Croatia's right turn

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Croatia's parliamentary elections have resulted in a political sea change for the small Central European nation. The country's Social Democrats were ousted from power by the conservative Croatian Democratic Union, known by its acronym HDZ. Its leader, Ivo Sanader, an economic conservative, has an electoral mandate to bring about much-needed economic reform.

An admirer of President Bush, Mr. Sanader campaigned on a moderate conservative platform of tax cuts, deregulation, increased public spending for health care and pension reform. It is important for the HDZ-led coalition government to kick start Croatia's anemic economy.

Although inflation is under control, the unemployment rate remains disturbingly high at nearly 20 percent. Also, Zagreb's crushing foreign debt threatens the country's long-term economic future. If Mr. Sanader wants to achieve his goal of having Croatia join the European Union by 2007-2008, he will have to follow through on his election promises to implement economic reforms -- especially his calls to modernize the tax-collection system and shrink the public sector.

A stable and prosperous Croatia is not only important for the region, but also for the United States as well. For while Zagreb has a pro-European center-right government, neighboring countries are slowly sliding back toward the kind of ethnic and religious extremism that ravaged the Balkans during the 1990s. In Serbia's recent elections, Tomislav Nikolic, a radical nationalist who loathes the West and longs for a "Greater Serbia," was the biggest vote-getter. Meanwhile, Bosnia has seen a rise in Islamic fundamentalism and al Qaeda activities.

Hence, Zagreb can serve as a counterweight to both Serbian revanchism and Bos-nian Muslim extremism. Croatia needs to become the Israel of southeastern Europe: a pivotal small, democratic ally that is a Western outpost in a volatile area of the world.

Mr. Sanader was the only major Croatian politician to support the war in Iraq. He also has made it clear that his government would back a treaty exempting U.S. forces from prosecution by the International Criminal Court (ICC). The HDZ's initiatives should be welcomed by the Bush administration as good first steps in improving Washington-Zagreb relations, which were damaged by the previous leftist administration's opposition for the Iraq war and the U.S. position on the ICC.

Ultimately, the success of the new conservative government will depend upon its handling of the economy. Croatia's electorate has given Mr. Sanader a mandate for his tax-cutting, pro-growth agenda. He is already coming under pressure from within his own ruling coalition and the Croatian leftist media to water down many of his free-market proposals.

Conservative policies have worked in reviving the economies of Italy, the Czech Republic, Chile, Ireland, Britain and, of course, the United States under Mr. Bush. There is no reason why they cannot work in Croatia as well.