SLOVENIA

Republic of Slovenia

Republika Slovenije

COUNTRY OVERVIEW

LOCATION AND SIZE.

Located in southeastern Europe, bounded on the north by Austria, on the northeast by Hungary, on the southeast and south by Croatia, and on the west by Italy and the Adriatic Sea, Slovenia has an area of 20,253 square kilometers (7,820 square miles), slightly smaller comparatively than New Jersey, and a coastline of 46.6 kilometers (29 miles). The capital city, Ljubljana, is situated on the Sava River in the central part of the country; the second major city is Maribor on the Drava River in the northeast.

POPULATION.

The population of Slovenia was estimated at 1,930,132 in July 2001. At the 1991 census, it was 1,962,606, giving it an overall population density of 97 persons per square kilometers (252 per square miles). In 2001, the birth rate was estimated at 9.32 per 1,000 population, while the death rate stood at 9.98 per 1,000, giving Slovenia a negative rate of natural increase. In 2001, however, a positive population growth rate was estimated, partly due to immigration from other former Yugoslav republics. Unlike many Eastern European countries, Slovenia has not been seriously affected by economic emigration in the 1990s.

Slovenes, a Slavic ethnic group, constitute about 88 percent of the republic's population; ethnic Croats (about 3 percent), ethnic Serbs (about 2 percent), and several other ethnic groups (about 7 percent) constitute the remainder. Slovenian culture has been strongly influenced by Austrian and German culture. Languages include Slovenian and others, corresponding to the ethnic breakdown. Most Slovenes (about 69 percent) are Roman Catholics, with smaller numbers of Lutherans and others. In the mid-1990s, Slovenia was home to some 20,000 refugees from the war in Bosnia and Herzegovina. About 52 percent of the population lives in urban areas, particularly in Ljubljana. The population is aging, with 16 percent below the age of 14 and 19 percent older than 60.

The aging of the population was spectacularly illustrated by the success of the Democratic Party of Slovene Pensioners (Desus) in the late 1990s. Having entered parliament in 1996, this retiree party achieved a record 5.2 percent share of the popular vote in 2000, pledging to put off pension reform. The Slovenian government has been consistent in its commitment to supporting families and youth, yet unable to reverse the aging trend, characteristic of Europe as a whole.

ECONOMIC SECTORS

Most major sectors reported growth in 1999. Industry constituted 35 percent of GDP in 1998. Agriculture accounted for a modest 4 percent, although its contribution to the market value of products rose by 2.2 percent, and services were by far the largest sector in the economy with 61 percent of GDP and almost half of the value added to all commercial companies.

SERVICES

TOURISM.

Tourism is a significant source of foreign currency, accounting for US$1.22 billion in revenue in 1996, a record for independent Slovenia, but still far behind the results before 1991, when many more foreign tourists visited its famous mountain resorts (around Lake Bled) and coastal areas. The authorities have been somewhat slow in recognizing the earning potential of that sector. Even now, opinions are divided on this activity whose fortunes depend sometimes on circumstances beyond the country's control. More recently the view has prevailed that tourism deserves more support, given the potential in a country combining an Alpine setting and a Mediterranean coast within a short distance, as well as numerous places of historical and architectural interest and broadly acclaimed health spas located in resort towns along the coast.

Germans (782,128), Italians (537,412), Austrians (483,472), Croats (212,676), Dutch (151,470) and British (135,269) made most overnight stays in 1999. The government plan is to achieve some 9 million overnight stays of foreign guests by 2005 in order to surpass the level of nearly 8 million in 1990, but few in Slovenia are relying on a return to mass-market tourism—which is rather unlikely, given the overall decline of the industry in Europe and the country's relatively high labor costs. Casinos, which bring in 30 percent of all tourism earnings, will also be encouraged. But foreign involvement in this sector has been limited so far, and some foreign tour operators sometimes get a hostile reception by domestic firms.

FINANCIAL SERVICES.

With 25 banks, 6 savings institutions, and 70 commercial credit houses at the end of 1999, Slovenia is considered to be rather over-banked. The role played by financial institutions in the economy is in line with other leading Eastern European transition economies but still lags below levels found in Western Europe. The 3 largest banks, Nova Ljubljanska Banka, SKB banka, and Nova Kreditna Banka Maribor, hold more than half of the total banking assets, but are still state-owned despite long-standing privatization plans. The Slovene banking sector has avoided the calamities that have plagued other east-central European countries. Slovene banks tend to be more profitable and efficient than their counterparts there, but they are still behind those in the EU, owing to a large extent to the lack of competition. Credit card companies have been active throughout the 1990s, and their market is steadily growing.

RETAIL.

Slovenia's retailers, especially the chains with near monopolies in their regions, have been growing throughout the 1990s. Mercator, the largest Slovene retailer, presently accounts for some 40 percent of the entire retail sector, the structure of which is now much closer to that in Austria or Switzerland than to Croatia or Hungary. There are also about 11,000 small stores, with an average size less than one-third of the European average. About half of them have less than 5 employees, and sales per vendor are less than 50 percent of the European average number. The sector is considered ripe for consolidation and for heavy foreign investment. The arrival of heavyweight western-European retailers such as Interspar (Austria) and Leclerc (France) has helped focus interest on higher-volume and lower-margin sales. Competition from such large chains, building hypermarkets (large supermarkets) with western European standards of layout and service, will likely drive many of the smaller retailers out of business.

In Slovenia, direct marketing is quite a serious business as many large direct sales companies, including Amway, Avon, Tupperware, Golden Neo-Life Diamite, Stanhome, Kirby (of the United States), and AMC (of Switzerland), have established their presence. Some, such as Amway and Golden Neo-Life Diamite, have direct representation in the Slovenian market while others, like Avon and Tupperware, use independent agents. Direct marketers complain, however, that their business is made unnecessarily difficult by the many restrictive regulations. A reason for this is the occurrence of many fraudulent pyramid schemes in the early 1990s, which has led to the annihilation of millions of dollars in personal savings and has generated broad government skepticism about direct sales, particularly multi-level marketing ventures.

DEPENDENCIES

Slovenia has no territories or colonies.

BIBLIOGRAPHY

Hafner, Danica Fink, and John R. Robbins, eds. Making a New Nation: The Formation of Slovenia. Hanover, New Hampshire: Dartmouth University Press, 1997.

The Economist Intelligence Unit. Slovenia. <http://www.eiu.com> .Accessed December 2000.

United States Central Intelligence Agency. World Factbook 2000. <http://www.odci.gov/cia/publications/factbook/index.html> . Accessed November 2001.

United States Department of State. FY 2000 Country Commercial Guide: Slovenia. Online, 2000. <http://www.state.gov> . Accessed December 2000.

—Valentin Hadjiyski

CAPITAL:

Ljubljana.

MONETARY UNIT:

Slovene tolar (SIT). One tolar (SIT) equals 100 stotins. There are coins of 50 stotins, and 1, 2, and 5 tolars, and notes of 10, 20, 50, 100, 200, 500, 1,000, 5,000, and 10,000 tolars.

CHIEF EXPORTS:

Manufactured goods, machinery and transport equipment, chemicals, food.

CHIEF IMPORTS:

Machinery and transport equipment, manufactured goods, chemicals, fuels and lubricants, food.

GROSS DOMESTIC PRODUCT:

US$22.9 billion (2000 est.).

BALANCE OF TRADE:

Exports: US$8.9 billion (f.o.b., 2000). Imports: US$9.9 billion (f.o.b., 2000).

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