Globalization in Slovenia
This essay tries to analyze the effects globalization on the economy of Slovenia.
Since its independence in 1991, Slovenia has undergone a major political and economic change. From a heavily burdened economy in 1990s it has transformed itself completely. Its status has changed from a borrower country to a donor country at the World Bank. Its GDP per capita is much higher than the other transition counties of central Europe. It has developed excellent infra structure, well educated human resources and privatization of economy accelerated at a very fast pace during 2002-05. Much of the economy still remains in the hands of the state and foreign direct investment is still the lowest in EU.( Slovenia)
Globalization and economy
Slovenia was one of the most productive republics of Yugoslavia, before its independence in 1991. Thus, it had the inherent advantages of good trade relations with the western European countries.
Many new policies were framed by the newly established political system of Slovenia. These steps have enabled Slovenia to evolve a strong market economy.
Briefly these steps were:
Embrace liberal trade
Follow the rule of law
3. Rewarding enterprise
4 Diversification of trade towards the west
5. Integration into western and transatlantic institutions.
6. Become a party to bilateral and free trade organizations
7. Accelerate privatization
Slovenia was one of the founding members of WTO , and joined the Central
European Free Trade Agreement ( CEFTA) in 1996. It also participates in SECI,
the central European Initiative, the Royaumont Process, and the Black Sea
Economic council. Slovenia became a member of EU on 1 May 2004.
Slovenia has been cautious in its approach to globalization, and economic management of its reforms. It has been heavily emphasizing on consensus before proceeding. Still, its overall record is one of relative success. Today, Slovenia is one of the best economic performers in central and eastern Europe.
The GDP per capita in 2006 is estimated at US $ 22,900=00 which is
almost 88% of EU-15 average.
2. A steady growth rate of GDP at 4% . It stood at 4.4% in 2006.
3 Services contribute 62% of the GDP, industry and construction comprise
34.7% and agriculture, forestry and fishing account for 2.3% of GDP.
4 Public finance deficit at a modest 1.5% of GDP
5. Current account deficit in 2006 stood at $ 789.2 million
Slovenia has been receiving the highest credit rating amongst all transition economies. However, its ability to meet its growth rate objectives will largely depend on the global market, because its own primary market is stalled.
Foreign direct investment policy needs to be carefully planned because there is a huge deficit in pension accounts, the western exports are vulnerable and inflationneeds to be further curbed. FDI stake is certainly going to increase once the state owned assets like telecommunications, finance and energy sectors are opened up.
Slovenian enterprise has a tradition of market orientation that served them during the transition period. In many cases, under the Slovenian brand of privatization, managers and workers in formerly “ Socially owned” enterprises have become the majority share holders perpetuating the practice of “ worker management ” prevailing under the Yugoslav brand of communism. Difficulties associated with that model are likely to decrease as shares in these firms change hands, and as EU reforms enforce more western oriented management practices.
Historically the Slovenian finance markets are heavily protected. However, market forces and Bank of Slovenia regulations are forcing the government to open up this sector. In 2003, portfolio and direct investments were allowed into Slovenia. Banking and securities brokering and undertaking credit transactions were also allowed. Mutual investment funds were allowed in 2004 and now banking and insurance sector are likely to follow. With a number of barriers on FDI being removed in 2002, the blue chip companies of Slovenia were taken over by foreigners. It is interesting to note that despite these successes, the foreign direct investment in Slovenia is the lowest amongst the EU on a per capita basis, and much of the economy is still in the hands of the state.( Economy )
The Slovenian economy has undergone a major change since its independence. Steps taken by its political system to co- operate with other nations for mutually beneficial trade have resulted in a major success. Its cautious approach is worthy of appreciation. Despite a success in globalizing its economy, much of the control is still in the hands of the state.
Works cited page
Slovenia, The World fact book, 15 Mach 07, Retrieved on 6 April 07 from:
Economy, Slovenia, Europe, Travel document systems,
Retrieved on 6 April 07 from :
< http://www.traveldocs.com/si/economy.htm >