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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: 084 - (29/04/04)

The success story
Slovenia is the odd one out among the former communist countries. It enjoys by far the highest standard of living, some $16,000 per capita, while having a highly successful economy, the Switzerland of the former communist world, as it were. Tito had the sense to leave it largely alone in the former Yugoslavia, though it had state industries naturally. 
Although Slovenia enjoys a GDP per capita substantially higher than that of the other transitioning economies of Central Europe, it needs to speed up the privatization process and the dismantling of restrictions on foreign investment. About 45% of the economy remains in state hands, and the level of foreign direct investment inflows as a percent of GDP is the lowest in the region. Despite the global slowdown in 2001-03, the economy turned in an excellent record on exports, which grew 5% per annum in the period. Inflation dropped slightly but at over 8% remains a matter of concern.

Caution on FDI
Foreign direct investment (FDI) has not been encouraged because the Slovenians fear, not without reason, that mafia elements from Italy and the Southern Balkans, notably Albania and Montenegro, would rapidly move in if restrictions on foreigners owning land and property were relaxed. Indeed, they would have reason to beware of Serbian gangsters too, implicated in many a scam in the region and not a few assassinations, as of Premier Zoran Djindjic of Serbia in March last year.
It is not only gangsters, however, that appreciate Slovenia's superb location as the gateway to the Balkans. So do legitimate businessmen. From May the republic will, moreover, be a Balkan gateway to the EU for other Balkan businesses and for those from further afield.

The China connection
The Chinese are a pertinent partner here. They are always on the look-out for a reverse Hong Kong, with which to establish a bridgehead in foreign regions. They have hit on Slovenia as the ideal entrepot for the Balkans and Central Europe. The port of Koper, although small, is becoming a good entry point for Chinese goods into these regions.
Slovenian companies are also very interested in the Chinese market. The Ljubljana-based International Centre for the Promotion of Enterprises is the favoured forum for planning for future cooperation between the two sides. The Slovenian Export Corp. is to sign an agreement with a kindred organization in China, after a visit late last year to the Balkans, and notably Slovenia, by the Deputy Minister for Chinese Development and Reform Commission, Zhu Zhixiang.
He met Slovenia's Economics Minister, Tea Petrin, who said: "Now that Slovenian companies are already present on the Chinese market with exports or even their own production facilities, there is the question of where to find additional opportunities for cooperation."
Zhixiang replied that there are opportunities in environmental technologies and the automotive industry. The bulk of trade is conducted in pharmaceuticals, engineering and electric components. Both countries see the largest window of opportunity in the knowledge-based industries. The one thing that communism has done is give their populations an excellent education in the exact sciences and mathematics. Their !4 year-olds do very well in international comparisons of literacy and numeracy, so prized on the world-wide web and the new industries emerging on the internet.

Financial independence
Slovenia now enjoys not only geopolitical, but financial, autonomy. GDP growth of 2.9% in 2001 and again in 2002 has been steady if not spectacular, sufficient to finance return of debt.
Slovenia is going to be financially independent by next year, says the central bank chairman, Mitja Gaspari. "Slovenia has become independent of international sources of finance and is therefore indirectly making a transition to the group of developed countries that finance the less developed," he said recently at the annual meeting of the IMF and the World Bank.
Its credit rating with Moody's Investors Service is excellent at Aa3 for foreign currency bank deposits and bonds. It has a strong record of prudent fiscal and debt management, including the use of the proceeds of privatisation to pay back debt.

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AVIATION

Slovenian & Polish airlines to launch Ljubljana-Warsaw route


Slovenian air carrier, Adria Airways, and the Polish airline, LOT, signed a code share agreement to launch a daily Ljubljana-Warsaw connection via Vienna on May 1st, Slovenia News reported recently. 
"The agreement will enable lower ticket prices and better connections. We hope there will be more demand for this route so that a direct flight will be opened next year," said Branko Lucovnik, the Adria CEO, who signed the agreement together with Piotr Dubno, the deputy executive director of LOT. There are currently not enough passengers for direct flights, but Adria expects a growing interest in this route after both countries join the EU. The biggest problem is currently the price of tickets: a return ticket will be €349, and is not expected to change immediately. Now that the agreement has been signed, talks about prices will be launched, Lucovnik explained.

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ENERGY

ES sings deal with Gorenje

Istrabenz energetski sistemi (ES), a subsidiary of Slovenian oil trader Istrabenz Group, recently signed a deal with home appliances manufacturer, Gorenje, on the set-up of a joint venture that would produce and sell electric power, the Slovenia Business Week reported. 
The new company will be looking for opportunities in Slovenia and abroad. After its first year of operations, Istrabenz-Gorenje is expected to sell between 3,000 and 4,000 GWh of power, CEO of Istrabenz ES, Robert Golob, and head of the new company's supervisory board, said. Istrabenz-Gorenje is to be headed by Izrok Sotosek. It will not only sell electricity, but also produce it, said Golob, explaining the company would be too vulnerable to market trends if it were only in the power trade business. The company's target markets include Germany, Austria, the Czech Republic, Slovakia and some countries of the former Yugoslavia, he said.

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FOREIGN ECONOMIC COOPERATION

Serbia and Slovenia seek to intensify trade

Slovenia and Serbia hope to bolster economic ties, and the Slovenian Economics Ministry has taken notice of the interest expressed by Slovenian companies in boosting investments in Serbia, Economics Minister, Tea Petrin, said after meeting with visiting Serbian Deputy PM, Miroljub Labus, Slovenia News reported recently. 
Labus added that his country was entering the second phase of transition which will involve the restructuring of the economy and opening up to foreign investors. "In view of the latter, we've paid special attention to the possibilities for Slovenian investors, who were among the first to arrive on the Serbian market," Labus said. He explained that the two delegations also reviewed possibilities for the two countries to join forces in entering third markets. Labus said Serbia would like to quicken the pace of preparations for EU membership to make up for what it has missed in previous years. 
Labus also met Slovenian Prime Minister, Anton Rop, for talks that were dedicated to strengthening business cooperation. In an address to Slovenian businessmen, Labus pledged that the Serbian government would continue carrying out economic reforms, calming fears that the new Serbian government may put reforms on the back burner.

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FOREIGN ECONOMIC RELATIONS

Slovenia and Turkey sign investment accord

Slovenia and Turkey signed an accord on the mutual promotion and protection of investments as part of a two-day visit to Turkey by Economics Minister, Tea Petrin, Slovenia News reported recently. 
A document on economic cooperation between the two countries was also penned. According to Petrin, the two documents are very important for both countries, given that the free trade agreement will be void after Slovenia joins the EU. Options for cooperation in new technologies, machinery production, the electronics industry and tourism were also examined as Petrin met with Turkish Minister for Industry and Trade Ali Coskun. The officials focused on economic zones established by the government in a bid to boost the economy in areas with annual per capita income of less than US$500. Companies in these zones do not have to pay taxes, while the workers' social insurance is paid for from the state budget. Given that these zones boast extensive automobile, textile and chemical industries, which corresponds to Slovenia's exports to Turkey, they would be especially interesting for Slovenian companies, Petrin stressed. Bilateral trade amounted to €200m last year. Slovenia had a major deficit, as exports were at €71m and imports at €129m.

Slovenia, Estonia FMs discuss common future

Estonian Foreign Minister, Kristiina Ojuland, who paid a three-day official visit to Slovenia recently, met Foreign Minister, Dimitrij Rupel, New Europe reported. 
The two officials established that bilateral relations are excellent and problem-free. Holding a joint press conference after the meeting, Ojuland highlighted the fact that Slovenia and Estonia will have a common future, as they are about to join the EU and NATO. Rupel meanwhile stressed that the two countries have built a "solid legal infrastructure," while some agreements are currently being drafted. Bilateral business ties are relatively modest on the other hand, Rupel said. He thought that there was a lot of potential for upgrading them and said that he was hopeful they would develop further. The pair discussed possibilities for organising business conferences and other forms of direct dialogue between the business officials of two countries. For the time being, Estonia is reporting a deficit in trade with Slovenia. Meanwhile, according to Rupel, the countries have been cooperating extremely well in defence, interior affairs, education, culture and science, while lawmakers from the two countries have also been holding regular meetings. The two officials also agreed that all countries which will neighbour the EU after enlargement should be given a European perspective and that the enlargement process must continue. Both countries are moreover convinced that funds and energy should be invested in the Lisbon Strategy, which is extremely important for the two states as it creates conditions for a competitive economy.

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FOREIGN INVESTMENT

Slovenia, Turkey sign investment accord

Slovenia and Turkey signed an accord in Ankara recently in which they pledge to mutually promote and protect investment. The accord was signed as part of a two-day visit paid to Turkey by Economics Minister, Tea Petrin, STA News Agency reported.
A document on economic cooperation between the countries was also penned. According to Petrin, the two documents are very important for both countries, given that the free trade agreement between the countries will be void after Slovenia joins the EU on 1 May. The accords were signed at the end of a session of the standing commission for the economy. Meanwhile, Petrin met Turkey's Deputy Prime Minister, Abdullatif Sener, Industry and Trade Minister, Ali Coskun, and Economics Minister, Ali Babacan.
The two sides assessed economic relations as good, but that there is potential to upgrade them. Petrin and the Turkish officials examined fields where cooperation could be improved.

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TELECOMMUNICATIONS

Simobil ups revenues by 6.9%, cuts loss

Simobil, the second-largest mobile operator in Slovenia, reported a 6.9% growth in revenues in 2003, to €80.6m, Slovenia News reported recently. The company has also managed to cut its overall loss by €8.4m to €21.9m last year. According to Simobil's CEO, Milan Zaletel, earnings before interest, taxes, depreciation and amortisation - an important indicator in the industry - grew by 613% last year to €13.1m. CEO, Bojan Dremelj, stressed that the company was looking towards the future by continuing to upgrade its network to provide its users with the best quality and speed of services. Having joined forces with Britain's Vodafone last year, the company has started to provide high-speed EDGE technology for the GSM network, as one of the first providers in Europe to do so. Dremelj also announced that his company has no intention to bid for a UMTS license. However, he did not exclude the possibility that Simobil may change its mind in the future.

Two UMTS licenses put up for sale

The government has announced that two licences for third-generation mobile telephony services, UMTS, will be put up for sale, each costing €37.8m, Slovenia News reported recently. 
The proposal to sell two UMTS licenses was put forward by the Agency for Telecommunications, Radio and Post, which will now issue a public call to tenders. The call will be valid if at least one bid is entered, Information Society Minister Pavel Gantar explained. The fee is much less than the €92.5m that the country's largest mobile provider, Mobitel, paid when it acquired the first and only 3G license issued so far at the end of 2001. Although Gantar did not wish to speculate on who may be interested in the licence, analysts are scratching their heads as the two other mobile companies, Simobil and Vega, are said to be disinterested in UMTS.

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