THE EXPERIENCE OF THE TERRITORY DEVELOPMENT OF CROATIA POST THE ARMED CONFLICT: CONDITIONS, PRIORITIES AND TOOLS

Section Economics: Economic and Legal Problems of Regional Development

Abstract

The article examines experience of the Republic of Croatia in the development of de-occupied and affected territories post the armed conflict. The authors analyzed economic and legal conditions for the construction of the Croatian territories destroyed after the armed conflict and their financial support by international donors through the creation of local economic development agencies, development and implementation of the local economic development concept in Croatia and adaptation of the legal framework to new economic goals. The priorities and four components of the strategic project of the social and economic recovery of Croatia have been determined. The first component of the project aimed at attracting investment in territorial communities, the second component devoted to the process of demining de-occupied territories, the third is the provision of consulting services to strengthen management potential, and the fourth component of the project aimed at supporting sub-projects in such areas as: social integration, economic revival and infrastructure for small communities in Croatia. The article demonstrates the economic and legal instruments of special state support for the development of the de-occupied territories of Croatia as well as the classification of territories requiring special state support. Emphasis placed on the expediency of state administration decentralization and the use of tax incentives, including real estate transfer tax, income tax received in the territory of special state supervision and corporate tax. In addition, noteworthy is the creation of three types of territories that received special state aid through income tax exemption or tax rate differentiation over time. Special state support was provided by providing housing to the population affected by the “Croatian War”. The conducted research made possible to establish the successes and shortcomings of the Croatian experience for the possible extrapolation of developments to Ukrainian realities.

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