The 1988 Constitutional Amendment, formally the State Enterprise Act, was a significant economic revision to the Constitution of the Divine Republic of Kresimiria. Proposed by the government of Blue Dawn leader Ljubo Sanjakorin, the amendment clarified and expanded the powers of the Council for Development, providing a constitutional basis for the creation and operation of State-Owned Enterprises (SOEs).
The Act represented the peak of Sanjakorin’s “Statist-Labor” economic policy. It was designed to check the rising power of private conglomerates, specifically Maj Holdings, and to ensure that key strategic industries remained under the control of the Republic.
Background
The Rise of Private Capital
By the late 1980s, the Kresimirian economy was undergoing a rapid transformation. While the Constitution declared natural resources to be the “inalienable patrimony of the nation” (Article 43), the industrial sector had largely been left undefined. This ambiguity allowed for the rise of powerful private actors.
Most notably, the businessman Bran Maj had begun aggressively acquiring aging steel and ironworks in Novi Otonik starting in 1986. Sanjakorin, a former trade unionist with deep ties to the industrial workforce, viewed this privatization as a threat to national stability and workers’ rights. He feared that the Republic’s strategic infrastructure was falling into the hands of an unaccountable oligarchy.
Constitutional Ambiguity
Prior to 1988, the Council for Development functioned primarily as a regulatory body, issuing permits and overseeing construction. It lacked the explicit constitutional authority to own and operate commercial businesses in competition with the private sector. When the government attempted to nationalize a failing shipyard in 1987, the move was challenged in the Superior Tribunal by the Civic Renewal Front (CRF), which argued the government was overstepping its mandate.
To bypass the legal deadlock and secure the state’s economic role, Sanjakorin proposed a constitutional amendment.
The Amendment
The Act amended Article 19, which governs the Council for Development.
- Expansion of Mandate: It added language explicitly authorizing the Council to “establish, maintain, and operate enterprises of strategic national interest.”
- Definition of Strategic Interest: It broadly defined “strategic interest” to include energy production, heavy transportation, and defense manufacturing, effectively bringing these sectors under the state’s purview.
Voting Breakdown
The proposal sparked a fierce ideological debate in the Assembly, highlighting the growing rift between the statist establishment and the pro-market opposition.
- The Government Position: Ljubo Sanjakorin argued that the state had a moral duty to protect the economy from “predatory capitalism.” He framed the amendment as a protection of Kresimirian sovereignty, ensuring that the profits from key industries benefited the people rather than private individuals.
- The Opposition: Mia Marija Pavlovic of the CRF led the opposition. She condemned the Act as a regression to a command economy that would stifle innovation and deter foreign investment. Behind the scenes, Bran Maj and other prominent business leaders heavily lobbied against the bill, funding opposition research and advertisements.
Blue Dawn held 8 seats themselves. They secured the support of the Sons of Kresimir (who only held 1 seat by this point) and the Vjetrusa party (2 seats), both parties’ nationalist ideology favoring a strong state. Crucially, they managed to sway all but one senator from Northern Power by promising state investment in the northern railways.
The amendment passed with 15 votes.
| Senator | Vote |
|---|---|
| Antonio Labas (CRF) | Against |
| Ante Brov (BD) | For |
| Sinisa Ivic (BD) | For |
| Ljubo Sanjakorin (BD) | For |
| Filip Danijel Janes (BD) | For |
| Tihomir Bran (SoK) | For |
| Pavel Iric (NP) | For |
| Ilja Brasic (NP) | For |
| Mlada Wrba (BD) | For |
| Bozidarka Borsa (VJ) | For |
| Miljenko Tarin (NP) | Against |
| Haret Trn (VJ) | For |
| Mia Marija Pavlovic (CRF) | Against |
| Ante Dumanovic (BD) | For |
| Radan Vlaev (CRF) | Against |
| Dalibor Pralinovic (NP) | For |
| Stojana Czyhlarz (BD) | For |
| Dorde Palic (BD) | For |
| Jannik Lehr (BLF) | Against |
| Stipe Seitz (BLF) | For |
Impact and Legacy
The passage of the State Enterprise Act solidified Kresimiria’s status as a mixed economy.
- Creation of SOEs: In the years following the Act, the Council for Development established several major state companies, including Republic Rail and the National Grain Trust, and re-nationalised several companies including Krasja, Tele-Radio Kresimiria, National Energy, and Republic Steel.
- Economic Rivalry: The Act set the stage for a decades-long economic rivalry between the state-run sector and Maj Holdings. While the state retained control over energy and rail, it failed to dislodge Maj’s dominance in the steel sector, leading to an uneasy coexistence.
- Corruption Concerns: In later years, particularly under the leadership of Ari Stov, the expanded powers of the Council for Development came under scrutiny. Critics argued that the state enterprises created by the Act had become vehicles for patronage and corruption, lacking the efficiency of their private competitors.