In the seven months since President Franjo Tudjman's demise, Croatia has staged a dramatic turnaround, addressing many Western concerns and moving to integrate itself into the rest of Europe.
It's an example of what's possible once an obstructive strongman leaves power. Now, many Western diplomats hope, democratic forces throughout the former Yugoslavia will take note.
"This has to be heartening for the people who support a democratic opposition in Serbia," said a Western diplomat in Zagreb. "They'll say, 'If Croatia can do it, why can't we?'"
While Croatia faces increasingly acute economic troubles, political changes so far are encouraging.
Croatia's new government, led by Prime Minister Ivica Racan, has made significant progress introducing democratic reforms, meeting its international commitments, and promoting human rights, diplomats say.
"The parliamentary and general elections were the turning point," said Alessandro Fracassetti, acting spokesman in Croatia for the Organization for Security and Cooperation in Europe."Excluding Slovenia, the changes here have been unprecedented in Southeastern Europe. There has been a U-turn in the policy of the country toward democratization."
Rarely has a country seen its international reputation improve so quickly.
In May, NATO allowed Croatia to join its Partnership for Peace program, a training ground for countries preparing to join NATO. Officials in Washington have said that Croatia may soon be able to join the World Trade Organization.
Even Carla Del Ponte, the chief prosecutor for The Hague-based International War Crimes Tribunal for the former Yugoslavia (ICTY), long a thorn in Croatia's side because of the country's obstructions, has complimented new compliance in efforts to investigate war crimes that Croats may have committed during the breakup of Yugoslavia.
"The whole tone is different," said the Western diplomat. "Finally we have a partner in the Balkans and not just another problem."
With the threat of Yugoslav President Slobodan Milosevic's efforts to exploit tensions in Kosovo and Montenegro to cling to power, and slow progress in Bosnia, a partner is exactly what the West now needs in the Balkans.
Croatian officials have been quick to offer support to Montenegro, the poor republic which remains in the rump Yugoslavia and is struggling to avoid an armed conflict with indicted war criminal and Yugoslav President Slobodan Milosevic. Croatia's Parliament passed a resolution supporting the Southeast European Stability Pact, a process initiated by Western governments after the Kosovo crisis, and in which Croatia had been only reluctantly participating before.
It also has given the ICTY permission to conduct exhumations related to possible war crimes committed during the controversial "Flash" and "Storm" military operations of 1995.
Observers also say Croatian President Stipe Mesic has engineered a reorientation of the country's policy towards its Serbian minority that goes further toward meeting the criteria of the Dayton peace agreement, which Croatia signed at the end of the war in 1995.
The country has signed a pact allowing more Serb refugees to return to their former homes. Parliament also passed legislation giving Serbs greater access to funds for rebuilding their homes, which remain in ruins. "The new legislation is certainly more than correct," said Milorad Pupovac, president of the Serb National Council. He is waiting to see if implementation is fair, however.
President Mesic has also clearly renounced Tudjman's long-held ambition of creating a "Greater Croatia" by annexing areas of Bosnia. The government has cut off millions of dollars in aid flowing under the table to the Bosnian Croats.
The remaining $100 million in annual assistance is now passing through transparent international channels. The effect will be less support for Croatian nationalists in Bosnia, and a greater chance for moderates to compete for the affections of the electorate, said a Western diplomat in Zagreb.
Prime Minister Ivica Racan now faces huge challenges, however, including unemployment at almost 20 percent and rising.
With the fragile six-party coalition government in power for half a year and little change in the economy yet visible, discontent grows.
"The international community is happy, but they don't have to live here," said Guozden Flego, professor of social philosophy at the University of Zagreb.
Racan's government is now desperate for an injection of international aid, foreign investment, and renewed tourism along its Adriatic coast after years of conflict.
Tudjman nearly bankrupted the economy with a system of blatant patronage, shady privatization deals and mismanagement. The economic crisis has forced the government to close bankrupt state-owned firms and delay payment of overdue pensions.
Some 50,000 to 80,000 people in Croatia have not received wages in more than three months, despite Racan's campaign promise to create 200,000 new jobs.
"The social situation is very, very dire," says prominent Zagreb political analyst Zarko Puhovski. "In the fall people will start thinking about winter, and it will be eight or nine months after the installation of this government. If some assistance does not come to increase pensions or ease unemployment, then we will face a real social tragedy and face real protests."
(c) Copyright 2000. The Christian Science Publishing Society