Country Study, Slovenia Winning the Transitional Economies Race — страница 2

aforementioned characteristics provided the economic basis to secession. In May 1990, the people of Slovenia elected a government whose economic policy, according to Mencinger, " was set by the premise that prospects of transition to a market economy were worsening; the economic policy of the federal government mistaken, the existing economic system unsuitable, and the Federation facing political turmoil."[7] The referendum on independence passed with 90 percent support. Since that 1990 vote, Slovenia has come a long way economically. Slovenia declared its independence on June 25, 1991. The first year for Slovenia was quite difficult. “Real GDP fell 15% during 1991-92, while inflation jumped to 247% in 1991 and unemployment topped 8% - nearly three times the 1989

level.”[8] The economy continued to plummet until 1993 when it flatten and then head into the positive direction. By 1993 unemployment was at 11% and many companies had lost almost 30% of their markets due to the bitter conflict in Bosnia and the loss of faith in the region by international trade partners.[9] However, “[a]t its current rates of economic growth, [slovenia] it could pass EU members Greece and Portugal in four to five years.”[10] Current Economic Conditions Gross Domestic Product In order to appreciate the current economic conditions of the country, it is necessary to examine some of the economic indicators in relation to their past figures. The first indicator is Gross Domestic Product. According to the EIU Country Report for the 2nd quarter of 1996, the real

GDP growth percentage is slowing down. In fact between 1994 and 1995 there was a -1.4% increase in GDP.[11] Even though there was a negative change, the Chamber of Economy in Slovenia states that due to “tremendous growth of new companies, particularly small businesses, and the shift of foreign trade westward,” they project that slovenia is expecting to experience a 5-6 percent increase in GDP in the period up to the year 2000.[12] In addition, “the GDP per capita is higher than those of Greece and Portugal, double that of Hungary and the Czech Republic, and it has a comparatively efficient manufacturing sector.”[13] Currently, mining and manufacturing are contributing the largest percentage to the GDP (figures from 1995 report 31%) with Trade, Hotels and Restaurants and

Financial Market Services at 14% each. Although, Slovenia continues to depend on manufacturing and machinery production, other industries continue to grow and keep a diverse base for Slovenia’s GDP. (See Appendix I) The country of 2 million people has a GDP of more than $18.5 billion.[14] The EIU predicts that the real GDP percentage change form the previous year will be 3.0 and 4.0 in 1996 and 1997, respectively.[15] (See Appendix II) Imports and Exports Other important indicators are foreign imports and exports. In 1995 Slovenia had $20.8 billion in foreign trade, goods and services. Slovenia’s international trade has been geared towards western Europe, especially Italy and Germany.[16] (See Appendix III & IV) One advantage that Slovenia has had in trading with the

Western European countries, is that Western Europe does not charge any duty on good entering their countries from Slovenia, except some agriculture, steel and textile products; in 1995 70% of all of Slovenia’s foreign trade went to the EU.[17] Western Europe has maintained a high demand for machinery and transport equipment, comprising 27% of Slovenia’s exports. (See Appendix V &VI) This consistent link with the West also is evident in the political philosophy of Slovenia. Inflation In 1991, when the Republic of Slovenia first started establishing policy towards a market economy, the inflation rate reached a peak of 247.1%.[18] This was expected, since the economy was moving from a highly state subsidized centrally planned economy to a free- market economy. Fortunately,

by 1995 the inflation rate had reached 9.5%.[19] One important quality of this transition was that Slovenia managed to bring inflation under control without any balance-of payment problems. Inflation in 1996 thus far is at 10.7% a small increase form 1995, however, the Chamber of Economy of Slovenia has a positive outlook for the next year.[20] (See Appendix VII) Privatization In 1994, the Slovenian government took its first steps towards privatization. At first the country observed the other Eastern Bloc countries and learned from their failures. The companies or enterprises’ were allowed to choose between five privatization models, which were then approved by the Agency for Privatization.[21] Most of the companies were sold off to the workers and managers. The citizens were