InFocus Slovenia

Slovenia 2018

SLOVENIA & CROATIA

OUR RELATIONS ARE COMPLEX AND INTENSIVE ZDRAVKO POČIVALŠEK

Slovenian Economy Minister

H.E. SMILJANA KNEZ

SAŠA MUMINOVIĆ, PhD

Slovenian Ambassador

President of the SLO CRO Business Club in Zagreb

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FOREST, FOREST

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Exactly one half of the Slovenian territory is covered by forests, thus making it one of the greenest destinations in the world.

GOING DEEPER UNDERGROUND There are over 10,000 caves in Slovenia. The best known, Postojna, runs for around 20km. That’s a lot of time in the dark. It is the most-visited cave in Europe.

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In Slovenia, there are so many vineyards that there is one vineyard on every 70 people!

It is one of the highest concentrations of vineyards per capita in the world.

05 SKI JUMP NATION The fact that Slovenia is doing great in ski jump is well known, but there is also the greatest ski jump in the world in Slovenia, the famous Planica.

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WINE EVERYWHERE!

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CLARO QUE SÍ!

The Slovenian Internet extension domain is not .sl (since it was already taken by Sierra Leone) but .si. Extension .si is often used for Spanish-speaking web sites because it means – “yes”!

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THE BEAR COUNTRY

Slovenia also has one of the greatest populations of brown bears in the world per capita, and there are more than 400 wild brown bears roaming around!

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FAIRY TALE LIVES HERE The film “The Chronicles of Narnia: Prince Caspian” was filmed in Soča Valley in Slovenia.

Fairy tale landscape, right?

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HIKING IS THE KING

Slovenia has as much as 7.000km of marked hiking trails and also 165 huts and shelters for hikers!

Slovenians are so in love with mountaineering that the first married couple to climb Mt Everest was Slovenian!

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TOURISM IS A REGIONAL THING

Tourism is an excellent example of how our two countries can work together. We are very sucessful in our joint approach to remote markets, under the common slogan »Experience Croatia, Feel Slovenia«. Now, we are jointly targetting China

INTERVIEW

ZDRAVKO POČIVALŠEK Slovenian Economy Minister

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s it safe to say that the Slovenian economy is now stable and charging ahead?” we asked Zdravko Počivalšek, the Slovenian Economy Minister. In short, the answer was “yes”. Back on track to convergence with more developed Member States, Slovenia has been moving towards an inclusive society in the last few years. While many indicators look promising, there is still room for improvement in research and development, innovation, and digitalisation, which are the key long-term factors of productivity growth, says the minister.

How do you explain the fact that, despite the relatively difficult situation after the financial crisis, the Slovenian economy has recovered quickly? How many of these inherited problems are still visible in the balance sheets of companies and banks?

— The recovery in growth relied mainly on the restructuring of indebted state-owned enterprises, reform of the banking sector and attracting foreign investment in a huge privatisation programme.

In the financial sector, the banks have been recapitalised and restructured at considerable cost following the

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banking crisis of 2012-2013. The privatisation should be expedited in order to complete the restructuring of the industrial and banking sectors. Almost 54% of the public debt, namely 40% of the GDP, is held by foreign creditors and an external export debt ratio is currently above 120%.

However, most of this debt is long-term, 70% is denominated in euros, and corresponds to private commitments.

WE EXPECT THE REBUILDING OF AGROKOR TO BE PERFORMED IN SUCH WAY THAT ENABLES GROUP MERCATOR D.D., WHICH MAJORITY STAKEHOLDER IS AGROKOR, TO OPERATE NORMALLY AND HAVE SUITABLE BUSINESS CONDITIONS IN THE FUTURE

Given the low unemployment and expected wage growth, how does Slovenia intend to ensure its export competitiveness?

— Slovenia is a strongly export-oriented country. Exports account for more than 80% of the Slovenian GDP. The export of goods and services in 2017 increased by 13.3% compared to 2016 (amounted to EUR 35.6 billion), while the import of goods and services in 2017 was 13.6% higher than in 2016 (amounted to EUR 31.4 billion). For Slovenia it is extremely important to stay competitive in the global market. That could be achieved with an additional increase in the relative importance of high-technology products and a decline in the share of low-technology products. The market share of natural resources (wood) has also been rising relatively rapidly.

How much has Slovenia digitised in terms of government and business services?

— Slovenia made significant progress in the integration of digital technologies by enterprises, where it now ranks above the EU average. Slovenian enterprises have considerably stepped up their digitisation efforts. Our country ranks 3rd

in the use of e-Invoices due to a generalised roll-out of e-Invoice transactions by the public sector; the business sector now needs to use e-Invoices in transactions with the public sector. In 2015, 16% of companies were using e-Invoices, compared to 57% in 2016.

Slovenia has considerably improved its performance in Digital Public Services due to a considerable increase of re-use of public sector data (from 34% to 60%).

The re-use of Open Data has significantly increased after the adoption of national legislative measures related to the implementation of the Directive on the re-use of public sector information.

How much are the Slovenian and Croatian economies linked via production and trade?

— The bilateral co-operation between Slovenia and Croatia in the field of tourism at the national level is very good. Croatia is one of 5 most important markets for the Slovenian tourism. In 2017, 14% more Croatian tourists visited Slovenia compared to 2016. Croatia was the 4th tourist market according tourist arrivals and 5th tourist market according overnight stays, right after Italy, Austria, Germany and the Netherlands. Last year, we registered more than 392,800 overnight stays by Croatian tourists, which is 11.6% more than in 2016.

This number represents a 4.58% share in foreign overnight stays.

What results have been achieved in solving the Agrokor issue from the Slovenian side?

— The Republic of Slovenia wants the restructuring of the AGROKOR concern to be successful and not result in nega-

tive consequences for the regional economy. Croatia is an extremely important trade partner of the Republic of Slovenia, therefore our goal is to have stable economic circumstances, which enable growth in the economic cooperation between the countries.

FOR SLOVENIA IT IS EXTREMELY IMPORTANT TO STAY COMPETITIVE IN THE GLOBAL MARKET. THAT COULD BE ACHIEVED WITH AN ADDITIONAL INCREASE IN THE RELATIVE IMPORTANCE OF HIGH-TECHNOLOGY PRODUCTS AND A DECLINE IN THE SHARE OF LOWTECHNOLOGY PRODUCTS Both Slovenia and Croatia are tourist powers in the region and in the European context as well. What are the plans for further bolstering of the cooperation and joint appearance in third markets?

— The cooperation between the Slovenian Tourist Board (STB) and the Croatian Tourist Board (CTB) is developing excellently in the form of common presentations of tourism offers on remote markets, under the common slogan »Experience Croatia, Feel Slovenia« since 2010. Throughout the years, the two tourist boards had joint activities such as organizing trade fairs

and workshops in Central and Eastern Asia, while in October last year, these two organizations carried out a common study tour for Chinese travel organizations and agents through the activities carried out by the European Travel Commission (ETC) in the period of the preparation for the EU – China Tourism Year 2018. Both the STB and the CTB received European funding for the above activities following a tender launched by the European Tourism Commission.

Among the key goals that both countries are pursuing in the Chinese market, the most important ones are increasing recognisability and bolstering the reputation of both countries as attractive and authentic European tourism destinations, as well as increasing the number of Chinese tourists in the region. At the same time, we also want to have the tourists from our region coming here for as long as possible.

Slovenia is very focused on ecology.

How many green jobs can the Slovenian economy generate?

— Slovenia wants to position itself as a green destination both in tourism and in the wider economy. This, of course, is understandable in the light of the natural features that it has. Slovenia is the third most forested country in Europe with 60% of its territory covered in forests. The Natura 2000 network in Slovenia covers 38% of the entire territory. We also have 13% of protected areas, which include 1 national park, 3 regional parks, 44 landscape parks and 60 nature reserves. The fact that Slovenia has a wealth of waterways creates further opportunities for the development of a green economy and the creation of green jobs.

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SLOVENIA MADE SIGNIFICANT PROGRESS IN THE INTEGRATION OF DIGITAL TECHNOLOGIES BY ENTERPRISES, WHERE IT NOW RANKS ABOVE THE EU AVERAGE SLOVENIA 2018

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OUR RELATIONS ARE COMPLEX AND INTENSIVE We have resolved open issues with three of Slovenia's neighbours, which has resulted in excellent relations with these countries. We want to achieve the same with Croatia

INTERVIEW

H.E. SMILJANA KNEZ Slovenian Ambassador

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he primary goal of Slovenia's foreign policy is to ensure peace, security and prosperity, as well as to work towards a strong European Union and a well functioning multilateral system, says H.E. Ms Smiljana Knez, Slovenian Ambassador.

Foreign policy always begins with good neighbourly relations, notes the ambassador. “This has always been our top priority. We have resolved open issues with three of Slovenia's neighbours, and I can say that such an approach has resulted in excellent relations with these countries. We want to achieve the same with Croatia.”

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THERE ARE MANY POSITIVE STORIES AND CASES OF EXCELLENT COOPERATION WITH SLOVENIAN PARTNERS ALL AROUND CROATIA. I AM SOMEWHAT DISAPPOINTED THAT THESE GOOD STORIES DO NOT MAKE HEADLINES AT THE NATIONAL LEVEL

What are the main characteristics of Slovenian-Croatian bilateral relations?

— Relations are complex and intensive, with a lot of potential for improvement.

On the one hand, there is good economic cooperation, rich cultural ties, and intensive cross border contacts. On the other hand, there are open issues that prevent the intensification of these relations and prevent other forms of cooperation.

To what extent has the European integration process influenced relations between the two countries?

— The European integration process offers great transformative potential. Some coun-

tries use this better than others do. The ultimate goal is to achieve fully functioning institutions for the protection and promotion of democratic standards. The European integration process should be led and navigated in a way that prevents backtracking.

Slovenia joined the EU eleven years before Croatia. Our country not only supported the Croatian candidacy politically, but also provided technical expertise, and shared experience and lessons learnt. We regret Croatia's attempts to unilaterally draw the border between the two countries at the time of EU accession negotiations. At that point, Slovenia had to respond. We agreed on a compromise, and that compromise was the Arbitration Agreement, concluded and signed with the help of the EU , more specifically the European Commission. The Arbitration Agreement allowed Croatia to join the Union; at the same time, it obliged our neighbour to respect the ruling of the Arbitral Tribunal.

We expect Croatia to do so.

The fact that both Slovenia and Croatia are members of the EU makes business cooperation somewhat easier.

In what way do the two countries common economic interests unite them?

What is your assessment of economic cooperation; which segments are most developed, and in which areas could cooperation improve?

— That is a very good question. Trade between Slovenia and Croatia is important, close to 5 billion euros. Croatia is Slovenia's fourth-biggest trading partner, while Slovenia is Croatia's third-biggest (after Germany and before BiH).

There are many investments as well.

I am proud to say that most Slovenian investments have been in regions that are less popular with other foreign investors, and usually mean a lot to the local population. One example is TLM Šibenik, bought by Impol. As is well known, around 1.4 million Slovenians visit Croatia every year, thus significantly contributing to good tourist seasons there. What is less known and really should be pointed out, is the good cooperation of both countries in third countries.

In recent years, Slovenia has enjoyed stable and rapid economic growth, at 5% annually. This growth is based on exports, industry and technology. Areas where Slovenian companies and research are

particularly strong are artificial intelligence, blockchain and e-mobility. At the same time, these are areas where we see potential for future cooperation with Croatia.

When we focus on attracting more visitors, we promote Slovenia as "Green, Active and Healthy"; when we focus on attracting more businesses, we promote ourselves as "Green, Creative and Smart".

These slogans are highly evocative, and show the direction our country is taking.

I wish to underline the role of the SLO-CRO Business Club. I am very proud of their work and happy about our intensive cooperation.

WE NEED TO BUILD CONFIDENCE AND TO START MAKING SERIOUS ATTEMPTS TO RESOLVE THESE OUTSTANDING QUESTIONS SUCH AS THE ISSUE OF THE BORDER IN THE GULF OF PIRAN, AND THE ONE WITH LJUBLJANSKA BANKA Apart from developed economic relations, what makes you optimistic about cooperation between the two countries?

— It is my role as ambassador to be an optimist and to do the utmost to realise this optimism. As an embassy, we are doing our utmost to minimise the effects of open political issues on economic, cultural and people-to-people relations. There are many positive stories and cases of excellent cooperation with Slovenian partners all around Croatia. Local politicians and the media highly appreciate them, as well.

Still, I am somewhat disappointed that these good stories do not make headlines at the national level.

The issue of the border in the Gulf of Piran, as well as certain open economic issues, like the one with Ljubljanska Banka, loom over political relations between the two countries. What concrete steps need to be taken to address these issues, because it seems that no

one is willing to change their position?

— To be clear: the border issue, now resolved with the Arbitral Award, concerns the whole border – the maritime and land boundaries.

To begin with, full respect for the principle of the rule of law would change a lot. We need to build confidence and to start making serious attempts to resolve these outstanding questions. The Arbitral Tribunal ruled on both the land and maritime boundaries. Slovenia has taken all the necessary measures to implement the Award on its side. The Final Award has been issued and needs to be implemented.

Slovenia is ready to discuss its implementation with Croatia. When you ask about concrete steps – this is the first concrete step to be taken by our neighbour.

Rule of law is the key to the solution, also when it comes to LB/NLB issue. Slovenia respects the judgements of international courts and tribunals and duly fulfils its obligations. In line with the pilot EctHR judgement in the Ališić case (regarding LB foreign-currency deposits), Slovenia paid more than 150 Million EUR to the savers of LB Main Branch in Zagreb in last two-years.

Croatia on the other hand, continues to violate the treaties concluded between the two neighbours – among them the Memorandum of Understanding (signed in Mokrice in 2013), when it comes to foreign currency savings transferred to ZaBa and PBZ. Furthermore, Croatian courts proceedings related to LB claims towards Croatian companies were not concluded in 25 years (!). Related to this issue Slovenia lodged an inter-state procedure against Croatia before the EctHR in Strasbourg in 2016 and we hope for a favourable outcome.

How much can Slovenia's experience contribute to the faster accession of candidate countries?

— Slovenia is one of those EU Member States that strongly advocates an open door policy for the EU and NATO. Having said that, it is important to underline the responsibility of aspirant and candidate countries themselves to meet the criteria and fulfil their obligations. In the past, Slovenia has been providing expertise and technical assistance; our country will continue along this path. Without the Western Balkan countries, the European Union (and NATO) cannot be considered a truly complete community.

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WE CLOSELY COOPERATE WITH OUR SLOVENIAN COLLEAGUES Business people from Zagorje and Slovenia are developing joint projects, competing for EU cross-border cooperation funds and having a close cooperation

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he information that a Zagorjebased company, Vetropack Straža from Hum na Sutli has built a bridge that connects their factory premises with finished goods warehouse in Slovenia speaks volumes about the close connection between the two economies – says Janja Kantolić, Director of the Regional Chamber Krapina at the Croatian Chamber of Economy (CCE).

How can the CCE help Slovenian and Croatian entrepreneurs to implement individual and joint projects?

— We have signed agreements on mutual cooperation with the Chamber of Commerce from Slovenia. We are developing joint projects, with one of the last projects being DEMINE. The aim of the project was to promote knowledge about the EU and national regulations in order to increase employee involvement in business operations and management of operational practices in companies.

Also, together with our colleagues from Slovenia, we have a meeting once a year to find opportunities for joint projects in which entrepreneurs and Croatia and Slovenia could be interested.

How much did the recovery of the EU

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INTERVIEW

JANJA KANTOLIĆ

Director of the Regional Chamber Krapina at the Croatian Chamber of Economy (CCE)

economy affect the production growth in your region?

— We are an export-oriented county, with the foreign sales revenues of HRK 3.8bn.

We have also recorded a 7.2% growth compared to 2016. Our import to export ratio in 2017 was the impressive 170.2%. In addition, we have had significant positive shifts in certain business indicators and we value the importance of industrial production in our county's economy. Our total revenues increased by 6.3%, and expenditures by 7.1% relative to 2016.

OUR MOST IMPORTANT PROJECT IS BUILDING "THE DIGITAL CHAMBER", AN INFORMATION AND COMMUNICATION PLATFORM FOR E-SERVICES FOR MEMBERS OF THE CROATIAN CHAMBER OF ECONOMY, PUBLIC ADMINISTRATION AND CITIZENS

Do you have labour shortage?

— Labour shortage is noticeable in our county too, especially in the processing, transport, construction and tourism sectors. In the coming years, this problem will strongly affect more and more business people, but this is also the problem that the neighbouring countries are facing.

What can you offer to young entrepreneurs?

— We are organizing a whole series of activities such as trade fairs, trainings, study tours, and business meetings, and we are readily available to all our members for any suggestions and assistance related to their business. We provide various counseling services to young entrepreneurs. Their participation in many trade fairs and professional trainings is either free of charge or co-financed by the Chamber, which could be important in the beginning of business.

What are your plans in terms of further boosting the competitiveness of companies in your county?

— We are focusing on the promotion of companies and products in foreign markets, and we are also working hard on the implementation of dual education in Croatia.

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COOPERATION

ALPS MEET ADRIA Strong in spite of obstacles

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lovenia and Croatia have begun their economic cooperation a long time ago. At the time of Yugoslavia, when, as the two most developed republics, they gravitated toward the West most, they established a strong co-ordination, primarily with Austria and Italy. Today, these are the only two ex-Yugoslav republics that are the members of the European Union.

Their cooperation is basically like cooperation between any other countries Croatia and Slovenia have much better economic than political ties. Obviously, the border dispute and the case of Ljubljanska Banka are not too much of a threat to their economic cooperation.

THE BEGINNING: FORMER UNION AND ALPE-ADRIA COOPERATION It all started, some 40 years ago, as a tripartite cooperation meeting, and later turned into something much more important. The Alpine-Adriatic Working Group was established on November 20th, 1978 in Venice, following the signing of the Joint Declaration of Regional Prime Ministers.

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The Group had no legal authority and its activities covered an area of 190,423 square kilometers, and a population of approximately 30 million people. After the breakup of Yugoslavia and the fall of Socialism in Hungary, the group included 5 countries: Hungary, Italy, Austria, and of course, Slovenia and Croatia. It helped strengthen the ties between the two republics and connected them with the future Western markets. After the war started in 1991, the work group had the

IN 2017, SLOVENIA WAS THE THIRD BIGGEST CROATIAN PARTNER, BOTH IN IMPORT AND EXPORT crucial importance in detachment from the Balkans and re-orientation towards the West. Later on, CEFTA came into focus, and the cooperation between the two countries grew even further. Unfortunately for Croatia, it became a CEFTA member only in 2003, while Slovenia became a full-fledged EU member in 2004 so the two countries

were CEFTA members at the same time only for a year. In 2013, Croatia joined the EU which resulted in yet another boost in the economic cooperation with Slovenia which will develop even more once Croatia enters the Schengen Area.

FACTS AND FIGURES Croatia's trade with Slovenia has been growing steadily since 2009 and was expedited by the accession of Croatia to the European Union. The growth trends have continued into this year too. The Slovenian Ministry of Economy has reported that Croatia is ranked fourth among Slovenia's biggest trade partners, while the most encouraging figures indicate a continuous trade growth (both in goods and services).

The new record highs in the bilateral economic cooperation, reached in 2016, were marked by the value of the external trade totaling EUR 4.64 billion, of which EUR 3.58 billion was goods trade, and EUR 1.06 billion trading is services. Croatia is the country in which Slovenia has invested the most in 2016, with the investments worth over EUR 1.6 billion.

Croatia has made close to EUR 900 million worth of investments in Slovenia so

far which is an excellent growth since, by 2014, Croatian companies had made EUR 777 million worth of investments in the country, which is 7.7% of the total foreign investments in Slovenia. Border counties and municipalities have been especially active investors.

The figures improved in 2017 with Slovenia becoming the third biggest export partner to Croatia, accounting for 10.6% of its export, after Italy, which is the no 1. with 13.4%, followed by Germany with 12.2%. After Croatia comes Bosnia and Herzegovina with 9.8%, Austria with 6.2%, and Serbia with 4.8%. Fifty percent of Croatia’s export ends up in one of these 6 Central European countries, so focusing on exporting to Slovenia was a natural and logical choice. In terms of import, the situation is different since Germany is the country that Croatia imports the most from. Slovenia takes the third position with 10.7% of Croatian imports coming from Slovenia.

In 2016 alone, Slovenian companies exported goods worth almost EUR 1.2 billion to Croatia.

Croatia was the third most important market last year for Slovenian exporters, with the Slovenian companies exporting EUR 2.1 billion worth of goods. Gorenje alone sold EUR 40 million worth of products in Croatia last year, while the pharmaceutical company Krka exported EUR 26 million worth of its products to Croatia.

However, they say that one of the main problems for the Slovenians is that the Croatian market is quite peculiar and favours local companies, while the attractiveness of domestic products is extremely high. “Croats are very keen to buy products that are of the Croatian origin” - says Perutnina Ptuj.

INVESTMENTS The Slovenian investments in Croatia and vice versa are quite big due to similarity of mentalities and the knowledge of business conditions which has been shared between the two countries for 300+ years.

Slovenia and Croatia were basically always together. But there are new developments

THE SLOVENIAN INVESTMENTS IN CROATIA AND VICE VERSA ARE QUITE BIG DUE TO THE SIMILARITY OF MENTALITIES AND THE KNOWLEDGE OF BUSINESS CONDITIONS WHICH HAS BEEN SHARED BETWEEN THE TWO COUNTRIES FOR 300+ YEARS on the horizon! The Slovenian automotive parts supplier, Cimos plans to invest EUR 20 million ($23.4 million) in expansion of its three production facilities in Croatia by 2020. The plants will be built on a plot of land spanning 22,114 square metres in the town of Buzet, which was sold to Cimos. Cimos is known as one of the main suppliers of Citroen. On the other hand, the Croatian wholesaler and distributor Orbico has taken over the Slovenian distribution group Everet which, in 2015, had a turnover of EUR 33 million and generated EUR 45,000 of profit. The company now operates under Orbico Beauty. In 2016, Slove-

nia-based Impol launched an aluminum product factory in Šibenik. Slovenian companies have announced even bigger investments in Croatia in the future.

CHINA AS A GREAT OPPORTUNITY Croatia and Slovenia are also willing to open more to China, Serbia and Bosnia and Herzegovina tourism-wise since they have already abolished visas for the Chinese citizens. They are aware of the strong economic attractiveness of the Chinese tourism market for Central Europe. The importance of the Chinese market and establishing cooperation between the two countries to create a competitive and attractive tourism offer for Chinese tourists was recognized by the Slovenian and Croatian foreign ministers. The “16 + 1 Initiative” also promotes economic cooperation between China and 16 European countries, including Slovenia. The goal is for these two countries to attract Chinese investments at the time when West is not doing much in that aspect.

LEX SPECIALIS, TWICE Then there is the case of Agrokor.

Although the problems with Agrokor shook up the Croatian economy, they are finally getting resolved. Two Lex Specialis were passed with Slovenia adopting the Lex Mercator to protect the business of Mercator and ensure that the company’s operations keep moving in a good direction which will help the economies of both countries and facilitate the recovery of Agrokor. Lex Agrokor was adopted by Croatia in order to help resolve the destiny of this retail giant of regional importance.

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CROATIA WAS THE THIRD MOST IMPORTANT MARKET LAST YEAR FOR SLOVENIAN EXPORTERS, WITH THE SLOVENIAN COMPANIES EXPORTING EUR 2.1 BILLION WORTH OF GOODS SLOVENIA 2018

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COOPERATION IS THE FOUNDATION OF LONG-TERM PROGRESS The Club's vision is that development of one neighbour is beneficial to the other. The Club wants to encourage the establishment of links between businesses and other important economic policy stakeholders, and their mutual dialogue with the view of treating each other as friends, associates and partners in the end and establishing trust

INTERVIEW

SAŠA MUMINOVIĆ, PhD

President of the SLO CRO Business Club in Zagreb

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he SLO CRO Business Club, comprising of Slovenian and Croatian business people, was founded in 2002 as a non-profit association with the view of organizing and bolstering the economic relations between the Republic of Slovenia and the Republic of Croatia. Considering the sheer number of Slovenian business people in Croatia and vice versa, the Club hopes to have 100 members quite soon.

Currently, the Club has close to 50 members, namely Slovenian business people in Croatia and Croatian business people in Slovenia, as well as friends who have an interest in the club and see it as an opportunity to have business meetings and socialize with business community. “Our goal is to promote, develop and improve the Slovenian-Croatian cooperation in all aspects of economic and social life. We have a very diverse membership and it is exactly this diversity that is an advantage that helps us to get acquainted with each other's problems and share experiences in solving them," says Saša Muminović, President of the SLO CRO Business Club, CFO and a member of the Managing Board of AquafilCRO d.o.o.

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(Croatia) and a member of the Managing Board of AquafilSLO d.o.o. (Slovenia).

How do you rate the business climate in Croatia?

— The Aquafil Group has been present in Croatia since 2001, so I have been following the development of the business climate in Croatia very closely. Generally speaking, the business climate has improved in many segments over the past 15 years.

THE CHALLENGES WE ARE FACING TODAY ARE CONSIDERABLY DIFFERENT FROM THOSE 15 YEARS AGO. THEY ARE NOT JUST THE PRODUCT OF THE ACTIVITY OR INACTIVITY OF THE COUNTRY IN WHICH A COMPANY OPERATES, BUT ALSO OF GLOBAL TRENDS THAT CANNOT BE IGNORED

Of course it's still far from what we want it to be, but still, we must not be malicious and criticize everything. It is easy to criticize and do nothing. Business climate is created by central government, local government, and business people themselves through their own actions. Aquafil has excellent experiences with various ministries in Zagreb, as well as with Krapina-Zagorje county and the town of Oroslavje. We have to ask foreign investors what did they do and how much they have contributed to the development of the business climate.

How does the Club contribute to boosting the business links between the two countries?

— There are two pillars that the Slovenian-Croatian relations rest on - understanding there is a misunderstanding of the political agenda (despite the two countries being close in historical, language and geographical terms) and excellent economic relations that have been developing in the shadow of the first pillar for two decades.

The best indicator of this is the external trade between the two countries, which value, in 2012, amounted to EUR 2.3 billion and EUR 3.7 billion in 2017. In the first six

months of this year, according to data collated by the Statistics Bureau of Slovenia, the value of the trade has already reached EUR 1.99 billion, which is 6.1% more than the same period last year.

The Club's vision is that the development of one neighbour is beneficial to the other.

There is a saying that goes „together we are stronger“. But, in order to be together, we need to meet, socialize and get to know each other better. Through socializing, we are going to establish contacts and eliminate prejudices. The Club wants to encourage the establishment of links between businesses and other important economic policy stakeholders, and their mutual dialogue with the view of treating each other as friends, associates and partners in the end and establishing trust.

While working on reaching this goal, a little bit of wining and dining certainly comes in handy. Although this is a shortterm pleasure, it has long-term benefits.

Apart from organizing business breakfasts / meetings, the Club has been one of the organizers of the conference titled „Can the Croatian tourism do it 365?“ for the second consecutive year. Also, for a couple of years now, we have been participating in the Celje Trade Fair, and this year, at the Zagorje Business Gathering in Krapina.

Next year, we are planning to substantially expand the scope and the number of events for our members.

Do you also face challenges when Slovenian and Croatian companies are doing business together? How do you solve them?

— The challenges we are facing today are considerably different from those 15 years ago. They are not just the product of the activity or inactivity of the country in which a company operates, but also of global trends that cannot be ignored.

Fifteen years ago, global growth was a constant and it was implied. Back then, in Croatia, it was also important to do more and to have a strategy to attract as many investments as possible. However, the crisis gave us all a rude awakening. We have seen how vulnerable an economy can be, what it means to be or not to be part of the European market, and what does Euro mean as a bulk currency. Today, the focus is more on workforce, sustainability of development, digitalisation and social responsibility.

Are you satisfied with the quality of communication with the Croatian government? How do you communicate your initiatives for changing regulations and practices?

— Generally speaking, we are, but that does not mean we should not strive to improve.

This also depends on the impact that the SLO CRO Business Club has and how big is our membership.

At our gatherings, like business breakfasts, we try to have eminent guests from political and economic world from both countries, and in an informal environment, to inform them about the issues that are of interest to us or our members. We were

SINCE OUR PLAN IS TO CARRY OUT SOME OF OUR ACTIVITIES IN LJUBLJANA, WE HAVE ALREADY ESTABLISHED CONTACTS WITH THE EMBASSY OF THE REPUBLIC OF CROATIA IN LJUBLJANA, AND ACCORDING TO THE FIRST INDICATIONS, WE ARE GOING TO HAVE AN EXCELLENT COLLABORATION honoured to have been able to have ministers from Slovenian and Croatian ministries on several occasions. Our guest at the last business breakfast in September 2018, was the Minister of Environmental Protection and Energy in the Government of Croatia, Dr. Tomislav Ćorić. In 2017, the Minister of Economy and Deputy Prime Minister of the Republic of Croatia, Dr. Martina Dalić, and State Secretary Mr. Mario Antonić, were our guests, and before them, the Minister of Construction and Spatial Planning, Mr. Lovro Kuščević joined us at the breakfast.

In 2016, our guest was the Minister for Economic Development and Technology in the Government of Slovenia, Zdravko Počivalšek, MBA. Apart from state officials I would also like to mention other guest such as

renowned businessmen Davor Majetić and Bernard Jakelić from the Croatian Employers Association, Marjan Bagatelj (from the Slovenian Business Club and Director of the company that manages the Postojna Cave), Vedrana Jelušić Kašić from the EBRD, Ladislav Artnik from SID Bank, Primož Karpe, Chairman of the Supervisory Board of NLB etc.

I would also like to say a few words about our last business breakfast during which we had a presentation about the permanent mobility platform EDISON (Eco Driving Innovative Solutions and Networking), and our plans on the transfer of knowledge between Slovenia and Croatia via this platform. At the same time, we also had a presentation of the results and plans of the Croatian Ministry for Environment and Energy in the energy and renewable sources segment.

Do you and in which way encourage networking between your members and members of other domestic and foreign business associations in Croatia?

— We strive to connect with institutions and organizations from both countries: chambers of commerce, employers' associations, the Croatian Business Council for Sustainable Development, ministries and government agencies from both countries and related business clubs so that our social gatherings are more current, attractive and interesting.

We have the help of the Embassy of Slovenia in Zagreb, the Ministry of Economic Development and Technology of the Republic of Slovenia, the Ministry of Foreign Affairs of the Republic of Slovenia, and the SPIRIT Agency, which also financially supports the activities of the SLO CRO Business Club. We would not be able to carry out all of our activities without SPIRIT's support.

I would also like to mention personal efforts made by the current ambassador, H.E. Ms Smiljana Knez, PhD, and the former economic adviser, Jakob Štunf, MBA. I am especially glad about the continuous support that we receive from the embassy regardless of the changes in their staff. As we plan to carry out some of our activities in Ljubljana, we have already had the first contacts with the Embassy of the Republic of Croatia in Ljubljana, and the first indicators show that we can expect an excellent cooperation.

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CORPORATE

Excellence in Sustainability and Innovation Aquafil is a successful example of the acquisition of production plants in Slovenia and Croatia which both play an important role in the overall success of the company that operates on three continents

EDI KRAUS

A

quafil is one of the most recognized European producers of the nylon 6 yarn used for textile flooring and the primary supplier of synthetic yarns to some of Europe's leading manufacturers of clothing, swimwear and sportswear.

Established in Northern Italy over 50 years ago, the Aquafil Group operates today on 3 continents, and has 16 plants employing more than 2,700 people in Italy, Slovenia, Croatia, Germany, UK, USA, Thailand and China.

Aquafil acquired a company in Slovenia in 1995. A former Yugoslav nylon yarns manufacturer has been transformed by Aquafil into a superior chemical and textile production company. Today, AquafilSLO has four plants, employing more than 800 people. Its core business is the production of nylon chips and yarns for garments and carpets.

The Croatian branch, AquafilCRO, located in Oroslavje in Krapina, Zagorje Region, deals with reprocessing of yarn for garments (texturing, interlacing and coiling). It employs almost 300 people.

The Trieste born, Mr. Edi Kraus, the general manager of AquafilSLO, has been one of the key figures in the acquisition of the first Slovenian plant by Aquafil and in the expansion to Slovenia and Croatia.

What where the main reasons for Aquafil’s expansion to Slovenia and to Croatia in 2001? What was the acquisition process like?

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— At that time, we were looking for an additional production facility. We found out that certain buildings owned by the Orotex industrial complex, which had declared bankruptcy, were for sale in the town of Oroslavje, Croatia, less than 2 hours drive from Ljubljana. After several visits we decided to purchase them, also because the town had a very strong textile industry tradition. After the purchase, we renewed the factory halls, installed the machinery and started to work. All of this was possible also thanks to the support of the Municipal and Regional authorities and the utilities suppliers.

WORLDWIDE

IN 2007, WE COMMITTED OURSELVES TO SUSTAINABLE DEVELOPMENT AND INTRODUCED SUCH POLICIES IN ALL AQUAFIL COMPANIES WORLDWIDE

How did you handle the transfer of knowledge between AquafilSLO and AquafilCRO? Is this process a reality for all the companies in the Group?

— In Croatia, we applied our classical model of knowledge transfer that we use in all new companies that become a part of the Aquafil Group. We send experienced colleagues from an existing Aquafil factory to the new facility to transfer knowledge and experience to the local colleagues. The goal is for the plant to become “independent” and operate only with the local employees. This proved very successful in the Oroslavje plant also because the colleague from abroad, who oversaw setting up the production process, was really well integrated into the local community.

The Aquafil Group is known as the leader in research of sustainable production models. What have been your achievements so far?

— Thanks to the vision of the Group’s President, Mr. Giulio Bonazzi, Aquafil has been extensively investing into the research and development of recycled products for the market. This led to the inauguration of a plant that regenerates the nylon 6 waste which is transformed into the raw material identical to the original one. Since Aquafil’s factory in Ljubljana was chosen as the location of the ECONYL® regeneration plant, it has become a centre of excellence for the Group’s policies of sustainability and innovation.

COMPLEXITY OF EU FUNDING EXPLAINED IN SIMPLE TERMS

In regard to EU funding, the very first association that many entrepreneurs have is complexity. Neither procedures, nor documentation are easily understandable.

However, experts from Tiko Pro can provide a simple explanation of this complexity

CORPORATE

TEA MARKOTIĆ

CMO and CSO of Tiko Pro d.o.o.

F

inding the proper solution for financing innovation development and business investments takes time. Fortunately, the company what will be celebrating soon its 10th anniversary of successful operations in the world of EU funding consultancies and the 5th anniversary of its Croatian daughter company, is here to help.

“Croatia and Slovenia are inextricably intertwined in our day-to-day operations – a half of the members of our team are Croatians, a half are Slovenians, we have our offices in Zagreb and Maribor, and we work on projects that create cooperation opportunities for Croatian and Slovenian organizations. We try to transfer the good examples from Croatia to Slovenia and vice versa,” says Tea Markotić, CMO and CSO of Tiko Pro d.o.o.

I have read that the Tiko Pro portfolio consists of 600 clients, mostly from Croatia and Slovenia. What are the main differences between them?

— Many entrepreneurs in Croatia do not believe in the system of EU funding. In the recent past, Croatia has been solving some problems through national calls. However, calls are delayed, the e-system for applications is not working properly and the evaluation process lasts too long.

In Slovenia, everything functions

much better, business people are more satisf ied and their approach to EU funding is more optimistic.

Are there any differences between Croatia and Slovenia in the segment of national funds?

— The ministries in Slovenia are far more open for cooperation. They are answering the questions of potential applicants more frequently than in Croatia by mail or even by phone which makes the preparation phase easier. Still, particularly this year, Croatia has realized that the dialogue with applicants has to be improved in order to assure meaningful utilization of the funds provided by

MANY ENTREPRENEURS WANTED TO GIVE UP ON FUNDING OPPORTUNITIES, BUT WE ARE HERE TO MOTIVATE THEM, TO PROVE THEM WRONG, AND TO SHOW THAT PROJECTS CAN MEAN A FRESH START WITH NEW BUSINESS OPPORTUNITIES

the European Union. I would say that things are changing in the right direction.

Moreover, in Slovenia, the main focus is on R&D projects. Enterprises can receive grants for innovative products/services and small-scale grants for digitalization and business process optimization.

In Croatia, there are more possibilities in various fields (for example, grants for marketing activities, certification processes, fixed capital formation) and companies can receive much higher grant amounts per project. Grants for these segments in Slovenia are more or less already spent and probably will not be available in the future. Grants are slowly being substituted with loans and we can expect that, after some years, the same will happen in Croatia.

Is there a universal recipe for successful application?

— Let me start by saying that, in the world of EU funds, the famous saying “slow and steady wins the race,” does not work at all.

Without a proactive approach, opportunities will pass us by.

In both countries, even in a few European countries, granted applications consist of three basic elements: innovative project idea, eligible applicant with all the resources needed to realize the project and a touch of magic in the project documentation.

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ECONOMY MUST NOT SUFFER BECAUSE OF BORDERS Economic development in the region is a conditio sine qua non. To me, Croatia and Slovenia are one market, because their economies are mutually complementary and have the potential to improve their relations

P

resident and Proprietor of Orbico, Branko Roglić is convinced that this market is much bigger than the regional. But as the Honorary Consul General of the Republic of Slovenia in Split and Vice President of the SLO CRO Business Club he also contemplates about opportunities for establishing more connections in the region, especially about Croatia and Slovenia building the relations since he sees these two markets as one.

"Orbico's position in Europe is determined by the development of the entire market of about 500,000,000 people, while following all the changes that occur every day. We have never been particularly concerned with the competition, with which we have good relations. Today we operate in 20 European countries, we have 6,500 employees, a fleet of 2,200 cars and our turnover this year will exceed 2 billion euro," says Roglić and adds: "We have some new brands and new takeovers, but we are also working on digitalization and modernization of logistics, with the view of reducing our costs, which is a very important task."

Speaking from the standpoint of your own work experience, how do you view the development potential of the region, including Croatia and Slovenia?

— I have always viewed Croatia and Slovenia

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CORPORATE

BRANKO ROGLIĆ

President and Proprietor of Orbico, Honorary Consul General of the Republic of Slovenia in Split and Vice President of SLO CRO Business Club

as one market, because back at the time of our common state, these two have always been very compatible and complementary. Economic development in the region is a conditio sine qua non. Regardless of the borders, economy must function and facilitate the development of new states.

This is necessary irrespective of the sad past of this area.

What problems do you encounter the most in your business and how much understanding is there for solving these problems in different markets? Who are your partners in this respect?

— Dealing with administration has always been problematic because it doesn't have much understanding for entrepreneurial

CROATS STILL VALUE SLOVENIAN PRODUCTS AND SLOVENIANS TRADITIONALLY COME TO VACATION ON THE ADRIATIC. I SINCERELY HOPE THAT THIS WILL REMAIN THE SAME IN THE CENTURIES TO COME

problems. Their reactions are slow and they are never in a rush to do anything since their salaries are not tied to their performance, unlike in business. This is much more pronounced in southern countries while the situation in Slovenia and Poland is much better. The situation will change with the development of the true, Swedish-style capitalism, which is a role model to many.

This is a challenge for me too because I'm trying to go down that path. I find that entrepreneurship is not a luxury, but it is more about caring about people and your employees, as the only long-term option.

What are the particularities of the Croatian and Slovenian markets and in which way do they differ?

— As I have mentioned earlier, the Croatian and Slovenian markets are complementary. Tourism is important for both countries. In Slovenia, the processing industry is significantly stronger and they have a lot of customers in Croatia, while there are close to a million Slovenian tourists visiting Croatia. Slovenia and Croatia, especially Dalmatia, have lived together for centuries, and because of this, new borders did not bring any special changes. Croats still value Slovenian products and Slovenians traditionally come to vacation on the Adriatic. I sincerely hope that this will remain the same in the centuries to come.

GOOD COOPERATION HAS OPENED MANY DOORS CORPORATE

JANJA STARC

The Krško Craftsmanship and Entrepreneurship Chamber has been working successfully with the Zagreb Chamber of Commerce for several years. The main goal of networking and cooperation is to create new opportunities for Slovenian entrepreneurs in Croatia and vice versa

Director of the Krško Craftsmanship and Entrepreneurship Chamber

D

uring the many years of the successful cooperation, we have opened quite a few doors and solved a number of problems faced by Slovenian entrepreneurs when entering the Croatian market. That is why our Chamber has become a contact and information point for most Slovenian entrepreneurs doing business in Croatia. We help with documentation and give legal advice.

We overcome the obstacles and solve the problems that Croatia has to deal with.

JOINT INSTITUTION, PARTNERSHIP AND COOPERATION As the director of the Krško Craftsmanship and Entrepreneurship Chamber and the Posavje Crafts and Entrepreneurship Bureau, I was the initiator of the establishment of a joint institution - the Craftsmanship Business Network - based in Zagreb.

The purpose of this cooperative is a joint appearance of entrepreneurs in the Croatian and Slovenian markets.

The SLO-CRO Business Club is a very important partner that supports the economic cooperation between Slovenia and Croatia, and our Chamber of Craftsmanship and Entrepreneurship is the club's member. Together with the club, we organize events aimed at linking the econ-

omies of both countries. This year, for the second consecutive year, we have organized the main economic event at the largest trade fair in Slovenia and the region (MOS in Celje), a forum devoted to economic cooperation and internationalization of Slovenian, Croatian and Serbian companies.

WE HAVE SOLVED SEEMINGLY UNRESOLVABLE PROBLEMS AND CREATED NUMEROUS BUSINESS OPPORTUNITIES FOR SLOVENIAN COMPANIES IN CROATIA Through discussions and round tables, we have acquired a lot of information about the problems and challenges of entrepreneurs and presented joint proposals for their resolution to the line ministries.

LACK OF QUALIFIED WORKFORCE Since last year, Slovenia and Croatia have been facing the worldwide problem that has plagued modern economies – lack of qualified workforce. We have proposed

a solution of this problem to policy decision makers, including the EU - MASTER5 project, through which we are preparing an Artisan School format in Slovenia and Croatia. The School would educate workers who have already completed vocational and high school education so that they can easily get involved in the work process, or start an independent business venture. As Krško lies in the border zone with Croatia, we are interested in the two countries resolving the problem of the free movement of workforce.

We are also credited for the fact that the ban on free movement of workforce between the two countries was not extended. Finally, on July 1st, 2018, this ban was lifted.

FURTHER PLANS Everyday I get a lot of questions over the phone and e-mail about business opportunities in Croatia. It is true that Croatian craftsmen are increasingly interested in working in Slovenia. Due to many years of experience in the field of economy and entrepreneurship, I have held numerous lectures on doing business in Croatia and vice versa, about doing business in Slovenia. In this way, the biggest number of interested parties are given relevant information so that the economic co-operation between the two countries will continue to be perpetuated.

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ECONOMY

DIVERSIFIED, REGIONALISED Successfully swimming upstream 20

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S

lovenia had never implemented a format that was so successfully (or rather unsuccessfully) applied in other ex-Socialist countries – from Montenegro and Kyrgyzstan to Estonia and Armenia. Slovenians did not centralize their economy to become a part of the state economy hub which overpowered economies in the rest of the country. On the contrary, they did it the way Germans, Italians or Austrians did it.

And it was all worth it!

U NIFORMITY – SMALL AND MEDIUM ENTERPRISES

When Socialism came with the end of the World War II, Slovenia adopted a very interesting economic policy

which literally emptied out villages and pushed farmers to move to towns thus strengthening the industry that was

THE DISADVANTAGE OF THE SLOVENIAN ECONOMY IS THAT IT IS NOT A POPULAR DESTINATION FOR FDIS, BUT THIS HAS STARTED TO CHANGE AS EVEN CROATIA HAS BEGUN INVESTING IN SLOVENIA

created artifically, on the back of the destruction of the economy's organic structure. Slovenia was creating a diversfied economy. The aim and the strategy for this was to build smaller factories in smaller towns across the countries, i.e. what we call today small and medium enterprises, in Socialist environment. What Slovenians did back then was something that we have in Croatia today – like the village of Čelarevo that is home to a big brewery, or the village of Bački Maglić where the HQ of a big snack producer, Marbo is located. By doing so, the Slovenians prevented a huge migration to cities like Maribor and Ljubljana, and created a workforce that is uniformly employed across the country.

THE FIRST

SLOVENIA WAS THE FIRST NEW MEMBER OF THE EUROPEAN UNION TO ADOPT THE EURO AS NATIONAL CURRENCY IN JANUARY 2007 SLOVENIA 2018

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FACTS AND FIGURES SAY IT ALL Today, Slovenia is a developed country that enjoys prosperity and stability, as well as the GDP per capita of purchasing power parity which stood at 83% of the EU28 average in 2015, was the same in 2014 and 2 percentage points higher than in 2013. The nominal GDP in 2015 amounted to 38,570 million EUR, while the nominal GDP per capita (GDP per capita) in 2015 amounted to 18,693 EUR. The highest GDP per capita was in Central Slovenia, where the capital city Ljubljana is and which is a part of the statistical region of Western Slovenia, which, again, has a slightly higher GDP per capita than Eastern Slovenia.

Slovenia was the first new member of the European Union to adopt the euro as national currency in January 2007, and to become a member of the Organization for Economic Co-operation and Development in 2010. Adoption of the euro is today interpreted in many circles in Slovenia as a controversial move since the countries which adopted the euro at the onset of the 2008 crisis (Greece, Portugal, Ireland) faired worse than those which fluctuated their currency (Poland, UK, Estonia, etc.).

Slovenia has a highly educated workforce and a well-developed infrastructure, and lies on the junction of main transport routes, whichever side you look from and whichever route you take - railway, sea, or roads. On the other hand, the level of foreign direct investments is one of the lowest, but has been continuously growing over the last several years. The Slovenian economy was seriously affected by the European economic crisis that began in the late 2000s, and its recovery lasted for quite a long time which is why Slovenia is now

not much different from its neighbouring countries. At the end of 2011, recession hit, and the reasons were attributed to the decline in domestic consumption and exports. Slovenia exports mainly to the eurozone countries. Furthermore, this crisis has seriously affected the construc-

ALMOST TWO-THIRDS OF THE WORKING POPULATION IS EMPLOYED IN THE SERVICE SECTOR WHICH MARKS A STRONG U-TURN IN THE DIRECTION OF POST-INDUSTRIAL SOCIETY

tion sector. After 2013, the GDP per capita starting growing again. Almost two-thirds of the working population is employed in the service sector which marks a strong U-turn in the direction of post-industrial society. The disadvantage of the Slovenian economy is that it is not a popular destination for FDIs, but this has started to change as even Croatia has begun investing in Slovenia.

For a long time, Slovenia was a quite closed up economy. It was Croatians, out of all ex-Yugoslav republics, that, that broke the mould first, and started investing in Slovenia in the second decade of the 21st century. On 1st July 2010, the Mercator supermarket chain was bought

by Agrokor for 454 million EUR. However, it remains to be seen what will happen with this investment considering that the business empire of Agrokor's owner, Ivica Todorić is crumbling.

INFRASTRUCTURE

SLOVENIA HAS A HIGHLY EDUCATED WORKFORCE AND A WELL-DEVELOPED INFRASTRUCTURE, AND LIES ON THE JUNCTION OF MAIN TRANSPORT ROUTES 22

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CULTURE

RESILIENT, SOFT AND FRIENDLY

Feel at home, a childhood home

I

t was a close call for Slovenians who, at certain point, risked having the same destiny as the Sorbs, a nation which was assimilated by its powerful neighbours Italy, Germany and Hungary, and is now a thing of the past. Slovenians decided to fight back, and in 19th century, had a

powerful Slovenian national revival that formed the foundations of the modern nation, which, in the 20th century, elevated Slovenians to the level of the constitutive element of the Kingdom of Croats , Serbs and Slovenians, later the Socialist Federal Republic of Yugoslavia, so that Slovenian

spirit would finally become completely free in independent Slovenia.

In a literary sense, Slovenians have a long history. Their main cultural holiday is marked on 8th February, the anniversary of the death of the great Slovenian poet, France PreĹĄern who, among other things,

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wrote the Slovenian national anthem 'Zdravljica'. Apart from Prešern, a Protestant priest called Primož Trubar also played an important role in the Slovenian culture.

Despite the fact that modern-day Slovenians are mostly Catholic, Protestantism did contribute a lot to development of their national identity thanks to the Protestant tendencies for everything to be done in mother tongue which resulted in the first book in Slovenian language being published in 1550. When this happened, the Slovenian language officialy joined the group of the European literary languages.

In 2010, UNESCO declared Ljubljana „the world book capital“ while, in 2012, Maribor was declared „the European culture capital“. Still, it is interesting to note that both Austria and Italy, as Slovenia's neighbours, had a huge influence on the Slovenian culture because it is these two countries that produced the biggest number of classical music composers. As a result of this, Slovenia's has been expressing itself mostly through music. Or is it Mathematics? Slovenian Jurij Vega gave a huge contribution to the world of Mathematics with his logarithmic tables.

Slovenians have always guarded their culture carefully, and have been successful in doing so. Even back in Yugoslavia, they

Laibach, Red Districts, Trbovlje

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SLOVENIANS ARE ONE OF THE SLAVIC NATIONS AND HAVE SOFT SOUL, THEY ARE ALSO DEEPLY INFLUENCED BY GERMANIC MODESTY AND CLOSENESS

were very keen on sports. There is no country in immediate surroundings and very few in the world that have so many sporting equipment stores per capita as Slovenia. Slovenians always live in harmony with nature and close to it. They are also big fans of outings in nature. They love the winter although their winter is not that much harsher than in other Balkan countries. They see snow as their friend that

enables them to indulge in healthy skiing activities, and not as an enemy that can kill or should be avoided.

On the other hand, Slovenians are very modest and quiet, as well as very keen on hiding how much money they actually have because talking about money is, fortunately, considered exceptionally bad manners. Other Balkan nations view Slovenians as maybe too frugal since it is not in their mentality to splurge and demonstrate how wealthy they are in front of everyone which was also one of the biggest complaints that Slovenians had against other Yugoslav nations, back in the day. Simply put, they think that saving is one of the main cornerstones in life. Although they are one of the Slavic nations and have soft soul, they are also deeply influenced by Germanic modesty and closeness. Slovenians are Catholic

THERE IS A VERY PRONOUNCED PARADOX IN THE SLOVENIAN CULTURE WHICH IS A CONFLICT BETWEEN HARDCORE TRADITIONALISM AND MODERNISM through and through, but have accepted the Protestant work ethic and the art of blending in, combining it with necessary relaxation and spending time with their families and on hobbies. They will not burn out at work, which often and unfortunately happens too often in the countries that are very Americanized despite being Americanophobes as Croatia paradoxically

is. But that is a whole different story...

Do Slovenians have any mental or cultural paradoxes? Of course they do.

There is a very pronounced paradox in the Slovenian culture which is a conflict between hardcore traditionalism and modernism. For instance, back in Yugoslavia, Slovenians were at the forefront of guarding social freedoms and protesting against the rigid system. They were the forefathers of Neue Slowenische Kunst and Laibach, while remaining deeply conservative. They were the first to insist on democratization and rejection of Socialism, and yet they had the most egalitarian society out of all Yugoslav republics. Their egalitarianism is reflected in the fact that they feel awkward when someone is demonstrating their power. They are quiet and rebelious, and modern and traditional, all at the same time.

HARMONY

SLOVENIANS ALWAYS LIVE IN HARMONY WITH NATURE AND CLOSE TO IT. THEY ARE ALSO BIG FANS OF OUTINGS IN NATURE SLOVENIA 2018

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C SMALL IS SPIRIT AND CUSTOMS

BEAUTIFUL Conservative yet idyllic

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o n s e r va t i s m i s a t r a i t common to Central Europe, as we have established many times before. Mitteleuropa is the one that keeps the traditions of old Europe alive, and is least receptive to liberal novelties in terms of people's behaviour, economy and spirit. Slovenia is one of the best examples of this.

Tendency not to move to a big city at any cost and stay loyal to your home and lesser populated areas are the most characteristic elements of this Slovenian conservatism - unlike

Greece, where everybody gravitates towards Athens and Thessaloniki, or Croatia, where everything is concentrated in NiĹĄ, Novi Sad, and primarily Belgrade.

This is the reason why Slovenia doesn't have many big cities. Actually, it doesn't have any big cities at all because Ljubljana is as big as Novi Sad, and Maribor is somewhere there too, size-wise. There are anegdotes / urban legends circulating around about the town council in Ljubljana banning any construction activity both in down-

town and suburbs. Same thing can be seen in Sibiu, Odessa or Prague because 'normal' countries would not allow architects to destroy old parts of their towns in order to build horrendous looking buildings like in the aforementioned Novi Sad. However, banning construction both in the town centre and in suburbs could be construed as an act of a big city sabotage. Townsfolk in Ljubljana have sabotaged the idea of having a metropolis that never materialized with the nearest metropolis being Zagreb.

People say that authorities in Ljubljana are slow with issuing building permit, and that this is the reason why foreign investors, wanting to build huge skycrapers in Slovenia, don't do that because they lose patience with the authorities and move onto towns like Batumi in Georgia or Warsaw which, as things would have it, is starting to resemble Frankfurt or big American cities. This will not happen in Slovenia!

This is also the reason why Slovenia is evenly populated, why town spirit is still alive and well in small towns, why they live in harmony with nature, why they often climb mountains or hike, and why people look after animals, or are engaged in beekeeping, or gardening, or other hobbies for that matter. They don't spend endless hours in public transport, going from home to work and vice versa. True to their conservative tradition, Slovenians have built a humane society, focused on people.

It is a well-know fact that Germany and its economic system have been studied by many economy experts, especially the American ones. The reason for this is that since the Americans cannot outdo the Chinese in terms of dilligence, dedication and long working hours, they are trying to find another way to regain their status

SLOVENIANS ARE THE PEOPLE WHO LOVE CYCLING AND WALKING, HATE THE HUSTLE AND BUSTLE OF BIG CITIES, NURTURE THEIR OWN CULTURE, AND DON'T ASK TOO MUCH FROM LIFE of the world power no. 1. It seems that the Germans hold the key to this. But, do they?

Maybe not. With their strict demarcation between work and private life, and insisting on having enough spare time, Americans are more like Slovenians. This is something that Slovenians are proud of – they are perfectly capable of going hiking in the afternoon despite having house guests or leaving a lot of unfinished work while not sacrificing their well-being for companies they work for. And, they are doing just fine.

Slovenians are among the nations that live

the longest. Are they also among the most melanchonic nations? Well, maybe yes, but they would definitely be more melanchonic if they worked more. They have found their middle ground, and have dodged corporate culture of modern-day capitalism for sense of personal freedom and quality of life.

If this negatively reflects on the country's competitiveness, bearing in mind that Slovenians are not keen on sacrificing their own well-being to compete with tireless Asians or workaholic Americans, than be it. Slovenians copy the German way of living in a sense that they are aware of how important is to have a quality product and quality life, as well as enough time for nature and family while hoping for success. Even if success never comes, they are happy with the status quo, and, in Slovenia, it is a good status quo. If there is a spirit worth copying, it is definitely the Slovenian one. These are the people who love cycling and walking, hate the hustle and bustle of big cities, nurture their own culture, and don't ask too much from life, while, at the same time, actually wanting the best of it which cannot be measured in numbers or growth indicators.

QUALITY OF LIFE

THE SLOVENIANS HAVE FOUND THEIR MIDDLE GROUND, AND HAVE DODGED CORPORATE CULTURE OF MODERN-DAY CAPITALISM FOR SENSE OF PERSONAL FREEDOM AND QUALITY OF LIFE SLOVENIA 2018

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S A LITTLE JEWEL...

TOURISM

...full of undiscovered dreams

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lovenia is a country that practically has everything – mountains for skiing, a Mediterranean coast which, although short, is spectacularly beautiful, rivers, lakes, gorgeous towns and even more picturesque villages. Slovenia offers a wide range of landscapes to tourists – the Alps in the northwest, the Mediterranean in the southwest, the Pannonian Plains in the northeast, and the

Dinaric Mountains in the southeast. These are considered the traditional regions in Slovenia, formed on the basis of the four areas that made up the so-called Habsburg Crown (Carniola, Carinthia, Styria, and the Littoral). All of these areas have their own unique natural, geographical, architectural and cultural features. Slovenia has mountains, meadows, lakes, caves and a sea which makes it a very attractive tourist destination in Europe.

WHAT IS ON OFFER? The capital Ljubljana has many beautiful buildings built in baroque and art nouveau styles, and several masterpieces

designed by architect Jože Plečnik who was born in this town. Other attractions include the Julian Alps with the picturesque Lake Bled and the Soča Valley, as well as the highest mountain peak in Slovenia called Triglav. Perhaps even more

SKIING AND SPAS ARE SLOVENIA'S MAIN TOURIST TRUMP CARDS, AND A HUGE NUMBER OF PEOPLE FREQUENT SLOVENIAN SPA AND SKI CENTRES

famous is the Slovenian karst called the Karst Plateau in the Slovenian Littoral.

More than 28 million visitors visited Postojna Cave, and only a 15-minute drive from it is the Škocjan Caves, a UNESCO's world heritage location. Several other caves are also open to the public, including the Vilenica Cave.

The Adriatic coast, also known as the small coast of Slovenia for being the shortest coastline in Europe, is further down in the same direction. Despite being short, the Slovenian coastline is as beautiful as any coastline, but has no big towns whatsoever. The small towns on the coast are so brimming with charm that they are irresistible. The most important historic

EQUATION

WHEN A COUNTRY RECORDS A NUMBER OF TOURIST ARRIVALS THAT EQUALS OR EXCEEDS THE NUMBER OF ITS INHABITANTS, THAN THAT COUNTRY IS CONSIDERED SUCCESSFUL IN ITS TOURIST ENDEAVOURS SLOVENIA 2018

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monument here is the town of Piran, built by the old Venetians in the Gothic / Mediterranean style. The nearby town of Portorož is a popular place with tourists, especially the ones who like to gamble.

The former fishing town of Izola has been transformed into a popular tourist spot while many tourists also flock to the old town centre of the port of Koper which is, nevertheless, less popular than its coastal counterparts because of its industrial inclination perhaps.

Skiing and spas are Slovenia's main tourist trump cards, and a huge number of people frequent Slovenian spa and ski centres. This is particularly true of Croatians and Croatians who often choose Slovenia as their holiday destination because of the similar language and affordable prices, as well as because of the proximity and high quality services.

Rural tourism is important in Slovenia, and is especially developed in the Carniola region, while horseback riding, cycling and hiking are among the most imporant tourist activities in the country. The Triglav National Park is the biggest and most popular national park here.

Slovenia has a number of smaller medieval towns that are often fortified or have a very charming architecture of bygone times and they are important tourist attractions.

The most popular are Ptuj, Škofja Loka and Piran. Fortified villages, mainly located in Western Slovenia (Štanjel, Vipavski Križ, Šmartno), have also become an important tourist destination, especially because of

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SLOVENIA 2018

TOURISM IN SLOVENIA GENERATES ABOUT 13 PERCENT OF THE TOTAL GROSS DOMESTIC PRODUCT AND ACCOUNTS FOR ABOUT 8 PERCENT OF SLOVENIA'S TOTAL EXPORTS

their cultural events which take place in the scenic surroundings. All in all, although small, Slovenia is a wonderland in which you feel at home, and which quickly fills your camera's memory card, as it does your heart.

FACTS AND FIGURES, AGAIN According to the Slovenian Tourist Board, 2017 is expected to be a record year for the Slovenian tourism, because, in the first ten months of this year, the increase in the arrivals of foreign tourists

and overnight stays has been close to 10%. The Tourist Board says that these are the results of large investments and tourism development. In the last twenty years or so, tourism in this country has developed at an extraordinary pace.

Tourism provides a great opportunity for Slovenia as the most propulsive branch of the economy of today. Also, tourism is the only branch that has grown despite the various adverse conditions and economic crises, including the one from 2008.

Tourism in Slovenia generates about 13 percent of the total gross domestic product and accounts for about 8 percent of Slovenia's total exports. In addition, every eight employe in Slovenia works in tourism, which is above the EU average. It is interesting to note that although it has the same population as Bosnia and Herzegovina, a coastline that is not much longer, and approximately the same number of

JUDGING BY THE NUMBER OF VISITS, SLOVENIA STANDS SHOULDER TO SHOULDER WITH OTHER SMALLER BUT SUCCESSFUL EU COUNTRIES mountains as Bosnia, Slovenia attracts even four times more tourists from the Central Balkan countries.

Judging by the number of visits, Slovenia stands shoulder to shoulder with other smaller but successful EU countries. In terms of the foreign tourist arrivals, Finland with 2.6 million tourists, Estonia with 2.7 million, and Cyprus with

2.6 million, are in the same group of EU countries as Slovenia. When a country records a number of tourist arrivals that equals or exceeds the number of its inhabitants, than that country is considered successful in its tourist endeavours. And Slovenia has definitely succeeded! Still, it can always do better. Knowing Slovenians, that is exactly what they are going to do – become better.

SLOVENIA 2018

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