% of GDP
a free service
In 1918 the Slovenes joined the Serbs and Croats in forming a new nation, renamed Yugoslavia in 1929. After World War II, Slovenia became a republic of the renewed Yugoslavia, which though communist, distanced itself from Moscow's rule. Dissatisfied with the exercise of power of the majority Serbs, the Slovenes succeeded in establishing their independence in 1991. Historical ties to Western Europe, a strong economy, and a stable democracy make Slovenia a leading candidate for future membership in the EU and NATO.
Update No: 067 - (19/11/02)
The runaway success story in former Communist Central Europe is Slovenia. Its small size, excellent location in the Alps and long tradition of a market economy make it potentially a sort of mini - Switzerland. It has all the right ingredients, good banks, marvellous scenery, a splendid capital and an industrious, highly - educated multilingual population.
FDI at last booming
Its GDP per capita at nearly US$17,000 is much higher than in any other former communist state, more like Greece or Portugal, without having had their good fortune in being EU members.
That is about to change, as EU entry approaches in 2004. The Slovenes will fit in well inside the EU and will be no headache for Brussels in terms of subsidies, unlike Poland and others.
The Slovenes have been prompt is negotiating l'acquis communitaire, with its 29 chapters, nearly all now completed. One consequence is a considerable relaxation of restrictions on foreign direct investments (FDI), about which the Slovenes have been wary. They have been worried about Italian mafia encroachment, not without reason if they look south down their peninsula towards Montenegro, Bosnia and Albania.
Foreign investors have been picking up on this existence of a new dispensation, allowing outright foreign ownership of land and full access to local markets and their facilities. FDI is consequently picking up. It rose by 10.9% in 2001, the biggest annual increase in the last four years. Total accumulative FDI in Slovenia stood at US$3.2bn at the end of last year.
The pattern of the future was revealed in the breakdown of the figures. The EU member states were responsible for 85.6% of FDI into Slovenia, with Austria accounting for more than 50%. This last fact is telling; history and geography really count. For long a part of the Austro-Hungarian empire, Slovenia consists of two former Duchies, Austria is right there next door.
FDI by Slovenia investors
Foreigners come to Slovenia because they see it as a natural gateway to the Balkans. This is something the Slovenes know full well.
There has been a veritable surge in FDI by Slovene firms, it rising by 23.7% no less in 2000, also a record growth for the last four years. The pattern of old was repeated, reports the Slovenian Central Bank in its publication, "Foreign Investments 1994-2001," published in October. More than 50% of the investments went on to the other former republics of Yugoslavakia. People like to go where they know local conditions and are themselves known. This means investment flows southwards from Austria to Slovenia and southwards from Slovenia to the former Yugoslavia and the Southern Balkans.
Slovenia considering repeating tenders for sale of stake in largest bank
The commission for privatisation of Nova Ljubljanska Banka [NLB] is preparing a report on the second phase of privatisation where the state has put up for sale 9 per cent of shares in the largest bank, Radio Slovenia has reported. Only eight bidders submitted a purchase bid. Together they are willing to purchase only 0.3 per cent of the shares. If the government decides to accept the current bids, then it should sell the remaining shares to the European Bank for Reconstruction and Development [EBRD] which would then offer them to domestic investors on an annual basis. According to Finance Minister Tone Rop, the Bank of Slovenia has so far expressed a negative opinion on the possibility of increasing the stake owned by the EBRD above 10 per cent. Therefore Rop did not exclude the possibility of repeating the tenders.
Ropsaid: "We will consider the possibility of selling only up to 9 per cent of NLB shares to the EBRD or even of repeating the tenders. In particular because of the fact that, later on, some important investors are going to get funds from the sale of Slovene drug company]Lek shares to Swiss drug giant, Novartis, and their purchase power and potential will therefore increase. This is principally what we have to take into account.
Besides this, they are also considering the possibility of selling NLB shares in packages smaller than 500 [shares] so as to enable small investors also to purchase them.
FOOD & DRINK
EU improves placement of Slovene wine-growing regions
Wine growers from Podravje and Posavje [areas of eastern and northeastern Slovenia] have received encouraging news from Brussels. The working group for enlargement at the European Union's ministerial council placed the mentioned Slovene regions in the wine-growing zone B. This will enable the continuation of centuries-long
wine-growing and wine-making tradition in these areas.
Natalija Mursic for Radio Slovenia reported: At first, it was planned that Podravje and Posavje would be placed into zone C1. The new placement into zone B will allow wine growers to add sugar to wine, something that has always been a tradition in
Stajerska and Dolenjska regions. Agriculture Minister Franc But is of the opinion that Slovenia achieved an extraordinary negotiating success which will enable the continuation of a centuries-long tradition of wine-making and viticulture.
Foreign investments hit new 4-year high in Slovenia
Foreign direct investments (FDI) in Slovenia increased 10.9% last year, recording the biggest annual growth in the last four years. The information was released by the Slovenian central bank at its presentation of its publication "Foreign Investments 1994-2001" recently. Furthermore, Slovenian direct investments abroad, up by 23.7% in 2001, also saw record growth for the last four years.
Bank officials explained that the pattern established in previous years continued in 2001, with more than 50% of the country's direct investments going to countries of the former Yugoslav republic, while more than half of FDI in Slovenia came from Austria.
Slovenia Business Week reported that at the end of last year, the overall value of FDI in Slovenia amounted to US$3.2bn, up US$316.3m over 2000. The Bank of Slovenia noted that this is the biggest growth of FDI after the relatively modest inflows seen in 1999 and 2000. EU member states, which commanded 85.6% of FDI in Slovenia, are the biggest foreign investors there.
Data on the structure of all FDI in Slovenia reveals that investments were mostly concentrated in the manufacturing industry, where almost 38% of all FDI goes. The financial services sector is second with 28%, followed by trade and vehicle repair with 14%.
Swiss Novartis secures majority stake in Slovene drug company
The Swiss pharmaceutical group, Novartis, officially confirmed that the bid for the purchase of shares in the Slovene pharmaceutical group, Lek, has been successful, Radio Slovenia has reported.
A week prior to the bid deadline running out, Novartis has acquired more than 51 per cent of the shares in the Ljubljana-based pharmaceutical company necessary for the bid to be successful.
In line with the law on takeovers, the validity of the bid has been extended for two weeks, that is until 18th November...
Krka opens new R& D centre
The pharmaceutical company, Krka, opened a new research and development cent, an investment worth 6.5m Euro. The centre is especially important for the further development of generic drugs, said head of the Krka management, Milos Kovacic, Slovenia News has reported.
The four-storey facility employs 60 workers and includes several research laboratories, a pilot programme of the development of solid drugs, and a quality control department. Krka has been investing in development for ten years now, priding itself with employing more than 300 experts, who continually improve their knowledge, manager Ales Rotar noted.
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