1,863 million in de-mining funds. These projects now underway will de-mine around 1.243 million square meters of mined territory. An estimated 1,170 square kilometers in Croatia remain mine-suspected. The Democracy Commission funded a project to help displaced persons currently living in Vukovarsko-Srijemska and Osijecko-Baranjska counties to return to their pre-war homes and/or integrate into new areas.
Croatia continued to improve the professional capabilities and performance of its law enforcement organizations in FY 2004. In June, the Police Academy graduated 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. Although their hiring has been delayed by GOC budget constraints until early 2005, these officers will receive an additional six months of supervised field training, also developed under the ICITAP program. The Ministry of Internal Affairs has distributed a new police policy and procedures field guide, with ICITAP assistance, and all 25,000 police officers will be trained by spring 2005. The Embassy Public Affairs Section administered three International Visitor grants involving 16 people that focused on combating and prosecuting drug traffickers, protecting maritime borders, and weapons of mass destruction.
In FY 2004, Croatia took serious steps to improve domestic prosecution of war crimes cases. Important penal code changes were approved to harmonize Croatian law with international conventions, and the Ministry of Justice conducted a series of seminars in cooperation with the International Criminal Tribunal for Yugoslavia (ICTY) to prepare prosecutors and judges to adjudicate war crimes cases, including those transferred by the Tribunal as called for by the ICTY completion strategy. Building on these seminars, the U.S. initiated a comprehensive program further to develop Croatia's investigative, prosecutorial, and judicial capacity to manage war crimes cases. U.S. assistance also funded procurement of video conferencing equipment to facilitate regional cooperation and allow witness testimony to be taken outside Croatia during trial proceedings.
COUNTRY PERFORMANCE MEASURES
ECONOMIC & DEMOCRATIC REFORMS, 1991-2004
Data are drawn from EBRD, Transition Report (November 2004) & Freedom House, Nations in Transit 2004 & Freedom in the World 2004. Ratings are based on a 1 to 5 scale with 5 representing the most advanced. Latest year observation refers to 2004 economic reform data and 2003 democratic reform data; i.e., 2004 data for democratic reforms are not yet available.
ECONOMIC STRUCTURE AND HUMAN DEVELOPMENT, 1990-2004
World Bank, World Development Indicators 2004 (2004); UNICEF, Social Monitor 2004 (2004); EBRD, Transition Report (November 2004); and UNDP, Human Development Report (2004).
SECTORAL PERFORMANCE MEASURES
DEMOCRATIC REFORM
Performance Indicator: Number of local governments using modern public administration practices to improve their capacity. (Source: Urban Institute)
|
FY 2002 |
2003 Baseline |
FY 2004 Target |
FY 2004 Actual |
|
N/A |
200 |
230 |
242 |
FY 2004 Results: The Mission signed Memorandums of Understanding with 42 new local governments representing 25% of Croatia's population. Each of these local governments has adopted one or more of local government management packages provided by USAID's Local Government Reform Project (LGRP).
Performance Indicator: Improved rating of Croatia on the NGO Sustainability Index
(Source: USAID NGO sustainability report)
|
FY 2002 |
2003 Baseline |
FY 2004 Target |
FY 2004 Actual |
|
3.7 |
3.5 |
3.2 |
3.47* |
(*Not the final, official NGOSI)
FY 2004 Results: Croatia's NGO sustainability did not improve as much as was anticipated. The new GOC has been slow to adopt new legislative reforms improving the sector's legal environment, , and more needs to be done to engage NGOs in economic and social policy programs.
ECONOMIC AND SOCIAL REFORM
Performance Indicator: Increased private sector share of employment
(Source: Croatian Bureau of Statistics)
|
FY 2002 Baseline |
FY 2003 |
FY 2004 Target |
FY 2004 Actual |
|
56.6% |
61% |
62.0% |
63% |
FY 2004 Results: The selected indicator exceeded the performance target for the year. The target was set at 62 percent, and the actual private sector share of employment reached 63 percent, indicating a positive trend in private sector growth and expansion, due in part to a stronger, expanding SME sector.
Performance Indicator: Increase in annual buy-off of domestic agricultural products
(Source: Croatian Bureau of Statistics)
|
FY 2001 Baseline* |
FY 2003 |
FY 2004 Target* |
FY 2004 Actual* |
|
1,227,615 |
1,440,463 |
1,564,748 |
1,487,419 |
(*in Thousands of Kuna)
FY 2004 Results: USAID's Agribusiness Competitiveness Enhancement (ACE) program is rebuilding the market linkages in the agriculture sector from on-farm producers to final markets that had disintegrated in the break-up of Yugoslavia. Partnerships were formed with some of the country's largest food processors in the dairy, horticulture, and swine sectors that focus on assisting producers to improve their production practices so that their higher-quality, lower-cost outputs can meet the requirements of the processors. The FY 2004 target for the increase in the buy-off of agriculture products was missed due to much lower than average rainfall. However, the upward trend clearly illustrates that the market linkages created from U.S.-assisted partnerships are having a positive impact overall .
Performance Indicator: Number of entities tendered at Croatian Privatization Fund (CPF) (Source: CPF)
|
FY 2002 Baseline |
FY2003 |
FY 2004 Target |
FY 2004 Actual |
|
348 |
35 |
250 |
21 |
FY 2004 Results: Performance in privatization was poor again this year and causes the most concern for the Mission. During FY 2004, the new government publicly and privately expressed firm commitment to moving forward rapidly, and privatization targets were built into IMF and World Bank commitments. The Mission reacted by remobilizing its assistance but to little effect. Despite ongoing GOC expressions of good intentions, there have been repeated delays in making the critical decisions to actually tender and sell enterprises. Given the importance of privatization to this economy, the Mission remains committed to pressuring the GOC to speed up the process, and, toward that end, will convene and chair a regular working group of representatives of the IMF, the World Bank, the EU, and the GOC starting in December.
Performance Indicator: National Action Plan to Combat Trafficking in Persons (TIP) (Source: GOC)
|
2002 Baseline |
FY 2004 Target |
FY 2004 Actual |
|
No national TiP coordinator. No National Action Plan (NAP). |
Implementation of NAP begins; increased GoC funding for anti-TIP activities. TIP made a specific criminal act. |
NAP was amended; GoC funding for TIP activities increased 3-fold in 2004. TIP was made a criminal act. |
FY 2004 Results: With USG assistance, a working group was formed in July 2004 to draft a revised national action plan on TIP. It was provided to the GOC's National Committee to Combat Trafficking, with concrete recommendations and an operational plan for 2005-2008. The Committee is expected to approve the revised plan by January 2005. The GOC met its target to increase funding for anti-trafficking activities in 2004 by tripling its anti-TIP budget. The Parliament adopted amendments to the Penal Code entitled Human Trafficking and Slavery, which took effect in October 2004.
SECURITY, REGIONAL STABILITY AND LAW ENFORCEMENT
Performance Indicator: Adequate resourcing and timely implementation of planned Croatian Armed Forces reforms. Progress in fulfilling NATO/Partnership for Peace (PFP) Partnership Goals. Revision of strategic national security documents, legislation and regulations to promote defense reform and support NATO/EU membership. (Source: NATO)
|
FY 2003 Baseline |
FY 2004 Target |
FY 2004 Actual |
|
Downsizing and restructuring underway. New force structure (4Corps) established. 2% or greater GDP devoted to defense budget. Personnel costs greater than 70% defense budget. Initial deployment of peacekeeping operations (PKO) unit. |
Internal Strategic Defense Review & Professionalization Study complete. Future force structure with enabling legislation approved. Strategic security documents drafted. Defense budget at or above 2% GDP. Increased force contributions to NATO-led peacekeeping operations. |
Strategic Defense Review largely completed, new National Defense Plan in drafting process. Defense budget at 2% of GDP. Preparing to deploy new civilian contributions to NATO PKOs in Afghanistan. Personnel costs remain over 70% of MOD budget. |
FY 2004 Results: Although it was unable to meet all of the 2004 NATO Partnership for Peace targets, the GOC continued to make good progress toward NATO membership. NATO judged Croatia's Annual National Plan submission as its "best ever." Under Croatian Chairmanship, the Adriatic Charter countries (Albania, Croatia, Macedonia) agreed to assemble a joint medical team for deployment to Afghanistan. Despite downsizing efforts, personnel costs consume a disproportionate share of defense spending.
Performance Indicator: Restructuring of police force / improvement of police training (Source: GOC)
|
FY 2002 Baseline |
FY 2004 Target |
FY 2004 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 SOPs promulgated. GOC develops comprehensive strategy for unified border management. Dual-use export control law passed. |
Police SOPs distributed with training ongoing. Comprehensive border management strategy developed with EU assistance. Dual use export control law and implementing regulations passed and in effect by the end of calendar 2004. |
FY 2004 Results: Despite an ongoing budget freeze, Croatia's Ministry of Interior met its 2004 targets pertaining to police, with the Border Police emerging as the most dynamic directorate. Export control efforts took a qualitative leap forward with a true interagency licensing process emerging from U.S.-led EXBS assistance programs to help draft new legislation and implementation regulations.
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