Many aspects of the privatization process are still seen as controversial as the political and economic turmoil, coupled with the events of the simultaneous 1991–95 independence war, are thought to have led to a degree of criminal activity.
[3] These new laws in Croatia and Slovenia were interpreted as tacit nationalization, a tendency of both governments to first re-nationalize public property in order to later proceed with privatization.
[5] During the rule of the Croatian Democratic Union (HDZ), Croatia initiated its privatization program in 1992 when companies began arranging sales of shares to their employees.
[6] Privatization often involved appointing new managers close to HDZ, or even the party's leading members,[7] a trend which discouraged foreign investors.
[3] With the end of the war in 1995, Croatia's economy recovered moderately, but corruption, cronyism, and a general lack of transparency stymied economic reforms and foreign investment, accompanied by public distrust when many state-owned companies were sold to politically well-connected people at below-market prices,[5][8] all of which were common to reforms that took place in most post-communist transition economies.
As of 2000, roughly 70 percent of Croatia's major companies were still state-owned, including water, electricity, oil, transportation, telecommunications, and tourism.