This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 03 ZAGREB 001327 
 
SIPDIS 
 
 
VIENNA ALSO FOR BOSNIA; USVIENNA FOR USDEL CSCE 
 
DEPT FOR EUR/RPM/PMC 
 
E.O. 12356:  DECL: N/A 
TAGS: PHUM MARR ECON PHUM MARR ECON PHUM MARR ECON HR
SUBJECT: 1993-94 CSCE IMPLEMENTATION REPORT: 
                       UNCLASSIFIED 
 
                       UNCLASSIFIED 
 
PAGE 02        ZAGREB  01327  01 OF 03  011807Z 
         CROATIA 
 
REF:  STATE 50644 
 
¶1.  FOLLOWING IS OUR CONTRIBUTION FOR THE ANNUAL 
CSCE IMPLEMENTATION REPORT (REFTEL). 
 
------------------ 
GENERAL ASSESSMENT 
------------------ 
 
¶2.  CROATIA CONTINUES BY AND LARGE TO IMPLEMENT 
ITS CSCE OBLIGATIONS, THOUGH THERE HAVE BEEN 
SOME INCIDENTS IN VIOLATION OF CSCE NORMS.  THE 
CONTINUED PREVALENCE OF UNSETTLED CONDITIONS -- 
WAR, A HOSTILE OCCUPATION AND EFFECTIVE CIVIL 
WAR, AND MAJOR REFUGEE FLOWS -- COMPLICATES THE 
GOVERNMENT'S TASK AND MAKES THE SECURITY BASKET 
ONCE AGAIN THE MAIN FOCUS OF DEVELOPMENTS THIS 
YEAR. 
 
¶3. DEVELOPMENTS IN THE SECURITY AREA, INCLUDING 
ESPECIALLY THE SIGNING OF A PEACE AGREEMENT WITH 
NEIGHBORING BOSNIA-HERZEGOVINA IN THE FIRST 
QUARTER OF 1994, REFLECTED THE PURSUIT OF 
RESPONSIBLE SECURITY POLICIES.  BEFORE THAT 
THERE WERE, HOWEVER, SOME CASES OF CROATIAN 
MILITARY OPERATIONS THAT VIOLATED CSCE NORMS. 
 
¶4. ROUGHLY A QUARTER OF CROATIA'S TERRITORY IS 
STILL MILITARILY OCCUPIED BY REBEL ETHNIC SERB 
                       UNCLASSIFIED 
 
 
                       UNCLASSIFIED 
 
PAGE 03        ZAGREB  01327  01 OF 03  011807Z 
FORCES THAT HAVE STRONG LINKS TO THE GOVERNMENT 
OF THE "FRY."  THE POLICING OF THE OCCUPIED 
AREAS BY THE UN PROTECTION FORCE (UNPROFOR) HAS 
NOT SUCCEEDED COMPLETELY IN PREVENTING MILITARY 
ATTACKS ON CROATIA FROM WITHIN THOSE AREAS, NOR 
THE ABUSE AND HARASSMENT OF ETHNIC MINORITIES. 
THE NUMBER OF NEW REFUGEES FLOWING INTO CROATIA 
DIMINISHED SOMEWHAT DURING THE YEAR, BUT THERE 
HAS BEEN LITTLE CHANGE IN THE OVERALL NUMBERS OF 
REFUGEES AND DISPLACED PERSONS IN THE COUNTRY 
WHO MUST BE CARED FOR. 
 
¶5. IN OTHER CSCE AREAS, THERE WERE NO MAJOR 
DEVELOPMENTS THIS YEAR.  KEY FEATURES OF THE 
LANDSCAPE ARE CONTINUED BUT SLOW PROGRESS TOWARD 
ECONOMIC PRIVATIZATION, MUCH SLOWED BY THE 
UNCERTAIN INVESTMENT CONDITIONS; AND A GENERAL 
RESPECT FOR THE PRINCIPLES EMBODIED IN THE HUMAN 
DIMENSION, MARRED BY CONTINUING PROBLEMS 
CONCERNING THE RIGHTS OF MINORITIES AND PRESS 
FREEDOMS, IN PARTICULAR. 
 
-------- 
SECURITY 
-------- 
 
¶6. SECURITY ISSUES DOMINATE ALL OTHER MATTERS IN 
CROATIA, DUE TO THE CONTINUING MILITARY 
OCCUPATION OF LARGE PARTS OF THE COUNTRY BY 
BREAKAWAY ETHNIC SERBS.  IN 1993, THE UNSC 
RECOGNIZED THESE "UN-PROTECTED AREAS" (UNPAS) AS 
                       UNCLASSIFIED 
 
 
                       UNCLASSIFIED 
 
PAGE 04        ZAGREB  01327  01 OF 03  011807Z 
INTEGRAL PARTS OF CROATIA.  CROATIA CONTINUED TO 
COOPERATE IN INTERNATIONAL EFFORTS TO NORMALIZE 
THE UNPAS AND RETURN THEM TO CROATIAN GOVERNMENT 
CONTROL, BY PEACEFUL MEANS, IN PARTICULAR BY 
PROLONGING ITS AGREEMENT TO THE PRESENCE OF UN 
PEACEKEEPING TROOPS AND BY COOPERATING IN OTHER 
EFFORTS TO ESTABLISH A FRAMEWORK FOR A PEACEFUL 
APPROACH TO THE RETURN OF THE UNPAS (SEE 
BELOW).  THERE WERE ALSO BREACHES, HOWEVER, 
NOTABLY IN CROATIAN ATTEMPTS IN SEPTEMBER 1993 
TO RETAKE BY FORCE CERTAIN SERB-CONTROLLED AREAS 
AROUND MEDAK.  IN ADDITION TO MANY CASUALTIES ON 
BOTH SIDES, THERE WAS EVIDENCE OF THE TORTURE 
AND MURDER OF SERB CIVILIANS, THE CROATIAN 
GOVERNMENT INVESTIGATION OF WHICH HAS NOT YET 
BEEN COMPLETED.  CROATIA HAS NOW ENTERED INTO 
SERIOUS NEGOTIATIONS, WHICH WERE UNDER WAY AS 
THE REPORTING PERIOD CLOSED, FOR A CEASEFIRE 
WITH THE SERBS WHO CONTROL MOST OF THE UNPAS. 
 
¶7.  INTERNATIONALLY, CROATIA SIGNED AN AGREEMENT 
IN MARCH 1994 THAT WILL HELP BRING PEACE TO THE 
FORMER YUGOSLAVIA BY ESTABLISHING A CROAT-MUSLIM 
FEDERATION IN BOSNIA-HERZEGOVINA AND A 
CONFEDERATION BETWEEN THE B-H FEDERATION AND 
CROATIA.  CROATIA HAS EXPRESSED INTEREST IN THE 
 
 
                       UNCLASSIFIED 
 
 
 
 
 
 
 
 
 
NNNN 
 
                       UNCLASSIFIED 
 
PAGE 01        ZAGREB  01327  02 OF 03  011808Z 
ACTION EUR-01 
 
INFO  LOG-00   ACDA-17  ACDE-00  AGRE-00  AID-01   BIB-01   CEA-01 
      CIAE-00  COME-00  CTME-00  CFE-00   C-01     OASY-00  DODE-00 
      ITCE-00  EB-01    EXME-00  E-01     FRB-01   HA-09    H-01 
      TEDE-00  INR-00   IO-16    ITC-01   LAB-01   L-01     ADS-00 
      NSAE-00  NSCE-00  OIC-02   OMB-01   OPIC-01  PA-02    PM-00 
      PRS-01   P-01     RPCS-01  SCT-03   SNP-00   SP-00    SR-00 
      SS-00    STR-01   TRSE-00  T-00     USIE-00  RPE-01   PMB-00 
        /068W 
                  ------------------372981  011809Z /38 
R 011758Z APR 94 
FM AMEMBASSY ZAGREB 
TO SECSTATE WASHDC 1442 
INFO AMEMBASSY LJUBLJANA 
AMEMBASSY VIENNA 
AMEMBASSY BELGRADE 
USMISSION USNATO 
USMISSION USVIENNA 
 
UNCLAS SECTION 02 OF 03 ZAGREB 001327 
 
SIPDIS 
 
 
VIENNA ALSO FOR BOSNIA; USVIENNA FOR USDEL CSCE 
 
DEPT FOR EUR/RPM/PMC 
 
E.O. 12356:  DECL: N/A 
TAGS: PHUM MARR ECON PHUM MARR ECON PHUM MARR ECON HR
SUBJECT: 1993-94 CSCE IMPLEMENTATION REPORT: 
                       UNCLASSIFIED 
 
 
                       UNCLASSIFIED 
 
PAGE 02        ZAGREB  01327  02 OF 03  011808Z 
         CROATIA 
 
NATO PARTNERSHIP FOR PEACE PROGRAM.  ALSO IN THE 
FIRST QUARTER OF 1994, THE CROATIAN GOVERMENT 
COOPERATED IN BRINGING ABOUT A CEASEFIRE BETWEEN 
ETHNIC CROATIAN AND MUSLIM FORCES IN 
BOSNIA-HERZEGOVINA, THUS HELPING TO REDUCE 
VIOLENCE.  A MAJOR PROBLEM IN THE SAME AREA, 
HOWEVER, HAS BEEN THE CROATIAN GOVERNMENT'S 
CONTINUED ACCEPTANCE OF A PRACTICE BY WHICH 
CROATIAN REGULAR TROOPS WERE INVOLVED IN 
FIGHTING IN BOSNIA-HERZEGOVINA. 
 
¶8. CROATIA COOPERATES IN THE UN EFFORT TO 
ENFORCE A NO-FLY ZONE OVER B-H AND CONSISTENTLY 
GRANTS OVERFLIGHT CLEARANCE FOR AIRCRAFT 
INVOLVED IN THAT EFFORT.  IT HAS, HOWEVER, 
ITSELF VIOLATED THE NFZ.  INFORMATION PROVIDED 
ON CROATIAN MILITARY FORCES PURSUANT TO VD-92 
HAS BEEN INCOMPLETE. 
 
-------- 
ECONOMIC 
-------- 
 
¶9.  CROATIA CONTINUES TO MOVE, ALBEIT SLOWLY, 
AWAY FROM THE SYSTEM OF STATE OWNERSHIP THAT 
PREVAILED UNTIL 1991 TOWARD A FREE-MARKET 
SYSTEM.  PRIVATIZATION CONTINUES, THOUGH MOST 
EFFORTS HAVE BEEN ON A SMALL SCALE.  PROGRESS 
HAS BEEN UNEVEN AND SLOW BECAUSE THE GOVERNMENT 
                       UNCLASSIFIED 
 
 
                       UNCLASSIFIED 
 
PAGE 03        ZAGREB  01327  02 OF 03  011808Z 
HAS BEEN PREOCCUPIED WITH THE WAR AND ITS 
EFFECTS, SO THAT MANY NEW RULES AN LAWS REMAIN 
TO BE PASSED.  FORMER EXPORT MARKETS REMAIN 
LARGELY CLOSED OFF AND HAVE NOT BEEN REPLACED, 
AND THERE HAS BEEN LITTLE INTERNATIONAL 
FINANCIAL ASSISTANCE.  AS A RESULT, ECONOMIC 
RECOVERY HAS BEEN BLOCKED AND THE AVERAGE 
STANDARD OF LIVING REMAINS AT LEAST 50 PERCENT 
BELOW ITS PRE-1991 LEVEL.  FURTHER, THE 
UNCERTAIN SECURITY SITUATION HAS PROBABLY CAUSED 
INVESTORS, BOTH DOMESTIC AND FOREIGN, TO 
POSTPONE THEIR DECISIONS. 
 
¶10.  A NEW ECONOMIC TEAM INSTALLED BY PRESIDENT 
TUDJMAN INTRODUCED IN OCTOBER 1993 MEASURES THAT 
LARGELY HALTED THE RAMPANT INFLACTION PREVAILING 
LAST YEAR, AND THIS HAS MADE A SIGNIFICANT 
CONTRIBUTION TO STABILIZING THE ECONOMIC 
SITUATION.  CROATIA REMAINS A MEMBER OF THE 
WORLD BANK, IMF, AND ETRD AND HAS RECEIVED 
TECHNICAL ASSISTANCE FROM THESE INSTITUTIONS TO 
HELP STRENGTHEN ITS FREE MARKET BASE.  THE 
GOVERNMENT HAS OBTAINED U.S. AND EUROPEAN UNION 
SUPPORT FOR EVENTUAL CLOSER ASSOCIATION WITH 
WESTERN ECONOMIC AND FINANCIAL INSTITUTIONS. 
 
¶11.  BECAUSE OF UNSETTLED CONDITIONS AND HIGHER 
PRIORITIES, CROATIAN ENVIRONMENTAL PROTECTION 
POLICY REMAINS IN ITS INFANCY BUT FOLLOWS IN 
PRINCIPLE THE LINES OF WESTERN PRACTICE. 
CROATIA AND THE U.S. SIGNED AN AGREEMENT ON 
                       UNCLASSIFIED 
 
 
                       UNCLASSIFIED 
 
PAGE 04        ZAGREB  01327  02 OF 03  011808Z 
SCIENTIFIC AND TECHNOLOGICAL EXCHANGE IN MARCH  . 
¶1994. 
 
---------------                                 . 
HUMAN DIMENSION 
--------------- 
 
¶12.  CROATIA HAS ENACTED MOST OR ALL OF THE 
LEGAL STRUCTURES OF A PLURALISTIC, DEMOCRATIC 
SOCIETY.  HOWEVER, THE GOVERNMENT APPEARS TO 
HAVE LEFT THIS MACHINERY TO OPERATE ON ITS OWN, 
AND HAS NOT BEEN ACTIVE IN EXTENDING ITS 
PRACTICAL AND FAIR APPLICATION, NOR AGGRESSIVE 
IN ENSURING THAT ABUSES ARE AVOIDED. 
 
¶13.  ELECTIONS IN EARLY 1993 WERE GENERALLY 
CONSIDERED FAIR AND OPEN BY BOTH OUTSIDE AND 
DOMESTIC OBSERVERS AS WELL AS THE PARTICIPANTS. 
BUT DEMOCRATIC, PLURALISTIC INSTITUTIONS ARE NOT 
YET AS ROBUST AS IN OLDER WESTERN SOCIETIES. 
THE SABOR (PARLIAMENT), FOR EXAMPLE, HAS LITTLE 
       EFFECTIVE POWER TO CHALLENGE THE PRESIDENT OF 
THE REPUBLIC.  FEW CONCRETE STEPS HAVE BEEN 
TAKEN TO ADVANCE THE AGENDA OF GREATER PLURALISM 
AND OPENNESS.  THE GOVERNMENT AGAIN ENGAGED IN 
SOME ACTS (SUCH AS LEGAL PROCEEDINGS AGAINST THE 
 
 
                       UNCLASSIFIED 
 
 
 
 
 
 
 
 
 
NNNN 
 
                       UNCLASSIFIED 
 
PAGE 01        ZAGREB  01327  03 OF 03  011808Z 
ACTION EUR-01 
 
INFO  LOG-00   ACDA-17  ACDE-00  AGRE-00  AID-01   BIB-01   CEA-01 
      CIAE-00  COME-00  CTME-00  CFE-00   C-01     OASY-00  DODE-00 
      ITCE-00  EB-01    EXME-00  E-01     FRB-01   HA-09    H-01 
      TEDE-00  INR-00   IO-16    ITC-01   LAB-01   L-01     ADS-00 
      NSAE-00  NSCE-00  OIC-02   OMB-01   OPIC-01  PA-02    PM-00 
      PRS-01   P-01     RPCS-01  SCT-03   SNP-00   SP-00    SR-00 
      SS-00    STR-01   TRSE-00  T-00     USIE-00  RPE-01   PMB-00 
        /068W 
                  ------------------372989  011808Z /38 
R 011758Z APR 94 
FM AMEMBASSY ZAGREB 
TO SECSTATE WASHDC 1443 
INFO AMEMBASSY LJUBLJANA 
AMEMBASSY VIENNA 
AMEMBASSY BELGRADE 
USMISSION USNATO 
USMISSION USVIENNA 
 
UNCLAS SECTION 03 OF 03 ZAGREB 001327 
 
SIPDIS 
 
 
VIENNA ALSO FOR BOSNIA; USVIENNA FOR USDEL CSCE 
 
DEPT FOR EUR/RPM/PMC 
 
E.O. 12356:  DECL: N/A 
TAGS: PHUM MARR ECON PHUM MARR ECON PHUM MARR ECON HR
SUBJECT: 1993-94 CSCE IMPLEMENTATION REPORT: 
                       UNCLASSIFIED 
 
 
                       UNCLASSIFIED 
 
PAGE 02        ZAGREB  01327  03 OF 03  011808Z 
         CROATIA 
 
OFFICIALS OF TWO SMALL OPPOSITION PARTIES) THAT 
LED TO CHARGES OF STIFLING THE FREE EXPRESSION 
OF OPPOSITION VIEWS. 
 
¶14.  CROATIA SHOWS A STRONG RESPECT, IN LETTER 
AND IN PRACTICE, FOR INDIVIDUAL RIGHTS, AND 
INCREASING INTERCHANGE WITH WESTERN EUROPEAN 
SOCIE 
TIES HAS BROUGHT A GREATER AWARENESS OF 
GOVERNMENT OBLIGATIONS IN THIS REGARD.  THE 
GOVERNMENT USUALLY TAKES ACTION TO INVESTIGATE 
AND/OR PROSECUTE SERIOUS ABUSES, BUT RESPONSE 
CAN BE SLOW AND INEFFECTIVE.  MINORITIES IN 
CROATIA -- IN PARTICULAR THE ROUGHLY 11 PERCENT . 
SERB MINORITY -- HAVE BEEN SUBJECT, AGAIN IN 
1993, TO CRIMES OF VIOLENCE COMMITTED BY 
NATIONALIST EXTREMISTS.  SERBIAN REPRESENTATIVES 
ALSO COMPLAIN THAT THEY SUFFER DISCRIMINATION 
AND HARASSMENT IN A WIDE VARIETY OF AREAS, FROM 
ABNORMAL SLOWNESS IN THE ISSUANCE OF GOVERNMENT 
DOCUMENTS TO DISCRIMINATION IN HIRING AND FIRING. 
 
¶15.  FREEDOM OF SPEECH AND PRESS REMAINS AN 
ISSUE.  THE GOVERNMENT EXERCISES A STRONG 
INFLUENCE OVER MOST MEDIA, BUT THE PRESS 
NEVERTHELESS WILL AND DOES PRINT MATERIAL 
CRITICAL OF THE GOVERNMENT AND ITS LEADERS. 
CRITICS HAVE POINTED OUT THAT THE PRACTICE OF 
ALLOWING MEMBERS OF THE SABOR TO REMAIN IN 
                       UNCLASSIFIED 
 
 
                       UNCLASSIFIED 
 
PAGE 03        ZAGREB  01327  03 OF 03  011808Z 
CHARGE OF KEY PRINT AND ELECTRONIC MEDIA IS AN 
INVITATION TO ABUSE; THE GOVERNMENT HAS DONE 
NOTHING TO CORRECT THE PROBLEM. 
 
¶16.  CROATIA HAS AN ORGANIZED AND EFFECTIVE 
JUDICIAL SYSTEM, THAT OPERATES TO AN ADEQUATELY 
FAIR AND REASONABLE STANDARD, ALTHOUGH IT IS NOT 
YET FREE OF ETHNIC BIAS OR POLITICAL INFLUENCE. 
IN MANY AREAS, WORK REMAINS TO BE DONE IN 
CREATING LAWS AND PROCEDURAL SAFEGUARDS TO 
ACCORD WITH MORE GENERAL PRONOUNCEMENTS 
CONTAINED IN THE CONSTITUTION.  WESTERN 
COUNTRIES, INCLUDING THE UNITED STATES, ARE 
DEVELOPING TECHNICAL ASSISTANCE PROGRAMS IN THE 
AREA OF JUDICIAL REFORM. 
GALBRAITH 
 
 
                       UNCLASSIFIED 
 
 
 
 
 
 
 
 
 
NNNN