Hina, September 27, 2001

Foreign direct investment flows in Croatia from 1993 to the end of the first quarter of 2001 amounted to $4.8 billion, the bulk being major privatization projects. Contrary to Hungary, the Czech Republic or Estonia and some other Central and Eastern European countries which were successful in attracting foreign capital, Croatia entered this process with delay owing to the war in the early 1990s, the National Bank's (HNB) deputy governor, Boris Vujcic, said during a presentation of the UNCTAD's annual "World Investment Report 2001", this week in Zagreb. Until 1995 there was virtually no FDI in Croatia. Following the creation of a favorable political climate, foreign financiers began investing. The investment primarily referred to major privatization projects such as the ownership transformation of the leading pharmaceutical company "Pliva", "Zagrebacka Banka" and later "Croatian Telecom". The highest annual amount of foreign investment, which totaled $1.5 billion, was registered in 1999, during the first stage of HT's privatization. According to the central bank's figures, foreigners invested $924.5 million in 2000, with the majority going into the banking sector. The privatization of "Privredna Banka Zagreb" was completed early in 2000, and another two banks- Splitska and Rijecka- were privatized as well. Since 1993, telecommunications have accounted for 23.18 percent of foreign investment, followed by banking which has attracted 20.53 percent, and the pharmaceutical industry 18.85 percent. In the first three months of 2001, FDI came to 65.1 million, including 29 million in capital investment. The investment was diversified in different sectors, Vujcic said. According to HNB data, investing in press publishing in that period accounted for 17.74 percent of the entire amount, real estate accounted for 15.41 percent, the production of crude oil and gas 14.6 and sea-borne transport 11.86 percent. During the presentation of the UNCTAD (UN Conference on Trade and Development) report, some differences in the figures from the report and those given by the Croatian Central Bank were shown. According to UNCTAD, Croatia received $899 million through while statistical figures of the HNB show the amount 25 million larger. Professor Branko Vukmir pointed out the UNCTAD report placed Croatia in an illogical group called developing Europe, which includes countries in the area of the former Yugoslavia plus Malta. In such standings, Croatia was first, and Malta, with $639 million of FDI, second. They are followed by Slovenia (181 million), Macedonia (170 million), Bosnia-Herzegovina (117 million) and after a long time the Federal Republic of Yugoslavia was also listed, with 29 million. Domestic experts maintain Croatia should be cited at the list of Central and Eastern European countries where FDI flows reached $25 billion last year. Under the classification according to FDI per capita, Croatia was cited in the second group. The first group consisted of Hungary, the Czech Republic and Estonia with between 1,300 and 1,800 dollars per capita. Croatia shares the group with Poland and Latvia with over 800 dollars, the HNB's Deputy Governor Vujcic said.