The Slovenia Times

FDI Summit 2013: Timetable for privatisation will be known by the end of the month


Privatisation should be seen as a tool for unlocking economic potential in Slovenia, Jean-Marc Peterschmitt, the managing director for central and SE Europe at the EBRD, said in one of the opening addresses of the annual conference, organised by the Economics Faculty and The Slovenia Times paper.

He argued that the policy of gradualism had resulted in loss of competitiveness and productivity and that in the past Slovenia had missed out on multiple benefits that the injection of foreign capital brought, including the introduction of new technology and new managerial input.

"The privatisation agenda must now be made one of the centrepieces, as it presents not only new sources of revenue for the government but also an opportunity to change the fabric of the economy that can contribute to boosting growth," Peterschmitt told the conference, entitled "A Clear Vision for the Future".

He assessed that privatisation will be a test of the government's credibility and commitment to implementing reforms required to make the Slovenian economy more competitive and welcomed PM Bratušek's announcement of measures aimed at making Slovenia more appealing to foreign investors.

Bratušek said in her address that the Slovenian government was committed to encouraging foreign direct investment. "The Slovenian government supports FDI as an excellent tool for supporting economic growth and reducing unemployment," she said.

The government is aware that a sound economic environment was a key precondition for making Slovenia appealing to foreign investors, which is why it has embarked on reforms and measures to fix Slovenia's ailing bank sector and deal with corporate over-indebtedness, said Bratušek.

Announcing that a timetable for privatisation should be finalised by the end of the month, Bratušek stressed that the government was determined to ensure that Slovenia's economic potential would be better utilised by opening up its economy.

She pointed to Slovenia's geographic position, strong industrial base, developed infrastructure, and a well-educated and hard-working labour force as key advantages that the government was determined to help develop.

Participants of subsequent panels welcomed the government's commitments regarding privatisation, while urging concrete signal to investors and a well communicated privatisation strategy.

Marjan Hribar of the Ministry of Economic Development and Technology agreed it was high time for privatisation, saying he expected that the state would hold on to hardly any investments as strategic in the end and that almost all would be sold.

Marko Golob, a former management member of AUKN, the short-lived custodian of state assets under the 2008-2011 government, disagreed with the eleventh hour metaphor, pointing to low debt levels of the state and households among other things, while he did emphasise the need for a clear strategy to provide a necessary framework for investors.

Also pointing to potential pitfalls of privatisation, debates called for the choice of responsible investors that can be embraced by workers, whose loyalty is one of Slovenia's biggest assets.

Another thing raised at the conference included the need to cut red tape, which was presented by Ivan Lee, who heads the Hong Kong Economic and Trade Office in Berlin, as a win-win situation for the state on one side and businesses and citizens on the other.

Slovenian Interior Minister Gregor Virant, who is also in charge of public administration, said the country had been focusing on streamlining public administration procedures since 2000 and enjoyed success while still needing to undertake work in a number of areas.

Other aspects highlighted at the conference were the need for efficient decision-making at all levels of government in order to increase certainty for investors, as well as the need to improve the promotion of the country, which is fully embraced by pleasantly surprised foreigners only once they actually come here.

Appearing in many of the panels as a common thread was the tendency of Slovenians for pessimism and for projecting a more negative image of the situation in the country than as is indicated by rather encouraging data.

Dean of the Ljubljana Economics Faculty Dušan Mramor for instance pointed out that several fundamental macroeconomic indicators, including public debt and confidence indices, were better than the EU average.


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