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SLOVENIA


 

 

In-depth Business Intelligence

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 26,284 21,108 18,800 63
         
GNI per capita
 US $ 11,830 9,810 9,760 51
Ranking is given out of 208 nations - (data from the World Bank)

Books on Slovenia

REPUBLICAN REFERENCE

Area (sq.km) 
20,273

Population 
2,011,473

Capital 
Ljubljana 

Currency 
Tolar 

President 
Janez Drnovsek

Private sector 
% of GDP 
40% 



 
Update No: 095 - (01/04/05)

Key Slovenian role in Kyrgyz crisis
The Organisation for Security and Cooperation in Europe (OSCE) can play an important role in Kyrgyzstan by bringing parties to the negotiating table, US Deputy Secretary of State Robert Zoellick said on March 29th during a visit to Slovenia. "There is a key role (for the OSCE) in terms of trying to bring the parties together within Kyrgyzstan as they deal with the departure of the president and looking towards the new government," Zoellick told journalists after meeting Slovenian Foreign Minister Dimitrij Rupel, who currently heads the OSCE. 
Speaking at the start of a European tour that took him to 14 NATO member states, Zoellick said the OSCE, which is currently chaired by Rupel, should also play a particular role in soothing Russian sensitivities about the crisis in the former Soviet republic. "The OSCE can also play a role in terms of making sure that key partners, particularly Kazakhstan, Russia and others, have a comfort about the process moving forward and supporting it," Zoellick said. "All these needs to be kept in the context of recognising that the people of Kyrgyzstan want to determine their own future," Zoellick said. 
Moscow, reeling from a series of popular uprisings in former Soviet republics, has accused the OSCE of triggering the unrest that led to the fall of president Askar Akayev because the pan-continental body criticised the March elections in Kyrgyzstan. 
"What we've seen over the course of past months is an expression by people in very diverse parts of the world - whether it is Ukraine, Georgia, Iraq, Afghanistan or the Palestinian elections - of a desire to be free and participate on their own future with their governments," Zoellick said. He added that "large changes are afoot but the process of change also requires careful attention by countries that want to try to support the process taking place peacefully." 
Zoellick also said the OSCE should also play a role in Kyrgyzstan in the context of election assistance and election monitoring, as well as work with the free press and providing support to the police services. 
Rupel announced he would visit Kyrgyzstan in the near future.

OSCE chairman-in-office to visit Azerbaijan 
In the frame of his visit to the South Caucasus on April 2, OSCE Chairman, also foreign minister of Slovenia Dimitrij Rupel was due to visit Azerbaijan. 
On the agenda were meetings with Foreign Minister Elmar Mammadyarov, the Speaker of the Milli Majlis (National Parliament) Murtuz Alaskarov, Prime Minister Artur Rasizade and President Ilham Aliyev. 
The OSCE Chairman was also said to meet with representatives of political parties and non-governmental organizations, as well as local media and OSCE mission. 

OECD membership shortly
Membership of other international bodies is also important to Slovenia, now that it is firmly in the EU, for whose new constitution it has already voted heavily in favour in a referendum earlier this year.
Slovenia has a good chance of being shortlisted among states for which the Organization for Economic Cooperation and Development (OECD) would launch accession strategies. This estimation is a result of past cooperation between Slovenia and the OECD as well as the wide support among the member states. The selection will, however, be a matter of political judgment, the ministry said in a press release on March 29th. 
As the ministry explained, the enlargement of OECD is frozen right now, given that some members, especially non-European ones (Canada, US, Australia, New Zealand and Japan), oppose the integration of other European states because of regional stability. 

Economic success story of the region
Slovenia has by far the best economy in the entire former communist world, with a higher GDP per capita than Greece and Portugal, who both joined the EU in the 1980s.
Its GDP is expected to grow by 3.8% this year and 3.9% in 2006, while its inflation rate is due to fall from 3% this year to 2.7% next year, enabling it to qualify for membership of the Euroland club. This development would put a cap on its successful performance and encourage one thing lacking - abundant foreign direct investment (FDI). FDI is barely over US$2bn to date, a poor showing for such a promising place.
Actually, there are of course other things lacking too. A new tax code came into force in the New Year on January 1st. But it is proving opaque and cumbersome for business. It needs to be simplified. A look at Estonia and Russia would not be amiss here, both with buoyant economies, albeit from considerably lower bases than Slovenia's, after adoption of greatly simplified tax regimes.
The government economic panel, an inter-ministerial body, has advocated a re-think of the whole matter. It advised the setting-up of a task force to deliberate the best way forward to fiscal soundness and probity.

The target date is now 2025 for parity with the EU
Slovenia is still not well-off by EU standards, trailing all but two of the established member states on joining in May last year in terms of GDP per capita. It was after all under communism for fifty years, a sure way to blight enterprise and individual initiative.
Growth statistics depend overwhelmingly on the base from which you start off. Slovenia's base line is high, indeed the highest in the former communist world.
Nevertheless, a leading Slovenian economic institute has concluded that Slovenia is unlikely to catch up to the average GDP per person in the European Union before the year 2025. This is 12 years later than predicted in the current national development strategy. 

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BANKING

Nova Ljubljanska banka shows solid performance

The chairman of Nova Ljubljanska banka (NLB) recently announced that the bank, the largest on the domestic market, plans to sustain the results it attained in 2004. The statement came after the NLB reported a 25 per cent surge in pre-tax profit to 13.8bn tolars (57.56m Euro). The NLB group consists of 53 banks and financial firms in 16 countries, New Europe reported.
The bank was successful at limiting its expenses, which have hovered around 192m Euro since 2002. Andre Bergen, NLB supervisory board member and chairman of Belgian bank KBC that owns 34 per cent of NLB, believes the bank could be more profitable. He said that KBC would not increase their share in NLB unless they are asked for it.
Commenting on the 2004 results, NLB Chairman Marjan Kramar, told Slovene press agency that the bank had operated in line with the plans, and that in some aspects, targets had been beaten.
"This year, the management intends to at least repeat these results, the wish is always to keep improving on what has been achieved and keep the rising trend up in all individual segments," Kramar said.
Last year NLB raked in 56.7m Euro profit while the group's total profit was 81.2m Euro, which is more than 17 per cent higher than in 2003, something that Kramar described as "a good basis for the future."
According to him, the performance was good in all aspects like sales, operations on the emerging markets, as well as in terms on internal measures - both staff-and organisation- wise. The chairman said the operations of the group would remain a priority for the management this year.
"The NLB group is where we see our biggest opportunity for growth, where we invest the bulk of our funds, capital and human resources," Kramar commented.
According to him, NLB is the only group based in Ljubljana that has the potential and would endeavour to keep up with all key players in the field.
The objective for 2005 is to improve the effectiveness criterion by 7 per cent points and to retain the assets growth rate at last year's 9 per cent, both through an increase in market share and growth in profitability. Other priorities for 2005 include the group's further expansion in Slovenia and particularly abroad and streamlining efforts at all levels, Kramar said.

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TELECOMMUNICATIONS

Voljatel gains foothold on Slovenia telecom market

Voljatel has become Slovenia's second licensed national telecommunications operator after the state-owned teleco, Telekom Slovenije.
The company offers a comprehensive package of services for international calls as well as calls to the national landline and mobile networks. Voljatel was established in 2000 by a group of Slovenian and international shareholders with experience in IT, internet and telecommunications.
In 2001 the company started providing free dial up access to the internet, Slovene Press Agency reported. Voljatel's prices of international calls and calls to mobile phones within the country are slightly lower than those of Telekom, while prices for calls to national landline networks are same as Telekom's.
"The option to choose from several telecommunications operators means not only better and cheaper services for the user, but also creates the conditions for healthy competition among all business subjects on the telecommunications market," Voljatel CEO, Tomo Pust, said in a statement on January 28th. According to Pust, the quality of Voljatel services is comparable to any national operator.
The proof of this is the cooperation contracts the company has signed with all leading European telcos.
International calls through the Voljatel network are cheaper than those through Telekom by up to 60 per cent, while Voljatel users will save six tolars a minute for every call from a fixed to a mobile phone, the company statement read. Voljatel services are available on subscriber's existing line, while subscribers need to sign a contract before selected services can be activated. The subscribers will not be liable to a monthly fee, but will only pay for the calls they make.

Slovenije eyes Albanian telco

Telekom Slovenije, the national fixed-line telco, has expressed interest in acquiring a majority stake in Albtelecom, the Albanian provider, the company told Slovene Press Agency STA on January 25th, New Europe reported recently. The Albanian government values the 76% share at €189m. According to Telekom spokeswoman, Darinka Pavlic Kamien, the expression of interest is in line with the company's strategy of regional expansion. "Telekom defined Southeast Europe, including Albania, as its priority market," she said. Albtelecom is the only telecoms operator in Albania with a fixed-line as well as a mobile licence. The company was awarded the mobile licence last year as a means of boosting competition on the mobile market. However, Albtelecom is no longer the monopoly provider of international calls. "The Albanian telecom is a healthy company with good growth potential … We see opportunities for growth in the digitisation of speech telephony and the introduction of broadband, but we also want to offer an alternative to wireless carriers," Telekom explained. The state-owned Telekom has been on a shopping spree in the region and recently submitted an offer for the Montenegrin telecoms utility. Telekom submitted the second-best bid, but the winner has not been selected yet.

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TOURISM

Spa Terme 3000 gains 2.5m Euro in 2004

Spa Terme 3000, which operates five spa resorts, posted net profit of 611m tolars (2.5m Euro) for 2004, up 20 per cent over 2003, on the back of sales of 8.7bn tolars (36.3m Euro), general manager, Dusan Bencik, said recently, the Slovene Press Agency reported.
The biggest project last year was the project of creating the brand Panonske Terme (Pannonian Spas) for the spa business that Terme 3000 manages for chemical and tourism group Sava. The capital integration of spas in the northeast of the country is finished and it makes it possible to achieve the strategic objective of 5,000 high-quality beds and 10bntolars (41.7m Euro) in revenues, Bencik stressed. Terme 300 group comprises spas from Moravske Toplice, Radenci, Ptuj, Lendava and Banovci, which recorded 745,000 overnight stays last year, up 4 per cent year-on-year. Over half of all guests came from abroad, especially Austria and Germany. Bencik outlined the main objectives for 2005 are to develop the Panonske terme brand and further consolidate spa tourism in north-eastern Slovenia.

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TRANSPORT

New railway venture kicks off

A deal was signed recently on the creation of a railway transport company between Luka Koper, the company managing the port of Koper, and its Austrian partner, Graz-Koeflacher Bahn und Busbetrieb, Slovene press agency reported. By signing the partnership agreement, the two companies laid their business and capital foundations for an efficient joint presentation on key markets, Luka Koper said. The nominal capital of the new Koper-based company, called Adria Transport, will total 24m tolars (€100,103). Each of the associates would own a 50% share, according to the Slovenian group. For the new founded company to start its business, the partners must acquire consent from the Slovenian Competition Protection Office, sign a contract on the establishment of the company Adria Transport, register it with the Koper district court and acquire a licence for providing transport services in railway traffic, a safety certificate and a railway route.

Slovenia gears up for motorway network expansion

Janez Bozic, Slovenia's transport minister recently said that the government ratified a plan for motorway construction. Up to 22.3km of new motorway sections will open for traffic this year, including the 8.2km section Trojane-Blagovica, the only missing part of the Maribor-Ljubljana motorway, Slovene Press Agency reported.
According to Bozic, the value of construction for all sections under construction this year is estimated at 124bn tolars (517.2m Euro). Construction companies will continue or start on 174.6km road. Other major sections due to open this year include Skofije-Srmin (1.7km) between Koper and Ljubljana, Smednik-Krska vas (4.6km) between Ljubljana and the border with Croatia and another 7.8km on the same stretch between Hrastje and Lesnica is expected to materialise.

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