The Slovenia Times Spring Edition 2017 by The Slovenia Times

Real Es tate Sloven : Real E ia Specia state, l Insigh t Page 38-45

The Slovenia Times Slovenian Magazine in English Language Spring Edition 2017, Volume 14, EUR 4.90

www.sloveniatimes.com

Martina Larkin, WEF: 2016 FDI Summit Slovenia "Europe Needs Inclusive Growth" Conclusions

IEDC: Quality, innovation and a balance between "high-tech" & "high-touch"

Koper-DivaÄ?a Railway: A decade too late, yet still crucial

Bank talk: Access to Bank Credit and SME Financing in Slovenia

Editorial

Spring Edition 2017 www.sloveniatimes.com

Published quarterly by Domus, založba in trgovina d.o.o. Bregarjeva 37, 1000 Ljubljana, Slovenia

Editorial office Bregarjeva 37, 1000 Ljubljana desk@sloveniatimes.com

CEO and Publisher Brane Krajnik

Editor in Chief Tina Drolc

Editorial Consultant Louise Chatwood

Marketing & Advertising +386 (0)41 51 62 65 marketing@sloveniatimes.com

Contributors Tonja Blatnik, Jan Bratanič, Dr Erhard Busek, Valerio Fabbri, Silvija Fister, Geoffrey West, S&P Global

AD & D Marko Pentek, www.mgo.si

Cover Photo Plečnik's Ljubljana market by Luka Esenko, Ljubljana Tourism, www.visitljubljana.com

Printed by Schwarz Print d.o.o. Circulation: 5.000 copies The Slovenia Times is listed in the Media Register of the Ministry of Culture of the Republic of Slovenia under number 491. All content - texts or pictures - with no author specified are exclusively created by contributors to The Slovenia Times or published in accordance with owner’s instruction. All uncredited materials printed in the Slovenia Times are either created by the Slovenia Times journalists/photographers or acquired from the author/owner in accordance with the legal terms.

"If I was to give a theme to this Spring edition of The Slovenia Times, I might choose 'Innovation, Adaptation and Change'. Innovation because Slovenia is increasingly being recognised for its potential in contributing to the technological and economic growth of the EU, while at the same time maximising investment partnerships that are finding Asia an increasingly attractive destination. Adaptation because there is a new President of the United States who has brought attention to numerous issues that were previously not discussed in the mainstream and in Europe, we are witnessing the mass movement of people which is challenging the very fabric of European culture, language and identity. In 2017 we can see increasing uncertainty as to the way forward. Albert Einstein was credited with the saying that 'We cannot solve our problems with the same thinking we used when we created them'. This year seems to point toward Europe exploring solutions that are different from the collective approach of the past. And change because Slovenia is finally moving forward. In February, for example, the small Slovenian town of Kočevje entered into a contract with Japanese company, Yaskawa, to produce robotics and create hightech jobs in the region. Yaskawa could be considered as a model for the growth potential that serves not just Slovenia, but also the EU. There are also a number of other initiatives. On 1 April, The Slovenia Times will be coordinating an event that will highlight the potential of the emerging "One Belt, One Road initiative" – also known as the new Silk Road. This event will seek to introduce business and political opportunities and bring the issue of foreign direct investment to Slovenia, and help position the country as a direct and important link in the emerging trading alliance. The opportunities will also open new doors to explore and better understand cultural and social issues within the forum of globalisation. The Slovenia Times is an active partner in promoting and enhancing the business environment in Slovenia. We recognise the importance of focused content to reflect the interests of our readers. Your valuable insight, questions, comments, requests and feedback are most welcome, and can be sent to me at brane@sloveniatimes.com. We appreciate and thank you for your support!"  Brane Krajnik CEO The Slovenia Times

Spring Edition 2017 | The Slovenian Times

Contents Page 6

IN THE SPOTLIGHT

4 The politics of national economic policies and / or globalisation

6 2016 FDI Summit Conclusions

8 REGIONAL INSIGHT IN ASSOCIATION WITH S&P GLOBAL RATINGS

ECONOMY

10 Economic overview: Good times ahead Page 16

12 Access to Bank Credit and SME Financing in Slovenia 14 Interview: Professor Marko Hočevar, Faculty of Economics, University of Ljubljana 16 Interview: Vladimir Prebilič, PhD, Mayor of Kočevje 18 Koper-Divača Railway: A decade too late, yet still crucial 19 Interview: Professor Danica Purg, President, IEDC Bled School of Management 20 How should global business work to make the world more humane? 21 Success is in the Expertise 22 PwC on Brexit, global insights

Page 21

LEADERSHIP CORNER

23 And how do you treat your talents?

EXPLORING OPPORTUNITIES

24 Win-win cooperation along the 'One Belt One Road'

Page 22

26 TOPIC: Business Focus 2017

The Slovenian Times | Spring Edition 2017

INTERNATIONAL BUSINESS PARTNERS American Chamber of Commerce – AmCham Slovenia, British – Slovenian Chamber of Commerce – BSCC, The German-Slovene Chamber of Commerce and Industry – AHK Slowenien, Advantage Austria, Luxembourg-Slovenian Business Club (LSBC), Italian Trade Agency (ICE), Slovene - Russian Business Club, Kazakh-Slovenian Business Club - KSBC

Contents Page 30

GLOBAL PITCH 30 The future: Made in Slovenia

POLITICS 32 Political Overview 33 What are the factors shaping Slovenian economic diplomacy and what has been your experience? 34 Donald Trump: A challenge for the EU

Page 34

35 Deconstructing Migration - Getting To Root Causes 36 25 years of Slovenian independence

REAL ESTATE 38 Interview: Professor Janez Koželj, Deputy Mayor of Ljubljana 39 Invest Ljubljana – your first choice: A city of human scale 44 Main Drivers and Investment Opportunities in Slovenian Real Estate 45 Will Europe Manage Its Building Portfolio In Line with the 2°C Target?

Page 38

46 EVENT GUIDE

EXPERIENCE & LIFESTYLE SLOVENIA 48 Slovenia’s best restaurants selection

Page 46

Spring Edition 2017 | The Slovenian Times

European In the Spotlight Union

The politics of national economic policies and / or globalisation Europe Needs Inclusive Growth Europe’s economic unity is under threat from fiscal imbalances, regional disparities between the north and south, and chronic un- and under-employment. At the same time, its ability to address these issues on a Europe-wide basis has become more difficult in the context of the backlash against globalisation, rising populism, and increasing Euroscepticism. The antidote to these challenges is a growth strategy which is more inclusive and more knowledgeintensive. This cannot be achieved by applying the same, one-size-fits all, strategy everywhere. What is needed is a tailored approach matching specific policy actions to specific national needs. Policies aimed at fostering inclusive growth work more effectively than those that seek growth first followed by redistribution as they achieve both goals simultaneously. We are already seeing a number of successful initiatives borne from public-private cooperation: now it’s time to scale these and share them across Europe.

Martina Larkin, MBA, Head of Europe, World Economic Forum, Geneva

Gone are the days when globalisation was preached as the solution to the world’s economic problems. Let us be clear, globalisation—understood as free trade, free movement of capital, worldwide extension of business practices, and the expansion of multinationals beyond borders - has been criticized as the culprit of today’s social injustices. In particular, offshoring production to low-cost countries has imposed a reduction in real salaries in richer economies; the fast development of once poor economies has benefitted only a few; multinationals today have more power than some national governments. Can we blame globalisation for that? By itself, the process by which the world economy is today fully connected has created imbalances but these are the result of poor national economic policies and the lack of commitment towards a more, not less global economy. Globalisation is less available when most needed, and this is probably what our politicians and societies need to internalise better. Professor Arturo

Bris, Director, IMD World Competitiveness Center

We live in a globally connected world and this, in particular, relates to export-oriented Slovenia. With the vision to become a green reference country in a digital Europe, it is of utmost significance for our country that local economic policies follow this guideline. The economic policy should contain a set of measures that support digital transformation, an orientation toward new technology, as well as domestic and foreign direct investment. The fiscal policy should follow these guidelines by enacting appropriate tax reform. I believe that we must seek advantages in our characteristics and not excuses for being geographically small and locally limited. The economic policy should take advantage of the favourable economic growth, and through proper incentives ensure the creation of new jobs so that highly-qualified people will not seek opportunities abroad so that our country will further develop into the place where professionals would like to live and work.

Nevenka Kržan, Senior Partner at KPMG in Slovenia

The Slovenian Times | Spring Edition 2017

European In the Spotlight Union ket forces to generate the high-quality, low-cost products that make it competitive and contribute to national prosperity. How prosperous and competitive is Slovenia?

What makes Slovenia one of the Europe’s most prosperous nations?

2016 FDI Summit Conclusions By Tonja Blatnik, Founder, Institute for Universal Future Communications (iUFC)

“Slovenia is a great place to live, but it is not an optimum location for doing business,” was one of the key messages of the FDI Summit Slovenia 2016, which was attended by 100 leading representatives from business and politics. The themes of the seventh FDI Summit, a major international executive-level business conference focusing on domestic and foreign direct investment, organised by The Slovenia Times and the Faculty of Economics, were: talent, competitiveness, and prosperity. "Where does talent come from, how is it transformed into competitive products, and under what conditions do competitive products translate into 'sustainable prosperity' – that is, stable and equitable economic growth?" was the main question addressed by the keynote speaker, Professor William Lazonick, University of Massachusetts Lowell (USA) and visiting Professor and

The Slovenian Times | Spring Edition 2017

Honorary Doctor of the University in Ljubljana. In his lecture, Professor Lazonick, the winner of the prestigious 2014 HBR McKinsey Award, provided some answers to these issues through what he called 'the theory of innovative enterprise'. This perspective is very different from that of conventional free-market economists. He is an economist, but one who argues that, in a prosperous economy, "well-developed markets in land, labour, finance and products are outcomes, not causes, of the wealth of nations", and that "markets must be regulated or they will undermine the competitiveness of business organisations and the prosperity of nations". The innovative enterprise is a social organisation that shapes mar-

The answer to which all participants waited so passionately was given by Alexandra Mousavizadeh, Director, Global Property Index, The Legatum Institute, a UK based, international think tank and educational charity focused on understanding and measuring prosperity. Her keynote speech 'Prosperity - Between Wealth and Wellbeing' revealed the latest annual Global Prosperity Index, a survey that over the past decade has ranked the most prosperous countries in the world, covering 149 nations, of which 16 are in Central and Eastern Europe. The Prosperity Index provides insight into why some countries have seen their prosperity rise, why some have seen it fall, and why some have stagnated. "In the 2016 rankings, Slovenia was 20th on the world prosperity scale, meaning that Slovenia is one of Europe’s most prosperous nations, helped along by the best natural environment of any nation on earth," stressed Mrs. Mousavizadeh in presenting the latest index findings. The Index combines both objective and subjective data, measuring not only how prosperous a country is, but, how prosperous its citizens feel. "Slovenia is 21st in prosperity from the 149 countries covered, despite having the 35th lowest level of wealth. Along with Austria, Slovenia is one of the only CEE countries that meaningfully over-delivers prosperity. Slovenia outperforms all other countries with the same/similar level of wealth," said Mrs. Mousavizadeh, who added that: "Slovenes wishing to raise their prosperity do not necessarily have to marry a billionaire president, they can simply stay in Slovenia!" So, what is behind Slovenia’s success? Slovenia’s best performance is in the Natural Environment sub-index where, for the fifth year running, it ranks first. Slovenia’s Social Capital sub-index which measures the strength of personal relationships, social network support, social norms and civic participation in a country, scores above the EU and OECD averages. "Slovenia is ranked second best performing country in the EU, behind Ireland, when it comes to citizens volunteering in organisations on a regular basis," stressed Mrs Mousavizadeh. Slovenian social capital, a powerful driver of prosperity delivery, is so high due to high levels of social network support and civic participation. It outperforms its neighbours in most social capital metrics. Slovenia also ranks in the global Top 20 for Personal Freedom, six places above the USA. It has a diverse free press and there

European In the Spotlight Union is widespread tolerance for immigrants, people of ethnic minorities and the LGBT community.

Slovenia needs a better business environment However, not everything operates so smoothly. Slovenia was hit hard by the financial crisis of 2008 and GDP per capita declined by 8.6% in 2009, so it is not surprising that Slovenia has seen a decline in its Economic Quality over the past decade. There is a higher rate of unemployment, though this peaked at 10.2% in 2013 and dropped to 9.5% in recent years. Although Slovenia’s Economic Quality is higher than its CEE neighbours, its recovery from the crisis has been much slower. Ranked 60th, Slovenia’s worst performance comes in the Business Environment sub-index, though good progress has been made over the past decade. Slovenia’s labour market is inflexible and its financial services unaffordable. Slovenia has been criticised for being slow at introducing reforms to boost competitiveness. "While redundancy costs have been reduced, the labour market remains among the least flexible in the EU," commented Mrs. Mousavisadeh.

Between competitiveness and talent The FDI Summit also presented three panel discussions focused on the magnets for foreign investors: Talent, Prosperity and Competitiveness. Dr Jure Stojan and Tine Kračun from The Institute for Strategic Solutions, Slovenia, led the discussion about the importance of a stable business environment, along with Imre Balogh, CEO of DUTB (Bank Assets Management Company), Slovenia and Branislav Vujovič, New Frontier Group, Austria, who claimed that Slovenia has great potential, but sometimes thinks about itself too much. "We are facing digital transformation so you have to open your mind." A panel discussion devoted to the importance of talent was introduced by Dr Andreja Kodrin, Strategist and 2015/2016 Advisor and Expert Cabinet Member to EU Commissioner Violeta Bulc, who stressed that: "Young people are the most authentic source for creating a sustainable future with inspired and disruptive ideas – and Slovenia certainly has the potential to be a talent hub." Her inspirational lecture was followed by a panel, efficiently led by Marko Mlakar, Director and Partner, Amrop Adria. Mr Mlakar raised the question of whether Slovenian companies can make intriguing job offers for students who graduate from the world’s top business schools, such as Harvard, Oxford, Ivey or Insead. Matej Potokar, Microsoft Western Europe, replied: "The whole planet is a global village because technology enables you to connect

the dots. The value of the new world is all about people, about talent." Mr Mlakar invited the panelists to comment on the following paradox – how is it that the Slovenian educational system is well invested and yet faces a significant mismatch with the needs of the local economy. Dr Maja Makovec Brenčič, Minister for Education, Science and Sport, observed that, on the one side Slovenia is achieving top results in education - for example, Slovenians are top in physics, maths, natural sciences and reading literacy is improving but many, including teachers, question whether the system is good. "The main question is how well knowledge is transferred. The Minister believes that Slovenia has enough knowledge but questions if we are able to use it efficiently?" The closing remarks of the Summit were presented by Sonja Šmuc, Managing Director, The Managers’ Association of Slovenia, and long-time BBC journalist and Director of Communications at the Legatum Institute, Giles Dilnot. They agreed that prosperity, competitiveness and talent are decisive factors for foreign investment and Slovenes need to change their attitude towards these drivers, bearing in mind that: a company cannot be competitive in the global economy without talent and no country can be prosperous without companies that are competitive. 

The Slovenia Times invites you to explore its Omni-channel Knowledge Share:  The in-depth presentations of the keynote speakers, including the Legatum Institute report, are available on the FDI Summit webpage. Visit www.fdi.si and dive into the following wisdoms and insights: • Legatum Institute: Prosperity in Central and Eastern Europe (report) • Professor William Lazonick: The Wealth of Nations: Talent, Competitiveness, Prosperity (transcript of the keynote speech) • Dr Jure Stojan: Competitiveness and the Business-Environment Stability (PPT presentation) • Dr Andreja Kodrin: Talent for 4th industrial revolution - Slovenia as a talent hub (PPT presentation)  Are you a more visual type?

Visit The Slovenia Times YouTube channel and watch: • 2016 FDI Summit conclusion video summary (best and most powerful quotes from the summit’s speakers)

As they said… FDI Summit Slovenia 2016 "Slovenes know they may not be wealthier than the Japanese but they are richer in some things - the things that create an environment in which people flourish," Alexandra Musavizadeh, Director, Legatum Institute. "We are not talking about the competition between companies, but between states, even continents," Matej Potokar.

"We are facing a war for talent, 36 percent of the largest companies around the world have problems with employment because they cannot find talented individuals who would be engaged", Dr Andreja Kodrin, Strategist.

"We are only two million, but we can still achieve big things," Marko Mlakar.

Spring Edition 2017 | The Slovenian Times

Regional Insight in association with S&P

Regional Insight in Association with

S&P Global Ratings Country

Hungary

Slovak Republic

Serbia

Slovenia

Period Year

Real GDP growth (%)

Unemployment rate (%)

CPI growth (%)

Net General Government Balance / GDP (%)

2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019

2,9 2,5 2,5 2,9 3,1 3,1 2,7 2,6 2,6 2,7 2,4 2,5

4,9 4,8 4,8 9,8 9,8 9,6 18,0 17,0 16,0 7,7 7,5 7,4

2,0 3,0 3,5 1,0 1,5 1,8 3,2 4,2 4,2 1,5 1,6 1,9

(2,5) (2,3) (2,2) (2,0) (2,0) (1,8) (3,0) (3,1) (3,1) (1,8) (1,5) (1,5)

Net General Government Debt / GDP (%)

Current account balance / GDP (%)

70,5 69,1 67,0 51,4 51,1 50,6 67,6 67,5 67,5 61,4 60,5 59,5

3,6 3,4 3,2 0,6 0,9 0,8 (3,4) (3,0) (3,0) 6,7 6,3 6,0

All years are S&P Forecast

Slovenia In December 2016, S&P Global Ratings revised its outlook on Slovenia to positive. At the same time, the agency affirmed its ‘A/A-1’ long- and short-term foreign and local currency sovereign credit ratings on Slovenia. The outlook revision reflects S&P’s expectation that the recovery of the Slovenian economy will continue at a solid pace. The rating agency now estimates that the Slovenian economy will grow by about 2.5% in 2016 and accelerate to 2.7% in 2017, supported by strong net exports and increasing private consumption. The latter will be supported by higher disposable incomes thanks to improving labour market conditions, low, albeit slowly increasing, inflation and likely public sector wage hikes, as well as growing household credit. In addition to domestic demand, Slovenia’s economy will continue to be supported by the country’s competitive export-oriented economic structure. Private investment will further underpin export potential – for example, as production in the automotive sector is extended. In this regard, S&P Global Ratings expects manufactur-

The Slovenian Times | Spring Edition 2017

ing to remain an important sector for Slovenian economic growth over the projection horizon. As the output gap narrows and wages continue to increase, the agency anticipates that inflation will be over 1% in 2017. S&P also believes that the implementation of growth-enhancing structural reforms, including in judicial and administrative areas, could further boost Slovenia’s medium- to long-term economic growth prospects, while health care system reform could improve the prospects for government finances over time. Furthermore, the educational system plays an increasingly important role in preserving the international competitiveness that the open Slovenian economy enjoys. Although the economy benefits from its openness to international trade – exports of goods and services will amount to about 80% of GDP this year – in S&P’s view, significant administrative barriers, e.g., in judiciary, still inhibit business and investments. The rating agency believes that rising domestic demand and the recent strong labour market performance – with the unemployment rate decreasing from around 8% on average in 2016 to 7.7% at year-end 2017 – will support the authorities’ budgetary consolidation efforts. S&P projects the general government deficit to average 1.8% of GDP over

2016-2019, with the deficit in 2017 likely to be slightly higher than envisaged by the government, depending on the outcome of ongoing negotiations on public sector wages and the stance on relieving consolidation measures introduced in recent years. S&P Global Ratings also expects government investment to resume following the break in 2015-2016 owing to the start of the new EU budget cycle. The positive outlook reflects S&P’s view that there is at least a one-in-three probability of an upgrade over the next two years if, alongside the continued economic recovery, the agency observe further improvements in the transmission of monetary policy to the real economy and budgetary position, with a decline in general government debt. S&P could also revise the outlook to stable if it considers there is a risk of a material slippage in Slovenia’s budgetary trajectory and a reversal in net general government debt dynamics, or if the current account turns into a deficit position, including a position due to a significantly weakened external macroeconomic environment. A weakening of Slovenia’s key institutions or policy consensus across the currently governing coalition with the potential to hamper policy cohesiveness could also lead the agency to revise the outlook to stable.

Regional Insight in association with S&P Serbia

Slovakia

Hungary

In December 2016, S&P Global Ratings revised its outlook on Serbia to positive from stable. At the same time, the agency affirmed its ‘BB-/B’ long- and short-term foreign and local currency sovereign credit ratings. The outlook revision reflects Serbia’s improved fiscal performance and the prospects for further gains.

In January 2017, S&P Global Ratings affirmed its ‘A+/A-1’ long- and short-term foreign and local currency sovereign credit ratings on Slovakia. The outlook is stable.

(Rating Update – 24th February 2017) At the end of February 2017 S&P Global Ratings affirmed its ‘BBB-/A-3’ long- and short-term foreign and local currency sovereign credit ratings on Hungary. The outlook is stable.

The rating affirmation reflects the longer-term features of Serbia’s credit profile – these include a high general government debt burden, most of which is denominated in foreign currency; a GDP per capita of just above US $5,000; limited monetary policy flexibility owing to the banking sector’s prevalent euroization and its high stock of non-performing loans; and favorable economic growth potential, in part due to the Progressive/Socialist party coalition’s structural reform agenda. The Serbian economy saw a continued recovery throughout 2016, with real GDP expected to grow by 2.7%, driven by investment inflows – mainly foreign direct investment (FDI). While S&P expects investment activity and industrial production to accelerate, fiscal consolidation might weigh on private and public consumption. That said, structural reforms – namely to labour, pension, corporate bankruptcy, and privatisation laws – if implemented, could stimulate growth beyond S&P forecasts, which are just over 2.5% between 2017 and 2019. The positive outlook signals that S&P Global Ratings see at least a one-in-three chance that it would raise the rating on Serbia during the next 12 months if the government’s fiscal performance exceeds the agency’s expectations and the country’s current account deficit remains in check. Key metrics, which would signal such a scenario, would include a reduction in the change in general government debt as a share of GDP and Serbia’s gross external financing needs as a share of CARs plus usable reserves. On the policy front, an upgrade would depend on continued compliance with the government’s precautionary standby arrangement with the IMF and progress on institutional integration with the EU. S&P Global Ratings could also revise the outlook back to stable if fiscal over-performance, compared to agency forecasts, does not occur; if the restructuring of public enterprises stalls; if the current account begins to widen anew; or if there are dislocations to the dinar foreign exchange market (due, for example, to a normalisation of interest rates in the U.S.).

The ratings are supported by Slovakia’s low external debt, gradually improving fiscal metrics, and healthy economic growth prospects. The agency expects that firm domestic demand will underpin average GDP growth of around 3% between 2017 and 2020. The ratings on Slovakia are constrained by modest GDP per capita, including persistent structural challenges, such as high long-term and youth unemployment. Slovakia’s high dependence on exports (more than 90% of GDP in 2015, and estimated data for 2016 suggesting an increase to about 95%) and the large auto sector (about 40% of industrial production and 27% of total exports), make the country’s economic growth prospects particularly susceptible to swings in external demand, mainly in Europe, but also globally. The main risks to economic growth prospects arise from uncertainty regarding global trade, for example due to the impact of Brexit or rising protectionism in Slovakia’s main trading partners.

Hungary’s substantial external surpluses and its track record of fiscal restraint support the sovereign ratings. Moderate long-term growth prospects, high public debt, and an impaired monetary transmission mechanism are key constraints on the ratings. Over the short term, S&P expects steady economic performance. The rating agency believes that real GDP growth for 2017 will approach 3% due to the wage agreement initiated by the government in late 2016 which implies higher private sector minimum wages in exchange for a lower payroll tax burden; the expectation of recovery in EU fund absorption; fiscal stimulus measures, including value-added tax (VAT) cuts on dwellings, a reduction in the banking tax, and rising expenditure on housing subsidies; real wage and employment gains; and stronger private sector balance sheets. However, over the medium term, S&P expects Hungary’s underlying fundamentals – namely poor demographics, worsened by net emigration, low labor participation, a large and encroaching public sector, as well as weaknesses in the business environment, low productivity, and an overheating labour market – will slow the pace of average GDP growth to just under 2.5% per year between 2018 and 2020. The stable outlook reflects S&P expectation that Hungary’s continued cyclical recovery and its contained headline fiscal performance will support a gradual reduction in general government debt. The outlook also factors in the agency’s assumption that the economy’s current account balance will stay in surplus, supporting Hungary’s strong external balance sheet.

Sources: Standard & Poor’s Rating Services and Eurostat. Please refer to our website for more information about ratings at https: www.spratings.com/corporates/Understanding-Ratings-2.html and read our disclaimers at www.standardandpoors.com/en_US/web/guest/regulatory/legal-disclaimers Copyright © 2015 by Standard & Poor’s Financial Services LLC. All rights reserved. STANDARD & POOR’S and S&P are registered trademarks of Standard & Poor’s Financial Services LLC. Spring Edition 2017 | The Slovenian Times

Economy

Good times ahead By Jan Bratanič

"The times, they are changing", sings Bob Dylan. And they are changing fast for the Slovenian economy. The small nation, in the shade of Alps, was a couple of years ago the next European country waiting for the visit from the mighty Troika, but today it is one of the fastest growing economies in the euro area. This year, gross domestic product (GDP) is forecast to be 3 percent for the second time since the crisis and only the third time in a decade. Consumer confidence is higher now than in the years before the crisis. Consumers are therefore spending and increasingly becoming a key driver of economic recovery. Years of saving for a rainy day have finally given way to consumer wants. Auctions of real estate, a very sombre and unprofitable endeavour just two years ago, have become as lucrative as it is overcrowded. The appetite for new homes is already starting to drive up prices and building activity. In December, the construction companies built 36.9 percent more homes than in the same month of 2015 and the upward trend is forecast to continue. The change in Slovenia’s fortunes hasn’t gone unnoticed in international markets or by foreign investors. Where Slovenia used to be known as a country drowning its economy in red tape, rigorous tax laws and an unstable government, it is now starting to become increasingly popular. Japanese robotics maker, Yaskawa, is building a new factory in Slovenia, the Austrian independent vehicle manufacturer, Magna Steyr - its Graz plant currently produces the Mercedes G class and BMW Group’s MINI countryman - is set to follow with a factory that could employ around 3,000 people. The decision of Magna Steyr to build its second manufacturing facility in the vicinity of Maribor speaks volumes about the progress Slovenia has made in a couple of years. So do the numbers. In roughly three years, the amount of foreign direct investments (FDI) has increased by 38 percent or EUR 3.4bn, which is almost 10 percent of GDP. In 2015, the FDI stock stood at EUR 11.6bn. The goal

The Slovenian Times | Spring Edition 2017

of EUR 15bn by 2020 is within reach; maybe it is not as ambitious as it should be. Slovenians like to make comparisons with the four Visegrad nations, Slovenia’s main competition in international markets for foreign capital – a battle Slovenia has been losing, and losing badly for the last decade. Poland has attracted more than US $180bn of FDI in the 15 years since year 2000. FDI stock in the Czech Republic stands at more than US $113bn, and even the Slovak Republic has managed to attract four times more foreign capital than Slovenia. "Small victories win big wars," is a saying that could hold true for Slovenia which has, in the last two years, slowly begun to outshine Slovakia in the eyes of foreign investors. All is needed is to build on the momentum and not mess it up with measures and reforms that lack strategic direction. 

01 Mercator; Photo: Anže Malovrh/STA 02 Ljubljan, Celovški dvori; Photo: Nebojša Tejić/STA 03 Vladimir Prebilič, Mayor of Kočevje and Manfred Stern, Corporate Vice President Yaskawa Electric Corporation (in the middle); Photo: Atelje Iris

Economy

Access to Bank Credit and SME Financing in Slovenia In the years before the financial crisis, Slovenian corporates and SMEs had been primarily funded by the banks. During the crisis, corporates began to rely on internal resources and services of the foreign financial systems. The assets of the Slovenian banking system were substantially diminished during the crisis as a result of negative credit growth and rather moderate developments in the Slovenian economy. The structure of the financing of the Slovenian non-financial sector thus reflects developments in major parts of the Euro area. The results of a survey on the access to finance for corporates, confirms that banks have been willing to lend since 2015 but have been faced with constrained demand from the real sector. It was also noted in the survey that market funding for corporates improved in 2016. It is expected that these trends will continue in 2017, which will result in a more competitive banking sector which will be eager to support the needs of corporates and SMEs.

Boštjan Jazbec, Ph.D., Governor of the Bank of Slovenia SMEs and mid-corps are a vital source of economic activity and employment. EIB has always acknowledged this reality, evidenced by its sizeable, longstanding SME programs. And each time, when signs of impaired access to financing for SMEs arise, the EIB steps up to the plate. Consequently, the EIB group (including EIF, the specialist SME financing arm), provided a record EUR 33bn of SME financing in 2016 a large fraction from the EC supported Investment Plan for Europe*. An IPE initiative, enabling access to various risk-sharing programs for enhanced support to SMEs, is actively rolled out in Slovenia in close cooperation with our local partners (promotional and commercial banks, funds, dedicated agencies). But IPE also gradually caters for more direct EIB support to mid-corps. All programs envisage viable projects, focused on growth, employment, innovation, research. A vibrant SME tissue is very important for the Slovenian economy, supporting them is key for EIB and IPE. * Investment Plan for Europe also commonly referred to as EFSI plan or 'Juncker plan'

Peter Jacobs, EIB Head of Office, Ljubljana, Slovenia

Challenge of financing Small Business

Demand for small business loans from NLB has grown fast in 2016 and 2017. On the supply side there are no major banking restrictions, but there are some positive changes happening. Interest rates are historically low and the economy is gaining speed with GDP growth powered by exports and higher personal consumption. This is why there is an optimistic horizon which means that small business also flourishes. So how does the bank cope with higher credit volumes in this segment? At NLB we have a strong focus on servicing the small business segment with high quality solutions. For them, having a fast and effective bank is one of the most important challenges which is why we are gradually aligning their expectations with digitalisation and our response time – we have already shortened the time-to-yes and time-to-money. We have automated some key credit processes (such as risk score cards, financial statements disclosure from accountants, collateral simplifications, etc.), and business clients can already request loans and BA overdrafts via the mobile banking solution, NLB Klikpro. In one way, we encourage clients to use digital channels but on another, we are out there where our clients are – we have a fully dedicated mobile team of experts who can take banking advice to your doorstep.

Darko Jurić, Advisor to the General Manager and Renato Puklavec, Regional Manager, NLB d.d.

The Slovenian Times | Spring Edition 2017

Economy

Abanka believes that superior and innovative banking services and our partnership approach represent the competitive advantages that prompt companies to select us as their bank. We establish a personal relationship with, and take an individual approach to our clients, and adapt to the needs of every single company. Expert advice in the selection of the appropriate banking product and in the execution of transactions is important, as the smaller number of employees at small and medium-sized companies does not facilitate a high degree of specialisation in specific products. Special attention is given to family companies that frequently grow from small businesses into medium or even large enterprises. In addition to credit arrangements, we offer competitive terms and conditions through excellent cooperation with the Slovenian Enterprise Fund, the Slovenian Investment Bank, various regional development funds and institutions established to promote the Slovenian economy. We ensure that clients have secure and prompt execution of transactions at home and abroad, with numerous guarantee and documentary transaction products, and a wide network of correspondent banks. In today’s digital world, clients are able to transact anytime and anywhere via the Abanet com online bank application and the best mobile banking application currently available in the Slovenian market: Abamobi com. Both applications use RWD technology. Photo: Žiga Intihar

Blaž Stiplovšek, Executive Director Corporate Banking Divison and Tina Možina, Director of SME Banking Sector, Abanka d.d. The company that decides to finance a part of its activities with external resources should, firstly, have sustainable business results and a realistic business plan that will enable repayment of the loan. The decision on the appropriate form of financing should be based on the purpose of borrowing and activities of the company. Two options that are available to businesses are the financing of working capital and secondly, investment loans for the purchase of fixed assets. If the company does not need to own fixed assets, leasing would probably be the most appropriate form of financing. If the company is operating in the technological innovation area and has no option to provide a material form of guarantee, it often decides to use the possibility of financing via the Slovenian Enterprise Fund, which offers a guarantee of up to 80 percent of the investment. UniCredit Banka Slovenia is an official partner of the Fund. It is always very important to discuss financing needs with a banking consultant who has broader knowledge and will be able to present different financing options according to the specific challenges of the particular company.

Alenka Požar, UniCredit Banka Slovenia

Banks are one of the key business partners of our company, LOTRIČ Metrology. As with all stakeholders, we strive to achieve a firm and reciprocal relationship which benefits both parties. One of our main steps is to maintain an optimum debt to equity ratio and ensure that our daily operations reflect business excellence. Therefore, financing and overall access to bank credit is, in our experience, accessible and affordable for SME’s in Slovenia. The financial institutions with which we cooperate are very responsive, responsible for the regulation of documents, and can operate in a dynamic environment like ours. We are pleased that the banks are competitive so that they can provide a quality source of financing at low interest rates which, of course, vary depending on the cooperation with the institution.

Marko Lotrič, General Director at Lotrič Metrology

Spring Edition 2017 | The Slovenian Times

Economy

Professor Marko Hočevar, Faculty of Economics, University of Ljubljana

Interview: Professor Marko Hočevar, Faculty of Economics, University of Ljubljana

Most important is that your stories are real, whether in accounting or football! By Tina Drolc, M.Sc.

Professor Marko Hočevar is the Head of the Accounting and Auditing department at the Faculty of Economics, University of Ljubljana and a member of Supervisory Board in many Slovenian companies and other institutions. As the author of many books and articles on management and accounting, he spoke with The Slovenia Times about the current accounting challenges for Slovenian businesses. He relates it to football and its global dimension, which he perceives as a great case of a perfect competition. Q We often see multiple interpretations of accounting statements, partly due to European and Anglo-Saxon accounting principles. What, in practice, are the main differences and how to cope with them? A The concepts are very different; the Statement of Financial Position made according to 14

The Slovenian Times | Spring Edition 2017

the Anglo-Saxon model has always been more optimistic, however the European model (also German) that includes Slovenia, is based on the principal of caution and is more conservative. Due to European integration, International European Accounting Standards have been created which are similar to the Anglo-Saxon

model that exhibits higher assets, recognises revenue at transaction rather than payment and so show shareholders the expectations. A good example for comparison in practice is the value of stock; if a company bought it for EUR 100 and the value today is EUR 120, the Anglo-Saxon accountant will record EUR 120.

Economy These days, accounting has ignored its core principal, to be careful or that it is better to show less business than artificially inflate. The German or European accountant will however say that until the stock is sold (for EUR 120), we will show it as EUR 100. The same applies for other assets such as real estate and other property. Finally, we usually hear that it is accountants that are guilty for the crisis however, I must disagree. The financial statements only summarise the business, but I can agree that the path that accounting has taken is certainly not good.

Q But still, the inflation of value was a significant contributor… A Definitely, expectations have only been increasing and consequently the demand for shares and real estate. These days, accounting has ignored its core principal, to be careful or that it is better to show less business than artificially inflate. Q It is widely recognised that companies of-

ten ignore items that should be stated in the Statement of Financial Position. Do the International European Accounting Standers deal with this issue? A Unfortunately in Anglo-Saxon practice no, but we have gone against the trend that Member States return to their national accounting standards, so a step back. In addition, in the Annual Reports more and more attention is put on non-accounting factors and the business report where the strategies for the future are seen, people, brands and markets. On the other hand, the auditors are tightening their standards and so they take care that the Statement of Financial Position is not artificially inflated. To mention a case in the US (as well in Slovenia) where companies were issuing many invoices at the end of the year (many times to their subsidiary companies) and the payment was never made and so to prevent such actions and fictional business, the greatest importance of the accounting is to report only realised rates.

Q In Slovenia, the value generated by an employee is high although we do not exploit it since we still have low added value and low prices for the products we sell. A In my opinion, this is a key problem of the Slovenia economy and the challenge for Slovenia managers. In terms of productivity, Slovenes are amongst the highest and even burn out, but when pricing the product the indicators for Slovenia are quite poor. Therefore, Slovenian companies needs to raise the question

of how to make good products and sell them for a good price! This is through R&D, branding and niche products, properly supported by marketing.

Q But, on the other hand, do you think it is also an issue of the Slovenian country brand which has a low perception value that is not supportive for Slovenian managers. - Slovenian companies are usually sold for a low price and then sold again for much more… A Absolutely! I would highlight the question of whether Slovenia is making enough from being in the EU. The same situation is with Slovenian footballers; those from Slovenia have to put in more effort to take part with the international elite. From the perspective of self-confidence Croatians are phenomenal! Slovenians are lack of the statement ship stance. Q You used to say that football is a symbol of capitalism and the market economy. Why? A Football has all the characteristics of perfect competition. It is played at all levels; professional and recreational; any by every child worldwide. It is a global game, the players move from one country to another. Also, it is a huge industry, player transfers are worth as much as US$ 100m… The thing that fascinates me are the brands; you have a judge who is a brand, the ball is a brand, the stadiums and the players… and if I am from the generation that supports Union, today my child supports Liverpool – totally international and a different perspective.

Q UEFA President, Alexander Čeferin, opened the possibility that the Champions League Final could, in the future, take place outside the borders of Europe. What does this means in terms of sponsorship? A The main intention is the extension of the market and consequently that sponsors are willing to pay more for the greater visibility. For example, if the Champions League would go to China, Heineken would, for sure, be willing to support it since this is the way to approach new markets. And finally, UEFA also makes more money. The challenge for Mr Čeferin is that the best football clubs are the richest and only they wish to play together. On the other hand, the European mindset wants to give the opportunity for smaller clubs to also compete. It is interesting that China has set the goal that by 2050 it become world champion, and already today, they are investing into the football players which they want to see in their league. 

If the Champions League would go to China, Heineken would, for sure, be willing to support it since this is the way to approach new markets. And finally, UEFA also makes more money.

Q What are the success factors for a brand? A To be seen and to be very good! In addition, you need to be attractive and have good communication skills - David Beckham and Ronaldo are great at this – the values and the way of life and the image in the local, as well as the international community. Are your stories, which are later supported by the sponsors, real?

Companies were issuing many invoices at the end of the year (many times to their subsidiary companies) and the payment was never made and so to prevent such actions and fictional business, the greatest importance of the accounting is to report only realised rates. Spring Edition 2017 | The Slovenian Times

Economy Q What is the secret of this success story for Kočevje? A "A good investment climate is about improving outcomes for society as a whole. At the city council, we do not work on our differences, but rather on our common interests and goals. So, it does not matter where you are from, but rather who you are. As a result, in the city we now have for different religious groups that live together in peace, and we all engage in a transparent, open dialogue to discuss all that is in our municipality’s best interest. This atmosphere has created a favorable humus for outside investors."

Interview: Vladimir Prebilič, PhD, Mayor of Kočevje

Serving the investor, which is the king for us, without being servile! By Valerio Fabri

Yaskawa Electric Corporation, the leading Japanese conglomerate that industrial robots, has decided to build its first factory in Europe in Kočevje, a small municipality in the Pokolpje region. How has Kočevje, a city with 8000 inhabitants at the border with Croatia, managed to secure a 25-million euro greenfield investment? To put things in perspective: 4000 robots are expected to be produced in the initial stage before scaling up to 6000, when the plant will reach full capacity; between 170 and 200 new jobs are going to be created; and 5.8 million euros will be coming from the state budget. The Slovenia Times went to talk with the city’s Mayor, Vladimir Prebilič, a professor at the Faculty of Social Sciences of the University of Ljubljana, who can be easily considered the main driving force behind this success story. 16

The Slovenian Times | Spring Edition 2017

It has definitely been an advantage that Yaskawa was acquainted with the area, but it is not as straightforward as you may think. Without support from the government, which travelled to Japan and relentlessly promoted the country as an investment destination, there would have been no Slovenia on the map, let alone Kočevje.

Q Well, it is all great, but I doubt that this alone has propelled Yaskawa to invest here. A "This atmosphere was not enough, but it has been crucial to have a city council where party-politics dynamics does not prevail. Over the last 20 years we realized that to grow we could not make it alone, but we needed foreign investors to succeed. Our philosophy became: we shall serve the investor, which is king for us, without being servile." Q So much for the investment climate. What were the steps that led to the formidable outcome? A "I met with Manfred Stern, the head of Yaskawa Europe, in 2015. He knew virtually nothing about the advantages of investing in the Pokolpje region, such as low taxation and government incentives. Another crucial aspect was to realize that land ownership structure is very simple: 15% belongs to the Kočevje municipality, the rest to the state, which made it easy for them."

Economy First and foremost, we started investing in infrastructure to create a favorable FDI environment, a decision that is paying off in the long term. Secondly, the majority of council members are not party-driven, but rather driven from the interest in the local reality.

Q Yaskawa Electric Corporation is already present in Slovenia, so this helped. A "It has definitely been an advantage that Yaskawa was acquainted with the area, but it is not as straightforward as you may think. Without support from the government, which travelled to Japan and relentlessly promoted the country as an investment destination, there would have been no Slovenia on the map, let alone Kočevje. Among the pool of countries that were considered for the investment there were France, the United Kingdom, Germany, and all the four Visegrad. Since Slovenia was picked as the investment destination, we managed to establish a direct line, and ultimately the counterpart was reassured to be in direct contact with the decision-maker. I think that a combination of transparency and flexibility from our administration proved to be the decisive factor." Q What about skills, competences and all else required of a high-tech industrial production? A "In general, it is very difficult to have 100% skilled labor force, but also in this regard we have been flexible. To all the companies coming here we ask what skills they are looking for, and we help them either identify the right candidates through the administration or our business incubator, or we build skilled forces together with the company. On top of this, we guarantee 4000 euros for every additional job created and for which a local person is hired." Q Beside Yaskawa, during the past year in Kočevje there has been a series of successful stories: from SiDG as manager of all stateowned woods, to a joint venture with a German investor to start smartMELAMINE, a production of a completely new textile material. What’s attracting them? A "I think that there are three features to emphasize in the big picture. First and foremost, we started investing in infrastructure to create a favorable FDI environment, a decision that is paying off in the long term. Secondly, the majority of council members are not party-driven, but rather driven from the interest in the local reality. An investment is not made only of money, but of people and all they bring. Finally, over the years we have established a good communication line with the government. When we call, we share the solution to a problem, we do not ask for subsidies."

Q As a municipality, you are the third largest forest owner in Slovenia. There seem to be good perspectives, in terms of tourism and sustainable development. Can you tell me more about this? A "We recently decided to establish a municipal company called Kočevski Les, which has the exclusive concession over 4000 hectares of woodland and oversees all the wood processing activities for over 25000 cubic meters of wood per year. This means that Kočevski Les is in charge of the whole wood production process, which currently employs 30 people and we hope to double that number next year. In terms of tourism, we have invested approximately 2 million euros to build infrastructure. This year we will open a youth hostel in the center of town with an info tourist point, plus we are creating and servicing a camping area. However, our primary goal is to attract hiking tourists, as the surrounding area caters to that. And we need to make sure that we are ready to offer them something in line with their expectations. In 2 or 3 years, we want to double the current number of visitors per year, which is now about 16000." Q What is your vision for the future? A "I do not hide that I have received some offers to work on the national political levels, but I am so focused on the future of Kočevje that I have kindly declined them. Though you never know: maybe tomorrow there will be someone who could serve better the municipality’s needs, and I will happily leave the stage. Regarding the vision for the future, our goal is three-fold: attracting new investments, as far as they are environment friendly; developing and growing tourism; and working on local self-esteem. We have to educate younger generations to believe in our city. Did you know that Kočevje was the first city to be electrified in Slovenia, in 1892, well before anywhere else in the country? This is one example of our past achievements on which we should build."

"The investment for the European robot plant is of strategic importance for Yaskawa. We plan to supply customers in Europe with robots manufactured in Europe. Being close to the production site increases customer satisfaction and thus supports growth. Slovenia is a good combination of the shortest distance for component supply from the Far East and a good location to distribute finished robots to customers in EMEA, and this is possible because of a well skilled, motivated local work force." Manfred Stern, President & CEO, Yaskawa Europe GmbH

01 Vladimir Prebilič, Mayor of Kočevje and Manfred Stern, Corporate Vice President Yaskawa Electric Corporation; Photo: Atelje Iris 02 Manfred Stern, President & CEO, Yaskawa Europe GmbH

Much like the electrification process, one could only hope that the Yaskawa investment will be considered as the first drop that propelled the spillover effect. 

Spring Edition 2017 | The Slovenian Times

Economy 01 Dr. Peter Gašperšič, Minister of Infrastructur, Republic of Slovenia; Photo: Tamino Petelinšek/STA 02 Ljubljana Train Station; Photo: Anže Malovrh/STA 03 Electric train EMU (Electric Multiple Unit). China has adjusted and improved the activities of its railways, with the introduction of rapid transport between the major cities.

Koper-Divača Railway:

inland hub of Divača. The existing single track railway has almost no capacity to spare, admitted Drago Matić, CEO of port operator, Luka Koper. Trains are incurring more and more delays which is causing headaches for transport and logistics companies operating on tight schedules. If Slovenia wants the Port of Koper to develop further, there is no other option but to build the second railway track from Koper to Divača. However, a second track will not be cheap. Slovenia has missed its chance to get extensive EU financing for the infrastructure project which is worth at least EUR 1bn. The Minister for Infrastructure, Peter Gašperšič, is nevertheless convinced that Slovenia could get around EUR 250m from Brussels, although it remains to be seen where the rest will come from. There is little incentive for private investors because it will take at least 30 years for the investment to be repaid. This, however, doesn’t mean that the second track isn’t crucial for Slovenia or the future development of its logistics sector. Even if the investment doesn’t make sense for a private investor, it is important for the nation as a whole. Without it, Luka Koper could lose up to 240 million tons of freight in the 30 years to 2055, which would mean up to EUR 3.4bn from the economy. Yes, the project is expensive and yet there is underlying logic for it - a second railway track from Koper to Divača means further development of Luka Koper and is key for the future of the Slovenian logistics industry. 

A decade too late, yet still crucial By Jan Bratanič

When the first African electric transnational railway began operation a few weeks ago, there was a song in the air serenaded by a chorus of tribal singers. As African leaders, European diplomats and pop icons climbed the stairs of the new, air-conditioned train travelling between Djibouti and Addis Ababa, the capital of Ethiopia, there was merriment in the air, writes the New York Times. The reporter who wrote the story would be hard-pressed to find similar scenes in Slovenia at any point in the last couple of decades. Slovenian railways and trains have long ceased to be a point of pride for Slovenians, who use the existing rail infrastructure sparingly, mostly due to poor connections and slow 03

The Slovenian Times | Spring Edition 2017

trains. A train from Koper to Hodoš travels its 315 kilometre route from the south-western to the north-eastern tip of Slovenia in six and a half hours – an hour and a half more than it takes a Chinese high-speed train to complete the route from Beijing to Shanghai which is four times farther. Transport companies have had fewer qualms using Slovenia railways, but that may change in the future. Croatia is building a modern railway from the Port of Rijeka to the Hungarian border, and the Austrians are investing around EUR 10bn in a railway that will connect Vienna with the ports in Northern Italy. The competition is fierce and Slovenia’s port, Luka Koper may, in the not too distant future, see some freight being transported through nearby ports instead. It will all depend on whether the Slovenian government can solve the increasing problem of railway connections from the Port of Koper to the

Economy Interview: Professor Danica Purg, President, IEDC Bled School of Management

Existence based on quality, innovation and a balance between "high-tech" and "high-touch" By Tina Drolc, M.Sc.

A look at the success of the first international business school in Slovenia with Professor Danica Purg, its founder, President and Dean, who emphasises that it only "first class professors that bring first class colleagues". Looking at the digital challenge, the Dean highlights the establishment of an optimal balance between "high-tech" and "high-touch", while from the perspective of strengthening IEDCâ&#x20AC;&#x2122;s global position she sees China as a potential market where there is still significant demand for managerial and leadership knowledge and skills. Q Times change and digital is now the norm in business with 70 percent of US$1 bn companies being digital ecosystems. There are many challenges to traditional business models which need to be addressed properly for the future survival of the business. What is IEDCâ&#x20AC;&#x2122;s educational approach to digital? A For IEDC as a management school, digitalisation presents the triple challenge: digitalisation of the educational process; digitalisation and its impact on functional managerial issues; and digitalisation as a stand-alone issue in the programs of the school. For IEDC, this opens opportunities to deliver classes online but the question is how to blend online and in-class lectures in order to find the optimal balance between "high-tech" and "high-touch". All of the functional topics, from finance to leadership skills, are influenced by digitalisation. At the same time, companies ask for special courses on the content and impact of digitalisation in their industries and how to stay in a leading position during the transition process. Q IEDC actively works to engage with the Chinese market. What is the profile of the Chinese students that you want to attract and from which industries? A It is hardly necessary, I believe, to explain that a market of about 1.5 billion people is important for any industry or sector which has the mission to operate internationally or globally. It is interesting that this question is never raised when it comes to North America, a significantly smaller market. Business oppor-

tunities in China are big because it has many immature markets. Although China has quite a number of excellent business-oriented schools and faculties, there is still a huge demand for managerial and leadership knowledge and skills. Schools in China are looking for the best partners abroad, and they are interested in cooperating with IEDC as the processes of transition in China is comparable to that in CEE, and IEDC is an internationally established innovative school. We are currently developing a global MBA with one of the top-faculties in China and partner-schools along the "Silk Road". We currently have Chinese executives in our programs and are in the process of preparing a special Young Managers Program at the request of a Chinese educational institution. We are not focused on a certain industry, although it is known that we have recently developed a special expertise in the financial services sector and in the pharmaceutical industry.

Q Where do you see the business potential, such that geographically "small" Slovenia and "big" China could achieve a win-win scenario and mutually benefit? A In the business world, the notions of "small" or "big" do not have a geographical meaning. In our research on "Hidden Champions" we showed that Slovenia has a relatively high number of small and mid-sized companies that occupy top-positions, not only in Europe but also globally. They have an excellent opportunity to be successful in China. China could offer Slovenia a lot in the fields of infrastructure, logistics and services.

Professor Danica Purg, President, IEDC Bled School of Management

Q IEDC ranks among the top business schools in the world. How do you maintain this position? A It is known that IEDC has operated since its founding more than 30 years ago with the slogan "only the best is good enough". We started by inviting the best professors of management and they came out of curiosity, to see a new management school founded by a woman in a socialist country, even though they were only paid a fraction of their normal fee. As I always say, "first class professors bring first class colleagues, second class brings third class". In this way, we have succeeded in bringing the best possible faculty to Slovenia. We survived the war and the financial crisis together with them, and we have strengthened our global relations. As we keep our core faculty small in order to be able to react quickly to the increasingly fastchanging business environment with relevant education, we have found that some accreditation schemes are focused on quantity rather than quality. This is not in accordance with our vision and mission. Our EMBA is accredited by AMBA because of its quality and has been awarded by AMBA as one of the most innovative MBAs amongst more than 700 programs globally. We are very happy with the CEEMAN IQA accreditation because its scheme is focused on the quality and impact of the school on the local, regional and national environment. With our entrepreneurial spirit and culture, we have to make a special effort to be in accordance with all of the prescribed procedures and regulations of the various accreditations. We shall continue to focus on this, but it is also important that we do not sacrifice our main advantage which is innovation. Our existence is based on quality and in innovation. Without that, we would become a school like the thousands of others. ď ´ Spring Edition 2017 | The Slovenian Times

Economy

How should global business work to make the world more humane? We need a compass. The majority of the global population is, in many ways, richer and better off than ever before although on the other hand, there is a lot of distrust and anxiety especially with regard to the radically changing employment needs in the wake of the Fourth Industrial Revolution. Real innovation now needs to be made not only in the technology but also in society. The global governmental and educational systems have not kept abreast of the latest economic and social developments and therefore global business will have to play a major role in this long term process of building the right mindset. This can be achieved by retraining employees, rebuilding their trust with transparent and accountable leadership, and by encouraging dialogue and thinking outside the box. I firmly believe that responsible leadership is the answer to a more humane world - cooperative leadership that creates the sustainable value in the long term and the value which is perceived as value for all the stakeholders.

Denis Mancevič, PhD, Vice President of the Management Board and CEO at SIJ

"The answer lies in the word itself: humane. Companies should centre their business culture and core values primarily around humans – people. People should always be considered as crucial and the most important, whether they are employees, customers or partners. Furthermore, I believe a company‘s success should also be measured in terms of people‘s satisfaction, not just financial metrics and statistics. I see this as the only way of doing business and relating with people in the future. I believe this sort of attitude will bring companies sustainability and great future success."

Matej Potokar, General Manager, Microsoft

Basically, global businesses should put people and their values first and create profit in a sustainable way. Many examples from history show that polarisation in a society is not a viable option. With countless innovations, digital structures and new technologies, we irrepressibly forge the "Fourth Industrial Revolution" which brings even more possibilities for progress. In these circumstances, we have a unique opportunity to form an economic environment in which striving for profit will definitely not be the only purpose of our companies. We have to put core values such as integrity, safety, business ethics, protection of human rights and environment into the company’s operating system. Corporate Social Responsibility must become an integral part of every company mindset and our employees should be empowered to use technology in a way that helps to make our world a better place to live. We should strive to make the "Forth Industrial Revolution" an opportunity for all.

Vanja Lombar, Managing Director at OMV Slovenia The key ingredient is that global business uses the right approach. Important are values rather than profit; we should look at how the quality of life improves in the environment that the company is operating. Has there maybe been an increase in new activity or initiative? Are there more people that have gained or youngsters in school who have new knowledge? To achieve this, corporations need to adapt intrapreneurship mindset, where employees are in constant touch with end-users and trace the problem to its cause. Today, corporations still lack this approach and thinking. Some develop responsibility programs which are encouraged not only by the management but the owners. However, the more scattered the ownership, the more difficult it is to support it. For example, our company is in the ownership of the Čadež family and one can feel their values and the approach to doing sustainable business.

Primož Zupan, CEO at MBILLS, E-Money and Payment Services, Ltd. 20

The Slovenian Times | Spring Edition 2017

Economy

Success is in the Expertise By Matjaž Kljajic´ and Katja Humar

Gorazd Lampič, founder and CEO of Elaphe, has been awarded the prestigious "Young Manager of 2016" title by The Managers' Association of Slovenia. After receiving a master's degree in Astrophysics, he founded the company which today employs more than 60 engineers and scientists. The high-tech company Elaphe Propulsion Technologies has developed the most powerful in-wheel electric motors for the global automotive industry. The potential was also recognised by Chinese investors who invested EUR 10m in the company. The goal is to start mass production in the next two years and become a synonym for electric cars with in-wheel motors. Q How do you see yourself? As an entrepreneur, a manager or an inventor? A I advocate integrity, which means that all these areas need to be well-managed, although we have to be the best in one of them. Without expertise and a base in the area of high technology, it is difficult for a manager to be successful. Similarly, a manager needs a feeling for people, leadership and organisation. Important virtues are also being very enterprising and good in identifying and recognizing opportunities. For myself, I believe that I am a combination of a scientist, an athlete and an entrepreneur. Q How did you come up with the idea to start Elaphe? A The concept of wheel motors in Slovenia was raised by Andrej Detela, also a physicist, inventor and philosopher. I read his interview, sent him an e-mail and then we quickly realised that we could cooperate. I was good with computers and I knew how to program many of his analytical solutions. Together, we came up with better solutions and we solved specific problems faster. In the beginning of the millennia nobody else was interested in electric cars and in-wheel motor technology. In order to set up a good environment for innovations in

the field of electric motors, Elaphe Propulsion Technologies was founded in 2006. Gradually, additional team members joined and today we have over 60 full-time employees and 15 students.

Q All the business you create is from foreign markets. Why? A We are involved in international projects and cooperate with foreign partners. We do not have any customers in Slovenia, which is not unexpected as we do not have any car manufacturers. It is great to work with ambitious and creative teams from all over the globe who have a similar vision and ambition as we do in Elaphe. Q Is Slovenia a supportive environment for high-tech companies? A Yes, there are several very positive players in this environment. We have the Technology park Ljubljana and several other institutions which play a vital role. The government is supporting startups with some grants and the legal environment is getting more and more friendlier for entrepreneurship in general. However, it still mostly depends on the individual. With those who act constructively we always cooper-

ate well but these things are left to chance and with some motivation of individual players, the question is whether this could be optimised by a solution of the system. The main disadvantage of Slovenia is the lack of large companies that could benefit from the small high-tech innovations which are arising in Slovenia. Therefore, these companies must always work with clients abroad, and this leap is somehow more difficult, as, for the buyers, it is easier to work with a company in their vicinity. On the other hand, cooperation with the university faculties and academia is going well, the country strives to establish various mechanisms.

Q What attracts investors to Slovenia? Do Slovenian companies get enough, too much or to little investments? A I am not familiar enough with other companies and statistics to give a relevant assessment. We do not have an investment tradition in the high-tech field, which is certainly a negative point. On the other hand, someone with the right content and the right team, if it is strong enough, could attract a strategic partner and together they will find ways as to how something can best be carried out in Slovenia or elsewhere, which again is not so terrible. Of course, we have to be smart and not sell everything, but find content where merging with foreign investors brings clear synergies. A concept, typical for Silicon Valley, applies here, where investments are in general up to 20 or 25 percent stake in the company. If it is a larger percentage investment it is already questionable as to whether it makes sense. Will the founders still keep the initial motivation? Q What is the company vision for the future? A When someone is considering making electric cars with in-wheel motors, he should first think of Elaphe.  01 In-wheel powered car with 6000 Nm by four Elaphe L-type motors inside the wheels. 02 Demo platform of Plug & Play in-wheel propulsion with two in-wheel motors, power & control electronics, and HMI.

Spring Edition 2017 | The Slovenian Times

Economy

PwC on Brexit, global insights By Pawel Peplinski, SEE Assurance Leader, Country Managing Partner PwC Slovenia

The UK’s decision to leave the European Union has far reaching implications for business and governments around the world. PwC is committed to supporting organisations manage the uncertainties and share our insights and expert opinion.

Pawel Peplinski, SEE Assurance Leader, Country Managing Partner PwC Slovenia

Economy and trade

In summary

With a number of unknown factors at play, confidence in the UK economy could be shaken with instability in worldwide financial markets as well as a potential decline in investment of concern. In addition, once the UK Government invokes Article 50 to leave the EU, the UK and EU will need to jointly consider whether the current free trade area will continue. This is an opportunity for Slovene companies – they should be considering whether they can find new business partners in the UK. If businesses in the UK will be forced to look for new trading partners then there is an opportunity for any proactive business to throw its offer into the ring.

Negotiations on Brexit between the UK and the EU will formally begin when Article 50 is triggered which is expected to happen by the end of March. There will then be a two year negotiation period on the legal terms of Brexit, but it will probably be a much longer negotiation, perhaps lasting five to ten years. There will probably therefore be a need for transitional arrangements between the UK formally leaving the EU in, say, 2019 and the later agreement and ratification of some kind of free trade agreement. The outcome of these negotiations will depend on whether the parties see this as a 'zero sum game' or not. If they do, then it may prove very difficult to reconcile the UK government’s political imperative to increase control of EU immigration and the EU’s fundamental belief that freedom of movement is an essential prerequisite for efficient functioning of the EU Single Market. But a superior outcome could be possible if both sides are prepared to be flexible. There are long and difficult negotiations ahead, but also the potential for a mutually beneficial compromise if both parties approach the talks with a flexible mindset. Business can also play a role by contributing constructively to the debate on post-Brexit options, focusing on areas where the UK and the EU can continue to work together to boost growth and innovation across Europe. 

This is an opportunity for Slovene companies – they should be considering whether they can find new business partners in the UK. If businesses Tax, regulation and legislation in the UK will be forced part of the exit process, the UK will have to to look for new trading partners As amend and replace existing EU legislation with then there is an opportunity Acts of Parliament enforceable under UK law. EU itself is also likely to reform its own for any proactive business The operations, legislation and regulations. This is to throw its offer into the ring. where the Slovene government has an opportu-

nity to act. It is not easy for businesses to enter new markets as they come across new regulations and working practices which means that they have to change their internal processes.

Organisational strategy Organisations will need to adopt strategies and ensure they have adequate resources to respond to the uncertainty brought about by the anticipated changes in the market.

The Slovenian Times | Spring Edition 2017

Leadership Corner

And how do you treat your talents? By Saša Fajmut, M.Sc.

Today, most companies are in a shortage of talented people. When there is an open position, companies turn to recruitment companies, stating "Bring us the best person on the market". The newly found talent is hired, joins the company and expectations on both sides are high. On the first working day, the person is usually overloaded with company procedures. Perhaps not the best way to greet fresh talent, right? Without proper on-boarding and clear goal-setting from the very beginning, you soon expect this person to show some concrete results. But the results are not there as the new recruit is still struggling with information overload. When, after a year or two, your talent is just another employee that you are not satisfied with, you start to wonder what happened - after all, this was "the best person on the market"… We often hear about many talent management initiatives that companies have. But what does "managing talents" really mean? Is it a training program where the best people are sent for a couple of days or is it the way you treat your (best) people in general? Unfortunately, talent management is often nothing more than a training program or some other stand-alone component which is exactly why it does not work. Talent management experts (Effron & Ort, 2010) say that companies build complex and headache-inducing talent management processes (such as performance management, competency model, succession planning etc.) without evaluating whether each of these components really add value. In reality, they often become time wasters for managers and hence fail to leverage engagement of talented employees. If this is the case in your company, then the Human Resources department has failed to do its initial job: help leaders to maximally develop and utilise employees’ potential to achieve the company goals.

Luckily, talented people are motivated by many other drivers than solely the financial aspects of their job. Three fundamental things that energise talents of any age or profile are (Pink, 2009): • autonomy, the freedom to direct our lives; • mastery, our craving to excel; • and purpose, the yearning for our work to serve something larger than ourselves. So your best people are also the most demanding ones: are you ready for them? Once you suffocate your talents’ autonomy with rigid company procedures and destructive micromanaging, their mastery with bureaucratic annual appraisals and answers such as "no, it cannot be done", and higher purpose with non-inspiring company values such as profit, don’t be surprised if your talents feel like they are not being managed and appreciated properly. Hence, the most rational thing to do is to leave. You are then again seeking for another "best person on the market" for whom you are certain that their performance will be extraordinary… Sources: • Bock, L. (2015). Work Rules!. London, John Murray (Publishers). • Effron, M., Ort, M. (2010): One Page Talent Management. Eliminating Complexity, Adding Value. Boston, HBR Press. • Garton, E. (2017): Time, Talent, Energy: Overcome Organizational Drag and Unleash Your Team’s Productive Power. Boston, HBR Press. • Pink, D. H. (2009): Drive. The New York Times.

TALENT

The skills, capabilities and ingenuity people bring to their work

HUMAN CAPITAL TIME

The hours that employees put into their jobs

ENERGY

The level of engagement, passion and focus people apply to their work Human capital components (Garton, 2017).

Research shows that the best companies generate over 40% more productive power (Garton, 2017). What they do differently from poorer-performing companies is that they successfully convert talent and other components of human capital into productivity and economic value. Translation of these into value-added company processes is HR’s job and this is also how their performance should be measured. According to some authors, when talents have the opportunity to perform at their maximum, the impact of their performance can be up to even 300 times greater than the performance of an average employee (Bock, 2015). Does your incentive system reward this kind of exceptional contribution? Even if your best people contribute "only" 10 times more than an average performer, are you able to reward them accordingly? Usually, performance bonuses differ by up to 30-40% between a poor performer and a top performer, which is light years away from being "fair" when it comes to rewarding top performance and impact.

Saša Fajmut, M.Sc., Director Leadership Services at Amrop, responsible for leadership assessments and development. She holds a Master’s Degree in Clinical Psychology and an Executive MBA.

Spring Edition 2017 | The Slovenian Times

Exploring Opportunities Strengthening economic interdependence in the 21st century:

Win-win cooperation along the 'One Belt One Road' By Silvija Fister M.Sc.

'One Belt One Road' (OBOR) stands for the double initiatives proposed by The People’s Republic of China in 2013, with the main aim of promoting intercontinental trade and building infrastructure to connect Europe, Asia and Africa through land and sea. OBOR comprises the 'Silk Road Economic Belt' and the '21st Century Maritime Silk Road'. The historic connotation is not accidental: the benefits of lively economic and cultural activity along the historic Silk Road should be revived, deepened and expanded with modern technology and know-how. So, this time, instead of depending on animals for transport, roads, ports and railways should be built to connect economies, countries, companies, international and regional organisations and people. Futuristic endeavors such as going from Berlin to Beijing in one day by a high velocity train should become a reality if China’s proposals will get willing partners. The 'Silk Road Economic Belt' focuses on linking China to Europe through Central Asia and Russia; China to the Middle East through Central Asia; and bringing together China and Southeast Asia and South Asia and the Indian Ocean. The '21st Century Maritime Silk Road' focuses on using Chinese coastal ports to link China with Europe through the South China Sea and the Indian Ocean and connecting China with the southern Pacific Ocean through the South China Sea. The imagined routes cover more than 60 countries and regions, currently accounting for some 30 percent of global GDP and more than 35 percent of the world’s merchandise trade. At this year’s Munich Security Conference, Chinese Foreign Minister Wang Yi expressed his satisfaction with the impact of the initiative over the last three years. In his words, the construction progress and results have gone beyond expectations. For example, as of March 2016, construction had begun on a railway between Hungary and Serbia, the Jakarta-Bandung High-Speed Rail, the China-Laos railway

The Slovenian Times | Spring Edition 2017

and the China-Thailand railway. These railways represent the first steps towards a Trans-Asia Railway Network and other expressway projects are under construction.

Jointly building the Belt and Road is in the interest of the world community.

Also known as the 'Belt and Road Initiative' (BRI), OBOR is more than just building railways and selling goods. As stated in the Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road, published by the Chinese Development and Reform Commission in 2015: "The initiative to jointly build the Belt and Road, embracing the trend towards a multipolar world, economic globalisation, cultural

diversity and greater IT application, is designed to uphold the global free trade regime and an open world economy in the spirit of open regional cooperation. It is aimed at promoting orderly and free flow of economic factors, highly efficient allocation of resources, and deep integration of markets; encouraging the countries along the Belt and Road to achieve economic policy coordination and carry out broader and more in-depth regional cooperation of higher standards; and jointly creating an open, inclusive and balanced regional economic cooperation architecture that benefits all. Jointly building the Belt and Road is in the interests of the world community". The document further stresses the need for upholding international law when seeking the 'biggest common denominator' for interests, strengths and potential of all parties, whether public or private. What is more, OBOR provides a "blueprint for global development in the new world order". Recognition that the global economy is changing is strengthened in the face of recent isolationist and nationalistic predictions for the foreign economic policy of the USA, which suddenly sees the global economy as a zero-sum game. OBOR can serve as a reminder of the yet unfulfilled promises of economic globalisation to bring prosperity to all. And China is prepared to put its money where its mouth is. Hundreds of billions of dollars are ready to be invested into five key areas of focus: policy coordination, infrastructure development, investment and trade facilitation, financial integration, and cultural and social exchange. The Silk Road Fund, the China Development Bank, the Export-Import Bank of China and the two newly established multilateral development banks, the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank of the BRICS, are all taking part in OBOR. To counter the initial skepticism provoked by the magnitude of the initiative in many countries, China is also willing to put in the needed diplomatic work to build trust, make its goals clearly heard and find appropriate partners and projects. As stressed many times, OBOR is not a one-sided, already delineated project, nor is it a program of Chinese international aid. It is an inclusive partnership building process which depends on dialogue and consultation with and joint contribution of all interested parties. In the words of Foreign Minister Wang Yi, OBOR is already actively supported by more than 100 countries and international organisations. On the other hand, it offers global businesses - from multinationals to small- and medium-sized enterprises - unparalleled opportunities to tap into new markets along the Belt and Road and gain deeper access to markets on the Chinese mainland, ASEAN, the Middle East, and Central and Eastern Europe.

Exploring Opportunities

Image: South China Morning Post

The imagined routes cover more than 60 countries and regions, currently accounting for some 30 percent of global GDP and more than 35 percent of the worldâ&#x20AC;&#x2122;s merchandise trade.

Projects are to be prepared until 2020, with implementation starting in 2021 and lasting until 2049. One of the most important in the series of high-level events, summits, conferences and meetings that took place in several countries since making the OBOR initiative public will be held in May this year in Beijing. Hailed by the Foreign Minister Wang Yi as the Chinese

diplomatic event of the year, the International Cooperation Summit Forum on the "Belt and Road" Initiative will focus on anti-protectionism, restating the potential of free trade and working with existing free trade regimes to bring tangible benefits to all involved regions, countries, communities and individuals more successfully. ď ´

OBOR can serve as a reminder of the yet unfulfilled promises of economic globalisation to bring prosperity to all.

Spring Edition 2017 | The Slovenian Times

International Business Partners TOPIC: Business Focus 2017

American Chamber of Commerce – AmCham Slovenia More Investment in Slovenia Means More Jobs and Greater Prosperity In today’s globalised world, a favourable investment environment is one of the crucial factors for economic growth. More foreign investment in Slovenia would bring new jobs and greater prosperity to the country, and consequently increase its competitiveness. With its strategic location at the heart of Europe, a market of 500 million consumers, highly developed infrastructure and a well-educated workforce, Slovenia is an attractive destination for foreign investors, with many opportunities. To explain the investment opportunities and discuss how to attract the right kind of international investment,

AmCham Slovenia has organised the Investment and Development Conference Slovenia Business BridgeTM , to be held on 19 April 2017 in Ljubljana, Slovenia. "Opportunities in the Center of Change" is the theme of this year’s conference, which will focus on the rapid development of new technologies and new business models which introduce new ways of investment and offer new opportunities in all industries. The conference is a top-level event, bringing together representatives of the business world, government representatives, investors, diplomats and entrepreneurs. 

British – Slovenian Chamber of Commerce – BSCC Great Britain is still open for business! Not only is it the second largest economy in Europe with over 60 million people, but there are many investment opportunities springing up following the Brexit referendum last June and which offer Slovenian companies the opportunity to set up in the UK and get support to go global. In 2017, we will continue to focus on increasing trade between the UK and Slovenia, opening doors for investment in both directions and organising activities in cooperation with our members, other Chambers and partners. This year, Slovenia will play Scotland twice in the World Cup Football Championship qualifications, where we will once again link business with sport, in both

The Slovenian Times | Spring Edition 2017

Glasgow and Ljubljana. We plan two business delegations in 2017 - to Scotland and Birmingham - to open doors to Slovenian exporters in spirits, packaging, construction/housing and automotive. We will also be the voice of British and Slovenian business to the Slovenian government in its negotiations for the UK leaving the EU, through our Brexit Ambition Initiative. Join us if you want your voice to be heard!  Barbara Uranjek, CEO of the BSCC

International Business Partners

The German-Slovene Chamber of Commerce and Industry â&#x20AC;&#x201C; AHK Slowenien Smart Business Smart People speaks to the future and highlights everything that will be important for companies in the not to distant future. We bring to Slovenia: German knowledge and experience on smart factories; work 4.0; the industrial Internet of Things; and industry 4.0, and combine them with the best Slovenian examples. The increasing digitalisation and the developments in industry are changing the working world in record time. It is not only the technical, economic and legal conditions that are constantly changing, it is also the workforce whose training and skills in this digital age increasingly require realignment. Working methods are changing continuously, "mo-

bile devices" have long since arrived in the workplace and are changing the skills and demands of many traditional professions. We are pioneers in the field of smart business and digitalisation of industry in Slovenia and therefore we will be offering further education for a Chief Digital Officer certification. ď ´ For DESLO, the business peak of the year will be on 5 April with the German-Slovene Business Day, the program is available at http://bit.ly/DanDE-SLOGospodarstva.

Advantage Austria

2017 will be another busy year for Advantage Austria as we seek to move our focus to the creative and graphic industries. The Biennial of Design in Ljubljana will be the first step in this new focus and it will give a good introduction and initial contact with the main players in Slovenia. In May there will be a visit by an Austrian business delegation, led by the President of the Austrian Chamber of Commerce, Dr Christoph Leitl. The program will involve meetings with politicians and the exploration of the Port of Koper. Another important event is our participation at MOS (Celje), in collaboration with The Chamber of Craft & Small Business. This year, MOS is celebrating its 50th jubilee and therefore will be even more special. Our main focus is to develop direct business relationships with international companies through B2B-discussions. Our main focus will continue to be the satisfaction of the Austrian business community so that they will continue to feel motivated for future opportunities in Slovenia and enrich the environment with new business ideas. ď ´

Spring Edition 2017 | The Slovenian Times

International Business Partners Economy

Luxembourg-Slovenian Business Club (LSBC) Digging for gold: Slovenia is a hub for creativity and innovation The focus of the Luxembourg – Slovenian Business Club (LSBC) for 2017 is to make sure that the potential of Slovenian companies is visible and recognised and so we have set three guidelines. Firstly, our main priority is to focus on R&D and showcase the potential of Slovenia. Slovenia is increasingly recognised as a regional hub for highly creative people, developers, scientists and innovative startups – a pool accumulating through the extensive business connectivity of the South Eastern European region.

Secondly, very focused and hands-on business delegation meet-ups. Time is still money and in the digital age a lot can be communicated upfront, thus increasing the efficiency of matchmaking activities. On 17 February we held the first event from our 2017 agenda - a visit by the Slovenian Space Delegation to the SES Société Européenne des Satellites Luxembourg in Betzdorf. Thirdly, advanced business connectivity. In the flood of redundant information, relevant

Visit of the Slovenian Space Delegation to the SES (photo LSBC)

search. Official data for 2008 – 2014 corroborate the significance of the third sector: while traditional businesses have lost nearly 500,000 jobs, during the same period the number of social cooperatives’ workers recorded 20.1% growth or 407,000 fully employed people. During the 5th Italian-Slovenian Business Forum in February, we spoke about this topic and highlighted our countries’ cooperation in this realm, with Slovenia using Italian legislation as a basis for its own law on social entrepreneurship. While only around 60 social enterprises had been launched in Slovenia until 2014, the

number has grown threefold and social entrepreneurship has officially been placed among the top policy priorities to be supported by a national investment fund to ease its financing. Italy’s and Slovenia’s laws are very similar because they fundamentally respond to the same social issues, made increasingly evident by the economic crisis and the difficulties faced by the welfare systems. The challenge ahead is to find a solution that combines an efficient answer to market demand while preserving the primary goal of social justice and equity. 

information is the new gold. We aim to not only connect people/businesses, but to find that gold and direct it to the people with talent and potential to assure the creation of more efficient and productive networks.  By Iztok Petek, Paraskevi Karageorgu

Italian Trade Agency (ICE) Shaping growth and innovation through social enterprise We opened the year with a focus on social enterprise, a peculiar model that was recently unfolded all over Europe. Social enterprise in Italy is well established and it has one of the most advanced and diversified ecosystems with over 100,000 social enterprises, involving more than 850,000 workers and 1.7 million volunteers. As a spontaneous, bottom-up phenomenon, our legislators have systematised it recently to release its untapped potential in several areas of general interest ranging from social and health services to training, work placement, culture, sports, environment, re-

The Slovenian Times | Spring Edition 2017

International Business Partners

Slovene - Russian Business Club The Digital Age – a time for reflection and fast decisions What I see as an agenda for this year is to focus on how our business will react to the new wave of digitalisation that has swept most industries. This is in the shadow of big bilateral business forums such as that recently held in Moscow with the participation of the President of Slovenia, Borut Pahor. Big data, blockchain, agile and other new hi-tech stuff are truly hyped in Russia and globally. These topics may seem far from our daily business routine, but those who catch this wave will surf it and reap the benefits, those

who don’t will have to re-think their business models and find another competitive niche. Reflecting on the messages sent by President Pahor during his address, I think that we are trying to build our relations too much on mutual trust and history, and meanwhile the new digital factor is somewhat overlooked. It may play a crucial role and downgrade all the other potential benefits of building business between Russia and Slovenia. What could drive the survival of economic relations is the concentration of a critical mass

of common digital competencies. Russian hi-tech projects such as Skolkovo technopark are cropping up here and there, but I don’t see much Slovene footprint - to my regret, because the Slovenian economy is intrinsically very much digitally-driven. The digital age will rule the game, high diplomacy may be a good framework and it’s time to consider this factor seriously.  Yury Praslov, Slovene-Russian Business Club in Moscow

Kazakh-Slovenian Business Club - KSBC At KSBC we believe that 2017 will be full of opportunities for deepening economic relations between the two countries and that it may even be a landmark year, benefitting from the agreement to avoid double taxation which was finally ratified at the end of 2016. From June, Astana will host the world exhibition, EXPO 2017. 2017 will be also a year for Slovenian greenfield investments in Kazakhstan and there are ongoing discussions with Kazakh investors. The number of visitors from Kazakhstan is constantly increasing and for this purpose, KSBC came to an agreement on a strategic development partnership with one of the key tourist companies in order to fully exploit the potential that exists in this segment. There has been a significant increase in the number of members of KSBC and we expect this trend to continue this year when we will organise delegations in Kazakhstan, with a focus on targeted B2B meetings, conferences and forums and for KSBC members we will also organise special visits to EXPO 2017. 

Spring Edition 2017 | The Slovenian Times

Global Pitch

Elan skis; Photo: Elan skis/Facebook

The future: Made in Slovenia By Jan Bratanič

There are times when science fiction literally becomes reality. For instance, last year scientists made clothes that could repair themselves with just a touch of warm water, shoes that lace themselves, a robot that can autonomously make a complete garment, and skin-like material that will mean an end to facelifts and dark bags under the eyes. Flying cars, anyone? They’re not that far from becoming reality. Innovation has already taken humanity farther than some futuristic science fiction authors thought possible. The world of Marty McFlys offspring from the movie series “Back to the future” now seems outdated rather than futuristic. Humanity’s progress has a habit of taking historical predictions and making them mundane, way before their supposed time of fruition. We have scientists and their innovations to thank for this, many of them hailing from Slovenia. Slovenians have always had keen minds and some daring ideas. Our ski maker, Elan, is a prime example. With their mbx models, they initially made visual changes to skis that were soon emulated across the globe but their truly revolutionary innovation came in the form of carving skis. This was probably the moment that saved alpine skiing, which at that point was fast becoming obsolete, losing the popularity contest to snowboarding. Elan’s innovation gave skiing a second wind, it became easier to learn, easier to enjoy and above all else – faster! Today it is difficult to find a skier who doesn’t use carving skis. Alas, Elan’s employees

The Slovenian Times | Spring Edition 2017

weren’t as good at protecting their inventions as they were in making them, the technology was therefore copied by all the major skiing brands. Let’s hope something similar won’t happen to the latest innovations from the Jožef Stefan Institute (JSI) which just a month ago presented one of its latest innovations – a smart watch IN LIFE, which is meant to extend independence for the elderly. It automatically calls for help in case the user falls, it can help relatives locate the whereabouts of their senior family member and it can remind users when to take medicines or go to a doctor’s appointment. Innovations and technologies that give answers for the ageing populations in the developed world have many uses and usually have significant potential on the market. JSI has therefore developed SAVVY EKG, a small medical accessory which monitors the user’s heartbeat, temperature and activity levels, and helps with tracking and finding abnormalities. Instead of doing tests with an EKG machines at a clinic, the user can simply bring the data to the doctor for analysis. It saves time and it can ultimately also save money and, above all, it could save lives. Saving lives is exactly what the researchers at Ljubljana’s Chemical Institute are achieving with genetic hacking – teaching cells to autonomously detect inflammation and initiate excretion of medicine. The world is indeed full of wonders, many of them man-made!

Smart watch IN LIFE; Photo: Lea Udovč/STA

Plan your future - become a Doctoral Student at FELU. For the ninth consecutive year, the Faculty of Economics, University of Ljubljana has announced enrolment for the doctoral program in Economics and Business, which is comparable to the best doctoral program in the EU. In addition, FELU has become the first and only Triple Crown School in Slovenia and the broader region to have been awarded three international accreditations. This achievement ranks FELU among the top one percent of Business and Economics schools in the world. Please note that the deadline for applications for doctoral studies at the Faculty of Economics is 26 June 2017.

“I found FELU’s PhD studies represented a perfect synergy of theory, methodology and practice. From the very beginning of our doctoral studies, I was encouraged to think critically using theoretical and methodological approaches to academic research through various courses and research seminars lectured by FELU and international academics. Furthermore, it was international experience that I found to be highly encouraged at FELU.“

“Getting a PhD is not easy. What I like about the doctoral program at FELU is that it is designed to keep us going, pushing us to constantly progress and providing us with all the necessary tools along the way. The doctoral program offers brilliant networking opportunities through collaborations with a vast number of renowned universities/institutions and exposes us to top-notch local and international researchers, field experts and business professionals.“

Tina Šegota, Teaching Assistant (Academic Unit for Economics), Bachelor Besfort Ahmeti, Teaching Assistant at of Communication Science, Ph.D. student University "Haxhi Zeka", Peja, Kosovo, at FELU. Ph. D. student at FELU.

“The PhD program at FELU could be perceived as an accelerator to the next level of your professional career as it strengthens accumulated knowledge and competencies through insight, experience and findings from academic research projects. I was impressed by the world-class researchers and lectures, and have benefited from their openness, business sense and pioneering research methods. All this enables the highest level of quality on a global scale and the applicability of academic research at FELU.“ Andreja Kodrin, Ph.D., Founder of Challenge Future.

Politics

Political Overview By Valerio Fabbri

It has been an encouraging and dynamic start to the year for the Slovenian economy with healthy fundamentals showing that the crisis is in the past, although the road ahead may have some occasional bumps. In its winter forecast, the European Commission (EC) significantly improved the GDP outlook for 2017 to 3%, with 3% also for 2018, placing Slovenia considerably above the euro area average and the European Union as a whole. The budget deficit forecast has also improved, decreasing to 1.7% for this year and to 1.4% for 2018. However, the EC has underlined that the future is not all bright, and stressed that there are risks associated with the Bank Asset Management Company (DUTB) and the denationalisation process, as was highlighted when Italian financial investment holding, Palladio, withdrew from the purchase of automotive supplier, Cimos, in mid-February. The EC’s positive outlook is a result of the solid economic and fiscal policies of recent years, when the belt was tightened and public expenditure put under control. The growth is the result of reinvigorated international activism of Slovenian economic diplomacy, which continues in the first quarter of 2017. Quite remarkably, both the President Borut Pahor and Prime Minister Miro Cerar travelled abroad to promote the country’s most valuable brands. On a two-day

The Slovenian Times | Spring Edition 2017

working visit to the United Arab Emirates, the Prime Minister appeared as one of the main speakers at the World Government Summit to discuss smart governance process and to consolidate Slovenia’s position as a green and innovative country, oriented toward knowledgebased sustainable development. It was a great opportunity to showcase the country’s expertise in the digitalisation of administrative infrastructure and its achievements in the realm of the digital economy, particularly with the upcoming Dubai Expo 2020, the topic of which is "Connecting minds, Creating the future". President Pahor went on a much-heralded European tour that took him to Moscow via Berlin and Kiev. While the latter two stops were a continuation of domestic politics in the international arena, the trip to Russia, with a significant business delegation, was peculiarly geared towards "economic cooperation", as the President repeatedly stressed both before and after the visit. Accompanied by the Foreign Minister, Karl Erjavec, Agriculture Minister, Dejan Židan and Infrastructure Minister, Peter Gašperšič, Pahor contributed to the

strengthening of economic ties by signing contracts worth between EUR 500m and EUR 650m, according to multiple sources. In addition, Russian energy giant, Gazprom and Slovenian gas company, Geoplin, reportedly signed a contract worth EUR 700m. Based on this premise, Russian President Vladimir Putin expressed the wish that Russian companies participate in large industrial projects, such as the renovation of the co-generation plant, Toplarna Ljubljana, the largest power station in Slovenia, and the construction of the second railway track between the inland hub of Divača and the port of Koper. 

01 Visit of the Slovenian President Borut Pahor in Russia. The third Russian-Slovenian business meeting "Looking to the future: new opportunities for cooperation with Europe". Photo: Daniel Novakovič/STA 02 Italian financial investment holding, Palladio, withdrew from the purchase of automotive supplier, Cimos, in midFebruary; Photo: Marko Cencič/STA 03 Prime Minister Dr Miro Cerar in the United Arab Emirates with Sheikh Ahmed Bin Saeed Al Maktoum, the Chairman of the Supreme Organizing Committee of the Dubai Expo 2020 and the Chairman and Chief Executive of Emirates Airlines; Photo: Nebojša Tejić/STA

Politics

What are the factors shaping Slovenian economic diplomacy and what has been your experience? In the last few years, Slovenian diplomacy has undergone a reorganisation and become a huge support to the economy. In the past, I was very critical of its work but today I’m happy to praise the way diplomacy places the economy in first place in all areas of involvement – from supporting Slovenian business representatives abroad to supporting bureaus in Slovenia, and to including economists in many governmental delegations. Last year it proved to be enormous support to the project to validate our aircraft for certification in the Chinese market. Specifically, the embassy in Beijing in cooperation with the Ministry of Infrastructure was the decisive factor in helping Slovenia become the only country with four valid aviation certificates in China. Unfortunately I can’t say the same for the American market where, after 10 years, our diplomacy still hasn’t managed to sign a bilateral agreement so that we could sell our aircraft directly to the USA from Slovenia, and not from Italy as we are now forced to do.

Ivo Boscarol, Founder and CEO of Pipistrel My experience shows that the role of economic diplomacy changes depending on the system of government. In countries with a centralised decision-making system, such as some Asian, African and Arabic countries, diplomacy in most cases can make a significant contribution to closing business deals. On the other hand, in western market economies it is important to work on the country‘s visibility and reputation. An example of good practice in this are the activities undertaken by the Slovenian Embassy in Germany and overseen by the Slovenian Ambassador, Marta Kos. Diplomacy can also help the economy by providing information on new developments that are crucial to exporters such as changes in regulations or announcements of major investments in foreign markets. I can confirm that Slovenian diplomacy listens to the needs of the economy. To the extent of their abilities, diplomats have always helped us to get what we need. Obviously, the company has to lay the groundwork by carrying out market research and evaluating its own market potential.

Andrej Božič, General Manager of Steklarna Hrastnik A different role for diplomacy is dictated primarily by globalisation; more emphasis must be given to the economy and this trend also applies for Slovenian economic diplomacy. Recognising that this is the key element for the success of our economy is increasingly directing the activities of our diplomatic missions. Comparing Slovenian economic diplomacy with other countries is a thankless task as the strength of economic diplomacy depends directly upon the country’s size and its economic potential. We should note that Slovenia is a small country with a very diverse economy, and without a long history of promotion. Personally, I am extremely satisfied with the functioning of our diplomacy; whether it is in Moscow, Kiev, Copenhagen, Cairo, Ankara or any other embassy that we ask for cooperation, we always find exceptional attention and assistance. In addition, I have to highlight the Minister for Foreign Affairs, Karl Erjavec, and his team who have recently helped open the doors to many countries and reduced the time required for finalising contracts. However, I see many opportunities for progress. Slovenia, as a country, should unify its internationalisation strategy, which should be operated such that the real task of economic diplomacy is not selling obsolete inventories of goods or searching for contractual customers, but to primarily create the conditions. In other words – the task of our state is to provide the scenery and the table for signing the contract but it is the company that must bring the customers and the contract to the table.

Dušan Olaj, General Manager at DUOL

Spring Edition 2017 | The Slovenian Times

Politics Dr Erhard Busek, Special Coordinator of the Stability Pact for South Eastern Europe

What the Europeans have to learn is that there is a kind of flexibility needed to live with Donald Trump because he is obviously very flexible on everything.

Donald Trump:

A challenge for the EU By Dr Erhard Busek, Special Coordinator of the Stability Pact for South Eastern Europe

In every way, the election of Donald Trump is a wake-up call for Europeans. In some parts, for sure, he is next weekâ&#x20AC;&#x2122;s riddle and maybe he will stay in this capacity because it looks like he often changes his position. For Slovenia his presidency may be of special interest because Melania Trump is from Slovenia. It is not possible to determine if this means something to her and if she will do something for the country of her birth but I think Slovenia should use this chance. It is not very clear what Donald Trump really means for Europe. On one side, he has made some comments which are not very friendly to the Union, on the other he may learn that he is depending on Europeans regarding some questions on the future of the United States. The main subject of his efforts is the economy and business. Listening to his comments, you get the impression that he is in favour of US business but not for investment from outside the US. How possible it is to keep this line is

The Slovenian Times | Spring Edition 2017

not yet clear because one of the consequences of US/EU relations and globalisation generally, is that business is very much interlinked, particularly for the biggest enterprises it might not be so easy to separate under the auspices of a "national" economy. What the Europeans have to learn is that there is a kind of flexibility needed to live with Donald Trump because he is obviously very flexible on everything. Initially, President Trump criticised NATO but it now seems that he is aware that the secu-

rity of the United States is very much dependent on its partners. One of the consequences will be that NATO members will have to make more investment in their own security, which is also very favorable for a stronger European position. Maybe we have to learn to be less dependent on the Americans than we have been in the past. For the neighbourhood of Slovenia, it also means that the involvement of the State Department in the affairs of South East Europe will diminish. Will the Russians have an even stronger influence? What does it mean for Turkey which has a growing presence in South East Europe? How will the problem of migrants develop and will it lead to a nationalistic separation of every government or will it create even closer cooperation between the members of the European Union? We have to pay close attention to the developments. Who will be the real partners of the Americans in the future? What kind of themes are of interest for the new US government? At the moment, in the US government, there are no real experts on European affairs. In addition, we have to pay attention to the decisions on the people who will do the jobs in the State Department in the future. It needs a minimum of three or four months to fix the new crew at National Security, in the State Department and the Pentagon. In general it will be right if the Europeans fix their own position because there is not only Donald Trump but also Vladimir Putin in the neighbourhood. Significant attention on current developments is necessary! ď ´

Politics

Our world has been socialised into a pattern of thinking that focuses on separation and it focuses on fear.

Deconstructing Migration Getting To Root Causes An exploration of the migration issue, and the xenophobia that has resulted from this, is as complicated to understand as it is to resolve. An exploration is also necessary to understand the difference between a migration of people resulting from a genuine humanitarian crisis, as opposed to a manufactured crisis with an intended agenda.

Let’s start first with the understanding that xenophobia is an intense fear of people from other countries. The facts, as they are being presented right now are: a group known as Daesh is causing destruction in certain countries; people are being forced to leave and live in countries that they have not have been prepared to live in, which is having consequences of violence and destabilisation in countries like Sweden; western people are being labeled as racist or xenophobic by simply questioning these events; NATO is losing popularity and is struggling to find a way to remain relevant in Europe against a so-called Russian threat. Our world has been socialised into a pattern of thinking that focuses on separation and it focuses on fear. The so-called ‘logical’ reason for this pattern of thinking is that if a peaceful world could be profitable, then we would have a peaceful world.

Over the last one hundred years particularly, there have been events that have caused a mass movement of people from one location to another; some by natural disasters, and some by forced human intervention. One may ask why something like this would be done, and the answer to this is again very complicated, but it appears that many Europeans are starting to understand not only who and what is really responsible for the current crises, but also why. Facts to any story are interpreted through many socialised, human filters such as ‘race, religion, culture, gender, orientation, class, education level’ and many others. Truth becomes relative. An unknown source has been quoted as saying: “Most people do not want the truth; they only want the reassurance that what they believe is the truth.” History has shown that any time a large group of people are inserted into another large group of people, there is going to be conflict.

This is the result of the socialised patterning of humanity. One may ask: "Was this most recent migration of people really necessary?" Arguments to both sides of this question can be made, depending how one views the world. The public is told to accept this migration and that if it is not accepted, then we are racist or xenophobic. Unfortunately, the deeper origins of the recent migrations must be understood before claims such as these can be made. In Saudi Arabia for example, there are fullyequipped tents in the desert that can hold over three million people and yet, we are witnessing increased destabilisation in several European countries, with Sweden making the news more recently. Ironically, one of the most socialised countries in the world is now considering NATO involvement. Questions need to be asked which are not being asked by the mainstream media and politicians. The few that do ask are criticised. We are witnessing a reboot of sorts, in our world. A shifting global paradigm that is exposing many problems in our world, and also presenting opportunities for change, if Europeans and people worldwide, are ready to have a full discussion on who and what is responsible for the socialised condition of xenophobia that has been imposed upon our world without the informed, democratic consent of Europeans.  Geoffrey West is a Canadian/Irish alternative news journalist - his work focuses on creating global peace through an understanding of the root source(s) of global problems, while empowering humans to create a clean, healthy and peaceful planet for life in all its forms.

Spring Edition 2017 | The Slovenian Times

Politics

25 years of Slovenian independence 25 years of independence of the Republic of Slovenia is a joyous occasion.

HE Klaus Peter Riedel; Photo: Nebojša Tejić/STA

Both the independence of Slovenia and its EU membership are European success stories. This is perhaps not a coincidence because, in the case of Slovenia, the birth of a state and the integration into the European Union went hand in hand from the outset. The evidence with which Slovenia has followed this path and with which the country still plays its part in Europe is particularly noticeable as some Member States are currently dealing with tendencies to turn away from Europe, and the European project is under pressure from various sides. Over the past few years, Slovenia has gained a lot of recognition and appreciation among the 28 EU Member States. And rightly so! Slovenia is one of the smallest EU Member States but the size of the population of a country is less important. What counts is dedication, creativity and the power of good arguments. Here we can rely on Slovenia as a valuable partner. This year we also celebrate the silver jubilee of Slovene-German diplomatic relations, the highlights of which can be seen in the 25 photos that are exhibited on the fence of our Embassy in recent weeks. The photos reflect the deep and trusting cooperation that characterises our bilateral political relations – not only the economic and cultural but also the uncountable personal ties that exist between our two countries. I would like to congratulate Slovenia on this occasion and extend my best wishes for a prosperous future. HE Klaus

Riedel, Ambassador of the Federal Republic of Germany to Slovenia

2017 marks a double anniversary for French-Slovene bilateral relations: This year we celebrate 25 years of political dialogue between France and Slovenia, animated by regular meetings between the authorities of our countries, by the signature of a strategic partnership in 2011, and also through the accession of Slovenia to NATO and the European Union, a process which culminated in our successive EU presidencies in 2008. However, the relations between France and Slovenia are much older than this as, this year, we also celebrate the fiftieth anniversary of the French Institute in Ljubljana, a place of promotion and rapprochement of the ideas and cultures of our two countries, but also as participants for the reinforcement of our scientific and academic cooperation. As the French Ambassador in Slovenia, I intend to work on deepening the relations between our two countries, whether it is within the political, economic or cultural field. HE Marion

Paradas, Ambassador of the French Republic to the Republic of Slovenia

Photo: Jure Makovec

"Italian President, Francesco Cossiga, was the first Head of State to visit Slovenia after the European Community recognised Slovenia’s independence. On 17 January 1992, only two days after recognition, the President visited Ljubljana for the agreement to establish diplomatic relations between Italy and Slovenia. Since then, the bilateral relations have turned into a true partnership; we are both members of the European Union, the eurozone and the Schengen area. When President Sergio Mattarella visited Ljubljana on 25 June 2016 to celebrate the 25th anniversary of Slovenia’s declaration of independence, he stressed "how much we are bound by our common European destiny". Italy is the number two commercial partner of Slovenia, as well as the fourth largest investor with many Italian companies having made a long-term commitment to make business and create employment in this country. Italians are also the most numerous tourists to visit beautiful Slovenia. Last but not least, the Italian community in Slovenia and the Slovenian community in Italy are a bridge of cooperation between our nations. Let me finally congratulate the people of Slovenia for the huge accomplishments achieved in the last 25 years." HE Paolo

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Trichilo, Italian Ambassador to Slovenia

Politics

Vse Najboljse Slovenija As British Ambassador here it is an honour to have marked 25 years of Slovenia’s independence with you and to celebrate 25 years of relations between our two countries. I have been thinking about how the UK and Slovenia’s partnership has evolved over the last 25 years and what next. There have been many special moments – the opening of our Embassy in 1992, the close partnership as Slovenia prepared for EU and NATO accession, educational exchanges supported by the British Council, the Queen’s visit in 2008, Prime Ministerial visits in both directions last year and the recent visit by Foreign Secretary Boris Johnson. We have also seen steady growth in trade and tourism. But underpinning it all are the connections between our people that have formed over these 25 years and beyond. I very much hope to build on this milestone anniversary, to boost our bilateral relations as we transition to a new relationship outside the EU. Taking inspiration from Slovenia’s ‘zlati orli’ ski jumpers, we should accelerate at great speed, leap high into the air and land gracefully into a new era of success. HMA Sophie

Honey, Ambassador of the United Kingdom to Slovenia

This year we are commemorating 25 years of the establishment of diplomatic relations between the new independent Republic of Slovenia and Czechoslovakia, then from 1 January 1993 with the new independent Czech Republic. Both countries, during these 25 years, have worked hard to develop internal and external relations as democratic open societies, sharing the values, human rights and free market conditions. From the beginning, the presidents of the Czech Republic and the Republic of Slovenia, Václav Havel and Milan Kučan, were in close contact trying to strengthen and develop our bilateral relations which were traditionally based on historical, intellectual and cultural ties. During these 25 years, the political and economic contacts between both countries have developed in a positive way. In the last three years, the political and economic exchange has been intensified substantially. Many reciprocal official visits have been held, the commercial exchange and investments is growing, and in 2016 the commercial balance between our countries reached EUR 1.1bn. The Czech Republic is Slovenia’s ninth largest commercial partner. The cultural and educational contacts are also developing positively with the possibility to study the Czech language as an independent subject at the Faculty of Philosophy of the University of Ljubljana since 2004. In 2017 the Czechs and Slovenians are together commemorating and sharing the heritage of the famous Slovenian architect Jože Plečnik. HE Ve ˘ra

Zemanová, Ambassador of the Czech Republic to the Republic of Slovenia

Spring Edition 2017 | The Slovenian Times

Real Estate Interview: Professor Janez Koželj, Deputy Mayor of Ljubljana

Ljubljana is looking to attract investment for tourism, housing and commercial projects By Tina Drolc M.Sc.

Professor Janez Koželj, Deputy Mayor of Ljubljana Photo: Primož Korošec

Q What is the main focus of Ljubljana’s presence at MIPIM this year? A The time has come to go from the recognition to the marketing of the capital, and consequently of the country. Ljubljana and Slovenia are becoming increasingly recognised around the world. The city is ranked more frequently on different international rankings and I am sure that our presence at MIPIM, for so many years, has been an important contributor to this. Therefore, the focus of this year’s presentation is not to only promote the brand identity of the city, but to also be proactive in attracting direct foreign investment. With this purpose, we have selected postponed projects and those that were put on hold due to stranded assets of failed companies, however interesting for business and important for the development of the city. Q How will Ljubljana perform on the world property market and in particular, who do you want to attract and for which projects? A In the global market we will be presented as a secure and innovative city that is primarily characterised by human capital and a high standard of living. Among the advantages we want to emphasise the role of the strong mayor who understands market-based planning and effectively manages the municipality as a so38

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This spring, for the 10th consecutive year, Ljubljana will again take part in MIPIM, the world’s largest investment and real estate fair in Cannes which gathers the most influential players from all sectors of international property. The city’s deputy mayor, who is also a professor at Ljubljana’s Faculty of Architecture where he lectures on urban design, explains that Ljubljana is looking to attract investment to the municipality, which is managed like a socially responsible company. In the year when Slovenia celebrates its most significant architect, Jože Plečnik, Professor Koželj highlights the importance of the cooperation with Prague in the nomination submission for recognising Plečnik’s unique architectural designs on the list of UNESCO World Heritage Sites.

cially responsible company. Investors will be offered the opportunity to invest in tourism and commercial projects on the one hand, and the construction of housing for young and old.

Q Ljubljana has dedicated 2017 to the internationally renowned architect, Jože Plečnik, who altered and marked the city in the second quarter of the 20th century. How do you continue to maintain the character Plečnik created and when will Plečnik’s stadium be renovated? A In the last 15 years the municipality has renovated eight Plečnik creations which are in the ownership of the municipality. Among these were renewed the central marketplace, the Triple Bridge, the Zale cemetery and in 2016, renovated Plečnik’s house was converted into a museum about this great architect. His arrangement of public spaces has been upgraded with the addition of embankments and new bridges over the Ljubljanica River. The city also promises to cooperate with Prague to nominate Plečnik’s architecture for inclusion on the list of UNESCO World Heritage Sites. For the renovation of Plečnik’s stadium, everything is ready! We have a consensus of monument protection institute, we have a project designed by the architects of the world’s best stadiums, and we have a private owner who is

able to carry out the investment; but we do not have a building permit which is under state jurisdiction. The responsibility for the postponement of the renovation of the stadium is the weak state administration which is not able to solve conflict situations, even when it has at its disposal all the possible mechanisms. As Mayor Zoran Janković announced, 2017 seems to be quite a promising year for real estate projects and the banks are more willing to support the households.

Q How many new apartment buildings are in the pipeline and what is the capacity and size of investment? A According to my information, there are 14 construction projects ready in city: 2,945 commercial apartments for the market and to rent (affordable housing) which could be built within three years, mostly on the land of abandoned industry. 

The focus of this year’s presentation is not to only promote the brand identity of the city, but to also be proactive in attracting direct foreign investment.

Real Estate

Ljubljana â&#x20AC;&#x201C; PreĹĄeren square with the castle in the background; Photo: Dunja Wedam

Invest Ljubljana â&#x20AC;&#x201C; your first choice A city of human scale Ljubljana is the geographical, political, scientific and cultural centre of Slovenia. With more than 288,000 inhabitants, it is the largest city in the country and an important driver of regional economic growth and innovation. The polycentric city is comprised of 17 district communities. A walkable, midsize city of manageable distances, Ljubljana is well known for being tailored for people. the city is only a short distance to nature and is less than a 10 minute walk from any location. In 2016, Ljubljana was the holder of the prestigious title "European Green Capital". In the opinion of the European Commission, the city had made the highest number of changes with regard to sustainable transformation that followed an integrated approach to the environmental management in the shortest period of time.

Spring Edition 2017 | The Slovenian Times

Real Estate

There are five key reasons as to why to invest in Ljubljana. standard of living 1 High for all citizens In the past 10 years, Ljubljana has implemented more than 1,700 projects to further increase the quality of life for its residents. These include a few long-awaited projects that were not realised during the recent period of stagnation. The city is marked by its diverse, high-quality cultural programs and numerous sporting events for all generations. Ljubljana is also distinguished by its well-preserved and easily accessible natural environment, great biodiversity and varied landscape. It is the preserved nature and the intertwinement of the built-up and natural environment that makes the Ljubljana Urban Region unique among European metropolitan regions. Ljubljana is a safe, open and friendly city developing for all generations. A survey on the quality of life in European cities in 2015, conducted by the European Statistics Office, indicates that over 92 percent of Ljubljana citizens are satisfied with their life in our city.

• 542 m2 of public green area per capita • Over 90 hectares of new green areas for socialising, sport and recreation

2 Innovation hub Ljubljana is a city of inspiration, bringing together young creatives who give the city its youthful character. The University of Ljubljana is renowned for its study programs in natural, technical and social sciences, humanities and medicine, designed in accordance with the Bologna Declaration. The University’s guidelines of co-creating and bringing together sciences, education, the economy and the wider social environment is successfully fulfilled through the Slovenian Innovation Hub, career centres and the Institute for Innovation and Development. New businesses are greatly supported by the Ljubljana University Incubator which is winning international recognition to become the best choice for start-up companies to launch into the world. In 2015, two innovations centres sprang to life in Ljubljana, ABC Accelerator and the ABC Hub, supporting the creation of a unique innovation ecosystem in Slovenia and opening the door to investors and the international business environment. In future, the character of this progressive city will be marked by the Centre for the Promotion of Science and the National Institute of Biology with the new Natural History Museum. Next to the Technology Park Ljubljana, Hydrogen City will be built which will serve a cluster of production and hightechnology research activities. This infrastructure will allow Ljubljana to become an experimental city, attractive to talented and creative people with innovative ideas.

• 35,093 students • 429 research organisations • The University of Ljubljana is in the top 500 universities according to the Shanghai, Times and Webometrics global ranking lists. • The University of Ljubljana is in the top 3% of the best universities in the world (according to the SICRIS database).

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3 Appealing investment location The revitalisation of the city centre in recent years has significantly contributed to the revival of business activities in the area. Developers and the local community have begun to consider the quality of public space as the most important element in shaping the image of a successful city. A positive city image significantly influences the city life and is an important factor for its economic and social development. It also helps to reveal advantages and new development opportunities, and is especially important in adopting fundamental strategic decisions which change the city. Ljubljana is one of 26 municipalities in the Ljubljana Urban Region with the highest level of acquired knowledge and human potential in Slovenia: key state, scientific, research, educational and cultural institutions are all concentrated in Ljubljana. The region hosts company headquarters employing a significant share of the Slovenian population and generating over one third of Slovenian GDP. The Ljubljana Urban Region is the most economically developed region in the country. Since Europe covers a vast territory, European macro-regions play an important role. From this perspective, Ljubljana’s competitive advantage is its geostrategic position, situated at the crossroads of major European transport routes.

• Ljubljana Urban Region • Most economically developed region in the country • Good connectivity of the region to other European capitals

Real Estate

of congress and 4 Rise cultural tourism

5 Investor friendly

Ljubljana is an architecturally rich city with many cultural layers deposited over millennia, since the Roman Emona gave the city its distinctive spirit. Friendly and interesting in every season, Ljubljana is a magnet for visitors from near and far which achieves record increases in overnight stays and significantly reinforces the international reputation of the city’s trademark. Ljubljana is also an important centre for specialised international fairs and the home of the largest congress centre in Slovenia. As a particularly profitable industry, with high income potential, we are strengthening congress tourism and promoting business meetings throughout the year. There are over 14,000 cultural events and different festivals held in the city annually. The Ljubljana Summer Festival, with its rich and high-quality artistic program, also attracts many tourists. Diverse gallery and museum activities complement the vibrant cultural image of the city. Soon, the key cultural infrastructure projects of the city will be the renovation of the abandoned bicycle factory, Rog, and the old sugar factory, Cukrarna. The new gallery and exhibition space will host larger exhibitions and events of contemporary art such as the globally recognised Biennial of Industrial Design and the Ljubljana Biennial of Graphic Arts.

City Hall is putting in enormous effort to make the business environment in the Ljubljana region more attractive to both local and foreign capital. The city offers a high standard of living, security and tolerance. Open widely to foreign investors and experts, the City is gradually acquiring a cosmopolitan character and image. The key sectors City Hall wants to develop and promote are city tourism, logistics, housing, research and the circular economy. New major infrastructure investment projects that could be interesting from the foreign investors’ perspective are a new travel centre and a multimodal logistics centre. The City has plans for large projects, including an IKEA store, the Intermodal Logistic Terminal Ljubljana and the Šmartinska Partnership, a 240 hectare redevelopment area. All these projects will give new meaning to once brownfield areas which are now bustling with activity. The Ljubljana Urban Region Development Agency provides distinctive and quality projects in the field of regional development, along with the necessary information for their effective implementation into our daily lives. Development in the city region is focussed on a functioning metropolis, thus enabling the best access to public services, while preserving the nearby natural and cultural wellbeing of every citizen.

• Ljubljana has twice been ranked among the Global Top 100 Sustainable Destinations • Ljubljana won the Golden Apple Award, the "tourism Oscar", • The Ljubljana Festival is on the global summer festival list.

• New jobs • Increasing number of projects • 1,700 projects in the last 10 years • Mayor Zoran Janković plays a key role in all important projects in the City of Ljubljana.

• European Green Capital 2016 • Numerous international recognitions and awards • Global Prosperity Index

Ratings • In 2012, Ljubljana received the prestigious international Gubbio award for the restoration of Kongresni trg and the revitalisation of archaeological parks. • Ljubljana won the bronze Accessibility Award in 2015 awarded to EU cities for their success in terms of accessibility of public spaces for disabled people. • Ljubljana is a new city on the Copenhagen Index which measures how bicycle friendly a city is and ranks 13th. • Ljubljana is ranked on the list of most sustainable tourist destinations in the world. At the Global Summit of the World Travel & Tourism Council, Ljubljana won the Tourism for Tomorrow Destination Award for 2015.

Spring Edition 2017 | The Slovenian Times

Investment Opportunity DEVELOPMENT PROJECTS Delamaris City – Izola, Slovenia Prime plot on the Slovenian coast Next to the ancient fishing and trading port, Izola is spangled with art galleries, craftsman shops, cafes and gourmet restaurants. It is unquestionably an undiscovered tourist destination on the Istrian coast with abundant development opportunities.

KEY FIGURES

 Project: Delamaris City  Land: 37,516 m2  Development: Brownfield  Type of use: Tourist  Footprint ratio: 50%  Floors: -2, Ground Floor & up to 3 upper floors Zoning is subject to change as long as the investor’s program is aligned with the strategy of the local authority.

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PROPERTY DESCRIPTION

MACRO LOCATION

A building plot, in the eastern part of Izola next to the shipyard, is currently used for manufacturing purposes. The property is occupied by the mostly abandoned food production facilities of the former Delamaris Izola factory. The Municipality of Izola intends to revitalise the 120,000m of gross floor space through a publicprivate partnership. The former industrial area of costal land is to be transformed into a luxury hotel complex. The revitalisation project foresees a 5* hotel with 300 rooms, a wellness centre and apartment complexes. The apartments, scattered in an irregular pattern and connected by narrow streets and squares, should create the atmosphere of an old Mediterranean town. The north side of the land is reserved for the hotel beach, hosting bars and premium apartments with a sea view or of the hotel’s central garden. A congress centre is foreseen as a separate facility on the southern side of the hotel.

Izola is an old fishing town in south-western Slovenia on the Adriatic coast. It has a Mediterranean climate with mild winters, hot summers and averages 300 sunny days annually. The Mediterranean pace can be felt in every step on the clustered medieval streets, with views of rocking boats, in a relaxing chat with the locals, and with the aroma of seafood dishes served with good wine. The lively town lies in the vicinity of five international airports (Portorož, Ronchi-Trieste, Ljubljana, Venice and Rijeka). It has excellent connections with other Mediterranean cities, in particular with Venice. The region generates 2.2 million overnight stays of more than EUR 460m annually.

MICRO LOCATION The property is located in the eastern part of Izola on the site of the former shipyard. The immediate surroundings are characterised by commercial and residential buildings. The property lies along the coast of the Adriatic Sea, close to the downtown, the park at the lighthouse and the city marina. The land is accessible along the south and west side. The plot can be easily reached from the new motorway connection to the regional capital city of Koper and Trieste in Italy.

More information about investment opportunities is available at www.nepremicnine-har.si

Investment Opportunity DEVELOPMENT PROJECTS Hotel Celovški dvori **** –

Ljubljana, Slovenia

Construction site, with a valid building permit for a 10 storey hotel, at a prime location in the north of Ljubljana on the main access road to the city.

The development plot has a valid construction permit and an already excavated construction pit prepared for the foundations of the building. The conceptual design, according to the construction permit, foresees the construction of a 4* business hotel with two conference rooms with 49,000m of gross building area. The stylish 10 storey hotel is planned to offer first-class conference and event facilities, combined with a casino and wellness on the second floor. The combination of both would make it the sole hotel in Ljubljana designed for business and leisure.

FOUR STAR HOTEL

 Floors: 4 basement levels, ground floor and 10 floors  Capacity: - 181 rooms, 340 beds - Office centre, 170 office units - Restaurant - Conference centre 1,000 m2 - Shopping centre 1,600 m2 - Wellness centre 1,100 m2 - Casino 600 m2 - Parking garage 579 spaces  Investment value € 22 m

DEVELOPMENT LAND PLOT

 Land size: 8,139 m2  Type of Use: Tourist  Foot print ratio: 95%  Max height: 60m  Status: Valid building permit  Asking price: € 4.636.000 (22% VAT included)

LOCATION Ljubljana lies at the crossroads of important transport routes: from Northern Europe to the Adriatic Sea; and from Western Europe to Eastern Europe, the Balkans and the Near East. Its central geographic location within Slovenia, transport connections, and concentration of scientific and research institutions have made Ljubljana the political, scientific and cultural centre of Slovenia. With more than 280,000 inhabitants, Ljubljana is the largest city in Slovenia and the most important economic centre, with 12,628 entrepreneurs, 18,560 registered limited liability companies and 343 corporate companies. Last year, Ljubljana recorded almost 1.2 million overnight stays and 16.1% growth compared to 2014. Ljubljana is renowned for its relaxed atmosphere, reminiscent of both the Mediterranean and Central Europe, and is well-known as an extremely picturesque and green city. The historical city centre is full of outstanding architecture, a medley of styles from different historical periods, most notably the Baroque, bound together into one of the 20th century’s most amazing total works of art by the famous Ljubljanaborn architect and urban planner, Jože Plečnik. According to the safety index compiled by Numbeo, Slovenia ranks as high as fifth among 39 European countries and 14th among 117 countries worldwide.

Spring Edition 2017 | The Slovenian Times

Real Estate

Main Drivers and Investment Opportunities in Slovenian Real Estate "Radar on Slovenia" Slovenia is currently "under the radar" for foreign investors although, in recent months, the Slovenian government has, with the local communities, managed to attract more foreign investors and thereby proven that, in addition to an appropriate location in the world and Europe, Slovenia is also able to provide adequate land and meet the high standards and conditions which are required by foreign producers and investors. The arrival of Yaskawa Electric in Kočevje and Magna Steyr in Maribor is a good signal to other foreign producers which now have an open door to invest in Slovenia. Slovenia, which is a small country but has a very good transport/logistics position, the Port of Koper and distinctive technological skills, is today "conquering" investors with the broad knowledge of its highly reliable workforce. An extremely rich selection of real estate and financial income, which is usually at least four percent higher than in Western European countries, create conditions and justify the reason for the growing interest in investing as well as living in Slovenia, since Slovenia is one of the most green and health-friendly countries. Slovenia will be presented as an investment real estate country at the international Real Estate conference, "Real estate opportunities in Slovenia", which will be held in Ljubljana on 11 - 13 September 2017. Foreign investors will have the opportunity to discover the types of realestate, knowledge and partnerships which are possible in local communities and municipalities, and also the employment, tax and other benefits that can be offered by Slovenia to ensure a competitive advantage. I am convinced that, with this conference the »radar on Slovenia« will be detected with greater interest by foreign investors and producers with the desire to open a new factory in Slovenia.

Andrej Kuplenk, CEO, ABC Real Estate DUTB is a Slovenian government-owned company with the main strategy to recover and maximise the value of acquired assets. DUTB owns a full spectrum of market attractive properties, varying from large greenfield and brownfield development projects on the one side, to fully-constructed or semi-finished real estate on the other. The ratio and volume of property development in Slovenia has been growing recently due to the country’s superb Central European geographical location and a promising business environment for foreign investors (growth in tourism rising GDP, low taxation of profits, etc.). An ongoing process of demographic centralisation makes Ljubljana, Slovenia's capital city, a most viable environment for residential and business property development, with investment in tourism the most promising in the alpine and coastal towns. Slovenia also has a need to develop large industrial zones and logistics infrastructure in strategic locations. DUTB can offer properties in all these segments.

Imre Balogh PhD, Acting CEO & Executive Director, Bank Asset Management Company (DUTB d.d.)

The Slovenian Times | Spring Edition 2017

01 DUTB Real Estate, Podutik Ljubljana (Residential) 02 DUTB Real Estate, Thermana Park Laško (Touristic) 03 DUTB Real Estate, Maribor, Bolfenk Hotel (Touristic) 04 DUTB Real Estate, Maribor, Arena Hotel (Touristic) 05 DUTB Real Estate, Thermana Park Laško (Touristic)

Real Estate

Will Europe Manage Its Building Portfolio In Line with the 2°C Target? At COP-21 the historic Paris Agreement was signed – world leaders were congratulated for their leadership - but what really matters now are the concrete actions taken in key sectors for our economy. In the building sector, countries and large global actors formed an alliance at COP-21, centred around commitments to keep on a two degree pathway by driving net zero energy new buildings and deep energy renovation of existing buildings. For European countries, the issue of renovating their entire national building portfolios to higher energy performance standards will be one of the challenges that makes or breaks the ambitions of the Paris Agreement. At this very moment, governments across the EU are finalising long-term strategies on how to renovate their existing buildings ahead of the 30 April 2017 deadline by which plans are required to be submitted to Brussels under EU energy laws. In connection with these requirements, the World Green Building Council’s BUILD UPON

project has just successfully concluded a campaign of over 100 events to support governments in producing ambitious strategies that help implement the goals of the Paris Agreement. The two year EU Horizon 2020 funded initiative – the world’s largest collaborative project on building renovation – was championed by 13 Green Building Councils in Europe (and led by GBC España), who have been working closely with the public and private sectors in their countries to deliver consensus around the direction these renovation strategies should take. Green Building Councils have recently delivered a series of final recommendations to their governments over the direction that future public and private financial instruments for energy efficient building renovation should

take, as well as how to fill the industry skills gap, and drive demand for energy efficiency among property owners. Amongst the recommendations put forward by several countries is that support should be given to establish a market for green mortgages and covered bonds. The idea is that these would provide cheaper capital to those improving their properties to measurably higher standards of energy performance, based on the lower probability of default of the borrower and the positive influence of property improvements on loan-to-value ratios. Off the back of these recommendations, the Europe Regional Network of the World GBC has recently launched a partnership to scope how a green mortgage product for Europe should look under the leadership of the European Mortgage Federation, and alongside partners including energy giant E.ON, the Royal Institute of Chartered Surveyors and several leading European universities. This project has begun to scrutinise the ways in which the current Energy Performance Certificate regime could be built upon to deliver robust energy performance data to valuers and the financial sector so that an accurate judgement can be made about its impact on probability of default and loan-to-value ratios. BUILD UPON has been instrumental in bringing together the most important organisations in and around the renovation sector to craft strong and robust strategies that will assist countries in unlocking the huge energy saving potential in their buildings. However, now it is a time to wait and see what direction is set by EU countries on 30 April 2017 when they set out their plans for managing their nations’ building portfolios. 

Spring Edition 2017 | The Slovenian Times

Event Guide

Culture / Festival

19th Ljubljana International Documentary Film Festival 15 – 22 March 2017, Cankarjev dom (Cultural and Congress Centre), Ljubljana The festival mission is to strive valiantly to reach into the core of the greatest social and political problems. It brings together political and portrait documentaries and films on myths, icons, the media and other themes. The festival includes a competition. In collaboration with Amnesty International Slovenia, a prize will be awarded to the best film on the theme of human rights.

Concert Music

9th International Music Competition and Festival for Soloists and Chamber Groups - SVIREL 22 March – 9 April 2017, Nova Gorica, Dobrovo, Vipolže The notable international music competition, Svirel, is held in a beautiful resort of the renowned Slovenian wine region, Brda. The competition hosts around 700 competitors from 25 countries. The acclaimed international jury, cash prizes, concert opportunities, sponsor awards and friendly environment, make Svirel an attractive and unique place for your musical growth.

Gipsy Kings 1 April 2017, Grand Hall Stožice, Ljubljana The Grammy Award winning group and recipients of Gold and Platinum records, will be on the Slovenian stage for the first time, after 10 years of touring the world! The group will mesmerise with their global hits such as: Volare, Bamboleo, Baila me, Djobi Djoba and many others. This legendary Latino group has been performing for the last 28 years on the world’s largest stages and has sold over 20 million albums. "Although it’s been 28 years since we formed the group, we still want to create music. Music is our life, music is us" says Nicolas Reyes, one of the founders and the lead singer of the g

Sport

Planica FIS World Cup Ski Jumping Planica 2017 23 – 26 March 2017, Nordic Center in Planica Every year the valley under Ponce organises events for all ages. The most important and memorable is the FIS Ski Flying World Championships on the flying hill of the Gorišek brothers without which we cannot imagine the annual World Cup of Ski Jumping.

The Slovenian Times | Spring Edition 2017

Culinary Festival

Olive oil and Chard Festival 29 April – 1 May 2017, Padna

Sport Exhibition

In April, a lovely atmosphere will liven up the streets of Padna as the beginning of summer holidays will be highlighted by the Olive oil and Chard festival, organised by the Portorož Tourist Board. Visitors to the festival will be invited to take a walk through the village, taste various homemade specialties offered on stands or buy the local olive oil. Visitors will also have the opportunity to join the hiking tour or enjoy the traditional village feast in the evening and be entertained by traditional Istrian music and the popular local music will make everybody want to dance.

internautica International Boat Show 4 – 7 May, 2017, Portorož Marina, Portorož Running for 22 years, the Internautica – Adriatic International Boat Show has established itself as one of Central Europe’s major meeting points for marine business and nautical tourism. It is the perfect lead in to the summer season for boating professionals and enthusiasts, offering quality and exciting content. Internautica is a good business platform offering many opportunities for trading, professional meetings, various events, sporting and social events, and for generating new business possibilities and relationships.

Event Guide

Concert

Culture

Flower festival

Depeche Mode

Day of Roses "Portorož"

14 May 2017, Grand Hall Stožice

2 – 4 June, 2017, Portorož

11th International Wildflower Festival

The day that you have been expecting for months is finally here! Depeche Mode’s last tour ended at the end of June 2014 when they toured South America. Depeche Mode, who are considered to be some of the most influential musicians, will be in Slovenia as part of their Global Spirit Tour where they will present their latest studio album, Spirit.

May is the month when the Portorož rose blooms and is just the right time to visit the Portorož Rose Garden which is open from 9am to 7pm.

20 May – 4 June 2017, Bohinj Anything you want to know about wildflowers and more can be found in Bohinj! The organisers will have you tramping through fields and rejoicing in the colours of spring. 100 years ago, when the railway enabled the development of tourism in Bohinj, people also visited Bohinj by carriages or on foot so that they could see and admire the picturesque and interesting flora and the beauty of nature. The festival will provide a bouquet of events that have one thing in common – the presentation of alpine flowers from all of the environments in Bohinj (along the water, meadows, hills, mountains). The festival is an opportunity to remind people of the unique natural advantages of Bohinj as a tourist destination.

Music Festival

22nd Jazz Cerkno Festival 18 - 20 May, 2017, Cerkno

Culture

The program presents various musicians and artists from all over the world, both established and unknown. The festival prides itself on uncovering the current trends in jazz music as it emphasises the unconventional and creative. The festival also features Rock, electronic music, modern and classical music, experimental music, various traditional types of music and much more. Special attention is paid to the promotion of Slovene musicians and many bands and musicians make their first appearance in front of the public in Cerkno. The festival program is enhanced by various workshops, exhibitions and similar events, and is also known for its lively after-party.

Cirque du Soleil: Varekai 2 – 4 June 2017, Grand Hall Stožice, Ljubljana Deep in the woods, at the top of a volcano, there is a magnificent world where everything is possible. It is called Varekai (meaning "anywhere" in the Romani language). A lonesome young fellow arrives and starts to unravel the colourful world full of fantasy creatures. He flies away to experience an unforgettable adventure, encountering the wonders and secrets of the world and mind. This spectacular production, with its explosive mixture of drama and acrobatic tricks directed by Dominic Champagne, pays special tribute to nomadic souls, the artistic spirit of the circus tradition, and to all those who are passionately engaged in the search for the path to the unknown.

Music Festival

33rd International Druga Godba Festival 25 – 27 May 2017, Piran, Ljubljana Primarily started in the days of socialism as an alternative to the drab offerings of state run festivals, this festival has always prided itself as being on the cutting edge. It is usually accompanied by other art forms such as film, poetry, lectures and exhibitions. Druga Godba brings together music from the wider world, and audiences of all generations and musical tastes, for three days of serious fun and this year, Druga Godba will, for the first time, hold one of its festival days in the coastal region.

Spring Edition 2017 | The Slovenian Times

Experience & Lifestyle Slovenia With our team at The Slovenia, who have many years of experience in international tourism publishing, we wish to identify the best selection of restaurants in Slovenia, which will be multi-faceted - professional, independent and designed for the broader public, both domestic and foreign tourists. Our vision is for Slovenia to be an international "foodie" tourist destination; we aim to increase its international reputation, support long-term improvements in the quality of services and experiences at restaurants, and develop a vibrant "foodie" culture among Slovenes.

We’re putting Slovenia on the world culinary map!

Slovenia’s best restaurants selection Food and wine tourism has emerged as the fastest growing tourism sector in the world, and also in Slovenia which, in recent years, has transformed into an important and recognised green destination packed with culinary experiences. Tourists appreciate Slovenia and happily return, not just because of the amazing diversity and natural beauty of the county, but also because of the rich and sophisticated range of food and drinks on offer. 48

The Slovenian Times | Spring Edition 2017

"We don’t want to wait for the Michelin stars to come for Slovenia to gain recognition. Reviews on TripAdvisor and in InYourPocket guides or the very rare foreign reviews and descriptions generally often overlook places and so we decided to create a Slovenia-wide selection of restaurants. Visitors to Slovenia could learn so much more about the nation’s cuisine which is why we want to improve Slovenia’s reputation when it comes to food tourism. We have set ourselves the goal of running an annual independent selection of the top restaurants from across the country, as well as from the different regions. We also plan to publish a book featuring these top restaurants which will showcase, for both locals and foreigners, all the best that Slovenia has to offer." Niko Slavnič, Director and Founder, The Slovenia International publishing house The Expert Committee consists of ethnographers Dr Janez Bogataj (Faculty of Arts, University of Ljubljana) and Dr Aleš Gačnik (Faculty of Tourism Studies - Turistica, University of Primorska), Helena Cvikl (Director, Vocational College for Catering and Tourism Maribor) and internationally renowned sommelier, Mira Šemič. The Committee determined the preliminary selection of restaurants and through this process established the common grade of "overall satisfaction with the experience" when visiting the restaurants. They made their selections by looking at a number of dimensions: a restaurant must have been operating for at least one year, (restaurants that opened in 2016 will be eligible for inclusion in 2018 at the earliest); food and drinks - diversity, quality of ingredients, presentation of dishes, consistency of flavours, innovation and how well the food and drinks were paired; service - greeting, table service, approach to recommending food and drinks as well as knowledgeable waiters. The list was divided into five Slovenian regions: north, south, east, west and the central area (Ljubljana and Central Slovenia), which was handed to the Chefs & Foodies Academy for voting. The list was also put to the popular vote which ran from 9 January 2017 until 24 February 2017.

"The SRA project is unique because of its creative design and democratic model of voting. In my mind, the best inns/restaurants are not just shrines to all that is good or selected sanctuaries for gourmands and wine connoisseurs, they are embassies of Slovene identity, embassies of hospitality, embassies of gastronomic heritage and contemporary culinary creativity and innovation. I am supportive of the project, particularly since it will help us to appreciate Slovenia as a boutique gastronomic - European tourist destination!" Dr Aleš Gačnik Head of the Centre for Gastronomy and Wine Culture, University of Primorska Head of Department of Cultural Tourism and Cultural Heritage, Faculty of Tourism Studies - Turistica, University of Primorska

The selection of the best restaurants – THE SLOVENIA RESTAURANT AWARDS The selection of the best restaurants will be published on the official website www.the-slovenia.com, as foodie maps and in a book. The winners and those who rank among the regional Top 5 (Top 10 for Ljubljana) will be profiled in detail, and all the other restaurants on the list that the Expert Committee handed to the Academy and for the public to vote on will be labelled as "recommended". Results of voting for best restaurants in Slovenia in alphabetical order THE SLOVENIA RESTAURANT AWARDS sponsored by Diners Club International are:

Slovenian amazing . .

Culinary spoiling . .

www.KAVAL-GROUP.si info: marketing@@kaval-group.si

STRELEC RESTAURANT

"A special business luncheon will be hosted by the Secretary for Commerce and Economic Development of the Government of the Hong Kong Special Administrative Region, Mr. Gregory So" (Belt and Road Initiative) This event is by invitation only. Kindly send all requests to: brane@sloveniatimes.com

ad & d: marko pentek / www.mgo.si, photo of hong kong: shutterstock

SAVE THE DATE 03.04.2017, LJUBLJANA, SLOVENIA