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GZS Panel Looks at Future of Slovenian Economy

Ljubljana, 19 March (STA) - A stronger focus on new foreign markets, on investment, stable public finances and sector-based policies were highlighted in a panel debate in Ljubljana on Monday as key steps towards improving the situation of the Slovenian economy.

The debate, hosted by the Chamber of Commerce and Industry (GZS) and marking 20 years of the GZS's "Economic Boom Trends" bulletin, examined at the key challenges for Slovenia's economy two decades after the first year of the country's independence.

Looking at the situation in the car industry, Robert Žerjal of car parts maker Iskra Avtoelektrika, stressed the need for technological development that will enable the sector to keep up with international competition, especially in the field of environmentally friendly engine solutions.

Additional capital will be needed to secure this, but also forays into new markets, which is where Žerjal sees a similarity with 1992. However, while Europe was the focus area then, it is necessary to follow global players onto emerging markets.

The need for a sector-based approach was emphasised by Andrej Mate of the GZS's wood and furniture industry section. Mate believes that the wood industry will thrive if all of its segments focus on production for buyers determined in advance.

Tomaž Kmecl of Kolektor Etra, a maker of energy transformation systems, said the company's success abroad was a result of constant investment in development, the choice of the right sector and good products.

While highlighting green energy sources as a good focus area, he argued that too few Slovenian companies were producing finished goods or investing into building a brand name to secure higher added value.

The debate also touched on the transfer of production abroad, with Kmecl saying that the process was already under way at Iskra Avto Elektrika. Plans include China and Bosnia-Herzegovina.

Mate argued that knowing the buyer in advance will keep companies from moving production, as they will want stay close to clients and hold on to highly skilled workers. He on the other hand expects takeovers by foreign investors in certain sectors.

Kmecl said that all production segments that bring added value to Kolektor - development, final assembly and lab research - are staying in Slovenia, while the rest is produced by partners abroad.

Meanwhile, speaking on behalf of the Institute of Macroeconomic Analysis and Development (IMAD), a government think-tank, Lejla Fajič mentioned the need to consolidate the banking sector, which would secure funding for companies, as well as public finances.

She also believes the government should shift its approach from horizontal support to more targeted support to specific sectors.

GZS head Samo Hribar Milic argued that sectors with good connections to research and development will tread better in the future, producing globally competitive products with higher added value. He called for the use of Slovenia's competitive advantages, such as large supplies of wood and its geostrategic position.

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