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Slovenia Lags Behind Similar European Countries in FDI

Ljubljana, 02 August (STA) - Slovenia is lagging behind small European countries in the flows of foreign direct investment (FDI), as its inward flows increased, while outward flows decreased in 2010, according to a report by the United Nations Conference on Trade and Development (UNCTAD) released on Tuesday.

Marjan Svetlicic of the Ljubljana Faculty of Social Sciences told the press that inward flows in FDI increased by USD 252m year-on-year in 2010 to USD 834m, while the outward flows amounted to only USD 151m (USD 167m in 2009).

He moreover said that Slovenia, with the FDI inflow at around 20% of the GDP, lagged behind small and countries in transition, such as the Czech Republic, Hungary and Poland, where the FDI inflow stood at around 40% of the GDP.

Svetlicic believes that the state officially supports the FDI, while in reality it fears them, failing to see the FDI as an instrument.

Fearing foreign take-overs, Slovenia has found itself in a paradoxical situation, called the "fire sale FDI", as it has to sell companies that have failed to restructure or are indebted due to management buy-outs and lost value due to crisis.

Jelena Cirjakovic of the Statistics Office meanwhile said that contractual forms of international production, the focus of the UNCTAD's report, were increasing in Slovenia, with service providers lagging behind production companies.

Most of the Slovenian companies still focus on nearby markets, such as Croatia, Serbia and Bosnia-Herzegovina, she added.

In global terms, the UNCTAD report suggests that flows of FDI, with inward flows at nearly USD 1,244bn in 2010 and outward at around USD 1,323bn, might reach pre-crisis levels already this year, while they are expected to catch up with the 2007 record amount of in 2013.

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