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Map of Croatia

Map of Croatia
flag of Croatia.

Republic of Croatia

Bilateral relationship

The bilateral relationship has traditionally been warm, based on strong historical ties and people to people links through the Croatian expatriate community in New Zealand.  Croatian immigrants began arriving in New Zealand from the 1850s.  Today there are over 100,000 New Zealanders of Croatian heritage, many of whom come from the Dalmatian Coast area, and, according to the (most recently available) 2006 census figures, 2,550 Croatian nationals living in New Zealand. Following independence in 1991 some New Zealand Croatians have returned to Dalmatia to set up businesses and help develop their new country.  Going the other way are family reunifications, marriages and young, qualified people seeking new opportunities in New Zealand. The current number of visitors travelling on Croatian passports is about three hundred a year.  Many more will be dual nationals not picked up by statistics.  The Working Holiday Scheme, which will open in August this year, will further strengthen people to people and historical links with Croatia.

Always warm, the relationship developed to a new level when Croatia joined the European Union as its 28th member on 1 July 2013.  The deepening bilateral relationship is reflected in the decision in May 2013 to grant visa free status to Croatian citizens wishing to visit New Zealand as tourists, the conclusion of the Working Holiday Scheme –signed during the visit of Prime Minister Milanović in March 2014 - and by an increase in high-level visits to Croatia.

Foreign Minister, Hon McCully visited Croatia in November 2010 and April 2011, and the Minister of Social Development, Hon Paula Bennett, in June 2013. The Speaker of Parliament Lockwood Smith led a Parliamentary delegation to Croatia in July 2012.  The New Zealand Ambassador in Rome is accredited to Croatia and makes frequent visits, most recently in January 2014.  Prime Minister Milanović, accompanied by Defence Minister Kotromanović, visited New Zealand in March 2014, the first high-level visitor from Croatia since President Tudjman in 1995.   

New Zealand and Croatia cooperate in the multilateral arena, where we share interests in particular as supporters of the United Nations’ peacekeeping efforts.  Croatia has a strong focus on peacekeeping operations and post-conflict recovery at the UN.  At the time it joined the UN in 1991, Croatia hosted five different UN peacekeeping missions. Today, Croatia itself contributes to 14 UN peacekeeping and policing missions worldwide, reflecting a desire to draw on its national experience for the benefit of the international community. A Croatian, Ranko Vilović, was appointed as Chair of the UN Commission on Peace building in February 2013.  New Zealand’s peacekeeping role during and following Balkans’ war is still highly valued and warmly recalled.

Although small, the Croatian community is significant.  It has been particularly successful in horticulture and viticulture (the Babich, Yukich, Selak and Nobilo families), as well as contributing to New Zealand society in a range of areas (e.g. politicians – former Education Minister, Dorothy Jelicic, Minister of Police, Clem Simic, former Wellington Mayor, Sir James Belich; in the sporting arena - All Blacks Frano Botica and Antony Boric, rugby league great Stacey Jones; business leaders – Sir Peter Talley, community leaders – Mira Szaszy, nee Petricevich, former President of the Maori Women’s Welfare League; and, of recent musical fame, Ella Yelich-O'Connor, better known as Lorde). 

 

Bilateral Trade Overview

Despite the recent growth in political relations, the bilateral trade relationship between New Zealand and Croatia has been slower to develop.  Trade levels remained at a very low level in the years immediately following Croatia’s independence from the former Yugoslavia. In 2010, two-way trade totalled NZ$4.5 million. This surged to NZ$39 million in 2011 (boosted by a one-off import of turbines from Croatia amounting to NZ$19 million, and $12.5 million of other electrical machinery) and stood at NZ$11.2 million in 2012.

Two-way trade for 2013 amounted to an estimated NZ$6.7 million, weighted in New Zealand’s favour. Exports to Croatia were worth NZ$4.2 million and were dominated by frozen beef, lamb, and squid.  Imports were valued at NZ$2.5 million, primarily tobacco products, plastics and footwear.

There are good prospects for expanding trade and economic links. In February 2013 a joint MFAT/NZTE and Croatian Chamber of Economy seminar promoting doing business with New Zealand attracted thirty Croatian business and government representatives, and demonstrated potential to boost bilateral trade in goods and services. Areas with potential for increased cooperation include agriculture, aquaculture, energy, fisheries, food processing, horticulture, viticulture and tourism.  

 

Country status report

Recent history

Formerly a republic of the Socialist Federal Republic of Yugoslavia (SFRY), Croatia declared its independence from SFRY on 25 June 1991. Fighting soon broke out in the east of the country as Croatian Serbs, with the help of the Yugoslav National Army, expelled Croats from the area. By the end of 1991, the Serbs controlled nearly one-third of Croatian territory. Despite deployment of a UN peacekeeping force in 1992, fighting continued until the end of 1995, during which period Croatia also became involved in the war in Bosnia-Herzegovina (BiH). Croatia agreed to the peaceful reintegration of Croatian provinces that remained in dispute in 1995. A year later, then-President Tudjman was one of the signatories of the Dayton peace accords which ended the war in BiH. On 15 December 2002, UN peacekeepers withdrew from the Prevlaka Peninsula giving control of all sovereign Croatian territory to the Croatian authorities for the first time since independence.

Political situation

After nearly ten years in opposition, Prime Minister Zoran Milanović’s centre-left Social Democratic Party (SDP) was returned to power at the December 2011 election, following the defeat of the Croatian Democratic Party (HDZ), which had dominated Croatia's political system since 1991. The next general election is due in February 2016.

Economy

Croatia’s economy suffered badly during the 1991-95 war. However, reforms introduced by the then-governing SDP Coalition in 2000, which continued under the HDZ-led government and accelerated following commencement of EU accession negotiations, helped restore the economy. Between 2000 and 2007, Croatia saw moderate GDP growth between 4 and 6 per cent, driven by a rebound in tourism and increased consumer spending. Croatia was ranked 89th out of 189 countries in the World Bank’s Doing Business 2014 report. About half of Croatia’s trade is with the Euro area, primarily with Germany and Italy, and the Euro area is the source of about three-fourths of foreign-direct investment (FDI) flows into the country. Croatia also has a high concentration of banks whose ownership indirectly exposes them to the Euro-area crisis.

The economy was seriously affected by the global financial crisis and has yet to recover. The average unemployment rate has climbed steadily in recent years, reaching 21.7 per cent in the first quarter of 2013, and youth unemployment in the country remains one of the highest in Europe (49.2 % in the fourth quarter 2013). Structural impediments to growth, including a lack of competitiveness, and bottlenecks to investment and export-led growth have led to forecasts that the economy will contract again in 2012-2013 before returning to weak growth in 2014-17. Economic activity is estimated to have contracted by almost 12% from a peak in 2008.

Croatia currently has no IMF programme, although it is subject to an annual Article IV review process. The IMF is concerned about the country's external imbalances and is pushing for structural reform. Despite a healthy stock of foreign reserves and the correction to the current-account deficit from 2009, a large external debt stock of more than 100% of GDP and the government’s liabilities leave Croatia vulnerable to financing difficulties, especially in view of the government’s wavering commitment to fiscal consolidation and the recent downgrades by rating agencies to speculative status.

The basic features of Croatia’s economy are industry, agriculture, forestry, fishing industry and food, drink and tobacco production, construction, transport and communication. Croatia, as one of the significant tourist destination in the Mediterranean, has a long tourist tradition and big development prospects.

Foreign Policy

Croatia joined the EU on 1 July 2013, becoming the bloc’s 28th member. EU membership is the beginning of a new era for Croatia. It will bring considerable economic benefits, not only in terms of increasing Croatia’s competitiveness but also in terms of receiving approximately €2 billion in annual aid transfers.
In line with its EU membership, Croatia is shifting its foreign-policy focus away from the Balkans and towards Europe. Significant progress has been made towards addressing historical grievances and territorial disputes stemming from the breakup of the former Yugoslavia.  Relations with Slovenia have improved notably since 2008-09, when a border dispute led to a year-long delay to Croatia’s EU talks. 

Croatia joined the United Nations in 1991 on its independence. Within the UN Croatia has a strong focus on peacekeeping operations and post-conflict recovery.  Croatian Ranko Vilović was appointed as Chair of the UN Commission on Peace building in February 2013. Assistant UN Secretary-General for Human Rights Ivan Šimonović is Croatian.
Croatia joined the North Atlantic Treaty Organisation (NATO) in April 2009 and has participated in NATO operations in Kosovo and Afghanistan. The government has stated its intention to participate in further NATO-missions. 

 

Key facts

Geography/Demographics

Land Area  56,594 sq km
Population 4.4 million (2013 estimate)
Capital City Zagreb
Languages Croatian

Political

Political system - Democratic republic
National Government – Appointed by the president and confirmed by parliament. The current national government, appointed in December 2011, is a majority government, led by the centre-left Social Democratic Party, supported by the Croatian People's Party, the Istrian Democratic Assembly and the Croatian Pensioners' Party, and minority representatives.
National legislature – Unicameral parliament (Hrvatski Sabor) comprising 151 deputies.
Last election December 2011 (parliamentary); January 2010 (Presidential)
Next election -December 2016 (parliamentary); February 2015 (Presidential)
Head of State - President Ivo Josipovic (sworn in on 18 February 2010)
Head of Government - Prime Minister Zoran Milanovic

Economic (2013)

GDP: $US58.3 billion
Real GDP growth: – -1%
Exports: US$11.8 billion
Imports: US$20.5 billion
Main exports: Transport equipment, machinery, textiles, chemicals, foodstuffs and fuels
Main imports:
Machinery, transport and electrical equipment; chemicals, fuels and lubricants and foodstuffs
Current account balance: US$-22 million
Inflation 2.2%
Unemployment 20.5%

New Zealand Trade (2013)

NZ Exports (FOB): $NZ 4.2 million
Main Exports: Frozen beef, lamb, and squid
NZ Imports (CIF): $NZ 2.5 million
Main Imports: Tobacco products; plastics; footwear l

 

Visits

From New Zealand to Croatia

From Croatia to New Zealand

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Representation

 

Travel advice

The Safe Travel website provides a travel advisory for travellers to Croatia [external link].

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Page last updated: Thursday, 20 March 2014 13:31 NZDT