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SLOVENIA


 

 
Key Economic Data 
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 21,108 18,800 18,100 67
         
GNI per capita
 US $ 9,810 9,760 10,060 53
Ranking is given out of 208 nations - (data from the World Bank)

Books on Slovenia

REPUBLICAN REFERENCE

Area (sq.km) 
20,273

Population 
1,935,677

Capital 
Ljubljana 

Currency 
Tolar 

President 
Janez Drnovsek

Private sector 
% of GDP 
40% 

  

Background:
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: 086 - (30/06/04)

Low EU Parliamentary electoral turn-out
The Slovenes registered a low turn-out in elections to the European Parliament on June 13th. The Central European's recent adherents to the EU generally polled poorly.
This is causing distress in concerned political circles in the former Yugoslav republic. They are aware of the superiority of their economy and educational tradition to that of the other entrants, with the highest per capita GDP at more than $17,000 and a multilingual, well-read population. Naturally the political class expected the Slovenes to show their greater maturity by voting in a high turn-out in the elections. 
Actually they showed exactly that by voting in the lowest turn-out of all. They were showing exceptional intelligence. How can the Slovene electorate be expected to form a mature judgment on EU affairs when they have not been a member of the EU for more than a few months, their adhesion taking place on May 1st?
As Karl Popper, the maverick political philosopher said, people vote against the powers-that-be more then they vote for their preferred choice. The Slovenes are just waiting for evidence of what their EU membership really means. As Sherlock Holmes remarked to Watson at the outset of a particularly difficult case, "I need more data, Watson, more data."

Slovenia the maverick
One thing the Slovenes suspect is that as the richest of the 10 entrants they will be expected to subsidise the poorer adherents by Brussels. They are almost certainly right.
The republic's experience under communism was very different from that of others. For a start Tito's Yugoslavia was much less isolated from the West. One could travel abroad; it was not a socialist prison. 
The Slovenes were never as keen on the US as Poland or the then Czechoslovakia. When asked for their views in referenda last year, they voted 66% for NATO, but 89% for the EU. They have been the most sceptical of the entrants on the US's policy in Iraq and are the only member of the Vilnius 10, who supported the war, not to send troops to Iraq.

A successful economy
Slovenia's economy is clicking along very well, all things considered. The average growth of GDP for the last ten years since 1994 has been four per cent. Its inflation rate, meanwhile, has averaged fewer than 4%.
There are economic concerns, but they resemble those of rich countries, such as France or Germany, not the poor incomers to the EU. Slovenia has high taxes, generous public benefits (by regional standards), high quality and costly public services, high wages for the region, rigid labour rules and, compared to most post-communist countries, large and influential trade unions.
Slovenia is basically doing all right; and Premier Antop Rop, head of the Liberal Democrats, who have had twelve years in power, should not be disappointed at the Euroresults. They are doing well, and the population knows it.

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AUTOMOBILES

Schefenacher eyes Zagorje investment

German company Schefenacher, a producer of automotive parts, plans to invest over €6m in a project in Zagorje which would produce over 100 new jobs, the local press said recently, STA News Agency reported. 
Economic Minister, Matej Lahovnik, said that an inspection will take place to assure whether the property owned by the Rudnik Zagorje can be transferred from the state to the municipality, local dailies Delo and Dnevnik reported. If the company decides for the investment, then there will be no taxes for five years, the reports said.
Lahovnik believes that this is an investment which will return as taxes and contributions, not a grant, according to Delo's report. The state can co-finance the investment in the amount of 10% through the Trade and Investment Promotion Agency, he explained. This means €600,000 or between €4,000 and €6,000 per new job.

Revoz produces new Renault

French carmaker Renault recently decided to construct a new Renault model, which includes the Novo mesto-based plant Revoz. Revoz said that this decision was credited to the Slovenian governments decision to chip in 10% of the investment whose value is likely €400m, STA reported. In the new plan, the Novo mesto company plans to double its output to 210,000 cars a year. This will facilitate a further 700 new jobs in Slovenia, especially in the Dolensko region in the south. More jobs are expected to be created with the suppliers.

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FOOD & DRINK

Zito falls short of Q1 targets


Bread and pasta maker Zito saw its sales drop in the first three months of the year, New Europe reported recently. 
Net revenues were down 12% year-on-year to 2.64bn tolars (€11.07m), or 3% short of the target, the company said in a statement. Despite the lacklustre sales, the company posted solid profits. Net profits for the first quarter stood at 91.8m tolars, 5.3% short of the first-quarter targets, in the same period last year. It is expected that Zito may face fierce competition on the single European market, but it plans to hang on to its market share in Slovenia. The company stated that efforts will be focused at effective brand management. The largest owners of Zito include the Pension Fund Management (KAD), which owns 15.98%, the Restitution Fund (SOD), which owns 11.11%, and investment funds ID KD (5.99%), KD Investments (5.23%) and Zvon 1 (4.72%).

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FOREIGN ECONOMIC RELATIONS

Ljubljana bolsters trade relations with Skopje


Economy Ministers of Slovenia and Macedonia, Matej Lahovnik and Stevco Jakimovski, respectively, promised to boost bilateral trade while addressing the participants of a recent two-day conference focusing on trade between the two countries after Slovenia joined the European Union, New Europe reported.
The conference, held at the recreational centre of Rogla, was organised by the Regional Business Forum of the Celje region. It hosted some 160 entrepreneurs, among them some 90 from Macedonia. On the first day, the participants were briefed upon changes in trade between the two countries, as the free trade agreement is no longer in effect.
Opportunities for investments in Macedonia were also examined.
While delivering the speeches both ministers stressed that the cancellation of bilateral free trade agreement, which was a consequence of Slovenia's EU entry, should not become an obstacle in strengthening business ties between the two countries.
Lahovnik, who was appointed to the ministry recently, stressed that the stability of the Western Balkans is in the strategic interest of Slovenia and its economy. Hence, Slovenia is looking forward to Macedonia's membership of the EU and is willing to offer the country all the support in its accession bid.
Jakimovski said, for his part, that he expects Slovenia to be one of the main lobbyists for Macedonia in the EU. He added that Macedonia can offer Slovenian investors a stimulating environment, security, and political and macroeconomic stability.
Last year, the two countries exchanged US$187.5m in goods and services. After the meeting with Jakimovski, Lahovnik said: "We are fully aware that Slovenia has a large surplus in trade. Yet, one should not forget that Slovenia is trying to make up for that with direct investments in Macedonia."
Although Slovenian exporters to Macedonia have it worse as a result of the changed trade regime following their European Union entry, Lahovnik stressed that the Slovenian government had done a good job in securing higher quotas for exports to Macedonia.

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MINERALS & METALS

Metal Ravne embraces reform


Metal Ravne, one of the companies within the Slovenian Steelworks, is the world's number five manufacturer of steel tools attempting to get out of its debts, New Europe reported recently. 
The group recently appointed a new management and is hiring foreign consultants and planning new lay-offs, the company told seeurope.net recently. The company reported losses of €3.46m in 2003. The operating loss amounted to €1.01m, mainly it is caused by the inability to adapt to new market conditions and higher prices of raw materials. Despite the forecast of profits of some €50,000, last year's negative drift continued into this year, with losses amounting to €0.57m in the first quarter. While addressing a news conference, Tibor Simonka, chairman of Metal supervisory board, said the company will be adopting a restructuring strategy in the coming months and has hired foreign help for efficiency in work. According to the newly appointed general manager, Darko Mikec, the prime concerns of the company will be to boost its brand on the global market, promote the quality of products and value added and improve its human resources policy.

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PHARMACEUTICALS

Lek opens facility in Poland


Slovenian drug maker Lek, a part of the Swiss pharmaceutical Novartis, recently opened a €70m plant for solid form drugs located near the Polish city of Lodz. This is one of its largest foreign investments so far. Lek is the second biggest maker of generic drugs in Slovenia. According to Lek, the plant, which is one of the largest pharmaceutical investments in Poland ever, will produce solid form drugs for the European market. It will supply all major markets for Lek and Sandoz, the generic subsidiary of Novartis, seeurope.net reported recently.

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TOURISM

Hit gears up to open hotel complex in Montenegro


Slovenia's leading gaming chain Hit is scheduled to open a hotel in the Montengrin sea resort town of Budva. The inauguration ceremony is expected shortly, in time for the upcoming summer holiday season, STA reported recently.
Hit, which employs 1,900 people, generated revenues of 47bn tolars (€197m) over the previous year. Its profit stood at 2.6bn tolars (€11m).
Chair of the Nova Gorica-based company Branko Tomazic said that this is Hit's biggest investment abroad of Hit's. Some €30m is envisaged for this four-star hotel project.
The Maestral hotel is said to be the biggest tourism centre in the southern Adriatic, with a hotel complex of 16,000 sqm and 14,000 sqm of outdoor surfaces.
Tomazic believes the hotel will promote Montenegrin tourism, and at the same time it will also provide an incentive for other Slovenian companies to invest in Montenegro. The project is highly appreciated in Montenegro, where it was awarded the title of Investment of the Year in 2003.
According to Hit officials, visitors of the Maestral will be able to choose from a wide range of activities.
Andrej Sluga, Hit's marketing manager, expects that the hotel will be used foremost for conferences and holidaying activities. To attract Italian guests, Hit has already engaged Montenegro Airlines in talks on the establishment of an air route between Italy's Bari and Tivat in Montenegro. "We have agreed on the terms of a charter route," Sluga explained, adding that there would be two weekly flights ahead of the peak holiday season. The first flight took place on 18th June.
Sluga stressed that Hit intends to build the most modern tourism and gaming complex in the southern Adriatic, which would be capable of attracting foreign and domestic tourists. Tomazic revealed some of the future plans of the company; he said the company would open two gaming parlours in Slovenia before the end of the year. Other plans include the opening of a casino in Sarajevo and Macedonia's Dojran, while the company is discussing with an American firm the purchase of a casino in Aruba.

Istrabenz draws up ambitious tourism plans for Slovenia

There is a growing demand for development of the tourism sector in Slovenia, CEO of the energy and tourism company, Istrabenz Igor Bavcar, said recently, the Dnevnik daily reported.
Bavcar specified a number of tourism projects in progress, some of which include renovation of the old Palace hotel in Portoroz, Postojnska jama cave and the convention centre Adriatic in Croatia's resort of Opatija.
According to the Istrabenz chief, apart from the plans in the seaside resort of Portoroz, the company aims to create a strong trademark called Life Class. This will prevent any new purchases, so the company will focus on management, Bavcar said in his interview with Dnevnik.
Asked whether the state would be a co-owner, Bavcar said: "The state is foremost too big an owner, not only of Istrabenz, but of the entire Slovenian economy. This is a big problem." Through its Restitution Fund and Pension Management Fund, the state controls a 30% stake in Istrabenz.
Istrabenz would like to get rid of the state as an owner, which Bavcar believes is not that simple. He is interested in more strategic considerations about consolidation of Slovenian economic potentials on the part of the state and not simply its attention to current problems. Bavcar, who considers Sava the biggest player on the Slovenian tourism market, followed by Istrabenz and the spa company Terme Catez, believes that all of them will have to unite in the coming years. Tourism is a stable sector, according to Bavcar, who believes that it can be even more profitable than it currently is. "Tourism represents certain stability in the diversity of Istrabenz investments, compared to other, relatively rapidly developing investments we have made mainly in energy, where we have invested a lot of money," Bavcar said.
As for the energy sector, Bavcar said that the development in the region largely depended on the state. "According to some information, the electricity market will be closed until 2007, which is not good," he said, adding that he would like to see the government back out of the energy sector more swiftly. "We are currently drafting quite a number of projects that would increase the competition on the energy market. We are making efforts for a gradual opening of the market that would be sufficiently controlled by the state," said Bavcar.
He said it was no secret that Istrabenz wishes to enter TETOL Termoelektrarna toplarna Ljubljana, a thermo power and heating plant, together with house appliance maker Gorenje and public utility company Energetika Ljubljana.

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