chapter  4
Economic policies
Pages 34

In contrast to the situation that confronted the post-socialist states in the rest of Eastern Europe neither Croatia nor the other successor states of former Yugoslavia were faced with the problem of creating a market economy from scratch in 1991. Central planning had been abandoned in the 1950s following the break between Yugoslavia and the Soviet bloc, and replaced by the system of workers’ self-management. Enterprise managers had already been given extensive autonomy over business strategy, and although subjected to political interference in their business decisions, they nevertheless operated in a relatively free market environment. The economy was open to trade and the visa-free movement of labour with both the West and East. The Socialist Republic of Croatia had a high level of foreign exchange earnings, partly from tourism and partly from remittances of migrant workers. A number of further pro-market reforms had already been introduced within the state of Yugoslavia at the end of the 1980s. The problems of economic transition were therefore of a different nature than elsewhere in Eastern Europe.