The Slovenia Times

Change of values required for fast recovery, AmCham event hears


Participants of the AmCham business breakfast in Ljubljana also touched on the expectations about the depth and duration of the economic crisis due to the pandemic and the measures required for a fast recovery from the crisis.

Nevenka Kržan of the management consultancy KPMG Slovenija said that this crisis was much different from the one from a decade ago, as it had been a crisis of the financial system, while today there was a crisis of demand in the real sector.

For this reason, the response of economic policies is different and focused in stimulating demand and investments, said Kržan, who expects that demand will be the main driving force of a recovery, as opposed to international trade in the previous crisis.

Participants assessed that Slovenia's gross domestic product (GDP) will shrink from 6% to 10%, but Blaž Brodnjak, the chairman of the NLB bank, was rather optimistic, expressing the belief that Slovenia and the wider region will recover fast.

According to him, one cannot speak about the biggest crisis since the Second World War. The cumulative effect of the previous crisis was much greater for Slovenia, he said, while adding that much would be clear in the autumn.

Nevenka Črešnar Pergar of the AmCham Investment Committee is not pessimistic, either, but she noted that trends in the coming months would depend on further government measures and investments and the ability to use EU funds to raise its development level.

Expressing somewhat less optimism was Biljana Weber of Hewlett Packard Enterprise, who thinks that Europe and the world are facing a slow recovery, which according to some estimates could take as many as three years, which is why companies need to make adjustments.

While the last three months were difficult, Infrastructure Minister Jernej Vrtovec said that the current situation was a great opportunity for a new beginning, launch of investments and restructuring of economies towards sustainable development.

Brodnjak assessed that the current, one-off drop in GDP was "resetting", which was necessary after five years of fast growth, adding that there were imbalances also in Slovenia - for example on the labour and real estate markets.

The debaters agreed that a fast recovery in the coming years and greater welfare requires a change in values, with Črešnar Pergar pointing to the importance of domestic and foreign private capital, saying that many Slovenians had a negative attitude to it.

"Slovenia does not have problems with foreign capital, it has problems with any capital," added Brodnjak, who believes that Slovenians should make a decision that they want to be the best in Central Europe, and then follow this ambition.

Kržan agreed that, for Slovenia to have a brighter future, values in society should be changed so that capital and profit is no longer perceived as an enemy. "We must be united in wanting to overcome historical limitations and achieve some more."

Vrtovec said that the government had the ambition to change things, noting the plans to stimulate digitalisation, make tax changes, attract talent and invest in infrastructure and logistics to take advantage of a favourable geographical position.

The minister invited investors to invest in logistics and other fields and promised that the state would help them, also pointing to the importance of investments in logistics by countries north of Slovenia in relation to the port of Koper.


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