What are the structural reforms Slovenia needs for economic growth?
Advantage Austria
Challenges of Austrian investments in Slovenia
Advantage Austria Ljubljana carries out an annual survey with Austrian companies settled in Slovenia. The survey focuses on the "economic climate in Slovenia" and highlights the challenges and problems Austrian companies might have in the Slovenian economic market, how they assess the current economic situation and what their future expectations are. On the one hand, Austrian companies wish for improvements in fighting corruption, payment discipline, flexibility of Slovenian labour law and in the tax system. On the other hand, the companies praise the investment support for SME's, the training, availability and quality of Slovenian workers, and the access to state aid. Furthermore, the brand "Made in Austria" is well known and highly appreciated in Slovenia. In summary 92.5% of the surveyed companies do not regret their decision and would chose Slovenia again as place to establish.
American Chamber of Commerce - AmCham Slovenia
With the goal of inspiring positive change and making our beloved Slovenia an even more desirable place to live and work, we see that the key structural reforms are tax reform, labour market reform and health reform.
We strive for a more competitive and predictable business environment in which companies have a chance to grow and develop, and in which the fiscal and financial environment encourages rather than obstructs. Slovenia needs and wants new jobs, jobs with high added value, and with the changes to business models brought about by the 4th industrial revolution, we need a stimulating education system that will promote open-minded, creative, innovative, multi-disciplinary thinking, financial literacy and entrepreneurship, development of social skills, and provide the knowledge employers need now and in the future.
We also believe that the foundation for the quality of life to be sustainable there needs to be effective, accessible and people-focused healthcare - focused on patients as well as on doctors and medical personnel. Healthcare should be discussed as an important economic industry that contributes to GDP growth in the long-term, and due to the complexity of healthcare, good organisation is of key importance.
British - Slovenian Chamber of Commerce - BSCC
In order to guarantee economic growth, we believe Slovenia should continue with reform of its fiscal policy which will contribute to the strengthening of its economic recovery and will ensure lasting sustainability in Slovenia's public finances. Continuing with healthcare reform is crucial, with an emphasis on cost efficiency, accessibility and quality of care. Slovenia should also adopt the necessary measures to ensure a long-term sustainable and adequate pension system.
To boost investment and employment there needs to be greater flexibility in the labour market, with simpler hiring and job termination procedures, and should also include efforts to increase the employability of part-time, low-skilled and older workers. We believe Slovenia should improve its financing conditions, while allowing a permanent solution to the problem of non-performing loans and access to alternative sources of financing, and ensure full implementation of the strategies of DUTB. These measures should be accompanied by a reduction in the administrative burdens arising from spatial planning and issuing building permits. Last but not least, poor governance of state-owned enterprises from the past only strengthens the hypothesis that selling them would bring higher added value in terms of employment, investment and GDP growth.
The German-Slovene Chamber of Commerce and Industry - AHK Slowenien
Slovenia has left the years of harsh economic conditions behind and has, in the last few months, improved. With regard to our survey among those companies in Slovenia with German capital, the expectations for the second half of the year are even better economic conditions and growth, and therefore the investment policy and employment policies of companies are said to be more stable.
The German-Slovene Chamber of Commerce had proposed to the Slovenian authorities that this gives the opportunity to drive through the necessary comprehensive structural reforms in the fields of taxation, labour, health and pensions, with the goal of enabling a good environment for small and medium enterprises as well as for attracting the regional headquarters of large multinational companies. A step towards this is the Law on Vocational Training which is useful for production companies. The government must also consider reducing administrative barriers to enable easier greenfield or other investment. Once the prerequisites in terms of human resources, conditions for R&D and local suppliers are favourable, the rest can be done with a view to a brighter outlook for future generations.
Italian Trade Agency (ICE)
According to the most recent European Commission forecast, economic growth in Slovenia in 2017 will accelerate to 3.3%, almost double the EU average of 1.7%. The strong economic growth prospects could encourage Slovenia to undertake some structural reforms that are still pending in its economy and which can help the country to become more competitive through capital investments from both national and foreign investors. In addition to assessing their sector of activity, which would bring the well-known Slovenian excellence in several sectors such as automotive, electrical equipment and machinery, chemicals and pharmaceuticals, metal, rubber, plastic and wood products, it is well known that investors pay the utmost attention to a few common requirements including financial stability, effective and flexible labour markets, low taxation as well as open, transparent and quick administrative and judicial procedures for protecting their rights, obtaining authorisations and permits, and resolving possible trade disputes. Satisfactory results have been achieved in consolidating public finances. Slovenia is becoming more attractive to foreign investors. It is not by chance, with a stock of over EUR 1bn, that Italy is the third largest investor in the country. This cycle of economic growth seems to be a good moment for a step forward to reduce foreseeable pressure on public social and pension funds due to the Slovenian demographic structure and ageing population. In this perspective, active and meritocratic policies to retain talent and boost entrepreneurial initiatives could have a positive impact.
Kazakh-Slovenian Business Club - KSBC
"The fact is that labour market reform is necessary and pension reform is also necessary. The pressure on pension funds has in fact already been slightly mitigated, however demographics continue to change and some of the other factors in the current system will sooner or later take it to the edge. The stimulant for growth is definitely exports but what is needed is an encouraging and developed environment, investments and jobs, especially jobs with added value, and last but not least a stimulative fiscal environment, including incentives. The current engine of the favorable economic climate in the country is a strong export economy initiative that generates development. I hope that there will also be a time when the politics will actively and effectively face the challenge of reform."
Luxembourg-Slovenian Business Club (LSBC)
Does Slovenia have a Vision for the Future - Not Really!
By Iztok Petek, Nejc Kebe
It is difficult to take the "Vision for Slovenia in 2050" seriously as it is formulated with the concept and mindset of the last century. Tomorrow's winners will be those that can anticipate the changes in technologies and new concepts in an economy and adjust their long-term strategy accordingly. Trends such as digitalisation, the sharing economy, automation and the collaborative economy will not only change some industries and make others completely obsolete, but have the potential to permanently remake our societies.
Slovenia has proven its potential in innovation, creativity and R&D - being a small country works for Slovenia's competitive advantage as it is less dependent on large rigid systems and so can afford to be more daring than other countries. Our advice to the decision makers is to therefore look for the vision in the most daring projects of startups and entrepreneurs and implement it through structural changes while you still can.
Slovene - Russian Business Club
Slovenia and Russia are "false mirrors of Silicon Valley"
The ageing population, social inequality, vulnerability of the financial sector, inefficiencies of state-run companies, unemployment and migration issues, all add up to a pile of structural problems that our governments have to face. The Russian agenda includes the diversification of the economy, raising export competitiveness and balancing our internal resources with the scarce financing from abroad under sanctions. Slovenia looks much more robust with GDP growth of over 2.5% and a strong economic recovery due to its export-driven industries.
However, as per the recent EC country report, one in three jobseekers in Slovenia is over 50 years old, fixed contracts are low at 12.4%, and 28.8% of the labour force are low-skilled workers. The closer the digital economy becomes, the wider the shortfall in human capital becomes. A high tech and FinTech edge could make Slovenia or Russia a true centre of global innovation. Russia shows weaker performance with slow technological advancement and over-regulation in all industries... Uber's capitalisation exceeded that of Gazprom in 2016 and many disruptions are yet to come! With all the positive statistics, our countries so far seem to be unable to drive this digital era where quicker structural reform must be undertaken.