KUHNER: Croatia in chaos

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By Jeffrey T. Kuhner

COMMENTARY:

Croatia's efforts to join the European Union are on the verge of being derailed.

A recent car bombing in Croatia's capital, Zagreb, killed well-known journalist Ivo Pukanic. Authorities said the assassination was a "mafia-style" hit job - one of several executions of prominent figures. The assassinations, public physical beatings of other notable investigative journalists and business executives have outraged the Croatian public, and undermined the credibility of Prime Minister Ivo Sanader and his Croatian Democratic Union (HDZ) government.

Mr. Pukanic earned a reputation for investigating the murky links in Croatian society between criminals, politicians and businessmen. His murder has crystallized the electorate's disgust with Zagreb's political establishment.

European Union officials say the recent growth of organized crime threatens to delay - and maybe even scuttle - Croatia's membership aspirations. In response, Mr. Sanader vowed "I shall not allow Croatia to become another Beirut." His government is attempting to restore law and order.

Yet Mr. Sanader is not really interested in combating organized crime and high-level corruption: For the past five years, the HDZ elite has been plundering public assets and looting state-owned companies. Most senior government ministers sit on supervisory boards of state-owned industries engaged in shady privatization deals or expensive construction projects in which public funds are siphoned off.

Several Croatian media outlets report that Mr. Sanader has enriched himself to the tune of several million dollars. He flaunts his elaborate - and expensive - personal collection of watches. Mr. Sanader and his cronies are engaged in massive theft, thereby depleting the country's limited financial resources. According to the Adriatic Institute (AI), Croatia's finest independent think tank, government corruption costs the Croatian taxpayer over $1 billion per year - a staggering amount for a country with a gross domestic product of $23 billion.

Mr. Sanader has staked his political career on trying to convince Brussels that Croatia is ready to become the European Union's 28th member-state by 2011. To achieve this goal, he has been intimidating and bullying opponents, and repeatedly lying to Washington and Brussels about his commitment to reform.

The Europeans are finally catching on. "Corruption still remains widespread," said the recent EU progress report. "The administrative capacity of state bodies for fighting corruption continues to be insufficient." The report adds: "A culture of political accountability is lacking. Further efforts are required in tackling high-level corruption."

Economic and judicial reforms have stalled. Croatia has the highest tax burden in the region. Its crushing national debt is over 80 percent of GDP. The economy is anemic (especially apart from tourism). Inefficient state-owned companies, especially in the shipyard and steel industries, continue to receive massive subsidies - in other words, the government continues to reward failure. The judicial system is rife with political meddling. Over 1.4 million property cases remain backlogged.

"Real reform requires the creation of an independent judiciary, the entrenchment of property rights, sweeping tax cuts and slashing wasteful public expenditures," says AI's president Natasha Srdoc. "The basic legal and institutional framework must be erected so that the rule of law and a vibrant market economy can flourish."

In their 2008 Index of Economic Freedom, the Heritage Foundation and the Wall Street Journal rank Croatia at 113 out of 157 countries; it placed a dismal 37 out of the 41 nations in Europe.

Mr. Sanader also shamelessly uses the Croatian media to smear his critics. For example, after I wrote a column last year criticizing his dismal governing record, he was quoted in news outlets saying I was a "friend" of radical right-wing politician Ivica Pasalic - hoping to tar me with the brush of being associated with neo-fascist, nationalist types. This lie was then compounded by an obvious hit piece in HINA, Croatia's main news agency, which also falsely claimed that I had ties with Mr. Pasalic and was "one of the few U.S. journalists" to support Croatia's late autocratic president, Franjo Tudjman.

These statements would be comical if the situation in Croatia were not so dire. In articles over the years I have repeatedly excoriated Mr. Pasalic for his xenophobic nationalism and massive corruption. How this makes me a "friend" is possible only in Mr. Sanader's puerile imagination. Also, during the 1990s I consistently wrote against Tudjman's regime, criticizing its authoritarianism, economic cronyism and anti-Semitism.

What I did support was Croatia's secession from Serb-dominated Yugoslavia - a major distinction one would think even the pro-HDZ hacks at HINA could grasp. After decades of communist oppression, Croatians earned the right to national sovereignty. Like the Baltic Republics, Croatia's independence represented a major victory for the forces of self-determination. Lithuania, Latvia and Estonia are well on their way to building modern European states. Croatia, however, remains mired in a kleptocracy that is eating away at its democracy and prosperity.

Mart Laar, the former prime minister of Estonia, put it best: "The first step in fighting corruption is that you are not corrupt yourself." Since Mr. Sanader is part of the problem, his "anti-crime," "anti-corruption" campaign is doomed to fail - and Croatians will continue to pay the price.

Jeffrey T. Kuhner is a columnist at The Washington Times.