Country Study, Slovenia Winning the Transitional Economies Race — страница 3

given privatization coupons valued at 100,000 - 400,000 Tolars, depending on the age of the individual. The coupons could be used to buy shares or invest the money into securities. Over 45% percent of the coupons were invested into fund securities.[22] According to Price Waterhouse, over 400 enterprises have been successfully privatized and another 1000 will soon be at the same status. However, some companies, such as public utilities, national telecom, and two commercial banks have not gone through the process; the government states that these entities will undergo special privatization processes.[23] Political Situation On the 25th of June, 1991, Slovenia declared the end of its political ties with the former Yugoslavia. Although, the government of the former Yugoslavia did not

want the republic to secede, after a mild show of military force, Yugoslavia gave Slovenia up. Since then, the National Assembly has been the main legislative body of the Republic of Slovenia. This national legislature consists of 90 members that are directly elected by the people for four year terms. In addition, there is the Council of State that is elected for five years. This council has 40 members, 22 representing local interests, 12 evenly divided between employers, and 6 representing non-economic activities.[24] Slovenia is currently governed by two dominant parties who have formed a government coalition, the Liberal Democracy of Slovenia (LDS) and the Slovene Christian Democrats (SKD). The LDS stems from the youth movement of the former communists while the SKD originates

from a Christian tradition dating back before the Second World War.[25] The differences in these groups are the main reasons why there seldom is cooperation in making government decisions. However, there are other parties with greater opposition: the Social Democrat Party of Slovenia(SDSS), the Slovene National Party (SNP) and the Slovene People’s Party (SLS).[26] One aspect that has helped Slovenia remain stable politically is that the ethnic make-up is not extremely diverse. Almost, 91% of the population is Slovene and they are predominantly Roman Catholic.[27] (See Appendix VIII ) This composition has allowed Slovenia to focus on economic revival rather than religious ethnic conflict, quite unlike their neighbors to the south in Bosnia-Herzogovina. In November of 1996,

Slovenia had elections and most of the incumbents were re-elected. The LDS won the most seats (25) and the Slovenian People’s Party, conservatives, won the second largest at 19.[28] This could cause a conflict because, both the liberals and the conservatives have gained a significant amount of power after this election. In the coming months the coalitions that form with the parties with fewer seats could be significant for the political climate of Slovenia. The far right conservatives, United List of Social Democrats(ZLSD- former communists), do not back Slovenia’s entrance into NATO, claiming neutrality should be considered an option; the entrance into the EU will be supported by the ZLSD.[29] However, economists warn that Slovenia should not rely on its economic successes

in the past but instead should focus on increasing privatization and address the slowing industrial production and rising unemployment.[30] The new government needs to continue to work towards improving the economic state of the Republic if they expect to become more like a Western European country. Budgetary and Monetary Conditions Slovenia began to stabilize its economy before it had gained its complete independence because inflation was increasing drastically. Although, Slovenia made a clean break to independence, there were some costs involved. Slovenia had 33 percent of its exports going to Yugoslavia, however, with its independence Slovenia had an instant 6 percent decrease in its GDP.[31] This economic shock was small in comparison to the 38 percent decrease in industrial

production Slovenia faced because of its transitional state. Slovenia stabilized its economy by October 1992. This was achieved through the introduction of a new currency, the tolar, and the creation of an independent central bank, the Bank of Slovenia. The financial sector plays a key role in the transition process. In 1995, the financial and market services sector comprised 14% of the GDP, the second largest contributor.[32] In addition, a strong financial sector is necessary for resource allocation and mobilization, and a prerequisite for any large-scale privatization scheme. In 1991, there was a lack of financial regulation in Slovenia, which produced many problems. Most banks were owned by the firms to whom they lent. As a result, 30-40 percent of the loans on the books were