Ljubljana, 20 September (STA) - Slovenia is a country which can offer good strategic location, right infrastructure, innovative spirit and a well-educated workforce. But what it lacks is reforms of its labour market and the withdrawal of state from the economy, stressed participants of the opening panel of the FDI Summit 2012 in Ljubljana on Thursday.
It is high-time to stop only talking and start working on creating a more business-friendly environment, said Brane Krajnik, CEO of The Slovenia Times, the organiser of the conference. He believes Slovenia can offer a lot provided it acts in time. "Maybe we are not on the radar, but there is potential here," he stressed at the opening of the conference.
Dean of the Ljubljana Faculty of Economics Dušan Mramor pointed to misguided economic policies that brought Slovenia into the situation where it is now, including the failure to pass major structural reforms and the pro-cyclical economic policies that led to the nation's public debt soaring by 160% between 2005 and 2009.
He believes challenges can be overcome with the right diagnosis of problems and decisive remedial action. He pointed to the hi-tech and energy sectors as the lesser-known areas of opportunity.
"Slovenia was lucky to start its journey in the time of economic growth and stable environment and probably didn't prepare sufficiently for the crisis that we are in today," said managing director of Goodyear Dunlop Central and South East Europe Thierry Villard.
He believes Slovenia's major problem is that its economy is more dependent on exports than many other EU members. Domestic demand is too low and that is cause for concern, especially when the rest of Europe is suffering, he told the panel entitled "Slovenia as Seen From a Critical Distance".
He was critical of the government austerity measures, saying cost-cutting would not help lift the low domestic demand. He believes the only way out for Slovenia is to attract foreign investment, especially since it is well located, has the right infrastructure and qualified labour force.
But in terms of labour laws, it does not have the right level of flexibility and is "not quite there yet" when it comes to accepting foreign direct investment as a positive thing, he added.
Chief operating officer of the Odelo group Klaus Holeczek called for the right level of competitiveness, stressing that Slovenia needed to conduct benchmarks to find and evaluate its competitive advantages.
Executive vice president for Eastern Europe of the SH Bosch and Siemens home appliance group Rudolf Klötscher meanwhile pointed to the need for a clear distinction between the role of politicians and the role of entrepreneurs in the economy, adding that the high level of state ownership did not reflect what should be a market economy.
With regards to the announced privatisation of state assets, Klötscher welcomed the willingness of the current government to withdraw from the economy. But he noted that privatisation could only be done once, so the government must decide responsibly whom to sell the state silverware.
He stressed that bringing in the right know-how would be crucial for Slovenia's further development, adding that there were many successful Slovenian entrepreneurs abroad that could be brought back to Slovenia. But for that they will want entrepreneurial freedom and fully-functional market economy, he stressed.
The panel was part of the third international investment conference FDI Summit 2012, which is running until Friday. With about 200 participants expected, the conference focuses on foreign investment trends, the changing economic situation in Slovenia and the measures the country will have to take in response to the new conditions.