- The Washington Times - Monday, August 6, 2001

The leader of Croatia's main opposition party is pledging to adopt conservative tax-cutting and pro-growth policies should he form the country's next coalition government.
Ivo Sanader, who took over as the head of the Croatian Democratic Union (HDZ) in April 2000 following the death in December 1999 of the party's founder, former President Franjo Tudjman, said he is committed to a sweeping reform agenda of tax cuts, deregulation and economic reform.
"I strongly believe in a free-market economy, and the program of the HDZ is to help Croatia make the transition toward genuine economic reform and privatization measures that will stimulate economic growth and job creation," said Mr. Sanader, 48, in an interview from the island of Korcula, located in the Adriatic Sea between Dubrovnik and Split.
Mr. Sanader spoke confidently about what he will do when — not if — he heads the next government, and that view is shared by many observers of the Croatian political scene.
"He is the most reasonable and moderate conservative politician in Croatia today," said Tomislav Sunic, a prominent author and writer on Croatian affairs. "He is the only conservative in the country who can become prime minister one day."
"He advocates a vigorous pro-free market and pro-free trade agenda, which is precisely what Croatia needs at this moment," Mr. Sunic said.
One of the major issues facing Croatia's current center-left government, which was elected in January 2000, has been to confront the country's nearly 23 percent unemployment rate and poor economic performance since it gained independence from Yugoslavia in 1991.
Prime Minister Ivica Racan, an ex-Communist who now leads the country's Social Democratic Party, has promised to implement far-reaching privatization measures to help the former Yugoslav republic's transition toward a Western-oriented, free-market economy.
The ruling coalition in Zagreb has sought to attract foreign investment and pursue an aggressive trade policy in order to foster economic growth, recently agreeing to the creation of a Balkan free-trade zone by 2008. It is also seeking that Croatia eventually become a member of the European Union.
Yet Mr. Sanader, who also supports EU membership and stronger ties with the United States, says that Mr. Racan's left-leaning government has failed to implement many necessary privatization measures.
"They are former Communists who don't understand privatization and the transition to a free-market economy. The government has failed to deal with the current economic crisis," he said.
He said that the ruling coalition's greatest weakness is that it is run by former apparatchiks who remain too closely wedded to the bureaucratic statism prevalent under the old communist Yugoslavia.
"You can't teach an old dog new tricks," Mr. Sanader said, adding that "under my leadership, Croatia will undergo rapid privatization and economic reform. Our only path is to follow the successful market economies of the West especially the United States."
That critique is adamantly rejected by members of the center-left government, which was elected on a platform to democratize and open up Croatia after the international isolation of the Tudjman years. Mr. Tudjman and the HDZ led Croatia's bid for independence and ruled the country until January 2000.
"The economic situation was just as bad under the HDZ's leadership. The [current] government has a good economic program and will implement it vigorously," said Goran Rotim, a spokesman for the Ministry of Foreign Affairs.
"There was a lot of economic cronyism under the Tudjman regime. We want to attract considerable foreign investment from the West. And we will be privatizing the country's remaining state-owned oil, electric and tourist industries. That is all that is left to privatize."
"Someone has to pay the bill for the mismanagement of those factories under the leadership of the HDZ. This government has paid down $1.1 billion of the state debt to numerous companies that were plundered by the HDZ leadership. Our publicly owned companies and banks are now finally solvent," Mr. Rotim said.

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