The Washington Times; Published 7/10/2002 Jeffrey T. Kuhner

Croatia's political and economic crisis

ZAGREB, Croatia -- Former President Franjo Tudjman must be turning in his grave. The Croatian strongman has seen much of his legacy discredited following the defeat of his once-powerful Croatian Democratic Union Party (HDZ) in early 2000 elections to a leftist coalition government.

Mr. Tudjman, for all of his flaws, was a principled nationalist and conservative whose greatest accomplishment was that he secured Croatia's independence in 1991 from Serbian-dominated Yugoslavia. The key to Mr. Tudjman's success was that, under the banner of national unity, he stressed reconciliation between the country's anti-communists and its former Marxists who served under the previous Yugoslav regime.

Mr. Tudjman's death in late 1999 not only left the HDZ a shadow of its former self, but more importantly shattered the glue that held Croatia's divergent political factions together. Now, nearly three years after his death, the country is in the midst of a political and economic crisis.

Elected on a platform of economic reform and battling corruption, the current regime in Zagreb has been a dismal disappointment to most Croats and foreign observers. Having pledged to end Croatia's international isolation brought about by Mr. Tudjman's authoritarian rule and to kick start the sluggish economy, the social democratic government has only deepened the country's problems.

Under Prime Minister Ivica Racan's leadership, Croatia has become an economic basket case. Unemployment has doubled. The country is saddled with a nearly $10 billion foreign debt. Its annual per capita income is slightly more than $4,000, which is half that of neighboring Slovenia and only 60 percent of what it was prior to independence.

The government has made much of its pro-European credentials. Mr. Racan insists that his administration's main goal is to have Croatia join the European Union by 2006. He is largely viewed by both Brussels and Washington as their man in Zagreb: a brainy liberal who can lead Croatia out of its current Balkan quagmire, enabling it to eventually become a full-fledged member of the West. They are wrong. Like most former communists in Eastern Europe, Mr. Racan has no understanding of an open, market economy. His ultimate objective may be for Zagreb to become part of the EU, but he has no credible plan on how to achieve it. Croatia's economic trajectory is not that of a rising modern European state that will eventually reach the living standards of Italy, Austria or even Poland; rather, it is headed in the direction of Argentina.

Instead of implementing sweeping tax cuts, deregulation and free-market reforms, the government has only made tepid efforts at privatization - while doing nothing to scale back the massive public bureaucracy that is stifling entrepreneurship and economic dynamism.

More ominously, the ruling coalition is full of ex-communist apparatchiks who are hostile to democracy and the rule of law. Mr. Racan, along with President Stipe Mesic, received their political formation as members of the Communist Party during the old Yugoslavia, when it was governed by the brutal dictator Josip Broz Tito. During Tito's iron-fisted rule, hundreds of thousands of Croatian peasants, dissidents, intellectuals and priests were murdered or sent to prison.

The current regime has continued the Titoist practice of vilifying opponents as "fascists." It has clamped down on the media, firing leading patriotic writers and journalists from state-run newspapers and TV networks. Ironically, there is less media freedom today in Croatia than under Mr. Tudjman's reign.

Many Croats on the street have become disenchanted with the government's inept performance. However, Mr. Racan's greatest asset is the disarray among opposition forces.

Rather than capitalizing on the ruling coaliton's plummeting popularity, the main conservative opposition party, the HDZ, remains mired in bitter infighting. Although claiming to be a tax-cutting Reaganite, party leader Ivo Sanader is behaving more like a neo-communist thug.

Following his re-election as party chief in late April against his archrival, Ivic Pasalic, Mr. Sanader has unleashed a nasty purge campaign in which critics have been removed from positions of influence within the HDZ. He and his entourage have also sought to bribe and intimidate the few Western journalists attempting to expose this blatantly undemocratic and illegal grab for power.

With early national elections expected to be called this fall or next spring at the latest, the ruling coalition will most likely be returned to office because of the lack of any credible political alternative. Hence, Croatia's descent into an economic abyss will continue unabated. One wonders what Mr. Tudjman must be thinking right now.

oJeffrey T. Kuhner is an assistant national editor at The Washington Times.

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