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Privatization in Croatia
Privatization in Croatia refers to political and economic reforms which include the privatization of state-owned assets in Croatia. Privatization started in the late 1980s under Yugoslav Prime Minister Ante Marković and mostly took place in the 1990s after the breakup of Yugoslavia, during the presidency of Franjo Tuđman and the rule of his party Croatian Democratic Union (HDZ), and continued in the 2000s with the privatization of large state enterprises. Many aspects of the privatization process are still seen as controversial as the political and economic turmoil, coupled with the events of the simultaneous 1991–95 independence war, are thought to have led to a degree of criminal activity.
== Early privatization ==
The privatization process in the former Yugoslavia was initiated during the government of Yugoslav Prime Minister Ante Marković.〔Patrick Heenan, Monique Lamontagne: (Central and Eastern Europe Handbook ), Routledge, 2014, p. 96〕 In 1990 he introduced a privatization program, with newly passed federal laws on privatization allowing company management boards to initiate privatization, mainly through internal share-holding schemes, initially not tradeable in the stock exchange.〔Milica Uvalic: (Investment and Property Rights in Yugoslavia: The Long Transition to a Market Economy ), Cambridge University Press, 2009, p. 185〕 This meant that the law put an emphasis on "insider" privatization to company workers and managers, to whom the shares could be offered at a discount. Yugoslav authorities used the term "property transformation" when referring to the process of transforming public ownership into private hands.〔
Separate privatization laws in individual republics soon replaced the federal law.〔 SR Croatia replaced the federal law on privatization with its own privatization law in April 1991. The new law stipulated compulsory privatization and the elimination of public ownership, while publicly owned enterprises were to be transformed into joint-stock or limited liability companies.〔William Bartlett: (Europe's Troubled Region: Economic Development, Institutional Reform, and Social Welfare in the Western Balkans ), Routledge, 2007, p. 65〕 These new laws in Croatia and Slovenia were interpreted as tacit nationalization, a tendency of both governments to first re-nationalize public property in order to later proceed with privatization.〔Milica Uvalic: (Investment and Property Rights in Yugoslavia: The Long Transition to a Market Economy ), Cambridge University Press, 2009, p. 190〕
At the time Croatia gained independence, its economy, as well as the whole Yugoslav economy, was in the middle of recession. As a result of the 1991–95 war, infrastructure sustained massive damage, especially the revenue-rich tourism industry. Privatization and transformation from a planned economy to a market economy was thus slow and unsteady.〔International Business Publications: (Croatia Investment and Trade Laws and Regulations Handbook ), p. 22〕
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