LECTURE BY

H.E. DR. IVO SANADER

PRIME MINISTER

OF THE REPUBLIC OF CROATIA

AT HARVARD UNIVERSITY’S

JOHN F. KENNEDY SCHOOL OF GOVERNMENT

CROATIA IN THE NEW MILLENNIUM:

TOWARDS EU AND NATO MEMBERSHIP

HARVARD UNIVERSITY

SEPTEMBER 23, 2004

Ladies and gentlemen,

Dear guests

I am delighted to be here with you today to speak about Croatia’s foreign policy objectives and to share with you a few thoughts about how my government plans to achieve them. I want to take this opportunity to thank Dean David Ellwood of the John F. Kennedy School of Government for his kind words of introduction, and I also want to extend a warm thank you to both the Kokkalis Program on Southeast and East-Central Europe and the Center for European Studies for the invitation to speak at Harvard University.

Since our independence, Croatia has come a long way in advancing social and economic reforms at home and pursuing the goal of joining the Euro-Atlantic community. The twin strategic objectives of Croatia’s foreign policy are to join the European Union and NATO. My government and I are working diligently on preparing Croatia for the challenges of membership by adopting key policy measures aimed at improving the business environment in Croatia, attracting foreign investment and know-how. We are also working towards reforming the judiciary, public administration and protecting the environment to preserve Croatia’s natural assets so that generations to come can enjoy the splendor and azure of the Adriatic Sea and the magic of its thousand islands.

Today I want to share with you what we want to achieve and how we are preparing for the way forward. I was privileged to be in Dublin on May 1 of this year to witness the historic enlargement of the European Union. This was one of those rare moments when one genuinely senses an irrevocable historical shift. As the Prime Minister of Croatia, being present at the expansion of the European Union from 15 to 25 members reinforced my commitment to ensuring that Croatia is part of the next wave of enlargement and that we, too, can take our place at the heart of a growing Union.

I believe that this historical enlargement process has a continuous, inclusive and irreversible nature. The new enlargement has inspired a common vision of a better tomorrow. And no European nation which shares and is committed to this vision and the fundamental values of democracy, the rule of law and human rights should be left behind. Croatia also believes that enlargement contributes directly to the strengthening of the European Union. The frontiers of Europe’s values are expanding, and each new country adds to Europe’s capacity to fulfill its global role. Above all, having directly experienced the turmoil of conflict and disintegration, I believe that the true potential of the European project will not be realized until the countries of south-east Europe join the European Union.

Croatia has also come a long way in moving towards membership in the European Union. A major step forward in achieving this important strategic objective was taken on June 18, 2004 when Croatia was officially granted the status of a candidate country of the European Union, and accession negotiations are expected to commence early 2005. This achievement is a milestone in Croatia’s integration process into Europe. Candidate status and the start of accession negotiations will anchor future reforms and economic policies conducive to advancing structural reforms in the legal, regulatory and judicial areas, and to achieving harmonization with the EU and remove administrative barriers.

Let me assure you that we harbor no illusion about the challenges that accession countries face. In Croatia, support for European integration has been consistently high. Croatian citizens are aware of the benefits and the costs of entering the European Union. My government and I are also acutely aware that integration in the European Union will be particularly painful for a segment of the population, and that we have to do everything in our power to mitigate this aspect of integration. That is why we have embarked on a number of reforms – not matter how painful – that will prepare the country for the challenges of membership. It is abundantly clear that postponing reforms only makes the decision much more difficult in the future. I have no doubt that the Croatian government and people have the strength, will and determination to bring about positive change.

To succeed abroad, we have to reform at home. The central pillars of Croatia’s reforms hinge on improving social and economic conditions. Croatia’s economic policy rests on measures aimed at improving competitiveness, raising exports and enhancing the business environment for domestic and inward investment. We are also establishing a transparent business environment, reducing the bureaucratic barriers to investment and improving the legal framework. A key factor in our economic policy is to encourage the development of the private sector, particularly small and medium sized enterprises that will spur job creation and increase exports. Since receiving candidate status, Croatia has worked intensively to implementing key reforms, harmonizing numerous laws, regulations and practices with the acquis communautaire, in order to achieve full compatibility with European Union standards. And Croatia is prepared and determined to embark on this process with full commitment – not only the government but also the citizens and the public in general as well.

Croatia is preparing a 9-point program to spur economic growth, job creation and increase the country’s competitiveness and boost exports. This economic plan aims to bolster small and medium sized enterprises, attract inward greenfield and brownfield investments. The nine point program encompasses the following measures:

Improving the business climate.

Restructuring and rehabilitating public enterprises.

Accelerating privatization.

Removing administrative barriers and red-tape.

Ensuring legal security and acceleration of procedures.

Introducing tax reforms.

Reducing the informal economy.

Introducing fiscal discipline.

Supporting small and medium sized enterprises.

The Croatian government has also already taken steps to create a new agency to facilitate inward investment through a one-stop-shop approach and launching CroatiaInvest. The economy has been robust: Croatia has a record of solid growth and low inflation over the last decade and real GDP growth has averaged about 4.5 percent with inflation in the low single digits. Croatia’s performance is comparable with the European Union members.

Croatia is fully committed to spare no effort in strengthening democratic values and principles, respect for human rights and fundamental freedoms, and the development of adequate framework for the full enjoyment of these rights and values by all its citizens. My government has clearly proven in practice our unequivocal commitment to protect the rights of all individuals belonging to national minorities. The validity of this policy is confirmed by the support of the representatives of national minorities that my government enjoys in the Parliament. It is also reflected in the continuing dialogue that my government and I have been engaged in with the leadership of the minority groups.

The Croatian government has also made an important contribution to the creation of adequate conditions and has undertaken necessary measures – including the allocation of significant financial resources – in respect to the process of the return of refugees, restitution of property rights, and the reconstruction of property damaged as a result of the war. All these steps have had a specific impact on the creation of a climate of tolerance, confidence, and prosperity throughout the country. The government wishes to turn a new page and to look towards the future and offer all Croatian citizens a better life unburdened with national disputes and wrangling from the past long gone.

Croatia is fully committed to continuing its cooperation with the International Criminal Tribunal for the former Yugoslavia. Let me just stress that this cooperation has significantly evolved, and has been positively assessed by the international community, including the Tribunal itself and the Chief Prosecutor.

Croatia’s relations with its neighboring countries are based on the principles that regional cooperation is an indispensable component of regional stability, prosperity and economic development. Regional cooperation is a vital part of Croatia’s priorities and strategic goals. Enhancing and deepening relations with our neighbors is a key to the development of democratic stability in this part of Europe. Croatia today, as a fully independent country and a candidate country for membership in the European Union, stands ready to assume another important responsibility – which will have benefits to Croatia and the region – that of bringing more of Europe to its Southeast and that of serving as a bridge to the Southeast.

Croatia is ready to foster its relations and cooperation with all its neighbors, and is convinced that some of the current obstacles can be overcome in the near future, in particular in the context of the existing European framework.

Nevertheless, Croatia understands too well that the stability and prosperity of the region to a great extent depends on the continuation of the acceptance of common European standards, including human rights and fundamental freedoms and their effective implementation in all the countries belonging to the region.

This is the reason why Croatia is ready to do its part by sharing its experiences and offering advice to the countries of the region on their approach to the European Union. The progress that Croatia has made with respect to achieving candidate status for membership in the European Union represents an incentive rather than a barrier to others in the region as the affirmation of a clear European perspective for all.

Croatia’s determination to be part of Europe is inseparable from friendship and partnership with the United States. This is the principle reason why we believe in the enduring values, principles and interests that bind the transatlantic community. Croatia is committed to joining Euro-Atlantic institutions because there is no alternative to a robust European and American relationship. The Atlantic bridges Europe and America rather than divides them.

In terms of national security, membership in NATO is Croatia’s main security objective. In the rapidly changing, and increasingly turbulent and unpredictable, global environment, Croatia believes that its security will best be served collectively within NATO. In addition, membership in NATO will enable Croatia to assume a more active role within the community of nations sharing the same values, principles and interests. For Croatia, NATO is about values; it is about protecting our common values such as freedom, democracy, rule of law and human rights.

The threats we face today are obviously different from the very visible and powerful adversary of yesterday. They are unpredictable and difficult to detect. In order to adequately prepare for these threats, NATO is transforming and modernizing itself. It has also accepted new members which, in itself, provides Europe with more stability. The enlargement represents real proof that the West realizes what actually happened once the Iron Curtain collapsed and understands that the curtain was not a lasting, permanent border.

NATO is arguably the most successful political and military alliance in history and it is quickly adapting to new challenges in an ever changing and complex world. By adapting its structures and missions, NATO has become a key player in shaping the cooperative structures in post-Cold War Europe. The admission of seven new members represents an historical moment for the Alliance and marks the end of the division of Europe. However, the process of unifying Europe and making it whole and free is still not complete, and the enlargement process must continue with the same momentum.

Croatia has actively worked as a partner with NATO allies and will seek out opportunities to further contribute to the evolution of the Alliance. Croatia presented its first Annual National Program shortly after the Prague Summit. This was a key step on our road to NATO. Having completed the second MAP cycle, Croatia has come a long way towards full membership. Croatia has proven to be a stable and fully functioning democracy, and has adopted a market economy. To achieve full membership in NATO, Croatia has embarked on key reforms, including the judiciary and defense, which are designed to prepare the country for future tasks as a member of the Alliance. Croatia is no longer a consumer of security, but rather has become a major source of stability in the wider region. We are already contributing to various NATO missions and expect to be invited as a full member at the next enlargement summit.

Whereas Croatia was once a recipient of international security operations through hosting a number of UN peacekeeping missions on its territory, we are now a net provider of security. We are presently active in seven UN peacekeeping operations throughout the world as well as the NATO-led peacekeeping mission in Afghanistan. Let me add, by the way, that just three days ago we signed a joint agreement with Germany on sending civilian administrators to Afghanistan to help that county rebuild its civil infrastructure.

We realize that we have a special responsibility not only to ourselves, but to others who are looking at our example.

Croatia has intensively worked with its partners on forging security in the region through the U.S.-Adriatic Charter. The U.S.-Adriatic Charter brings together the United States, Croatia, Albania and Macedonia. It is a powerful message on our commitment to regional cooperation and promoting the core values of the Euro-Atlantic Partnership: freedom, peace, stability and prosperity. Through the U.S.-Adriatic Charter, Croatia is working with its partners on ensuring that the region builds strong democracies working individually and sharing best practice on reforming the economy, military and political institutions. Croatia appreciates and values Americas support for efforts under the Adriatic Charter. The U.S.-Adriatic Charter is another step towards the goal of a Europe whole and free from the Baltic to the Black Sea.

Croatia in the 21^st century sees itself anchored in the Euro-Atlantic community. Croatia’s determination to be part of Europe is inseparable to its commitment in forging a firm partnership and close cooperation with the United States. And our membership and participation in Europe and NATO is aimed at enabling our citizens to enjoy the benefits of membership. On the way forward in this process of integration into Euro-Atlantic institutions, Croatia wants to be judged on its own merits and ability to contribute to the collective interest, security and shared values.