[balkanhr] IWPR'S BALKAN CRISIS REPORT, NO. 114 2/8/2000 for nyteeu@ursula; Fri, 11 Feb 2000 23:18:08 -0500 Via NY Transfer News * All the News That Doesn't Fit WELCOME TO IWPR'S BALKAN CRISIS REPORT, NO. 114, February 8, 2000 A SPECIAL REPORT ON THE CROATIAN PRESIDENTIAL ELECTIONS - AND THE CHALLENGES FACING THE NEW ADMINISTRATION. THE END OF THE TUDJMAN ERA. Croatia turns its back on the Tudjman era as voters choose one of the late president's fiercest critics to take his place. Dragutin Hedl in Zagreb reports. BOSNIAN CROATS FORSAKEN Croatia is set to break its controversial alliance with hard-line Croats in Bosnia and Herzegovina. Janez Kovac in Sarajevo reports. KNIVES OUT FOR HDZ CRONIES The new Croatian government is cracking down on corruption as part of its efforts to turn the economy around. Dragutin Hedl in Zagreb reports. ZAGREB SEEKS REGIONAL REVIVAL Croatia's long-suffering provinces are hoping the new government will lift them out of the doldrums. Goran Vezic in Split reports. CROATIA'S FUTURE IN EUROPE Croatia's new leaders must introduce substantial political reforms if they are to be taken seriously by the rest of Europe. Boris Raseta in Split reports. ****************** VISIT IWPR ON-LINE: www.iwpr.net ****************** THE END OF THE TUDJMAN ERA Croatia turns its back on the Tudjman era as voters choose one of the late president's fiercest critics to take his place. By Dragutin Hedl in Zagreb The new President of Croatia, Stipe Mesic, has achieved the unlikely feat of rising to the pinnacle of power in two different states. Ranked an outsider at the beginning of the Croatian presidential race, Mesic stormed home on Monday with a resounding 13 per cent lead over his second round-rival, Drazen Budisa. For a brief period in 1991, he was president of the now defunct Socialist Federative Republic of Yugoslavia (SFRY). He has inherited the Croatian presidency from Franjo Tudjman - who ruled the country from its creation in 1990 until his death late last year. But Mesic promises to be a very different head of state to his predecessor. This 65-year-old politician, with his cropped hair and grey beard, can attribute his electoral success to two things: of all the candidates he least resembled Tudjman and throughout the campaign he attacked the so-called "Herzegovinian lobby" of privileged cronies surrounding the late president. This Herzegovinian lobby comprises a group of influential people with origins in Herzegovina, the predominantly Croat region of Bosnia and Herzegovina. For years this group implemented Tudjman's orders, receiving financial rewards and social privileges as reward. To the bitter end, Tudjman held onto the idea of dividing Bosnia and annexing Herzegovina. Mesic was born on December 24, 1934, in a Slavonian town of Orahovica, some 200 kilometers east of Zagreb. He entered the faculty of law at Zagreb University, and began his political career while studying there, becoming a prominent student leader. After graduating, Mesic went on to become mayor of Orahovica. In 1971, Mesic took part in the "Croatian spring" - a dissident movement viewed by the Yugoslav authorities, under the leadership of Josip Broz Tito, as a revival of Croatian nationalism and Ustashism, the notorious fascist movement which allied with the Nazi German government during the Second World War. Mesic was arrested and imprisoned for one year - a fate he shared with several prominent Croat politicians, including Budisa. Like many politicians in Croatia, Mesic was at one time a member of the Communist Party - the only political party in the SFRY. With the first multi-party elections in April 1990, however, he joined Tudjman's Croatian Democratic Union (HDZ), after some hesitation. Initially, Mesic enjoyed Tudjman's trust. He became the first prime minister of the Croatian government before taking up the post as Croat representative on the rotating Yugoslav (SFRY) presidency in Belgrade. But Tudjman's aggressive policy in Bosnia forced a split with Mesic in 1994. He was sacked from his post as speaker in the Croatian parliament, later joining forces with Josip Manolic and around a dozen fellow outcasts from the HDZ, to found a new party - the Croatian Independent Democrats. Then, in 1997 Mesic changed allegiance again, joining the Croatian People's Party. Mesic comes over as a relaxed, unpretentious person, close to ordinary people. He is renowned for his jokes and wit, a style in stark contrast to Tudjman's dour rigidity and dark seriousness. Mesic - the candidate of the "Opposition Four"- a coalition combining the Croatian Peasants Party, the Croatian Peoples Party, the Liberal Party and the Istrian Democratic Assembly- does not dwell on history and Croat national myths. Budisa, however, leader of the Croatian Social-Liberal Party (HSLS), was unfortunate in that his manner, turn of phrase and, sometimes, his behaviour were mildly reminiscent of Tudjman. This difference in personality seems to have been key to Mesic's victory. The programmes put forward by both candidates were remarkably similar - a reduction in presidential powers, the transference of government to parliament and an end to the luxurious lifestyle associated with the Tudjman presidency. Similar programmes did not lessen, however, the intense competition for votes. At times the election campaign had been dirty. Some members of the Social Democratic Party members had declared that a Mesic victory could jeopardise the fulfilment of pre-election commitments made by the new coalition government, headed by Prime Minister Ivica Racan. But even shortly after Mesic's victory, tempers appear to have cooled. Budisa was prompt to concede defeat and offer his congratulations to Mesic, wishing him "a lot of success in carrying out his presidential duties." Dragutin Hedl is a regular contributor to IWPR from Zagreb. BOSNIAN CROATS FORSAKEN Croatia is set to break its controversial alliance with hard-line Croats in Bosnia and Herzegovina. By Janez Kovac in Sarajevo The Croatian presidential election campaign has given the strongest signal yet that the new authorities in Zagreb will distance themselves from their ethnic kin in Bosnia. Both candidates, Stipe Mesic and Drazen Budisa, suggested throughout their respective campaigns that the death of Franjo Tudjman and the subsequent defeat of his Croatian Democratic Union (HDZ) in last month's election has brought to an end Croatia's much criticised ties with hard-line Bosnian Croats. Although separate and independent countries since 1991, Croatia and Bosnia and Herzegovina remain highly dependent on each other, connected by history, geography, economic interests, and many other aspects of every day life. For the best part of a decade relations between Croatia and Bosnia and, in particular, between Croatia and Bosnia's non-Croat population, have been strained. This was in large part because of Tudjman's refusal to accept an independent Bosnian state and his drive to hive off territory populated by Croats. This policy, which found willing adherents among Bosnian Croat nationalists, led to war between the republic's Croats and Bosniaks (Muslims). During the conflict, Tudjman sent unlimited supplies of weapons, ammunition and other equipment, and even deployed the Croatian regular army, to defend his dream of a "Greater Croatia" incorporating part of Bosnia. After the war, Tudjman continued financing rogue Bosnian Croat institutions, which refused to embrace the idea of a joint Bosniak-Croat Federation. Bosnian Croats are currently entitled to Croatian passports and able to vote in Croatian elections, much to the chagrin of Bosnia's Bosniak leaders and international officials in Bosnia. The precise level of Croatian aid to Bosnia's Croats is unknown, but most analysts believe that it amounted to more than $100 million a year. Much of the money is believed to have ended up in the private pockets of local warlords, tycoons and even criminals in both Bosnia and Croatia. Croatian support for hard-line Bosnian Croats impoverished Croatia, contributed to falling living standards among ordinary Croats, and sullied Croatia's reputation abroad. Moreover, it proved a key factor in the HDZ's defeat in last month's parliamentary elections with the result that both Croatian presidential candidates were eager to distance themselves from the policy. Both candidates made it clear that hard-line Bosnian Croats would no longer be the beneficiaries of clandestine deals and secret subsidies, and that future Croatian aid would be directed towards genuine reconstruction projects seeking to benefit all of Bosnia as well as Croatia. Accepting Bosnia as an independent and sovereign country, both Budisa and Mesic repeated several times that Bosnian Croats cannot view themselves as Croatian diaspora any more, but must seek accommodation within Bosnia with the country's other ethnic groups. Analysts expect the Croatian parliament to curtail the right of Bosnian Croats to vote in future Croatian elections. While most Bosnian Serbs and Bosniaks and moderate Croats did not have a strong preference for either Mesic or Budisa and rather liked both candidates, hard-line Bosnian Croats object to both men. In the absence of Croatian funding for a Bosnian Croat para-state, analysts expect the fortunes of Bosnia's hard-line HDZ leadership to wane in the coming months, though probably not before April's municipal elections. Rifts in the Bosnian HDZ, while always present, have begun to emerge into the open and in the wake of the HDZ's eclipse in Croatia, speculation about new parties is rife. Last week, the Sarajevo daily Dnevni Avaz reported that Jadranko Prlic, an influential HDZ vice-president and Bosnia's foreign minister, will soon leave HDZ and form his own party, the Croat People's Union. Janez Kovac is a journalist from Sarajevo who regularly contributes to IWPR. KNIVES OUT FOR HDZ CRONIES The new Croatian government is cracking down on corruption as part of its efforts to turn the economy around. By Dragutin Hedl in Zagreb Minutes after the out-going Croatian government wound up its last parliamentary session on January 27, the minister for tourism, Ivan Herak, was charged with embezzling 250,000 DM ($125,000) of state funds to pay off his wife's debts. But Herak's alleged fraud was only the tip of an iceberg, as stories of crime, corruption and embezzlement, endorsed by the former ruling Croatian Democratic Union (HDZ) and its leader, the late President Franjo Tudjman, quickly began to unfold. Just a few days after Herak's arrest, on February 3, Miroslav Kutle, one of the founders of the HDZ and a close associate of Tudjman, was also arrested. The sum Kutle is alleged to have embezzled far surpasses the amount that put Herak behind bars. The new government is seeking to bring to justice those responsible for corruption and cronyism as part of efforts to revive the country's moribund economy. Many of those now being investigated grew rich off the proceeds of privatisation. Industrial plants, factories, hotels, large agricultural enterprises and news agencies were bought up by a few chosen members of the HDZ. The new owners either simply failed to pay for their new enterprises or purchased them using bogus credits. Croatia's fledgling tycoons continued in the same vain, never paying bills, sacking employees and running up massive debts. Croatia is now in a catastrophic economic state, the scale of which has taken even the new government by surprise. Unemployment has reached an astronomical 21 per cent, foreign debt has topped $9.5 billion and internal debt has climbed to around $14 billion. Faced with such a huge crisis it is clear the new government must implement some painful economic measures. And it has begun to do so, albeit modestly, by leading from the front. During its first parliamentary session, ministerial salaries were cut to 40 per cent of their pre-election level. Salaries for deputies were also slashed. Although these measures will not save vast sums of money, they reinforce the government's claim that times have changed and that those in power are prepared to share the economic hardships facing the public. At the end of last year, the average salary in Croatia was around $424. Unemployment is rife. Even young highly qualified people struggle to find jobs. And thousands of those in work have not been paid for months on end. Emigration is the favoured option for many. Expectations have been raised by the new government, but in the short term at least it may struggle to deliver significant improvements in living standards. The International Monetary Fund has said the new administration will probably not be able to reduce taxes in the coming year. The IMF has also proposed a freeze on public sector salaries, expenditure on the police, defence forces, social services and reconstruction. The proposals have already sparked trade unions protests. The new administration must introduce harsh and inevitably unpopular measures to turn the economy around. The exposure of new scandals involving former government figures and HDZ loyalists along with their prosecution may postpone public discontent, but it is unclear for how long. Dragutin Hedl is a regular contributor to IWPR from Zagreb. ZAGREB SEEKS REGIONAL REVIVAL Croatia's long-suffering provinces are hoping the new government will lift them out of the doldrums. By Goran Vezic in Split The historic Adriatic region of Dalmatia was dubbed "the cradle of Croatia" by the country's nationalist leaders. But this did not stop them forcibly renaming it Southern Croatia when Franjo Tudjman came to power in the early nineties. It was a linguistic facade, barely masking a process under which regions were stripped of their political, economic and cultural autonomy in the name of unity and resistance to "centuries of Croatian division at the hands of Vienna, Budapest and Belgrade." Centralisation of Croatia enabled President Tudjman and his ruling Croatian Democratic Union (HDZ) to tighten their grip on the country. At the same time, Zagreb developed into a metropolis where wealth was concentrated, while the provinces became impoverished. The new ruling coalition plans to tackle the legacy of centralisation by granting the Croatia's provinces more autonomy. That two of the four governing parties in the new coalition have a strong regional emphasis suggests the issue will be a priority. Indeed, the authorities have already pledged to spread economic development more equally across the country and to grant the regions a bigger share of tax revenues. This new approach has been welcomed in Dalmatia which along with Istria have been some of the most vocal critics of centralisation. Istrians expressed their resistance to the policy in recent elections by voting en masse for their regional party, The Istrian Democratic Parliament. Zagreb's response was to denounce the local government as irredentist, and pro-Italian. The authorities cracked down even harder on Dalmatia's regional party, Dalmatian Action, in the early 1990s. Members were accused of blowing up their own head office in Split. They were eventually acquitted by a Military Court, after a long legal farce. But the damage had been done. The party had been marginalised. Economic inequalities were some of the most damaging consequences of centralisation. Dalmatia used to be a wealthy region. But unemployment has steadily risen over the past decade, particularly in the once thriving port of Split. "It is catastrophic that statistically every third student will be unable to find a job when they complete their studies," says Dr Srdjan Vrcan, a professor at the University of Split. Towns of exceptional beauty and tradition, such as Dubrovnik, Sibenik and Zadar, which were badly damaged during the Croatian war, did not receive sufficient investment after the conflict. They suffered depopulation and economic downturn as a result. Dalmatian towns are "coming apart at the seams" and are turning into centres of poverty in which black-marketeering has become the foundation of the economy and life, a recent study on the region reported. The former HDZ government had planned to build a motorway from Zagreb to Dubrovnik, via Bosnia, bypassing Dalmatia. The regional authorities opposed this without success. The HDZ's obsession with connecting Bosnia to Croatia was, it seems, outweighed by any concern for a part of its own country. Privatisation in Croatia served to reinforce geographic inequality. Officials in Zagreb enriched themselves by buying up regional commercial concerns on the cheap. In Dalmatia, many of the firms purchased in this period are now derelict, their workers on the streets. The state's potential has ended up in the hands, not of the workers but the political elite in Zagreb. The new Croatian authorities have pledged to make a break with the past. But given the damage suffered by Croatia regions over the last ten years, the task of reviving them may prove to be one of the government's greatest challenges. Goran Vezic is a new contributor to IWPR from Split. CROATIA'S FUTURE IN EUROPE Croatia's new leaders must introduce substantial political reforms if they are to be taken seriously by the rest of Europe. By Boris Raseta in Split The new government in Croatia is keen to foster good relations with Europe, but to do so it will have to improve significantly the country's democratic record. Croatia's former leaders were frequently criticised for their authoritarian approach to government which, it was argued, stifled political development. The late President Franjo Tudjman pledged to address Croatia's "democratic deficit" as a condition of joining the Council of Europe three years ago. But he never had any serious intention of introducing reforms, as this would have challenged the very foundation of his brand of politics. Therefore, many of the Council of Europe's criticisms of Croatia remain valid. The task of addressing them, a process that could form a platform for the genuine Europeanisation of Croatia, now rests with the new ruling coalition. One of the most pressing tasks is the transformation of Croatian state television from a vehicle for party propaganda into a true public service station, free of any political control. The ruling coalition has said it intends to do this and also reform the process by which broadcasting frequencies are allocated. However, some undemocratic practices like the Croatian Democratic Union's (HDZ) authoritarian rule in Zagreb will be more difficult to change. Although the opposition won the elections in Zagreb in 1995, Tudjman imposed his own choice for mayor by manipulating votes. New elections for the Zagreb authorities, it is hoped, will prevent such practices in the future, but it will not be easy. Many of the Council of Europe's criticisms were concerned with Croatia's failure to put into effect various international conventions, charters and pacts that it has ratified. The only one it has fully implemented is the reintegration of Serbs from Eastern Slavonia into the Croatian legal system. Serbs from Eastern Slavonia have been granted their demands, such as a number of ministerial seats and the right to develop their own culture and elections for local authorities. Tudjman's government tried hard to disrupt these developments, but stopped short of seriously undermining them. As the new authorities in Croatia have placed European integration as a priority, there is reason to hope that the country will strive to fulfil many of the pledges Tudjman made to the Council of Europe But three conditions set by the Council could cause the administration real problems. These are the return of Serbs who fled Croatia, the reinstatement of their property and cooperation with the International Criminal Tribunal in The Hague. The new government is more likely to hand suspected war criminals over to The Hague than its predecessor, which regarded many Croat suspects as patriots and even war heroes. But the authorities will have to tread very carefully because a policy of cooperation with The Hague may result in a backlash from nationalist Croats. The return of the Serbs and the reinstatement of their property could be equally problematic. Croats have long regarded the country's Serbian population as a troublesome minority. When they fled the country during the Croatian army's re-conquest of Krajina four years ago, few tears were shed. Consequently, many Croats are reluctant to see them repatriated. Indeed, none of the opposition parties drew attention to the issue during the election campaign, as they feared it would undermine their support. Croatia's new leaders have indicated that repatriation is likely to take place, but they know it will be no easy matter. Boris Raseta, a journalist in Split, is a long-time contributor to IWPR. *********************************************************** IWPR's network of leading correspondents in the region provides inside analysis of the events and issues driving crises in the Balkans. The reports are available on the Web in English, Serbian and Albanian; English-language reports are also available via e-mail. For syndication information, contact Anthony Borden . Balkan Crisis Report is supported by the Department for International Development, European Commission, and Swedish International Development and Cooperation Agency and other sources. IWPR also acknowledges general support from the Ford Foundation. For further details on this project and other information services and media programmes, visit IWPR's Website: . Editor-in-chief: Anthony Borden. Managing Editor: Yigal Chazan. Associate Editor: Gordana Igric. Assistant Editors: Christopher Bennett, Alan Davis and Heather Milner. Kosovo Project Manager: Llazar Semini. Translation: Alban Mitrushi and others. The Institute for War & Peace Reporting (IWPR) is a London-based independent non-profit organisation supporting regional media and democratic change. Lancaster House, 33 Islington High Street, London N1 9LH, United Kingdom. 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