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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%
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Update No: 114 - (28/11/06)
The star in the post-communist firmament
Slovenia is an undoubted success story in the former communist world. It is
almost astonishing that it was ever a communist republic at all. Tito, himself
half Slovene (and half Croat), ruled it with a comparatively light leash,
although this is not a point to be overdone.
The richest republic in the former Yugoslavia, it had a per capita income five
times that of the poorest, Macedonia.
It has taken to market economics like a duck to water and is already an EU
member. It has a higher standard of living than Greece or Portugal.
Macroeconomic indicators the best so far, PM says
The relations between key macroeconomic indicators have never been so good in
Slovenia, PM Janez Jansa told the press on 8th November, after the European
Commission projected that Slovenia's gross domestic product (GDP) growth will
reach 4.8% in 2006, while the inflation rate is to stand at 2.5%.
The PM is convinced that the indicators are reason enough for even greater
optimism regarding the impeding 1 January 2007 euro changeover. "Slovenia
will become a part of the interior circle of the EU's developed countries, which
will in itself boost its reputation and improve opportunities for the Slovenian
economy," Jansa added.
According to Jansa, while business conditions will not radically change in the
short term, the stability of public finances will improve and business
operations will be simplified. As a new, simpler and friendlier tax system will
also enter into force on 1 January, labour costs will be gradually reduced, he
said. Parliament passed the government package of tax laws earlier in November.
The gradual reduction is necessary because loss of budget revenues will have to
be compensated somehow after what Jansa termed "the most radical reduction
in labour costs so far".
Jansa moreover believes that the business environment will become much
friendlier in the coming year, increasing the possibilities for achieving even
better economic results.
Slovenia is also reducing its budget deficit, not by reducing the scope of
social and other rights, but through cost-cutting by the state, the PM
explained.
The mountains beckon the desert; PM Jansa calls on Saudi Businessmen to
invest in Slovenia
Jansa made a five-day trip to Saudi Arabia on November 11-15. He called on
Saudi businessmen to increase their investments into Slovenia, as he addressed
the participants of a Saudi-Slovenian business conference in Riyadh on 12th
November. Jansa mainly stressed investments into finance and banking,
telecommunications, trade, tourism and information technology, while also
labelling Slovenia as a starting point for Saudi investments into other EU
states and the Balkans.
There are great possibilities for improving economic cooperation between the two
countries, the prime minister added at the conference, attended by over 100
Slovenian and Saudi businessmen, which was organised as part of his visit to the
kingdom. Jansa pointed to developed infrastructure, closeness to almost all more
important markets and Slovenian experience with markets of the former Yugoslavia
as the country's main attributes.
Saudi Minister of Commerce and Industry Hashim Al Yamani meanwhile called on
Saudi and Slovenian businessmen to search for opportunities to complement each
other, adding that both Slovenia and Saudi Arabia hold a strategic geographic
position in their respective regions. Al Yamani moreover believes that Jansa's
visit will allow direct trade between the two countries, while Slovenian
products now come to Saudi Arabia through intermediaries.
He also invited Slovenian companies to take part in Saudi infrastructure
projects, for which the government intends to allocate US$624bn in the next 15
years, and called for establishing a direct shipping link between Saudi ports
and the port of Koper.
Jansa met Riyadh Governor Salman Al Saud. He also met Saudi King Abdallah Al
Saud himself. On 11th November, Slovenia and Saudi Arabia signed a general
cooperation agreement and a memorandum of understanding between their foreign
ministries.
A new axis has been forged between Ljubljana and Riyadh, portending interesting
developments ahead.
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AGRICULTURE
Farmers want to keep dairy in Slovenian hands
Farmers are increasing their efforts to keep the largest Slovenian dairy,
Ljubljanske mlekarne, in Slovenian hands amidst talks on the sale of a majority
stake in the company to British investment fund Salford, Slovene Press Agency
STA reported October 17th.
Salford is reported to be offering 1.5 million Euro for a 54 per cent stake in
the dairy that is being sold by financial firm NFD Holding along with asset
management firms Zvon Ena Holding and Zvon Ena ID, food company Jata Emona and
Mlekodel, which manages the shares held by cooperatives.
Opposed to the sale of the majority stake to a foreign firm, the interest groups
of local communities and farmers at the National Council on October 11th
succeeded with a motion with which the upper chamber of parliament called on the
government to prevent the sale in order to protect the national interest.
Peter Vrisk, a representative of the interest group of farmers and the head of
the Chamber for Agriculture and Forestry, told fellow councillors that the lives
of 40,000 to 50,000 people depend on Ljubljanske mlekarne. This matter
"cannot be left to the capital market," he said.
Although Mlekodel, which owns nearly a quarter of the dairy, is one of the
companies selling its stake, the nine cooperatives that it represents came out
of a meeting with Agriculture Minister Marija Lukacic willing to reconsider the
move.
"The cooperatives are willing to reconsider...if we find a common solution
that would allow them to acquire a majority share of Ljubljanske mlekarne,"
Lukacic said.
She said the various options of keeping the dairy in Slovenian hands would be
considered, with concrete decisions to be taken when the matter will be
discussed together with the state-run pension Fund management (KAD), the
Association of Cooperatives and cooperatives that are not part of Mlekodel.
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FOREIGN DIRECT INVESTMENT
Investments too focused on EU markets
Slovenia still directs too much of its foreign direct investment (FDI) onto the
transparent EU market, while other countries are increasing FDI into developing
countries, foremost China, Marjan Svetlicic, the chair of the International
Relations Centre at the Ljubljana Faculty of Social Sciences, was recently cited
as saying by Slovenia Business Week.
Presenting a report of the United Nations Conference on Trade and Development (UNTCAD)
on FDI for 2006, Svetlicic added that Slovenia recorded a rise in outgoing FDI
from US$551 million in 2004 to US$568 million in 2005. The country's incoming
FDI meanwhile decreased from US$827 million in 2004 to the US$496 million in
2005, making Slovenia a net exporter of funds.
According to Svetlicic, this means that Slovenian companies have reached a level
of development that requires expansion in order to boost their competitiveness.
He also explained that Slovenia's possibilities for Greenfield investments lie
in investments in personnel, while investments into manufacturing, except into
high technology, are not likely to come about. He, however, believes that
Slovenia could record a high level of FDI after privatisation, with
possibilities also existing in tourism and health. The report, meanwhile,
revealed that FDI is expanding around the globe. It accounted for US$916 billion
in 2005, a 29 per cent increase over 2004. FDI growth was mainly recorded in
developing countries (37 per cent), with 88 per cent caused by mergers and
takeovers. A total of 60 per cent of FDI was invested into the developed
countries, less than in the past, Svetlicic noted.
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TRANSPORT
Plans to invest nearly 9bn Euro to modernise railroad
Slovenia plans to invest 8.89 billion Euro to modernise its railroad network
in 2008-2020, reports from the Slovenian capital Ljubljana said on November 7th,
New Europe reported.
The amount accounts for more than two thirds of the 12.2 billion Euro that
Slovenia intends to invest in the four transport projects in the 2007-2023
resolution of national development programmes, Slovenian Transport Minister,
Janez Bozic, told the press.
Of the 8.89 billion Euro, 4.27 billion Euro will be provided through
public-private partnerships, with another 4.27 billion Euro coming from the
state budget and 350 million Euro from EU funds, he said. The majority of the
investment will be used for the transport infrastructure on the fifth
trans-European transport corridor (7.41 billion Euro) and the remaining 1.48
billion Euro for projects on the tenth corridor. The investment in railroad
infrastructure is designed mainly to increase the allowed maximum weight of
trains and raise the speed on the main routes to 160 kilometres an hour.
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