CHAPTER FOUR
Simulated Democracy
Croatia’s Transition in the 1990s
The war became embedded in the transition, and the transition in the war.
CROATIAN POLITICAL ANALYST MIRJANA KASAPOVIC
The Road to Nationalist Authoritarianism
The regime that ruled Croatia in the 1990s exhibited both authoritarianism and a particular brand of simulated democracy designed to assure a baseline level of Western support. The first ten years of post-communist transition were dominated by the entrenched power of one nationalist political party, the Croatian Democratic Union (Hrvatska Demokratska Zajednica, HDZ) and its founder and leader, President Franjo Tu4
The nationalists blamed Croatia’s economic woes on Belgrade and Croatia’s Serbs, and used them to justify the displacement of ethnic Serbs from positions of economic and political influence. The positions were doled out to HDZ insiders such that the new regime’s anti-Serb policies at times resembled a grab for dwindling resources more than a real effort to rectify ostensible inequalities.5 Along with the ethnic Croat residents of the impoverished economic hinterland, the HDZ insider beneficiaries of misappropriated state resources became among the firmest supporters of the regime.
In the 1990s, Croatia’s mixed economic structure was reflected in the presence of liberal and pro-Western parties on the political scene. Though often fragmented and weak compared to the HDZ, these political groups nonetheless kept the regime in check and were available as a democratic alternative when the HDZ’s rule collapsed at the end of the 1990s.
It was the political exploitation of the so-called Homeland War (Domovinski rat) by the regime that helped to entrench President Tu
Nationalist rhetoric became the baseline of political competition in the 1990s. Criticizing the ethno-nationalist agenda effectively meant political suicide. It was the divisive politics of nationalism that kept the liberal opposition divided and marginalized. By using the war as its legitimizing principle, the HDZ regime managed temporarily to attract a large cross-section of society inclined toward liberalism. The creation of a sense of vulnerability and a state-sponsored nationalist mentality, fostered by the extensive use of historical mythology and symbols, helped keep the HDZ in power. War politics also added new beneficiaries to the HDZ’s growing clientelistic network: war veterans and their families, ethnic Croats in Herzegovina, arms dealers and other war profiteers, and residents of war-ravaged areas, all of whom became firm HDZ supporters and were duly rewarded in a number of ways. As the economic situation deteriorated, the HDZ invoked the war to divert attention from reform and solidify its hold on power.
Yet, one cannot fully understand the character of the Tudman regime without acknowledging the way external forces shaped its nature and demise. Though many foreign officials intuitively distrusted President Tudman, the West’s initial policy toward the post-communist Croatian regime ranged from begrudging tolerance to open support. Some Western countries pursued a policy of tacit support for the Tudman regime because it was seen as a counterweight to a greater evil, the Miloševic regime in Belgrade. The financial and military support provided by Western countries was much needed by Zagreb, and hence Tudman and the HDZ maintained a facade of democracy to avoid alienating their Western “friends.” However, such support was contingent on continuing hostilities in neighboring Bosnia, and after the Dayton Agreement the West’s threshold of tolerance for Tudman’s undemocratic behavior declined significantly. In the second half of the 1990s both the United States and the EU actively began pushing for democratization, supporting the opposition and sponsoring the expansion of civil society while chastising the Tudman regime for its infractions against democracy. Consequently, Tudman and the HDZ were under increased pressure to reform, and their response was twofold and somewhat contradictory. On one hand, the regime began to vilify the West as an enemy of Croatian sovereignty, while on the other it went out of its way to show a democratic face to the West.6 Certain domestic constituencies may have believed for a time that the West and its liberal agenda were a threat to Croatian sovereignty, while those who derived benefits from the HDZ regime did not raise their voices in protest. However, the West actively courted other constituencies, those that were pro-Western in their orientation and those that were beginning to see through the HDZ’s instrumental appeals to nationalism, especially as the economic situation worsened. Certain political groups, most notably the communist successor Social Democratic Party (Socijaldemokratska Partija, SDP), saw incentives in allying themselves with the West and promising EU and NATO integration in their public appeals.
The relative strength of the pro-Western part of society in Croatia compared to FRY explains why the pro-EU and pro-NATO rhetoric was much stronger in the Tu
Formal Democracy: The Record
It is no small irony that while the HDZ fiercely opposed communism, once in power it treated all institutions as an extension of the party, installing a politically loyal nomenklatura in all positions of influence, just as the communists had done (Ottaway 2003: 113). In this manner, Tu
Although the Tu7 The three cycles of parliamentary elections held in the 1990s were not marred by the irregularities that were commonplace in Macedonia and FRY. Such irregularities would have sullied the democratic face that the Tudman regime was so eager to show to the West. Presidential elections were deemed unfair, however, with the Organization for Security and Cooperation in Europe (OSCE) concluding that the 1997 election “did not meet minimum standards for democracies” (quoted in Karatnycky et al. 1999:178).
Many democratic transgressions were recorded in the media sphere, and it takes only a cursory glance at papers like Vecernji List or HINA (Croatian Press Agency/Hrvatska Izvještajna Novinska Agencija) reports in the 1990s to see that the big media outlets were simply tools of the regime. Croatian Radio-Television (Hrvatska radiotelevizija, HRT) was also a mouthpiece of the government.8 Yet, in the area of media, too, there was a conscious effort to simulate democracy. The press, for instance, was privatized early on to give an impression of independence, but most press outlets were owned and run by HDZ insiders.9 Later in the 1990s, some notable exceptions appeared: Novi List of Rijeka and the famous Feral Tribune. However, the latter in particular came under consistent and fierce attack from the regime and was left with massive debts from legal fees.10 Security services were also used to harass opposition journalists. Some independent publications, such as Nacional, Globus, and Jutarnji List got stronger and more critical toward the end of the 1990s. Yet, the problem with press freedom, even for such independent publications, was related to the government’s full control of the distribution of papers through its monopoly company, Tisak.11
Even though the legal system was nominally established on the model of a Western liberal democracy, Tudman and the HDZ’s influence in all spheres was undeniable. For instance, an extra-constitutional body created by Tudman, the Council of Defense and National Security, resembled something like a politburo that often took over functions of the parliament. The judiciary was used to prosecute journalists for insulting the president, offending public morality, and exposing the state’s top-secret documents (Maleševic 2002: 229). Judges who challenged the HDZ’s policy of interfering in the legislative system were quickly replaced. The minister of justice had broad discretionary powers over the appointment and removal of judicial personnel.12
The constitution initially was mostly democratic, although over time it was tailored to give Tu13 The regime tolerated abuse of ethnic Serbs, and Serb refugees who wished to return faced serious bureaucratic and other obstacles (Karatnycky et al. 1999: 194).
A key instrument of Tu
Parliament (known as the Sabor) legislated as a democratic institution, at least when viewed from a distance. However, close examination reveals that HDZ supermajorities acted as a rubber stamp for policies dictated by Tu
Civil society, virtually nonexistent under communism, was most evident in post-communist Croatia in the form of hundreds of externally financed nongovernmental organizations (NGOs). Some served the thousands of people affected by the war, while others were concerned with human rights and democracy. The government waged campaigns against those that criticized the regime, labeling them foreign lackeys and enemies of the state. They were also subject to unfair taxation and other bureaucratic obstacles. Yet, in the end NGOs were tolerated, as part of the broader strategy of simulating pluralism.14
The entrenched power of the HDZ and Franjo Tu
The First Elections
After the suppression of the 1971 Croatian Spring rebellion, there was a long period of political quiescence in Croatia, which became known within Yugoslavia as the “silent republic” (Bartlett 2003: 33).15 The Croatian League of Communists (Savez Komunista Hrvatske, SKH) was among the most conservative in the Yugoslav federation, and dissent was dealt with harshly. Signs that change was imminent appeared in the late 1980s when Ivica Racan, a reformer, was elected leader of the SKH and added “Party of Democratic Change” to the SKH name. However, by this time the SKH was largely discredited for failing to bring Croatia out of economic crisis and to deal with the rising inter-republican conflict. The SKH had no choice but to call for free elections in 1990. This call, however, was hardly the result of popular pressure; rather, besides being a response to the advent of pluralism in neighboring Slovenia, it was also a last-ditch effort on the part of the SKH to seek a popular mandate for its rule.
Pluralism begat intense competition among emerging parties and personalities. Initially, there were liberal voices among the countless new political parties and groups, but over time they were edged out by those adopting nationalist positions. The first new party to be established in Croatia was the Croatian Social-Liberal Party (Hrvatska Socialno-Liberalna Stranka, HSLS). It was set up by Dražen Budiša and other anti-communist intellectuals from the Zagreb political scene (Bartlett 2003: 33). Soon afterwards, in June 1989, the HDZ was established by Franjo Tu16
As the HDZ and other parties came onto the political scene, a section of the Serb Krajina elite began to organize its own party, the SDS. Whipped up by reporting in the Serbian press that equated the HDZ with the wartime Ustaša (Bartlett 2003: 35) as well as by the HDZ’s own divisive rhetoric, the SDS became openly hostile to the Croatian state. At first the SDS argued for full autonomy within Croatia, but over time it became a client of Miloševic and nationalist politicians in Belgrade, and adopted a much more hard-line stance.
The first elections were held in April 1990 in an atmosphere of fervent nationalism buoyed by strong anti-Serb and anti-communist sentiment. More than 1,700 candidates vied for 356 seats in what was then a tricameral legislature (Bugajski 2002: 583). Three entities dominated the electoral competition: the HDZ, the SKH-SDP, and the centrist Coalition for National Understanding, made up of five major liberal parties. Several other parties ran independent of any coalition, notable among them the SDS. The HDZ won comfortably on its platform of national sovereignty, while liberal parties were marginalized. The HSLS-led Coalition for National Understanding did not succeed in winning any seats at all.
The ruling communists had clearly been unprepared for the renewed wave of nationalism mobilized by the HDZ and Belgrade. Ironically, the SKH had designed a majoritarian electoral system that was supposed to work in its favor. Actually, it worked in favor of opposition: the HDZ gained 55 of 80 seats in the Sabor, 206 out of 351 seats in all three chambers. The SDP, many of whose members had migrated to the HDZ, accepted the results and Croatia’s new rulers could lay claim to democratic legitimacy.17
The HDZ at first argued for a confederal solution to Yugoslavia’s problems, but independence was already on the mind of many, and soon the government’s policy moved decisively in this direction. In May 1990, the new Sabor elected Franjo Tu
Along with the constitution, a new citizenship law was passed that allowed ethnic Croats living abroad to apply for citizenship (Bartlett 2003: 36). As a result, large numbers of ethnic Croats in neighboring Bosnia and Herzegovina became Croatian citizens, as did many others in the Americas and Australia. A much stricter law, by contrast, governed the citizenship rights of non-ethnic Croats. Moreover, the adoption of state symbols associated with the World War II-era fascist Ustaša regime further alienated ethnic Serbs. The new parliament also immediately set to work changing the names of streets and squares to make them more “Croatian” and proceeded to remove signs using the Cyrillic script from Serb-populated areas.
The preoccupation with sensitive state symbols, writes Bartlett (2003: 21), showed the political immaturity of the HDZ, while the lack of attention given to pressing matters of political and economic transition showed that the HDZ was driven by a populism that led people to believe that the Serbs were the cause of all of their woes, economic and otherwise. The new government dismissed many ethnic Serbs from the police, the judiciary, the media, and the educational system. Ethnic Serb managers were also dismissed, and small businesses were appropriated. Many Serbs were subject to officially sanctioned harassment that led them to leave their jobs and apartments, which were quickly taken over by Croats. Such policies pointed to the economic dimension of Croatian nationalism.
The response of the ethnic Serbs was the breakaway republic known as the Srpska Republika Krajina.18 In August 1990, roadblocks were set up in Serb-populated areas of the Krajina (known in Croatian as the revolucija balvana, “revolution of the tree logs”), making travel and shipping between Zagreb and the Dalmatian coast very difficult. The Serbian secret police from Belgrade were instrumental in instigating and organizing the Krajina rebellion (Judah 1997: 170). Both sides began to arm themselves, and sporadic fighting erupted. Soon afterwards ultranationalist paramilitaries from Serbia entered the fray.
A referendum on independence was held in May 1991. Eighty-three percent of registered voters turned out for the plebiscite, and 93 percent voted in favor of independence. However, the Krajina Serbs refused to participate. Intervention by the EU and U.S. Secretary of State James Baker convinced Slovenia and Croatia to delay their calls for independence temporarily.
As the fighting escalated, Tudman created a government of national unity that included the HDZ’s communist adversaries. Yet, political options were also greatly constrained. The opposition was basically silenced despite its presence in parliament. Voices of peace and reason were sidelined. One example was the infamous killing by HDZ functionaries of Slavonian police commander Josip Reichl-Kir, who had put substantial effort into reassuring local Serbs that they would not be harmed.19 Meanwhile, the Serbian-controlled Yugoslav National Army (Jugoslovenska Narodna Armija, JNA), acting in support of the Krajina Serbs, overran eastern Croatian lands and expelled the ethnic Croatian population. It also attacked coastal towns like šibenik and Dubrovnik. Bugajski writes: “Serbia’s intervention on behalf of the Knin insurgents caused the authorities in Zagreb to view the Krajina Serbs as puppets of Miloševic rather than as citizens with legitimate concerns about their status. As a result, the Tudman government was at first reluctant to negotiate seriously with the Serbs and unwilling to discuss the question of territorial autonomy—a discussion that Zagreb calculated would fuel ‘Greater Serbian irredentist pressures” (2002: 586).
The first major battle was fought for the eastern Slavonian city of Vukovar. It became a powerful symbol of Croatian resistance and the fight for independence. Ultimately, the fighting stopped under pressure from the international community, and the UN declared demilitarized zones in Krajina and Slavonia, but by this time Croatia had lost control of a third of its territory. The Serb militias were not disarmed, and continued to operate with impunity (Bartlett 2003: 34). Few ethnic Croat refugees returned, and the de facto division of the country became the status quo for the next three years. By December 1991, five thousand were reported dead, countless thousands were injured, and over a quarter million refugees had fled or were expelled from the conflict zones (Bugajski 2002: 588).
The outbreak of war had profound consequences for domestic politics. Political competition was curtailed, and the extremist wing of the HDZ was greatly strengthened and began to promote itself as the defender of Croatian sovereignty and interests. Later, this would be used to cover up economic mismanagement and quell political dissent. In becoming a justification for undemocratic politics, the war placed necessary political and economic reforms on the back burner. It was clear that certain elements within Croatia’s new political establishment had a vested interest in war and, ultimately, were able to benefit from it materially. The best evidence for this is that there was negligible effort on the part of the HDZ to acquire the support of the country’s Serb population (Bugajski 2002: 584). Bartlett observes:
Critically for the future development of Croatia, the political parties had been unable to secure an accord between Serbs and Croats in the process of gaining independence. There was no Serb-Croat coalition in the pre–First World War tradition of Pribi
Despite the loss of territory and some controversy over his willingness to defend Vukovar, Franjo Tu
The early transition took place in conditions of uncertainty and resurgent nationalism. Although liberal options competed on the political scene, they were ultimately crowded out by the politics and rhetoric of nationalism. That which had been competition over material resources turned into divisive ethnic competition. In such conditions, political and economic reform was hardly discussed, and nationalist populism became the legitimizing principle of the post-communist regime.
Subsequent Elections and Party Politics
The 1992 and 1995 Elections
In 1992, the HDZ announced the suspension of the national unity coalition and called for new elections in order to capitalize on postwar popularity. New electoral rules were instituted that included a mixed majoritarian system. This reversion turned out to be a shrewd tactic—the HDZ was riding a wave of popularity, and the opposition entered parliament fragmented into a number of small parties. The elections were held against the backdrop of lost territory, the outbreak of war in neighboring Bosnia and Herzegovina, and a sense of vulnerability and uncertainty. Not surprisingly, voters rallied around the government. The HDZ was returned to power with 44 percent of the vote, much more than the second-largest party, the HSLS. This was sufficient under the mixed electoral system to ensure an absolute majority of seats. A new government was formed and led by Prime Minister Hrvoje šarinic.
The opposition was fragmented, with the largest opposition party, the HSLS, gaining only 17 percent of the vote and just over 10 percent of the seats. The reformed communist SDP gained only 11 seats, having lost support of the moderate Serbs in the Krajina, who now had their own administration. The center-left Croatian People’s Party (Hrvatska Narodna Stranka, HNS) got six seats, while the far-right Croatian Party of Rights (Hrvatska Stranka Prava, HSP) and the agrarian Croatian Peasant Party (Hrvatska Seljacka Stranka, HSS) gained three seats each. The Serbian People’s Party (Srpska Narodna Stranka, SNS), representing urban Serbs, got three seats. Thus, parties with clearly authoritarian inclinations captured over 50 percent of the vote. Parties with nominally democratic programs (if untested liberal credentials) won the remaining vote.
Presidential elections were also held in 1992. Unlike before, the president was elected by popular vote. Tudman claimed a clear victory with 57 percent of the vote. In a subsequent election for the Upper House (Dom županija, “House of Counties”) and for local governments in 1993, the HDZ maintained preeminence, though with lower numbers than before (Bartlett 2003: 35). The main beneficiaries of the local elections were Dražen Budiša’s HSLS and the HSS. In Istria, the Istrian Democratic Party (Istarski Demokratski Sabor, IDS) emerged as the most powerful force and began to argue for a greater degree of regional autonomy, making it a principal enemy of the HDZ, who feared that Italy was coveting its former territories. Thus, despite the HDZ’s dominance in domestic politics, the local elections showed that there was an impetus in the public for more liberal politics. Many still trusted the HDZ to provide security and promote nationalist issues and thus voted for it at the national level, even as they voted for the opposition in local elections.20
Nevertheless, after 1992 the HDZ was firmly entrenched in power. As a party, it still represented a broad but tenuous coalition of various elements within the nationalist movement. The key to future policy lay in the elements that could consolidate their domination over the party, and by 1993 it was clear that the extremist wing had done so.21
The elections of 1992 and 1993 did show, on one hand, that pluralism in the form of multiparty competition had taken root in Croatia. On the other hand, it was also clear that the HDZ was willing to use unfair tactics to make sure that it would retain power. The HDZ did achieve some domestic policy successes, among them an economic stabilization program that brought inflation under control and the acquisition of aid from international financial institutions. Marko škreb was declared to be the best central banker in Eastern Europe. Things looked quite good for the ruling party, while the opposition was in disarray (Bartlett 2003: 46). Yet, one-third of the country’s territory was in open rebellion without representatives in central government organs, while hundreds of thousands of Croatian citizens were displaced from their homes, creating serious legitimacy problems for the regime.
The regime’s subsequent policy of open confrontation and half-concealed territorial ambitions in Herzegovina22 propelled the right wing elements within the HDZ to the top and simultaneously moved the regime in the direction of authoritarianism.23 Dozens of moderate HDZ members left the party in protest of its decision to pursue armed conflict with the Bosnian Muslims in the hopes of creating a Greater Croatia. The policy also created dilemmas for Croatia’s international relations: whereas before Tudman could portray Croatia as the victim of Serbian aggression, now it was clear that Croatia itself had become an aggressor.24
The regime had a choice on how to deal with the Krajina para-state. It could have sought to negotiate with the Serbs to peacefully reintegrate them into the country with guarantees of rights and autonomy. This option became increasingly feasible as Miloševic withdrew Belgrade’s support for the rebels. However, Tudman and the HDZ were deeply resentful of UNPROFOR’s presence in the country and what they saw as the international community’s effort to maintain the status quo, effectively legitimizing an illegal breakaway entity (Bartlett 2003: 47). Moreover, any recognition of Serbian autonomy would have seriously hurt the HDZ in the eyes of its supporters, many of whom clearly wanted the Serb problem to be solved in a less accommodating way.
The ultimate choice to launch an all-out offensive against the Krajina rebels reflected not only these interests but also deepening anti-Serb sentiment in international public opinion following the notorious massacre in Srebrenica, Bosnia and Herzegovina in the summer of 1995.25 This led to two major military operations dubbed Storm (Oluja) and Flash (Blijesak) in late summer 1995 in which the Croatian Army (Hrvatsko Vojsko, HV) recaptured all of the lost territories in a matter of days. The Krajina Serbs had been alerted to the impending action and organized columns of refugees that became one of the largest movements of people in recent European history. The JNA did nothing to help them.26 As for the Tu28 It also had profound demographic consequences: Croatia was now a much more homogenous nation with a population over 90 percent Catholic and Croat.
The domestic political consequences of Storm and Flash were a boon to Tu
New elections were called a year early, at the end of 1995, once again to capitalize on the HDZ’s popularity. In what was now a pattern of behavior by the ruling party, the electoral rules were adjusted to favor the HDZ. Now, out of a total of 127 seats, 80 were allocated by proportional representation, 28 according to majoritarian constituencies in the counties, and seven seats were reserved for national minorities.30 The number of seats reserved for ethnic Serbs was reduced from 13 to 3, a final symbolic removal of Krajina Serbs from political life. In addition, 12 seats were reserved for non-resident diaspora Croats, a guaranteed HDZ constituency. Enfranchising the Herzegovina Croats magnified their political influence.
The HDZ returned to power with an overall 45 percent of the vote and a majority of 75 seats in the 127-seat parliament, which was also enough votes to amend the constitution (Karatnycky et al. 1999: 177). The HDZ won 21 of the 28 single-member constituencies and, as expected, all 12 of the diaspora seats. Research showed that the HDZ did particularly well in poorer rural areas and in areas affected by the war. It also attracted large numbers of votes from older and less educated people (Kasapovic 2001: 83).
However, taking into account the timing of the election, the wild popularity of the HDZ, and its profound advantages in terms of organizational and media resources, the liberal and pro-Western opposition parties actually fared quite well, winning a total of 45 seats. Some opposition parties felt emboldened to criticize the HDZ and its top leaders for their accumulation of wealth at the expense of the masses of people. The opposition did best in larger cities such as Zagreb, Rijeka, and Split, and the liberal IDS won the majority of votes in Istria (Kasapovic 2001: 123).
These results and other developments following the end of the war indicated that at least part of the public was unwilling to tolerate authoritarianism and international isolation. When the HDZ lost control of the Zagreb city council during the same elections, Tudman reacted with a heavy hand, refusing to recognize the results. He vetoed the opposition choice of mayor four times, saying that the capital city could not be turned over to “enemies of the state,” and a political crisis erupted. The crisis lasted over a year, until finally Tudman prevailed and appointed his own nominee for the post. In the end, however, the Constitutional Court ruled in the opposition’s favor.
The regime’s abuse of power was again demonstrated in November 1996 when the government attempted to shut down the popular independent Zagreb radio station Radio 101 (Bartlett 2003: 62). This move outraged the citizens of Zagreb, who turned out for a 100,000 strong protest against the curtailment of media freedom. Tudman was able to overcome the protest, which he labeled the work of foreigners, but in many ways it signaled the beginning of the end for the HDZ, especially among the urban classes.31 The middle and educated classes were to become increasingly frustrated with the country’s obvious distance from Europe compared to the other transition countries and more and more hostile to the Herzegovinians and other rural refugees and migrants who were not only changing the character of Croatia’s cities but also exercising disproportionate influence in public life and the economy.32 Many were also outraged at the regime’s use of various security services for political purposes.33
With the war over, all Croatian citizens began to turn their attention to issues like economic improvement. Things did get better for a while but then in 1998 began to take a decisive turn for the worse. The lack of progress in reform was now quite evident, and the HDZ regime found it harder to play the national security card to justify these deficiencies. Instead, it began to point the finger at Western embassies and the NGOs they funded as the latest enemies of Croatian sovereignty. Although authoritarianism began to look increasingly anachronistic (Bartlett 2003: 72), a growing number of people in the HDZ had a vested interest in ensuring the survival of a single-party authoritarian state because of their material interest in the prevailing order. The opposition, however, continued to suffer from disunity, which was mainly the consequence of disputes among various personalities and egos.
As HDZ-style authoritarianism continued into the late 1990s and the economy went downhill, it was evident that Croatia was being left out of the process of Euro-Atlantic integration. Tu
However, there were limits to this strategy, and opposition parties could increasingly point to the international isolation brought upon Croatia by the HDZ and affirm their own pro-Western credentials, especially when Western governments and organizations began to support regime change in Zagreb openly. Thus, in the process, parties like the communist successor SDP became enthusiastic pro-Europeans not so much by virtue of a long history of internationalism but because it had become an expedient source of political capital and outside support at the time. Over time, of course, this tool became a responsibility (and even a liability) as power came within their grasp and expectations of EU and NATO membership rose.
Tu34 Strong links continued to be maintained between ministries in Zagreb and political leaders in Herzegovina, and the owners and managers of many prominent Zagreb firms were HDZ insiders from Herzegovina. This was well known and widely reviled: indeed, by the end of the 1990s, Herzegovina had become a political liability for Zagreb. One opinion poll conducted by the Croatian weekly Globus in 1998 showed that more than 80 percent of respondents said that Herzegovinians ruled the country and should be held responsible for all of its social, economic, and political problems (quoted in Oh 2003: 15).
Thus, while the HDZ may have enjoyed broad support at the beginning of transition, by the second half of the 1990s the urban educated classes had largely abandoned ship. However, it would take more than this part of society to remove the HDZ from power. To win the other part, the economic situation would have to deteriorate drastically, which, with the onset of a deep recession in 1998 and the collapse of a number of important regional banks, then happened. Unemployment and poverty rates rose steadily, real incomes declined, and income inequality increased. A general strike held in early 1998 spoke volumes about the public mood: eighty thousand took to the streets to protest the government’s social and economic policies (Oh 2003: 17). Graffiti scrawled during this period on the pension administration near my apartment in Zagreb read, “Tito! Give Us Back Our Pensions!” invoking memories of better economic times under his rule.
The pursuit of partial economic reform and the deficiencies of Croatia’s initial conditions had come back to haunt the regime. For years, despite gains in macroeconomic stabilization, little structural reform had taken place. Privatization was a cover for protectionist policies that ensured the interests of HDZ-affiliated tycoon capitalists who were more interested in increasing their personal wealth, stripping assets, and engaging in conspicuous consumption than in pursuing productive accumulation.35
It was in the context of economic downturn, international pressure, and a unifying opposition that the HDZ lost support in the last two years of the 1990s. The death of ailing President Tudman in November 1999 was also the symbolic death of the HDZ, at least as an anti-systemic nationalist party. Elections held in January 2000 dealt a resounding victory to a coalition of pro-Western liberal opposition parties.
The Role of Franjo Tudman
In order to understand the first post-communist Croatian regime, one must understand the biography, personality, and role of its main protagonist, the late president Franjo Tudman.36 In World War II, Tudman had fought with the Partisans and subsequently became a major general in the JNA. He later earned a controversial doctorate in history and in the 1960s became the director of Croatia’s Institute for the History of the Workers’ Movement.37 Tudman was also on the Executive Committee of Matica Hrvatska, a dissident organization that reexamined recent Croatia history based on new data and challenged sensitive doctrines about World War II, moving into direct conflict with the basic tenets of Titoist Yugoslavism. Consequently, Tudman was imprisoned and stripped of his military rank, giving him instant fame as a Croatian patriot.
After leaving prison, Tudman continued to write revisionist accounts of modern Croatian history and also began cultivating relationships with the anti-communist Croatian diaspora. As the Croatian sociologist žarko Puhov-ski explained to me, it was not necessarily easy for him to enlist the right wing émigré community since they were inherently distrustful of a man who had been one of Tito’s generals.38 Thus, Tudman was forced to prove his nationalist credentials, and did so by making extremist statements such as his since-infamous assertion that he was glad his wife was neither a Serb nor a Jew. In the late 1980s he was actively raising funds for a new political party and propagating the doctrine of unity among Croats of different political convictions and familial political histories.
In 1989 the HDZ was founded; from the beginning it had many émigré anti-communist dissidents among its core members. Croatian diaspora communities happily showered Tudman and the new party with millions of dollars, unaware that some of these funds were being used by their compatriots in the homeland to build villas and buy yachts.39
Tudman surrounded himself with all the wrong kinds of advisers, mainly ultranationalist members of the diaspora and corrupt local opportunists. He struck shady deals with international arms dealers and the ostensible enemy— Slobodan Miloševic’s Serbia—itself. It is by now a well-documented fact that Miloševic and Tudman made secret plans to divide Bosnia and Herzegovina between them, and some accounts even claim that Tudman was ready to sacrifice Vukovar and other frontline towns in exchange for other territories.
Tudman was described by many who knew him as a man with clear authoritarian and megalomaniacal tendencies.40 He surrounded himself with blind loyalists and quickly punished dissent. In the public sphere, he gradually established a personality cult that portrayed him as the father of the nation. Tudman’s pictures and posters were to be found in every corner of Croatia, and songs were written depicting him as a prince or king. Some textbooks compared him (in a positive light) to the wartime Ustaša leader Ante Pavelic (Maleševic 2002: 199), and official propaganda emphasized the need for a strongman in Croatia (Bugajski 2002: 597).
The Croatian president also indulged in nepotism. Tudman appointed his son, Miroslav, to several important positions, including chief of the Croatian secret service. His daughter, Nevenka, and his grandson, Dejan, overnight became owners of several banks, supermarket chains, and other businesses. Similarly, the relatives of the highly influential minister of defense, Gojko šušak, were given many influential posts in various ministries and the state administration (Maleševic 2002: 230).
The HDZ regime, then, was characterized in large part by the charismatic authority of President Tudman, who enjoyed popular support even as his party faltered. Yet, the pervasive sense of relief felt by many after his death41 and the fact that only one foreign head of state attended his funeral spoke volumes about his legacy.
The Main Parties and Their Orientations:
The HDZ and the Right Wing
The HDZ’s policies reflected to a large degree the preferences of its “extremist wing,” as this was the faction of the party that gained prominence in the early 1990s and comprised the party’s administrative apparatus. Many within Croatia saw it as a “movement” much more than a party in the classic sense (Cular 2000: 35). This is justified to the extent that the HDZ was from the beginning a collection of many disparate elements that united for electoral purposes. In this sense, Oh (2003) notes that Tu
The founders of the HDZ were motivated by both nationalism and anti-communism. Some were veterans of the Croatian Spring rebellion who had fallen out with the SKH. Others were SKH members who opposed the official pro-Belgrade stance. Still others were members of the nationalist diaspora, political émigrés or their descendants from the fallen Independent State of Croatia (Nezavisna Država Hrvatska, NDH). Thus, there were, at least initially, very different understandings within the HDZ of modern Croatian history, which Oh (2003) argues actually helped deepen divisions in Croatian society rather than overcome them. In terms of intra-party affairs, Oh observes that it was very difficult to coordinate these different viewpoints, so the party became increasingly centralized.
The right wing of the party was disproportionately made up of the “Herze-govinian lobby” that came to hold major sway over policy in the mid-1990s. Among its best-known members were Vladimir šeks and the hard-line defense minister Gojko šušak. šušak was an émigré Croat from Canada but had roots in Herzegovina, parts of which are overwhelmingly Croat and poor and have close historical ties to Croatia proper. It is no surprise, then, that the party program called for the “territorial integrity of the Croat nation within its historical and natural borders” (quoted in Oh 2003: 9). Herzegovinians were all but promised reunification with Croatia. At the other extreme of the party were the left-oriented elements that had abandoned the defunct SKH. Prominent members of this wing, such as Stjepan Mesito deal with Westerners. Ideologically, they were moderates who tempered some of the regime’s anti-Western leanings. Yet they did not leave the party even when they disagreed with its policies because they often had vested material interests in remaining a part of it. Former foreign minister Mate Granic belonged to this wing. In general, the moderate and left wings prevailed in executive positions (except for Defense and Interior), while the right wing dominated the party apparatus (Oh 2003: 14).
The HDZ initially attracted a broad following, but many from the urban and educated classes stopped supporting it in 1996. This left the HDZ with a strong base of unskilled workers, pensioners, the unemployed, and others who were promised a better life in a sovereign Croatia and in European structures. However, these people abandoned the party once they realized that living standards were declining rather than increasing and that Europe had closed the door to the Tudman regime.
The policies of the right wing of the HDZ, moreover, were not far removed from those of other ultranationalist groups on the political scene, such as the HSP, whose share of the vote in parliamentary elections increased throughout the 1990s and beyond.42 Irvine (1997: 3) has identified the following seven characteristics of the Croatian Right:
- An insistence on the historical continuity of the Croatian state and the state-building accomplishments of the interwar Ustaša fascist movement and the independent NDH.43
- An emphasis on achieving Croatian independence through military means.
- . The establishment of a strong authoritarian or semi-authoritarian state.
- Territorial expansion into Croatia’s “historical, natural, and ethnic borders.”
- A struggle for survival against “natural enemies.”
- A conservative social policy based on close ties with the Roman Catholic Church.44
- An isolationist foreign policy based on anti-liberal and anti-Western views.
What differentiated the HSP and other right wing groups from the ruling HDZ? To some degree, the political ambitions of individual leaders set the parties apart. Later in the 1990s, the HSP began to criticize the HDZ for its alleged corruption and willingness to concede to Western demands. Moreover, the HSP was able to push the debate further to the right with editorials in the state-controlled press.
One key characteristic of the HDZ was its anti-Western orientation. This was not an outright rejection: HDZ officials never rejected the prospect of EU membership, for instance, and in fact continued to insist that they would bring Croatia into European structures. Further, the posts of foreign minister and various ambassadorships were given to individuals who put a democratic face on the regime. However, in its domestic rhetoric and in its policies, the HDZ displayed a deep ambivalence toward Western norms, as Irvine has argued: “The liberalism spawned by the West, [the Croatian nationalists] argue, has failed to speak to the spiritual nature of man and his need to understand himself in the context of a particular community or nation; only the particularity of the nation gives meaning to the life of the individual. The specificity of the Croat nation and its unique mission provide individual Croats with a sense of their true and satisfying mission in the world” (1997: 7). At times this ambivalence was expressed by the HDZ as a profound suspicion of the West, despite the HDZ’s emphasis on Croatia as a bulwark of Western Christianity and European civilization against the East. UNPROFOR was portrayed as an occupying force, and Western demands were said to be incompatible with Croatian national values. The HDZ’s anti-Western stance came to constitute a main factor distinguishing it from the opposition parties, who by the end of the 1990s were expressing a clear desire to cooperate with the West and work toward meeting the conditions necessary to enter the EU and other Western organizations.
The HDZ’s economic policy, on the other hand, was unclear. In its official program, the HDZ declared support for market mechanisms and institutions, yet it also advocated strong state involvement in the economy and other populist measures. In practice, although a certain degree of economic reform was carried out, serious structural reform was avoided and privatization was carried out in such a way as to benefit and reward HDZ loyalists, a practice that propelled the Croatian economy to crisis at the end of the 1990s.
Although the HDZ had a rhetorical and at times procedural commitment to liberal democracy, there were elements within the party who questioned the benefits of democratic institutions.45 One such individual was Mladen Schwartz, a member of Tu46
The Main Parties and Their Orientations: The Opposition
On the left of the political spectrum lay the SDP, the successor to the defunct SKH. Although by the end of the 1990s it had become the most popular opposition party, it did not really have democratic credentials. However, its decision to adopt a pro-Western tone and accept Western support put it firmly in the democratic camp. The SDP was led by Ivica Racan, a reformer within the former SKH. Though not known for his charisma or interpersonal skills, he was nonetheless a skilled politician. The SDP’s program reflected social democratic values, though once in power after January 2000 its actual economic program was quite neoliberal in scope.47 In the early 1990s, the SDP was totally discredited and operated on the margins of political life, gaining a modest number of seats in local and national elections. It focused on narrow concerns, such as labor union activity, and quietly regrouped. The SDP’s political opening came at the end of the 1990s, when the economy was in crisis and support for the HDZ fell precipitously. It was then that the SDP seized on the opportunity to promote a pro-European agenda. However, an ongoing problem for the SDP was coalition building: several other parties in the democratic camp were wary or outright hostile to participating in a coalition with the former communists. It was only when public opinion shifted in favor of the SDP and Western organizations began to engineer an opposition coalition that this could be overcome.
The HSLS, as noted above, was formed by former participants in the 1971 Croatian Spring. It was a centrist party made up of both conservative and more leftist elements. It initially attracted the votes of educated people interested in developing civil society and free enterprise and bringing Croatia into Europe. The conservative wing was led by Dražen Budiša, the ex-dissident and well-known politician. Budiša was more interested in dealing with national issues than pragmatic issues of economic and political reform. As a result, the HSLS split into two factions in January 1998 following a bitter dispute between Vlado Gotovac, leader of a more left-leaning group, and the more conservative Budiša. The dispute was over the decision of some HSLS deputies to cooperate with HDZ, a move opposed by Gotovac. Gotovac and his followers left HSLS to form the Liberal Party (Liberalna Stranka, LS) and announced that they were willing to cooperate with other groups to oust the HDZ (Kearns 1998: 252). From that point on, the LS consistently attracted a loyal base of urban, educated voters. The party’s program was centered on ending HDZ rule (Bugajski 2002: 605).
To the left of the LS in economic terms was the HNS. It was organized after the 1990 elections by Savka Dabcevic-Kucar, who had been Croatia’s premier in the 1960s but was later removed from office for her involvement in the Croatian Spring (Bugajski 2002: 601). The HNS demanded a free press and the rule of law and advocated equal rights for all citizens and the protection of ethnic and cultural minorities and social groups with special needs. It was also pro-Western in its orientation. The HNS experienced some notable defections in 1992 and 1995, when some prominent members left to join the HDZ. However, it continued to play an important role as part of the democratic opposition.
The HSS, led by Zlatko Tomcic, was another democratic opposition party that garnered a respectable number of seats in parliamentary elections. The HSS could claim to be the oldest political party in Croatia, having been originally established in 1904 by two brothers, Ante Radic and Stjepan Radic.48 It was an extremely influential force in Croatian and Yugoslav politics during the 1930s and was outlawed by the Ustaša fascists in World War II. The party’s platform was democratic and pro-market but also advocated social welfare for the disadvantaged, especially for small farmers, which gave it a populist edge (Agh 1998: 195). It had a clear sense of Croatian national identity without engaging in the exclusivist rhetoric and policies of the HDZ.
Several regional groupings also were part of the democratic opposition. The most important in terms of membership figures and electoral influence was the IDS. Established in 1990 in the city of Pula and led by Ivan Jakovcic, it adopted a strongly regional position, stating that the central government should deal with issues such as the army, the police, finances, and foreign policy, and leave the rest to regional governments. This platform was based on the belief that the highly centralized HDZ regime did not recognize uniquely Istrian regional interests, and especially the rights of its sizeable Italian minority (Bugajski 2002: 620). In particular, it backed economic self-determination and close economic ties with Slovenia and Italy, which undoubtedly reflected its advanced economic status and close historical ties to Italy and Slovenian Istria. For this reason, it also adopted a decisive pro-EU position.
The IDS remained troubled by the HDZ’s national chauvinism and xenophobia, arguing that the regime’s emphasis on nationality would undermine Istria’s multiethnic character. Instead, it advocated a state that respected the rights of all of its citizens regardless of nationality, religion, race, or language. Not surprisingly, the IDS came into direct and fierce conflict with the HDZ, which included it on its ever-growing list of “enemies of the state.” Later, when the IDS received support from the Italian right, the HDZ claimed that the IDS’s activities constituted irredentist agitation (Bugajski 2002: 621). The IDS had strong showings in local elections, tending to win over 70 percent of the vote in Istria.
The Main Parties and Their Orientations: Ethnic Minority Parties
A number of ethnic minority parties also were part of the democratic opposition, among them small groupings representing Croatia’s Hungarian, Roma, and Slavic Muslims. Given the size of the ethnic Serb minority, however, the parties representing it were the most important. Three Serb parties emerged in the 1990s. The first was the SDS, which was formed in the town of Knin in 1989. Led by Jovan Raškovi
BabiZagreb and the UN to establish a UN protectorate in the occupied areas of Croatia. This status quo prevailed until 1995, with the SDS firmly entrenched in power and its leaders enriching themselves through various forms of war profiteering. After the 1995 military operations against the RSK, the SDS ceased to play a part in the Croatian political scene.
In sharp contrast to the SDS, the Serbian Democratic Forum (Srpski De-mokratski Forum, SDF) and SNS were interested in the politics of accommodation. They represented mainly urban, educated Serbs, since the SDS really had managed to rally only Serbs in Krajina. The SNS acted as a forum for Serbs who regarded Croatia as their homeland and concerned itself mainly with cultural and representational issues (Bugajski 2002: 615). Its extremely conciliatory tone toward the blatantly anti-Serb HDZ led many to charge that it was merely a creation of the Tu49 The SDF, by contrast, criticized both the SNS for acting as a HDZ front organization and the regime for its blatant disregard for the rights of Serbs and tried to build ties with Serbian intellectuals in the Krajina.
In sum, the first ten years of Croatia’s post-communist transition were dominated by illiberal political configurations with a radical populist and anti-systemic agenda. Though the HDZ comprised more moderate elements as well, it was for the most part run by the extremist wing. However, liberal, pro-systemic parties were very much part of the political scene, particularly in the second half of the 1990s. They managed to win around 40 percent of the vote in the 1992 and 1995 elections, kept a check on the regime’s more extreme tendencies, and were waiting as a liberal alternative when the HDZ faltered.
Loci of Political Conflict
Offe (1984) and Linz and Stepan (1996) concur that liberal democracy presupposes the existence of stable borders and a consensus on who should live in them. Throughout the 1990s, the main loci of political conflict reflected deep divisions over basic questions about the nature of the Croatian state. The existence of these divisions lowered liberal content and signaled significant impediments to the development of a substantive democracy. Divisions were reflected in an extremely polarized political scene, one in which labels like “communist,” “fascist,” “Ustaša,” and “Bleiberg murderer” were tossed about freely.50 One conflict was over the very definition of the Croatian state, whether it should be constituted as one of ethnic Croats or as one of all its citizens. It was the HDZ’s decision to opt for the former that ultimately helped lead to the Krajina Serbs’ refusal to recognize an independent Croatian state and attempt to secede.
Croatian elites and the public were also deeply divided over Croatia’s place in Europe, with the internationalist democratic opposition advocating full Western integration based on meeting liberal norms and the HDZ and its nationalist allies arguing that meeting such norms would compromise Croatia’s sovereignty and Croatian “national values.” The Roman Catholic Church was often used to justify the latter.
The HDZ found its strongest support in the countryside, while the constituency of the democratic opposition, meanwhile, resided primarily in urban areas. The urban-rural divide, in turn, corresponded to the kinds of sharp regional economic differences within Croatia, and to some degree it also corresponded to a split in society over democracy itself, with just 50 percent of respondents to a survey saying that democracy is always the best system and over one quarter responding that a strong leader is necessary (Cular 2000: 42).
Despite Tudman’s mission to unite the supporters and opponents of the NDH, divisions over Croatia’s recent history continued to matter a great deal. Just as Tito had temporarily frozen such differences through political authoritarianism and a commitment to Yugoslav unity, so did the Tudman regime gloss over such painful divisions in deference to the larger state-building task. The divisions were to reemerge after 2000, when the HDZ lost power. As Tomac (1992: 61) has written, Croatia was a country where World War II was not over, at least in terms of fighting between the right-wing émigrés and home-based leftist Partisans.51
The HDZ and the Politics of War
Nearly a decade after the end of armed hostilities on Croatian soil, a large body of evidence points to the many ways in which the HDZ regime used war to its political and material advantage.52 From the very beginning of the war, HDZ insiders in Croatia and Herzegovina profited handsomely from war-related activities such as the smuggling of arms and other contraband. Bicani54
The negative political, economic, and social repercussions of the Homeland War notwithstanding, it ultimately was used by the HDZ as the key component of a larger myth about the founding of the post-Yugoslav Croatian state, a myth in which Tudman and his party defended Croatian nationhood against various enemies, thereby facilitating the creation of an independent Croatia and fulfilling the Croats’ “thousand-year old dream.” The HDZ’s portrayal of the Homeland War was one of a cleanly fought battle of national liberation, which strayed greatly from the reality of the war and the way in which it was conducted. This view of the war nonetheless became a key source of its legitimacy. In the late 1990s, as the economy failed and Croatia was left out of the process of Western integration, the doctrine of the Homeland War arguably became the HDZ’s only source of political capital. Yet sources of legitimacy are not equal in terms of their ability to elicit public sympathy, and issues of the nation and state creation are always powerful in mobilizing support, especially when memories of war are fresh. As such the democratic opposition for a long time found it quite hard to match the strength of this appeal. Once, after the HDZ performed poorly in local elections, Tudman declared that the election showed that “all enemies of the HDZ are also enemies of the sovereign Croatian state,” one of countless such pronouncements (quoted in Maleševic 2002: 233). The use of such rhetoric allowed the HDZ regime to turn each election into a plebiscite on Croatian independence, creating an atmosphere of nationalist fervor that put the opposition in an impossible position (Ottaway 2003: 117). Questioning the conduct of the war, after all, meant questioning the way in which the independent Croatian state had been created.
The war was also used in electoral politics. The point was made in an earlier section that elections were called to coincide with successful military maneuvers: the reverse may also be true, that military offensives were planned to coincide with upcoming elections (Ottaway 2003: 117). Most prominently, the war was used as Tu
The International Dimension of the Croatian Transition
Croatia had historically been pulled in different directions with regard to its international relations: on one hand, it had long been part of two South Slav unions, and yet also had a coast with a strong Mediterranean orientation. Large parts of Croatia also belong firmly to the central European geographic, cultural, and trade sphere, in large part due to their long period of development in the Habsburg Empire. However, the presence of ethnic Croats in neighboring Bosnia and Herzegovina meant that foreign policy was made in reference to these regions as well. Economic networks reflected this varied orientation, with links to the west, south, and east.
There was, nevertheless, a strong impetus to direct the gaze of post-communist Croatia toward the West. The HDZ, in fact, came to power promising to bring Croatia “back” to Europe. There was a concerted effort on the part of the HDZ regime to market Croatia abroad as a Central European, and not Balkan, state. Joining European structures was positively viewed by an overwhelming majority of the Croatian public, though many of these people did not connect the dots between economic and political conditionality and membership in Europe. At the same time, there were domestic political incentives to bringing the Herzegovinian Croats into the transition project. Since the Herzegovinian Croats were resident in a neighboring state and in a backward region with very different political traditions, however, this effectively meant orienting Zagreb’s foreign policy away from Europe and toward the Balkans. Thus, the decision to support the Herzegovinian Croats and pursue irredentist policies in Bosnia helped in part to shape Zagreb’s ambivalent attitude toward Europe and the West.
Tudman justified the lack of progress on democratization to Western diplomats by continually emphasizing Croatia’s victimhood at the hands of the Serbs. These Western officials, for their part, were under no illusions about Tudman’s true intentions, but there was a clear strategic interest in supporting Serbia’s main adversary in the Balkans. Western diplomats refused to talk of ethnic cleansing even after the expulsion of 150,000 Serbs from the Krajina in August 1995 (Kearns 1998: 248). Yet, the West had an equally compelling interest in not allowing Tudman to overstep his bounds and to construct a full-blown dictatorship on the doorstep of Europe. Thus, simulated democracy served the purposes of both the Tudman regime and Western governments, at least while the war raged in neighboring Bosnia and the issue of the Krajina remained unresolved. Since domestic democratic movements were temporarily silenced, the practice of simulating democracy became institutionalized. Hence, until 1995, the pro-Western impetus was sidelined and the West itself pursued an improvised foreign policy in Croatia based on the imperatives of containing a war. The situation changed radically after 1996, when there was no longer the perceived need to prop up the Tudman regime to counter the Miloševic threat.
Human rights organizations had long been pressing Western governments to take a more proactive approach in condemning the anti-democratic tendencies of the Tudman regime.55 In 1996, Western countries began to respond. The West understood that Tudman would now have to begin to fulfill domestic aspirations for European integration, and it would be more difficult to use the war as an excuse for delaying their fulfillment. The problem was that even if Tudman’s pro-Western rhetoric was sincere, by the late 1990s he had, with his rhetoric and policies, placed Croatia firmly on the path of nationalism and authoritarianism.
Starting in 1996, Western politicians, officials, and diplomats began to block Croatia’s links with Western institutions to compel the Tudman regime to improve its democratic record. In the first half of 1997, official statements criticizing Croatia’s lack of democracy began to emanate from the U.S. Embassy.56 When Madeleine Albright assumed the post of U.S. secretary of state in 1997, U.S. pressure ratcheted up significantly. One low point was reached in October 1997 when Tudman “was forced into the humiliating position at a Council of Europe meeting in Strasbourg of defending Croatia’s human rights record against the backdrop of open U.S. attempts to secure his country’s suspension from the organization” (Kearns 1998: 248).
Germany, a strong supporter of Croatian independence and its struggle against Serbian aggression, began to criticize the Tudman regime openly. During the 1997 presidential elections, Hans-Dietrich Genscher, the German foreign minister at the time of Croatia’s independence in 1991 and a very popular personality in Croatia, was openly calling for Croatians to support the opposition candidate, Vlado Gotovac.
The HDZ response was to launch an attack on Western criticism, saying that it was seeking to undermine Croatian sovereignty, that it was supporting Miloševic in Belgrade, and that it was part of a larger strategy to recreate Yugoslavia. But Croatia had already become part of a broader strategy, one in which it was seen by the West as a potential model for reform in the region and a way to demonstrate the rewards that democratization can bring (Field 2000: 135).
The EU had been closely involved in Croatian affairs from the outset of transition. However, its failure to “seize the hour of Europe” and stop the war discredited it among many former Yugoslavs, Croats included. In the decade after Croatia’s independence in 1991, the EU provided over 367 million euros in emergency and recovery aid to Zagreb (Tull 2003: 137). Other kinds of aid, however, were frozen due to concerns over Croatia’s democratic record.
Following the end of the war, the EU began to reorient its policy away from solely humanitarian assistance toward conditional support based on concrete reforms. A regional approach and a policy of encouraging regional cooperation became cornerstones of the Stabilization and Association (SAA) process of EU accession, formulated in 1999. However, it was this very approach that gave Tudman the ammunition to suggest that the EU was indeed trying to recreate Yugoslavia, in fact a new “Euroslavia” (Cohen 1997: 111). The EU’s regional approach did create greater ambivalence toward Europe among Croats, since after years of war there was genuine revulsion toward the notion of cooperation with the likes of Miloševic’s Serbia.
Tudman was not ideologically anti-Western, and in fact he probably would have gained politically in the long term had Croatia made progress on its accession to Euro-Atlantic structures. But he was also a shrewd politician, and calculated that the short-term costs were too high. He knew that strong support for the EU in Croatian society was divorced from the actual process needed to join the organization and that granting more rights to Serbs or allowing for the mass return of refugees would be too high a political price to pay since any potential benefits that Croatia would derive from it in terms of EU membership were far away. The legitimacy of the HDZ regime, in the end, rested on a nationalist project and on noncooperation with its southern neighbors. In the 1990s, little progress was made on EU accession, and relations between Zagreb and Brussels remained difficult until January 2000.
By the late 1990s, then, Croatia was left out not only of the EU accession process but also of NATO and the Partnership for Peace (PFP) program and other important international organizations like the World Trade Organization (WTO). However, by this time the West’s policy of isolation also began to pay off. Economic isolation in particular helped turn the tide of public opinion against the HDZ regime.
There was a significant part of the Croatian public, larger than that in Macedonia or FRY, that was favorably disposed toward the West. They were represented by the democratic opposition parties and targeted by the Western governments and organizations that actively worked toward regime change in Zagreb. By 1997 both the EU and United States were launching a full assault on the Tu
Western funding poured into NGOs that sponsored seminars on democracy and media, trained and financed opposition parties, and educated and mobilized voters.57 Significantly, some of these organizations conducted polls that predicted an opposition victory in the next elections. These polls were enthusiastically received, as they were seen to be more objective than those conducted by Croatian media organizations (Krickovic 2001: 9). Other, more focused Western-sponsored polls were made available to opposition parties to help them sharpen their message to voters. Help was also provided in forming coalitions, thereby allowing the democratic camp to overcome years of disunity.
The opposition parties, in turn, saw this as a critical opportunity to adopt a firm pro-Western platform. Some smaller liberal parties had always run on such a platform, but the communist successor SDP had not been explicit in its desire to meet Western conditionality. In 1999 the SDP declared its willingness to carry out the tough reforms necessary to begin to negotiate Croatia’s accession into Euro-Atlantic organizations. The incentive of membership was not necessary for those groups and parts of the public that had been firm in their pro-Western orientation from the beginning. Rather, it was parties like the SDP and other parts of the Croatian public that may earlier have been ambivalent but now saw clear incentives in jumping on the pro-EU bandwagon, especially as the economic situation deteriorated. The story is not simply that of a repressed opposition and demobilized public “saved” by the West from a dictator: rather, it is about a sufficiently large number of political groups and people making a “rational choice” about where their interests lay.
Thus, the demise of the HDZ and its ultimate fall in January 2000 coincided with a concerted effort on the part of the West to criticize Croatia’s human rights and democracy record and take proactive measures to help precipitate regime change in Zagreb (Kearns 1998: 247). Regime change, consequently, was due not only to domestic factors but also to the pull of the West and its concrete strategies in Croatia. The West and its organizations had won the hearts and minds of at least part of the public. The other part may have been reluctant to cede Croatia’s sovereignty by giving in to the many Western demands but was also deeply dissatisfied with Croatia’s economic situation and either saw no other choice or hoped for a potentially bright material future in Europe.
Economic Performance
Despite a relatively successful program of stabilization, the 1990s Croatian economy was characterized by steep falls in production, real wages, and income and rising unemployment. GDP fell by one third in the first five years of transition (see figure 4.1). Real wages were reduced to the level of the 1960s, while household income was at half the level achieved in 1990 (Bellamy 2001: 34). In contrast to other post-communist states, and more than other Yugoslav successor states except Slovenia, Croatian firms had been exposed to market forces. Croatia was an established producer in some sectors, such as ships and pharmaceuticals (Bi58 Yet, as chapter 3 showed, the Croatian economy suffered from many structural weaknesses, including an overdependence on remittances from Gastarbeiter and tourism. Dependence on remittances made the economy less open than statistics implied and less likely to withstand the shocks of independence, not to mention war. Tourism itself was declining prior to independence, and serious improvements in infrastructure were needed. Certain parts of the country suffered from industrial decline, and unemployment was a growing problem. The service sector was undeveloped, small businesses were underrepresented, energy use was wasteful, and small-scale agriculture was inefficient and undercapitalized.
Figure 4.1. Croatia, Rate of GDP Growth, 1990-1999
There is no doubt, however, that the negative economic repercussions of the war were significant. Some cities such as Vukovar were completely destroyed. Industrial capacity and infrastructure were destroyed. Ten percent of the housing stock was destroyed or damaged, as were nine large regional hospitals. Economic networks within and outside the country were severed. Landmines rendered large swathes of land unusable. Bartlett observes:
A large part of the decline occurred before the war began. Measured in terms of GDP, total output fell from the equivalent of HRK 74 million in the third quarter of 1990 to HRK 59 million in the second quarter of 1991, or by 20 percent. After the war began in the middle of 1991, output fell further HRK 49 million, or by 17 percent. Clearly more than half of the cumulative decline in output was due to the breakup of Yugoslavia and the loss of traditional markets in the southern republics. The war only made a bad situation worse. Between 1990 and 1992 the number of people in full-time employment fell by over 300,000. Registered unemployment increased from 160,000 to 267,000, an increase of 66 percent. (2003: 89)
In short, there was an economic base for populism in Croatia before the war began. However, radical populists entrenched themselves not only through the politics of nationalism and war, as argued above, but also through economic clientelism. Besides HDZ clientelist networks, there was also a related informal economy, based on traditional networks, that operated within ethnic groups and regions. The networks among Herzegovinians in Bosnia, Zagreb, and abroad, in fact, provided the cornerstone for Croatia’s version of crony capitalism.
Not all economic policies were unsuccessful. A very successful stabilization program launched in 1993 brought down inflation and introduced exchange rate stability (Franicevic and Kraft 1997: 1).59 Some liberalization measures, such as lower import taxes, were also introduced. The most visible sign of the success of the stabilization program was the restoration of confidence in the domestic currency, which allowed people to sell their hoarded foreign currency holdings for Croatian dinars (Bartlett 2003: 95). Most important, the policy brought inflation down from a high of nearly 40 percent in late 1993 to less than 5 percent in 1994 (Bartlett 2003: 96). Croatia had been admitted to the IMF and World Bank in early 1993, and once these stabilization measures were implemented, it was offered a line of credit.
The cost of this stabilization policy was high short-term interest rates, which discouraged investment and growth. Although the National Bank had lowered its own interest rate, this had little impact on the actual rates charged to individuals and businesses, since in the process of monetary tightening the central bank ceased issuing credits to the commercial banks (Bartlett 2003:97). The banking sector was able to maintain high rates due to lack of competition in that sector, but large amounts of bad loans ultimately led to its collapse. Nevertheless, the success of the stabilization program compelled the National Bank to introduce the new Croatian currency (the kuna) in 1994.60
An economic recovery ensued after Dayton and the liberation of occupied territories in 1995. GDP grew by over 6 percent between 1995 and 1997 before slowing to just 3 percent in 1998 (Bartlett 2003: 100). Part of this recovery was due to bringing excess capacity back into use, repairing damaged factories, and restoring communications and transportation networks. Investment also grew at a healthy rate61 and inflation remained low, but this may have been because registered unemployment remained quite high at 14 percent (Bartlett 2003: 100). The economic recovery was also greatly facilitated by inflows of foreign aid and loans. The World Bank in particular invested in major infrastructure projects in the post-Dayton period.62 The several years of success after Dayton led to an increase in Croatia’s credit rating and praise from the international financial community.
However, problems left over from the pre-independence period and bad policies pursued by the Tu63
Privatization in Croatia: The Road to Crony Capitalism
These problems were compounded by an increasingly corrupt privatization process that put already failing industries in the hands of regime insiders, who used their position to strip the firms of any valuable assets. Privatization legislation was introduced early, in part to fulfill conditions for help from international financial institutions. A privatization agency was established with the power to install managers, who were then to initiate privatization. However, under strict political control, it often chose HDZ party insiders, who did little to restructure the firms and make them viable. Kearns describes how privatization became a sham:
Legislation on privatization was passed as early as spring 1991 and stressed a number of options . . . all proposals for privatization, however, had to be approved by the same Agency for Restructuring and Development which had been involved indirectly in press censorship. This ploy served two distinct political purposes. On the one hand it was designed to ensure the destruction of any remnants, legal as well as practical, of the old Yugoslav self-managed economy in which enterprises were socially rather than state owned. It was also, however, designed to give the government the opportunity to abuse the subsequent privatization of enterprises by selling the best companies to its political friends. (1998: 253)
The net result was that a new class of regime-friendly entrepreneurs was created—many of whom happened to be members of the former communist elite—and they, the winners of partial reform, had a vested interest in upholding the system of semi-authoritarianism.64
Privatization, writes Bicanic, “was an all-out failure” (2001: 170). It did not generate revenue, foreign investment, or foreign management experience. The corporate governance issue was not solved. Workers were coerced into relinquishing assets, and instead a nationalist capitalist class emerged through Tudman’s policy of putting the Croatian economy in the hands of loyalists. Therefore, ownership transformation was used to develop cronyism and a system of clientelism. But it also left the state as the pseudo-owner of countless ailing firms, many of which were already in trouble at the end of the communist era.
The Onset of Crisis
Besides leading to public outcry, the regime’s economic policies led to an economic recession, and then crisis, in 1998.65 Bicanic writes that “apart from price and exchange rate stability, economic policy has not lead to financial sector and monetary stability, nor has it managed to generate growth and favorable changes in the real sector” (2001: 171). Financial instability began in 1998 as the foreign and domestic debt skyrocketed. International indebtedness increased from $2.4 billion in 1993 to $6.1 billion in 1997, reaching 33 percent of GDP (Bartlett 2003: 109). This experience “gave a practical demonstration of how the growth of the economy was being held back by a structural balance of payments constraint as any upturn in the economy tended to suck in imports unmatched by growth in export revenues” (Bartlett 2003: 109).
The net effects of a politicized, partially reformed economy that had been weak in several key respects from the outset culminated in the collapse of the banking sector in 1998 and 1999, a devastating blow to the Croatian economy. In September 1999 Lehman Brothers advised foreign firms not to invest in the Croatian economy until regime change occurred (Bartlett 2003: 117). Many firms were on the verge of collapse, kept alive by subsidies from the government. Unemployment continued to grow, surpassing 20 percent in 1999 (see figure 4.2). In Eastern Slavonia and other war-torn areas, unemployment was as high as 80 percent, but foreign aid was only a fraction of what was flowing into Bosnia.66
Actual wages remained at 1980s levels while prices doubled. Surveys showed that the public was most concerned with the economy, corruption, unemployment, and social welfare and not with issues such as sovereignty and national survival (Bellamy 2001: 22). Most Croatians felt that they were poorer than before independence. Poverty increased dramatically, as did income inequality, since whatever growth had taken place in the 1990s benefited the small HDZ-affiliated elite. Much of this growth, furthermore, had been based on borrowing, leading to a $15 billion domestic and foreign debt (Judah 1997: 20). Despite the post-1995 gains, the Croatian economy was still 21 percent behind its 1989 GDP.
An analysis of post-communist Croatia in the 1990s suggests at least two counterfactuals. Would things have turned out differently had the Croatian Spring not been repressed in 1971 and the development of pluralism been essentially frozen until 1989? Had there not been a war, would liberal democracy have had a brighter future in post-communist Croatia? With regard to the first question, the Croatian Spring did not display the qualities of a true movement for liberal democracy67 —whether it would have been if the national question had not been present is yet another counterfactual beyond the scope of this analysis.
With regard to the second question about the detrimental effect of war on liberalism, we have shown that war helped to tip what was a precarious balance between liberals and radical populists toward the latter. Yet, I also recall Eric Gordy’s (1999) observation about Serbia: namely, if an authoritarian regime could have been sustained in the absence of war, perhaps there would have been no war in the first place. This is a direct way to summarize a more nuanced argument made in this chapter about the way in which the politics of war became embedded in the transition, and how certain elements within the ruling party derived great political and material benefit from the war. As this chapter has argued, war allowed leaders to rally people around issues of collective survival, sovereignty, and the national cause, thereby avoiding any real debate over the war itself or any major state policies. It also allowed the regime to neglect real political and economic reforms and instead pursue a kind of crony capitalism that enriched a few but brought the economy to its knees by the end of the decade.
Figure 4.2. Croatia, Unemployment Rate, 1990–1999 (end of year)
But the larger point is that Croatia’s transition did begin with a precarious balance between liberals and populists, and of all the analysts I interviewed, not a one argued that liberalism would have been assured in the absence of war, Miloševistructure: in the economically viable urban areas compared to the depressed hinterland and all the cultural and ethnic divisions that corresponded to this disparity. “Development without modernization” was an apt characterization for how parts of Croatia had developed under communism. There were clear illiberal proclivities in Croatian society, and the electorate was hardly a politically mature one in terms of its understanding of democracy (Glavaš 1994). The war contributed greatly to turning otherwise liberal and internationalist parts of the public toward the HDZ’s radical populism and strengthened the Balkan orientation of Croatia’s foreign policy.
The vacillation of the Tu
This chapter has also argued that the international dimension of transition is key to understanding the nature of regime change in post-communist Croatia. The promise of membership in the EU and other Western organizations turned out to be a powerful impetus for change, especially when the Tu
The international factor also helps to explain the simulated character of Croatian democracy. Because there was a sizeable domestic pro-Western constituency, and because Tuthe HDZ regime was constantly vacillating between permitting and repressing democratic institutions in reaction to Western pressure. Thus, the important conclusion is that to the extent that procedural democracy existed in Croatia in the 1990s, it did not reflect a substantive commitment to liberalism on the part of the elites.
Despite the existence of procedural correctness, there were a number of indicators of low liberal content in the Tu68
By the end of the 1990s, nationalist, paternalistic authoritarianism and the development of a rentier state led Croatia down the road to international isolation and economic crisis. This dire situation helped to propel parties with a pro-Western agenda to the forefront in 1999. The real test of commitment to democratic rules, as Croatian politician Ivo škrabalo noted, was whether the HDZ would surrender power.69 Many contend that had Tu
When the HDZ was ultimately defeated in January 2000, it was due to dissatisfaction with the economy, corruption, and international isolation. It did not reflect a universal condemnation of the nationalist project, nor did it indicate unconditional acceptance of Western liberalism. The public divisions that had existed under the HDZ regime, moreover, were still there. However, Croatia’s economy had potential, and there was genuine and widespread pro-European sentiment in society, which meant that divisions over the appropriateness of Western liberalism could be overcome by a decisive entry onto the road to European integration, the road on which Croatia’s new leaders embarked in 2000.
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