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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: 069 - (28/01/03)
The big success story among former Yugoslav states is not surprisingly the northernmost one, Slovenia, which in the old days had a per capita income five times that of the poorest FYR Macedonia. Its per capita income at around US$17,000 puts it at the top of all former communist states and by quite a margin. But then it has colossal advantages, a compact territory with fine Alpine scenery, an ancient urban heritage, especially in its spectacular baroque capital, Ljubljana, and an educated, multilingual work force.
Growth rates have not been as high as in certain other countries in transition. But Slovenia has already made it. Inflation is still too high at around seven per cent annually, but is coming down. Things are much better than in neighbouring Croatia for example, let alone Serbia and Bosnia to the south. Slovenes are never likely to forget their luck.
Leading the way into the West
Naturally, Slovenia is regarded as a prime candidate for inclusion in Western structures as soon as possible. It has been invited to join NATO by 2004, along with Bulgaria and five others. This may involve Slovene troops in joining NATO EU forces in keeping the peace in Bosnia, Kosovo and possibly FYR Macedonia.
In October the EU named Slovenia as one of 10 states ready to join on May 1st 2004. The other four former Yugoslav states are on the waiting list, where they are likely to remain for a while. Bulgaria and Romania are billed to join in 2007.
EU membership could nave pitfalls for the Slovenes, as they are well aware. For it will allow foreigners from other EU countries into the republic, free to own land and operate openly in whatever trade they like, which has not been true up to now. The Slovenes have been apprehensive of allowing Italian mafia into the country, given their baleful presence in Albania, Montenegro and other Balkan states. The police will need their utmost vigilance, and the help of Interpol, to combat the menace.
Stock market boom
The past year was a good one for Slovenia, and a record-breaking one of the Ljubljana stock exchange. The SBI 20 index broke all records in 2002, as the trading volume soared higher, reaching a peak on November 8th, when it attained 3,548 points. The largest daily turnover was on July 12th, at around €50m.
The big event of the year was the largest takeover in the country's history when Swiss Novartis acquired local drug maker, Lek. Slovenia is attracting the right sort of attention from foreigners here, FDI so far at just over US$2bn has been modest. With the domestic economy buoyant and opening up to outsiders, that is likely to change.
New helicopter for border control
A €7.3m contract was signed by the Slovenian Defence Ministry and the Italian- British company, Agusta Westland, on the purchase of an A109 Power helicopter, Slovenia News reported recently.
As defence Ministry official, Edvard Krasevec, said on this occasion, the helicopter is expected to be supplied in April 2004, and would be used to control the state border as well as in rescue operations. This means however, that on the basis of a special agreement with the Defence Ministry, the Interior Ministry, or its airborne police unit will use the plane. The government took a decision to buy a helicopter for the purpose of control of the state border from part of the money that was supposed to be used for the purchase of a flacon 900 EX jet. Following harsh criticism of its wastefulness, the government decided to buy a cheaper jet - Falcon 2000 EX - and to allocate the surplus to buy a helicopter.
Moody's upgrades SKB Banka to A1
Moody's Investors Service has upgraded the long-term foreign currency deposit rating assigned to Slovenia's SKB Banka to Al fromA2. This rating action follows the upgrade of the country's long-term foreign currency deposit country rating ceiling to Aa3 from A2.
SKB's deposit ratings benefit from a strong degree of support from its parent, Societe Generale of France (SG) that holds a 98.32 per cent stake in the bank. SG is rated Aa3/Prime-1 for deposits and B for financial strength by Moody's, a Moody's press release informed.
After injecting a significant amount of capital into the bank (71.8m Euro) SG appears firmly committed to supporting SKB should the need arise, Moody's noted. SKB's financial strength rating (FSR) of D+, which remains unchanged, has a stable outlook. SKB Banka is headquartered in Ljubljana, the capital, and at June 30th 2002, reported total IAS assets of US$1.57bn (consolidated).
Armoured vehicles service centre for Southeastern Europe set up in Slovenia
Two years ago, the Defence Ministry purchased 30 Hummer [HMMWV] M1114 wheeled armoured vehicles for the Slovene Army. With the deal, the supplier, the US company O'Gara-Hess & Eisenhards Armoring, promised that it would set up a Hummers service centre for Southeastern Europe as part of counter-trade with Slovenia, Delo web site has reported. At the time, they also signed a letter of intent with Tovarna Vozil Maribor. In the end, it was the Ljubljana-based company Viator & Vektor that concluded the deal.
According to information received, the O'Gara-Hess & Eisenhardt Armoring company, which is the biggest supplier of light wheeled armoured vehicles to the armies of NATO member states, analyzed several locations throughout Europe, and in the end chose the Ljubljana-based Viator & Vektor as its logistical-service centre for a 20-year period. Servicing and maintenance of Hummers will in this way be carried out on the premises of this company in Rudnik, an area of Ljubljana. So far, only a German service centre has been providing this service in Europe.
This information was confirmed also by Viator & Vektor. Ales Cerkvenik, the workshops' director, said that the contract had been signed in October and that their first job was the warranty maintenance of the Slovene Army's Hummer vehicles. As Cerkvenik says, they still need to finalize many details. The fact is, however, that the Ljubljana-based Viator & Vektor has become the logistical service-maintenance centre for Hummer vehicles for the Balkans and part of Eastern Europe, including Poland...
Viator & Vektor is supposed to provide also logistical services for peacekeeping forces on the territory of former Yugoslavia...
It appears that Viator & Vektor is also going to cooperate a lot also with the Slovene Army since it is the authorized service centre for 80 Iveco lorries which the Defence Ministry bought last year...
Cerkvenik did not want to disclose how lucrative the deal with Hummers is going to be on an annual basis, but he said that between 15 and 20 people would work on this project and that they would also employ some new people. Three Viator's employees have already completed a six-week training in the USA.
IMF tells Slovenia to continue "prudent policies of past"
Completing annual consultations with Slovenia on economic policy, the International Monetary Fund (IMF) said that the country must be encouraged to "continue with the prudent policies of the past" as it heads towards EU membership, reports Slovenia News. Although the two-week consultations did not identify any major shortfalls, the IMF delegation highlighted that Slovenia must focus its efforts on bringing down inflation as it seeks to join the European exchange system. According to the head of the IMF mission, Biswajit Banerjee, the priority at this moment should be preparing for entry into the European Rate Mechanism 2 (ERM2) and consequently the euro-zone. Inflation should be cut, while supporting policies should be prepared to ensure flexibility in the economy once Slovenia is part of the ERM2, Banerjee added.
Strong surplus in balance of payments
A surplus of €475.5m was recorded in Slovenia's balance of payments current account in the first ten months of 2002, the highest since 1994, reports Slovenia News. In the same period of 2001, the surplus stood at only €107.6m. The negative impact on the balance payments current account in the first ten months of this year was caused by the trade deficit (€55m) and income deficit (€75.9m).
On the other hand, the positive effects were the €499.8m from services and the €106.5m from current transfers. The trade deficit in the balance of payments was very low in 2002, while imports are about the same as in 2001, up by less than one per cent. Exports, on the contrary, rose by 5.6% comparatively. The amount of foreign direct investments in Slovenia stood at €1.1bn in the first ten months, up from €226m in the same period of 2001.
Ljubljana, Belgrade bourses finalise cooperation deal
The Directors of the Ljubljana and Belgrade stock exchanges, Drasko Veselinovic and Gordana Dosatnic, recently signed an agreement on information exchange and cooperation. A statement released by the Slovenian stock exchange said this represents a very important step, as it is the first agreement made by Ljubljana with a stock exchange with a different trading system.
The Ljubljana bourse has already introduced its BTS trading systems in almost every country that was once part of the former Yugoslavia, namely in Banja Luka and Sarajevo (Bosnia-Herzegovina), Skopje (Macedonia), Podgorica (Montenegro), and Varazdin (Croatia), Slovenia Business Week reported.
When launching its system on the Varazdin market on December 4th, the Ljubljana stock exchange revealed its intention to establish an information net among all the above-mentioned stock markets so as to exchange online data on trading and investments of individual stock exchanges in the region. Implementation of this project lays the basis for the beginning of a more intense cooperation between the above institutions.
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