Country Study, Slovenia Winning the Transitional Economies Race — страница 7

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desirable than the future income transfers covering unemployment benefits and social safety that would otherwise have to be provided.[66] Housing Housing Policy is yet another area of concern for the government. In October of 1991, the government of Slovenia passed the Housing Act. Creating a state housing policy was necessary for the private ownership of land and building. In addition, the government created the National Housing Fund which was anticipated to be a "social cushion’ and was supposed to create national housing policy.[67] This did not happen! The Housing Act ended up back firing. The Act was created to allow for equal ownership for all citizens. Unfortunately, some people were able to purchase greater amounts of property and effectively bought out the

property rights of their neighbors.[68] This situation has caused many tenant-owner conflicts. Another problem created by the Housing Act was the inequity in the amount of housing sold in each region. There was a great amount of disparity which may cause problems for future housing reforms. Unemployment Slovenia experienced high levels of unemployment in its first stage of transition as the number of individuals seeking early retirement increased substantially. In addition, many enterprises that had entire branches, equipment, factories in the other Yugoslavian republics went bankrupt or lost a large sector of their business.[69] Therefore, unemployment was a huge social problem for the new Republic of Slovenia. In 1992, 140,000 people were unemployed.[70] The transition of the

economy brought about increased need for social insurance. The residents considered retirement income systems(RIC) the most important part of the social safety net since the RIC alleviated the economic hardships faced by the retired elderly. The government of Slovenia knew how these problems used to be solved and they knew how the EU wanted them to deal with it. The dilemma was deciding what was in the country’s best interest. There was a complex relationship between spending priorities on social safety and on human capital development. The trade-off in the short-run balanced the government and the private sector expenditures on welfare and investment in human capital against high unemployment, increasing poverty, and a high share of retired persons in the total population

absorbing funds that could otherwise be allocated on labor training programs. However, investment in human capital had the possibility of increasing productivity and labor force competitiveness in the long-run. Without sufficient qualifications, Slovenia’s workers experienced high unemployment and created a demand for compensatory benefits that would have to be financed either by limited domestic sources or by external savings.[71] Pensions and Disability In 1995, the managers of the Pension and Disability Insurance Fund (ZPIZ) finished the business year with a deficit of 12 billion Tolars.[72] However, the ZPIZ has made it a priority to insure that all pensioners received their pensions. Additional support for the ZPIZ and their policy came from the Slovenian Parliament, which

passed an increase of 42 billion Tolars for the funding of the ZPIZ.[73] Furthermore, Slovenia is one of the few countries in transition that has tried to keep monthly old-age pensions as a relatively constant percentage rate of the average monthly gross wages. (See Appendix XII ) This has helped elderly citizens provide for their own needs through their pensions. Unemployment Slovenia also has a National Unemployment Office (RZZ). This office reported in February 1996, 123,689 people remained unemployed which is 1.9% more than February 1995.[74] This further supports that the economy of Slovenia may be experiencing a slow down. As of July of 1996, the RZZ reported that unemployment was 13.7% but according to the ILO definition of unemployment, the figure was much lower at

7.3%.[75] However, with the change in government, hopes are that these issues will be discussed and policies implemented to reduce the level of unemployment. Currently, the country is providing unemployment insurance for the people without jobs who register with the RZZ. Conclusion Slovenia remains a powerhouse in comparison to some of the other former Eastern Bloc countries. It has proceed with some caution, realizing the changes that are necessary for a stable free market economy. Now, with new leaders, the country has to decide whether it will continue the course set forth by the originators of the country or whether it will go back, taking more conservative steps. From Slovenia’s current actions, it would seem that the next step is either Associate Membership or Full