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Croatia Defence and Security Report Q4 2010

Business Monitor International, Aug 2010, Pages: 63


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The Croatia Defence and Security Report provides industry professionals and strategists, corporate analysts, defence and security associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Croatia's defence and security industry.

Croatia's EU accession drive could suffer from further delays following Slovenia's decision to hold a national referendum on an arbitration deal between the two countries. A 'no' vote on delegating the issue to international arbitrators, thus sending the issue back to parliament, would be likely to end Croatia's hopes of joining the EU by 2012. Further progress must also be made in a number of other EU accession areas, in particular with regard to reforms to the judiciary, the fight against widespread corruption, and the privatisation of loss-making shipyards.

With respect to Croatia’s economy, we have lowered our 2010 growth forecast from 1.1% to 0.5% on the back of a weaker outlook for private consumption. We expect a recovery in the tourism industry and a stabilisation in industrial activity to stave off the possibility of a second year in recession. Over the next five years, we anticipate growth to trend below pre-crisis highs, averaging 2.9%, compared with 4.1% prior to the economic downturn.

Earlier this year the Ministry of Defence and the Croatian Armed Forces presented a strategic framework for the Croatian military, according to Defence Professionals. The framework focuses on projects for modernising the armed forces and drawing upon the domestic military industry. Professionalisation of the forces along the lines of a NATO-style structure and capability is high on the agenda as is a gradual reduction of troop numbers from the peaks reached during war-time. What has caused some delay is a lack of willingness to cut jobs in a government area when the economic situation and unemployment make it politically unpopular.


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