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Cablegate: Zagreb Weekly Activity Report - September 10, 2008

VZCZCXRO0557
PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHVB #0646 2551028
ZNR UUUUU ZZH
P 111028Z SEP 08
FM AMEMBASSY ZAGREB
TO RUEHC/SECSTATE WASHDC PRIORITY 8613
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

UNCLAS ZAGREB 000646

SIPDIS

FOR EUR/SCE, EUR/PPD, EUR/RPM AND EUR/ERA
OSD FOR POPOVICH

E.O. 12958: N/A
TAGS: PREL PGOV ETRD ECON HR
SUBJECT: ZAGREB WEEKLY ACTIVITY REPORT - SEPTEMBER 10, 2008

1. (U) WITH A SLOWED PACE OF REFORMS, CROATIA DROPS IN
"DOING BUSINESS 2009" RANKINGS:
In its "Doing Business 2008" report a year ago, the World
Bank ranked Croatia 2nd among top reformers worldwide and
97th for overall ease of doing business. In "Doing Business
2009," however, Croatia does not rank among the top ten
reformers and has slipped to 106th overall among the 181
countries assessed. Among the factors considered in the
study, Croatia's worst performance was in dealing with
construction permits, where it ranked 163rd. Construction
permits was one of just two areas in which Croatia
implemented reforms over the past year, but the reform led to
an administrative backlog that actually lengthened the time
required to obtain a permit by 20 days. As this backlog
decreases the time needed to deal with the permits should
decline significantly. One other area of reform in Croatia
over the past year was trading across borders, where
improvements to port infrastructure sped handling of exports
by two days. In a statement about the report, Andras Horvai,
World Bank country manager for Croatia, said he was confident
continued reform would improve Croatia's ranking in the
future. (SLitke)

2. (U) EUR DAS JONES VISITS CROATIA:
In his first visit to Croatia since joining the EUR Front
Office, EUR DAS Stu Jones had a brief, but very positive,
visit to Croatia on September 10. In his meeting with DAS
Jones, FM Gordan Jandrokovic described the bilateral
relationship as "great" and thanked the US for all of its
support to Croatia. Jandrokovic described the GoC's
priorities as NATO membership, EU accession, and good
relations with all of its neighbors. The majority of
discussion then focused on recent developments in the region.
Full report will be sent septel. (RHoltzapple)

3. (U) MEDIA SPECULATION BEGINS ON POTENTIAL CANDIDATES FOR
CROATIAN PRESIDENT IN 2010:
Several media outlets have begun speculation on who might be
leading candidates in the race to replace current Croatian
President Stipe Mesic in early 2010. Influential dailies
Vecernji List and Novi List have argued that PM Ivo Sanader
is the HDZ's only strong candidate for the position and
perhaps the only one who could defeat leading opposition
candidates. Other dailies argue Sanader should not run for
President in 2010, as the prime ministerial position has much
broader powers and any vacancy there could lead to a damaging
intra-party competition. Sanader has been playing it cool
regarding a potential bid for the presidency, saying only
that "everyone in politics has ambitions," but that his
current ambitions were to conclude negotiations on NATO and
EU accession, ensure the HDZ wins municipal elections next
year, and curb inflation. Sanader has also been coy,
however, about who an HDZ presidential candidate might be,
other than dismissing suggestions that the HDZ could back
Miroslav Tudjman, son of Croatia's first president and HDZ
founder Franjo Tudjman, referring to Miroslav as a political
loser. COMMENT: With local elections in May 2009 as the
more pressing concern for all parties, speculation on
presidential candidates is somewhat premature. Still, public
fascination with the Sanader-Mesic relationship, and the fact
that no obvious candidates currently exist, means that the
question of who might be Mesic's successor will be the
subject of keen discussion. END COMMENT. (DMeges)
Bradtke

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