The Slovenia Times Spring Edition 2019 by The Slovenia Times

The Slovenia Times Slovenian Magazine in English Language Spring Edition 2019, Volume 16, EUR 4.90

www.sloveniatimes.com

SPECIAL INSERT: Real Estate & Investment Opportunities

12-15 MARCH 2019

The world’s leading property market PALAIS DES FESTIVALS CANNES, FRANCE

PROJECT DIRECTORY

A selection of projects showcased at MIPIM 2019

selected by retail expert and journalist Graham Parker

DAZZLING COMFORT

Alenka Bratušek, MIRS, on the EUR 1,194m investment for largest regional project

NEW FULL LIE-FLAT BUSINESS SEAT

AIRFRANCE.SI Gradually installed on long-haul flights on a part of Boeing 777 fleet.

Mojmir Mrak, FELU: "Political uncertainty and shape of international trade"

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Janez Koželj, DM, City of Ljubljana: Julij Božič, BTC d.d.: "Connecting, supporting and "BTC - An ecosystem of activating regions" connection and cooperation"

MIPIM 2019: 30-year edition of MIPIM – the world’s leading property market

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Editorial

Spring Edition 2019 www.sloveniatimes.com

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Contributors Maja Bednas, Simon Valentan, Ludwig Heinz, Karen Vartapetov, Himani Joshi, Charles Nonne, Boštjan Lajovic, Aleš Čakš, Petra Godeša, Tonja Blatnik, Saša Fajmut, Lucija Mulej Mlakar, Iztok Petek, Nataša Zajec, Jasmina Kozina Praprotnik

AD & D Marko Pentek, www.mgo.si

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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. ©DOMUS d.o.o., 2003. All rights reserved.

This year, spring is quick to knock on Slovenia’s door, and we hardly had any winter at all. The Slovenia Times is already on its way to Cannes on the Azure Coast and we have wonderful news—The Slovenia Times is proud to announce that we will be a media partner at MIPIM 2019, the world’s leading property market, where our magazine will be available to all guests in an area specially designated for media partners. For the last 30 years, MIPIM has been bringing together the most influential players from all sectors of the international property industry at a four-day event of networking and insightful discussion through various conferences and exhibitions. MIPIM 2019 is expected to be attended by over 26,000 participants and more than 5,400 investors from 100+ countries. How will Slovenia present itself? We have been participating in the property market for 11 consecutive years—the City Municipality of Ljubljana and the SPIRIT public agency have been the driving forces of our exhibitions, presenting various projects and promoting topical investment opportunities. The Slovenia Times is bringing some additional insights. See our interview with the Mayor of the Municipality of Kočevje, Vladimir Prebilič. "In 2016, the Yaskawa Corporation from Japan, the largest global producer of industrial robots, made a decision to open its first European robot factory in Kočevje, Slovenia," he says. The decision was the most positive news in recent years for the city, which had been fighting unemployment, a decreasing number of children in schools, and mass emigration of young people. The fact that Kočevje is one of the most investor-friendly environments in Slovenia was also confirmed by the mayor himself. "We started our negotiations with the investor in autumn 2016," he says. "Yaskawa’s decision to purchase the land followed in January 2017. We laid the foundation in November 2017 and, in four months’ time, the investor obtained the building permit and all the necessary paperwork to commence construction. It is important to mention that the land was entirely owned by the municipality." There is also our interview with Alenka Bratušek, M.Sc., the Minister of Infrastructure of the Republic of Slovenia, who is facing one of the most ground-breaking infrastructure investments in Slovenia—the construction of the second railway track between Koper and Divača. The first feasibility study on the construction of the Divača–Koper railway track was carried out 23 years ago by the second Slovenian government led by Janez Drnovšek. At its session on 24 January 2019, the 13th Slovenian government, with Marjan Šarec as the prime minister, adopted the investment program for the new Divača–Koper track, which will be constructed by 2TDK, the state-owned company established to construct and manage the new railway link. The construction of the second track is one of the largest infrastructure investments, not just in Slovenia but in the broader region. Alenka Bratušek, the Minister of Infrastructure, says that "the Investment Program for the project clearly defines the financing that will be required and how the 1,194m Euros will be funded." As investment is at the very core of MIPIM’s strategic value, we have also focused on a very important topic, Human Resource Management, where Slovenia is challenged greatly. Read what experts have to say about the importance of a highly educated & motivated labour force for the future. As ever, The Slovenia Times is an active partner in promoting the business environment in Slovenia—we believe that our media partnership with MIPIM will enhance investments in the country. Please get in touch with your tips and thoughts at brane@sloveniatimes.com. We appreciate and thank you for your support.

Brane Krajnik CEO The Slovenia Times

Spring Edition 2019 | The Slovenian Times

Contents Page 4

IN THE SPOTLIGHT 4 Interview: Alenka Bratušek, M.Sc., Minister of Infrastructure of the Republic of Slovenia

ECONOMY Page 10

6 Economy Overview: FinMin: Slovenia will stay comparably favourable for capital; Perutnina gets new

board as MHP takeover completed; Minister says govt had to intervene in sale of Istrabenz hotels 8 IMAD: Technological development among the most important megatrends in a long-lived society 10 Interview: Professor Mojmir Mrak, Faculty of Economics, University of Ljubljana (FELU) 12 Interview: Dr. Vladimir Prebilič, Mayor of the Municipality of Kočevje 14 Foreign investors on the Slovenian investment environment 15 Interview: Bogomir Strašek, founder, director and owner of KLS Ljubno 16 Will a sunny forecast attract more foreign investments? 18 British-Slovene Trade: The Future 19 Delight beyond satisfaction! 20 Interview: Dimitrij Zadel, President of the Management Board, Port of Koper REGIONAL INSIGHT IN ASSOCIATION WITH S&P GLOBAL RATINGS

22 Research Update: Slovenia 'A+/A-1' Ratings Affirmed; Outlook Remains Positive Page 12

POLITICS 24 Political Overview: Pahor tells Sky News EU short delay of Brexit possible; Šarec accepts Leben’s

resignation as environment minister; Interior Minister Poklukar attends Brdo-Brijuni Process conference 25 2019 European elections: The moment of truth for Europe and a window of opportunity for Slovenia 26 Column: The Day after the European Parliamentary Elections

Page 15

27 Interview: Matej Skočir, M.Sc., Head of the Internationalisation Division, Ministry of Economic

Development and Technology of the Republic of Slovenia 28 The future of real estate to be highlighted at groundbreaking 30-year edition of MIPIM – the world’s leading property market 30 Ljubljana, more than a capital city! 36 Architecture: An Interview with an Architecture Expert Mika Cimolini

The Slovenian Times | Spring Edition 2019

Contents Page 20

GLOBAL PITCH 42 Interview: Julij Božič, Executive Director for Innovation and Digitalisation, BTC d. d. 44 Thinking about the future, but dealing with the past

HUMAN RESOURCE MANAGEMENT 46 Interview: Tom Haak, the director of the HR Trend Institute 48 Scrum your life. 49 Can we Turn Corporate Culture into Competitive Advantage? 50 Column: TRUST, The NEW ADVOCATE OF a FUTURE HR-Centered ECONOMY

Page 30

EDUCATION PERSPECTIVE 52 Interview: Professor Jakki Mohr, University of Montana, USA

INTERNATIONAL BUSINESS PARTNERS 54 Interview: Gertrud Rantzen, President of the Slovenian-German Chamber of Commerce 56 TOPIC: Investment environment in Slovenia

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)

Page 46

ACTIVE LIFESTYLE 60 Slovenian Running paths

EXPERIENCE & LIFESTYLE SLOVENIA 61 Food Bluz: Flavours of Slovenia and the world 62 EVENT GUIDE Page 62

Page 54

Spring Edition 2019 | The Slovenian Times

In the Spotlight Interview: Alenka Bratušek, M.Sc., Minister of Infrastructure of the Republic of Slovenia

I believe that both the EIB and EBRD will want to cooperate on a regional project as large as the construction of the Divača–Koper track. By Tina Drolc, M.Sc., MBA

The first feasibility study on the construction of the Divača–Koper railway Q Deloitte, the company that developed the Investment Plan, assessed that the investtrack was carried out 23 years ago by the second Slovenian government, headed ment of EUR 1,194m for the Divača–Koper by Janez Drnovšek. At its session on 24 January 2019, the 13th Slovenian track is economically and financially feasigovernment, with Marjan Šarec as the prime minister, adopted the investment ble. What is the estimated capital injection program for the new Divača–Koper track, which will be constructed by 2TDK, from Slovenia and does it depend on the the state-owned company established to construct and manage the new railway extent of financing from other countries? What assurances can Slovenia expect from link. The construction of the second track is one of the largest infrastructure them? investments, not just in Slovenia but also in the broader region. Alenka Bratušek, the Minister of Infrastructure, claims that "the Investment Program for the A The Investment Plan clearly defines the extent of financing required and how the EUR project clearly defines the financing that will be required and how the EUR 1,194m will be funded. The amount in the In1,194m will be funded." She believes the project is financially and professionally vestment Plan was considered when amending well thought through and that its implementation does not depend on the the budget for 2019, with a capital injection financial support from land-locked countries. In the spirit of the upcoming from Slovenia of EUR 400m fully budgeted. European elections, Bratušek highlights that the European Union is a project for The fact that the financing will come from the budget is important for closing the financial peace and that this is what people should focus on. structure of the project, which has to be done Alenka Bratušek, M.Sc., Minister of Infrastructure of the Republic of Slovenia; Photo: Daniel Novaković /STA

by end of May this year if we are to receive the European funds already granted. Let me stress that this project is structured in such a way that the entire investment will be repaid with contributions from the track users, that is from the fees and charges from cargo carriers on the roads, rail and through our port in Koper. The government is yet to decide whether landlocked countries will be allowed to cooperate on our project. If the government approves financing from land-locked countries, then Slovenia will only have to invest half of the currently foreseen amount in the capital of the state-owned 2TDK, established to construct and manage the new railway link.

Q What is the estimated timeframe for the investment to be returned to the state budget? A 2TDK has a 45 year track management concession during which time, according to projections, the project will have been repaid, including the loans for the construction of the new track. It is also projected that the state’s

The Slovenian Times | Spring Edition 2019

In the Spotlight capital injection into 2TDK will be reimbursed. This means there will be no burden on the state budget. What is more, dividends from the operations of 2TDK, whose sole shareholder is the state, will account for a budgetary surplus in the long run.

Q The President or the European Investment Bank, Werner Hoyer, stated that the bank is well aware of the strategic importance of the second Divača–Koper track. Nonetheless, he drew attention to the criteria that are vital to the EIB when deciding on financing a project: regional competition, the technical feasibility and issues pertaining to traffic and transport development in the upcoming decade. What is your response to this? A All three highlighted dilemmas are relevant, but so are our answers to those dilemmas. Our traffic growth assessment is actually conservative: 3.9 percent traffic growth per year is predicted at the Port of Koper until 2030, and 2.9 percent growth from 2030 until 2040, while we have been witnessing a 6 percent yearly traffic growth for the past 10 years. We are also fully aware of the competition in the region. I am quite positive that our project is already causing a fuss among our neighbours. The Port of Koper has an exceptionally favourable strategic position and the new track will only make cargo transport through our port more cost- and time-efficient. As for the technical parameters, this section of the railway will be part of the TEN-T network, governed by certain standards laid out by the European Commission and which the track in question will fully meet. What the EIB sees as problematic is actually the expansion of the foreseen service pipes into actual tunnels. Nevertheless, we will stand our ground – we have decided on a double-track railway and we will not build tunnels so small they would have to be subsequently expanded.

Q You are also negotiating a loan from the EBRD so as to close the financial structure by the end of May. This is, after all, a prerequisite for obtaining the European funds which have already been granted. What amount of European funds have been allocated to the project? What is the predicted total amount of loans from financial institutions and will it be possible for both the EIB and EBRD to cooperate on the project? A The Investment Plan is a living document, thus, changes to the financing structure are possible. As we speak, we are already doing our best to further cut the estimated costs. Currently, EUR 250m of European funds are planned to trickle into the project, with the same amount coming in the form of loans from

financial institutions, possibly including the Slovene Export and Development Bank (SID). Due to the EIB-related challenges, we have also started negotiations with EBRD, but I am highly optimistic and I believe that, in the end, both institutions will want to cooperate on such an important project. It is a project of great significance, not only for Slovenia but for the broader region, which Hoyer himself has admitted.

Q There has been criticism that the estimated project management costs are too high. Is it possible to draw any parallels with other similar projects? A We have been warned about the management cost and the cost of excess material disposal. Each is estimated to approximately EUR 50m and we are already working on their optimisation. We have studied the cost of tunnel construction per cubic metre and found that, on average, digging out the tunnels on the Divača–Koper track does not deviate from or is even lower than the costs in other comparable projects or tunnels. We plan on analysing the management cost and the cost of excess material disposal in a similar way.

Q The total value of the project should therefore not increase? A Most definitely not. We are working on cost optimisation and as we speak, while in the Investment Plan EUR 150m is already estimated for any potential unforeseen costs. Of course, the actual and final price of the project will only be known after all the calls for tenders have been completed.

Q According to the Investment Plan for the construction and management of the Divača–Koper track, the construction will take place from 2019 to 2025, with commencement of operations scheduled for the start of 2026. How rigid are these timings? What could change them?

A Regardless of the project, calls for tenders is our weakest point. Various complaints with respect to this could delay the implementation of the project. 2TDK must implement the entire project in a way that will limit the possibility of complaints to the greatest extent possible during the selection of the service providers. It is on us, the government, to think about amendments to the law on public procurement. It is not logical that we have 10 times as many problems in this area than our neighbours in Austria.

are you with the project and how much is estimated to trickle into the project?

A The Third Development Axis runs from the Croatian border to Slovenj Gradec. In agreement with the civil initiative from Slovenian Carinthia, who have been waiting for a suitable road connection for a long time, we have decided that even though we have not yet obtained the required project documentation for the northern part of the route and the fact that this type of construction is financially more risky, we will start the works and begin constructing the road in individual sections. As you know, the feasibility of the Šentrupert– Velenje section will be determined by the Constitutional Court, while the Velenje–Slovenj Gradec section has already been approved. The construction will begin in the southern part of the Third Development Axis. The whole project is entirely funded by the motorway company in the Republic of Slovenia, DARS, and indebting will also be necessary. It would be difficult to predict the investment total, but according to the Ministry’s estimates, the Velenje–Slovenj Gradec section will cost approximately EUR 400m. It should be mentioned, however, that this section is one of the largest projects that DARS has ever undertaken – there will be many viaducts and tunnels, as is the case with the Divača–Koper section where most of it runs underground.

Q The 2019 European elections in May are predicted to be a turning point for the EU, in part due to Brexit. How is your party preparing for these European elections? A These elections are certainly important. Not only because – as it seems – they will take place without the United Kingdom (author’s note: at the time of the interview Brexit had not yet been agreed upon), but, above all, in terms of the future that the EU is heading toward. There is a lot of pessimism and scepticism about whether the union is working well and whether it is right that we are still united. The role of politicians in the upcoming elections, and afterwards, is extremely important. We must remind people that the EU is primarily a project for peace. We are, after all, experiencing the longest period of peace, so far, on European territory. We have the right solutions in our party to increase confidence in the EU and Slovenia as part of a strong union, we know how to implement them and voters will recognise this.

Q One of the priority tasks you have undertaken in your term of office is also designing the Third Development Axis. Where Spring Edition 2019 | The Slovenian Times

Economy

Perutnina gets new board as MHP takeover completed Ljubljana, 21 February - Poultry producer Perutnina Ptuj got new supervisory and management boards on Thursday as the new owner, the Ukrainian poultry giant MHP, completed its acquisition of a 91% stake in the company from Russian-Slovenian steel group SIJ.

FinMin: Slovenia will stay comparably favourable for capital Maribor, 2 March - Finance Minister Andrej Bertoncelj has told the newspaper Večer that despite the planned increase in schedular taxation, Slovenia will stay a "comparably favourable country", with capital still being less taxed than on average in the OECD countries. Commenting on the negative reaction from business associations to the announced changes to taxation of corporate income and capital, the minister said that the whole picture needed to be taken into account. "We should for, for example, listen to the OECD, which has told us that capital in Slovenia is undertaxed," he said, adding that "we therefore needed the measures". Bertoncelj said that the most appropriate thing to do was to keep a favourable system of final taxation, adding that "we only increased the tax rate by five percentage points". According to the minister, the government was thinking about business while adopting the measures, including when it comes to the lowest mandatory rate of income tax. He added that the possibility to raise the corporate income tax rate to 22% would depend on the possible cooling down of the economy. The minister noted that the state had decided to relieve the tax burden on labour by changing the income tax brackets, raising tax breaks, lowering tax rates, expanding tax brackets and lowering taxation of holiday allowances and performance bonuses. The government expects from companies to keep gross wages at the current level, so that employees get higher net wages, and to pay out as high holiday allowances as possible, he added.

The Slovenian Times | Spring Edition 2019

As soon as MHP took possession of Perutnina Ptuj stock, five of the nine members of the supervisory board were replaced with four MHP managers and Ljubljana lawyer Uroš Ilić, who was named chief supervisor. The supervisory board appointed a new management, which will be a mix of senior Perutnina and MHP staff. Enver Šišić, the new CEO, has worked at Perutnina since 1998 save for a brief stint as manager of Lactalis subsidiary Dukat in Croatia. Similarly, David Visenjak has been with the company since 2002. The third board member, Yevgeny A. Dranov, hails from the MHP Group, where he has worked as senior financial reporting manager.

The appointments wrap up what MHP said was its first such acquisition in Europe. The final transaction price will be revealed once all assets are priced at fair value. The company has repeatedly said it will invest in Perutnina and today reiterated its pledge to create new jobs, expand production and develop the Perutnina brand. "We’re glad to have closed the transaction and to start realising our ambitious plans," MHP Holding director Yuriy Kosiuk was quoted. He said the partnership made MHP the fastest growing poultry producer in Europe and was an important stepping stone on the way to making MHP a major player on the international poultry market.

Minister says govt had to intervene in sale of Istrabenz hotels Ljubljana, 22 February - Economy Minister Zdravo Počivalšek defended in an interview for Mladina the government’s decision to task the bad bank with suspending the sale of six Istrabenz hotels. He suggested the bad bank had engaged in a "covert agreement" to sell too quickly and too cheaply to a "wrong owner". The minister also argued against the privatisation of Abanka. The minister’s interview comes after the government tasked the Bank Assets Management Company (BAMC) with seizing shares of Istrabenz Turizem which the tourism company used as collateral for loans. The move was made just as the deadline for binding bids for Istrabenz Turizem, which owns six hotels in Portorož on the Slovenian coast and which has overdue liabilities to the bad bank, was about to expire. Počivalšek said that there was a "covert agreement" in the sale of the company, to which the government had to respond. He added that the BAMC had not followed the tourism strategy by wanting to sell "too quickly and too cheaply to a wrong owner". "What they were doing was a sabotage," the minister said, with the "wrong owner" possibly being a reference to Serbian businessman Miodrag Kostić, who has been mentioned as a prospective bidder for the six hotels. Asked whether the replacement of the management of the bad bank would be followed by

the replacement of Lidija Glavina, the chairman of Slovenian Sovereign Holding (SSH), he said he was satisfied with the "staff situation in the BAMC and SSH developing in the positive direction". The minister assessed that after the privatisation of the NLB bank, the third-largest bank Abanka should remain state-owned, "because we too are able to manage banks at least as well as some fund". He thinks that the commitment to sell the bank in exchange for the approval of the 2013 state-sponsored bailout should be re-negotiated with the European Commission. The resort town of Portorož; Photo: Tina Kosec/STA

Source: STA

Finance Minister Andrej Bertoncelj; Photo: Nebojša Tejič/STA

HETA ASSET RESOLUTION

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HETA Asset Resolution d.o.o. DunajsRa cesta 167 • 51-1000 Ljubljana For more information please visit our web page www.har.si or contact us by email: info@har.si.

Economy

IMAD:

Technological development among the most important megatrends in a long-lived society By Maja Bednas, Acting Director, Institute of Macroeconomic Analysis and Development

Demographic change and an increasing share of population over the age of 65 are calling for the existing systems and arrangements adapt in order to leverage the capabilities of the altered age structure. The Active Ageing Strategy, prepared by IMAD and the Ministry of Labour, is a key document in addressing the issue. The strategy, which the government adopted back in April 2017, has been drawn up bearing in mind the prevailing trends underpinning the economic and social development that will have a key impact on the society of the future and the responses to the ageing of society. Among the most important trends is also technological development. It has already accelerated changes in the economy and society, altering the nature and organisation of work. It will have an even stronger impact on the society of the future, especially on the responses to an ageing society. The adjustment to demographic change will take place in a dynamic environment driven by technological development and marked by rapid changes and transformations. The accelerating and intensifying introduction of digital and technological solutions in all fields is upending the environment that we live and work in. New technological products and services create new solutions which, in the context of a long-lived society, provide better opportunities in healthcare, long-term care, transportation and housing. In framing responses to the challenges of a long-lived society, the effective use of these achievements will be considered along with achievements in life sciences (neuroscience, genetics,

precision medicine, biotechnology and pharmaceuticals) as well as other complementary sciences. Digitalisation and the development of information and communication technologies are also creating new professions (with certain older ones disappearing) and transforming the modes of providing information and communicating. This will require an adaptation of educational systems and the strengthening of lifelong learning and training. New occupations and jobs will require a change of business models and an adaptation to the altered business environment â&#x20AC;&#x201C; both for businesses as well as individuals. This will make it easier to utilise the

Figure 1: The multi-faceted impact of technological development

The Slovenian Times | Spring Edition 2019

Economy benefits of technological development and digitalisation. Technological progress has also been driving a profound change in healthcare and longterm care. And while this has improved the quality of service and quality of life by reducing certain types of expenditure, it has also increased expenditure (i.e. non-demographic factors in healthcare). At the same time, integrated care, which blurs the boundary between healthcare and social services, has gained in importance. The social and healthcare systems will be sustainable in the long run only if a portion of traditional services is replaced by e-health and e-care services. This will also allow elderly people to live in their home environments longer. Technological development and digitalisation also entail certain risks. In terms of a long-lived society, the most notable ones include

transformation of established modes of communication, which tends to be easier for younger generations to adjust to. Digitalisation has also been changing the imaginary worlds of younger generations, which may affect communication and interpersonal relations. The widening of the digital gap between the "digitally literate" and the "digitally illiterate" therefore requires a reform of education and the creation of new support and advisory professions. The development of ICT and the possibility of direct communication on social networks will drive the growth of a "collaborative economy". This will affect the labour market (new employment opportunities with mostly non-standard forms of work) and the operations of the providers of products and services that are well represented in the collaborative

Figure 2: Positive effects of ICT development on a long-lived society

changes that may have a negative impact on the labour market, security, performance of large systems, communications and the ability to use the latest technologies. These effects are present at the social and individual levels. The society will have to adapt to digitalisation and rapid technological changes, which will improve the existing models of living, communication and transportation in many ways. However, they will also be challenging for users. Digitalisation will make communication easier, but it also entails the risk of widening the generational gap due to the

economy, while reducing costs for individuals and providing them with new sources of income. Technological development is thus an underlying megatrend or ongoing change at the global level which redefines the society and has a far-reaching impact on the lives of individuals, the economy, society and culture. It will affect the responses to demographic changes in all spheres of the economy and society, and should be broadly taken into account in conceiving responses brought about by the ageing of society.

Figure 3: Technological change and digitalisation entail certain risks

Spring Edition 2019 | The Slovenian Times

Economy Q On Dec 14, 2018, S&P Global Ratings affirmed its 'A+/A-1' long- and short-term foreign and local currency sovereign credit ratings on Slovenia. The outlook remains positive. As the S&P Global claims: "The country’s current account is in a substantial surplus, while net government debt is set to fall below 50% of GDP by 2020." What are your thoughts? A Country risk assessment provided by the

Interview: Professor Mojmir Mrak, Faculty of Economics, University of Ljubljana (FELU)

Recent issues show financial markets are relatively poor in predicting political developments By Tina Drolc, M.Sc., MBA

Mojmir Mrak is a full professor and a Jean Monnet Chair holder at the Academic Unit for Money and Finance at the FELU. He has also been a regular visiting professor at the Wirtschaftsuniversitaet (Vienna, Austria) and at Burgundy School of Business (Dijon, France). Based on more than 25 years of experience in designing and implementing the Slovenian Government’s policy in areas of international finance and EU economic policies, professor Mrak highlights in the interview that Slovenia should use the favourable international economic environment to intensify its structural reforms. From the global perspective, he says the world deals with political issues much more nowadays. This is in strong contrast with the period 10 years ago when economic issues were clearly in the forefront of policy debates. This shift from largely economic to primarily political challenges makes the world much less predictable than it was in recent decades. 10

The Slovenian Times | Spring Edition 2019

rating agencies is an important indication of how a particular country is perceived in the global economy. It should, however, be clearly said that changes in the rating typically come with a time lag and are behind the actual economic and political situation in a country. Just to recall Slovenia’s case. Though in the context of the recent crisis our economic performance started to deteriorate sharply and quickly already in 2009, Slovenia only experienced its first downgrading by the rating agencies two years later. So, the December 2018 affirmation of Slovenia’s rating should be assessed in this context. The rating rightly acknowledges significant positive developments in the country, especially high economic growth and the consequent decline of public debt as proportion of GDP. The other strongly positive development is that significant macroeconomic imbalances in the form of a large proportion of bad debts in the banking sector and large corporate-sector indebtedness have been largely eliminated. And finally, the growth drivers today are completely different than in the years prior to the 2009 crisis. At that time, economic growth was strongly driven by domestic consumption while today the growth is much more balanced and export based. This dramatic change is most clearly illustrated with the current account figures. While in 2007 Slovenia had a deficit of around 5% of GDP, now now run a surplus at an annual rate around 7% of GDP. Of course, high dependence of the country on the exports – it is logical for a small, highly open economy – is associated with certain risks as well. If the global economy cools down, which is actually already taking place, then this will quickly have negative implications on our export-based growth. Within this context, I am also not particularly happy with the recently proposed budget proposal. In my view, it is simply inappropriate or at least unwise that cyclically increased public finance revenues are by and large transformed into increased public expenditures with no clearly articulated structural reform agenda. In the current highly favourable international environment, public finance surplus should simply be higher than the one planned by the government. Similarly as before the 2008 crisis, we are again not using "good times" to strengthen the fiscal buffers

Economy for "bad times". It is more than obvious that the coalition composed of a rather large number of political parties is in fiscal terms a rather expensive governance structure.

Q What does the sale of the country’s largest bank, Nova Ljubljanska Banka (NLB), mean for the Slovenian financial system and economy? A Slovenia’s 2009–2013 crisis was a combination of banking and a sovereign crises. In 2013, our country was on the edge of a default and one of the main reasons were major weaknesses of the banking sector. The problem of this sector was addressed with a massive recapitalisation of major state-owned banks that was implemented under the state aid rules agreed with the European Commission. Under these agreements, Slovenia committed itself to restructure the near defaulted banks and then privatize them. The privatization of NLB should therefore be seen as a somewhat delayed implementation of the state aid commitment made in 2013. The method of NLB privatization that has been selected by the authorities reflects the realities of the banking industry in Europe these days, as well as the policy choices of the owner. In circumstances where selling to a strategic investor was not very realistic, the selected method of privatization seems to have been the most appropriate one. It allows the bank to remain an independent financial institution with a significant market share not only in Slovenia but in the region of South Eastern Europe as a whole. This is even more important at the time when some of the largest international banking groups have either reduced their presence in the region or plan to leave the region altogether. The privatization of the largest commercial bank in the country, however, poses a question to the authorities as to what strategy of financial sector development they will pursue in the country. Here I do not mean the banking sector only but the financial sector as a whole, including the insurance business and financial markets. Issues concerning the relationship between economic growth and financial sector development should also be addressed. One question within this context is, for example, the following. What kind of a role do the authorities envisage for the SID bank that will, in a not-so-distant future, remain the only important state owned bank in the country? This institution played a very important counter-cyclical role during the previous crisis. Should this role be continued or even strengthened?

Q Political uncertainty also raises questions about the shape of international trade, the outcome of Brexit and Italy’s budget. Could this affect the euro and how?

A If we first look at the global economy as a whole, it is these days being faced with a number of challenges. They range from geopolitical ones, including Donald Trump’s economic and especially trade policy, over macroeconomic challenges caused by growing debts and large differences in policies run by major central banks, especially FED and ECB, to the challenges associated with digitalisation and climate changes. Of course, all these global challenges affect the EU and the Eurozone in various ways. On the security side, Europe cannot rely exclusively on transatlantic partnership any longer. It will have to develop its own security and defence mechanism. The global economic and political governance is changing fast, and the status of the EU in the world is increasingly challenged not only by the US and China but also by EU’s large neighbours, Russia and Turkey. The weakening of the EU in a global arena is clearly visible in the Balkans, where the vacuum created by the de-facto fading commitment of the EU for expansion in the region is increasingly filled out by the growing presence of other global powers. Among other political challenges of the EU in the forthcoming period, Brexit, migrant issues and political changes in EU institutions seem to be the most pressing. On the economic side, the EU is still faced with an incomplete institutional reform of the Eurozone. Unfortunately, due to the lack of political appetite for further reforms in this area, they will probably be addressed no earlier than the moment we are faced with a new crisis. Experience namely confirms that the EU is ready to make politically difficult decisions in circumstances when they are absolutely necessary.

Q What are the highlights from the global monetary perspective after the UK leaves the EU? A Financial markets have proved to be rather good in predicting macroeconomic as well as business developments. On the other hand, these markets have proved to be rather poor in forecasting political developments. Let us be reminded about two first-class political events in recent years where financial market predictions were completely wrong. One was the election of Donald Trump for President of the USA and the other one was the outcome of the Brexit referendum. As unpredictable political developments are becoming the "new normal", it is realistic to expect that they will be accompanied with more intensified economic fluctuations as well as with more unpredictable changes in the global business environment. When we talk about implications of the planned departure of the UK from the EU on monetary policies of major central banks, it

really depends on the conditions under which Brexit will actually happen (if it happens at all). In case of a "hard" Brexit, we can expect a significant weakening of the pound over the medium-term term, although a part of this has already been integrated in the current price of the UK currency. This kind of a Brexit will also constitute an additional concern for ECB that is already challenged with weakening growth in the EU and softening fiscal and public debt commitments of some larger members, especially Italy and France. As far as the US dollar is concerned, its exchange rate developments over the next year or two are expected to be largely determined by the US domestic agenda as well as with its trade and financial relations with its major economic partners, especially China, the EU and Japan. Overall, it is realistic to expect that in the forthcoming period exchange rates among major currencies will fluctuate more intensively than in the recent past with political developments rather than economic fundamentals being the main reason for this increased volatility.

Q Growth is slowing in the euro area, while the EU parliamentary elections will happen in May 2019. Is the EU sufficiently prepared to withstand another recession and is there any correlation with the upcoming elections? A It has already been mentioned that the EU will face numerous political challenges in 2019, from Brexit through the EU parliamentary election to the formation of the new Commission and appointment of the new ECB president. The EU has never faced so many institutional changes within one year. Of course, this may mean that at the end of this year, the EU may look quite different from today. The EU faces all these institutional challenges in circumstances of solid economic growth and significantly reduced macroeconomic imbalances. In terms of its economic governance, as well, the EU is much better prepared for recession or even a new financial crisis than it was in 2008. For example, the financial sector, though not fully cured, is in a much better shape that it was a decade ago. Also, the euro zone’s institutional structure today is much better than at that time. On the one hand, crisis prevention infrastructure has been strengthened via the so-called "Six Pack", "Two Pack", Fiscal Compact and the banking union. On the other hand, euro zone has created a completely new crisis resolution mechanism called the European Stability Mechanism. So yes, the EU and eurozone are better prepared for bad times than they were a decade ago, but their institutional structure is still a work in progress.

Spring Edition 2019 | The Slovenian Times

Economy Interview: Dr. Vladimir Prebilič, Mayor of the Municipality of Kočevje

A story of success – The result of hard work By Tina Drolc, M.Sc., MBA

In 2016, the Yaskawa corporation from Japan, the largest global producer of industrial robots, made a decision to open its first European robot factory in Kočevje, Slovenia. As stated in the interview by the Mayor of Kočevje, this decision was the most positive news in recent years for the city which had been fighting unemployment, a decreasing number of children in schools and mass emigration of young people. Companies were not in favour of investments. Today, the municipality is making progress in line with the new requirements: after two decades, the Kočevje Grammar School has re -opened the programme for mechanical technicians; local companies are beginning to opt for investments and mutual integration; and the most forested Slovenian municipality has implemented a circular economy approach to wood management. Q Which municipal measures that attracted an investor as reputable as the Japanese corporation Yaskawa would you highlight? A In our case, the price of land was attractive as the municipality offered it at an exceptional EUR 5.2 per square meter. At the same time, the land was located beside an area equipped with the necessary utility infrastructure, meaning that the expansion of the utilities came at a relatively low cost. If this had not been not the case, the negotiations would have never been closed. After all, the Kočevje region is – in terms of its geographic – pretty remote and lacks the proper infrastructure found in Ljubljana, Maribor, etc. There are no nearby airports or motorways and the area lacks a gas system, which means we were never competitive to begin with. In the next stage of negotiations, we tried to determine what else an investor, who aims to invest EUR 25 million in the first phase and increase the added value to EUR 130,000 per employee, can get for the price we have proposed. The answer involved municipal measures. The first was a progressive relief of tax burdens in paying the community infrastructure levy – the reason was that each job vacancy created in the municipality partly relieves the tax burden, and in the case of Yaskawa, more than 25 new job vacancies were to be created. Thus, we agreed that Yaskawa 12

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would not pay the community infrastructure levy. The second measure was that we would cover the costs of all the utility infrastructure in the area that was not equipped with utilities upon the purchase. As we went deeper into the negotiations, we also assured the investor that we would provide our full support in obtaining the building permit as well as in communicating with the representatives of the Government and locals. In the end, the investor expressly requested that we conduct a geomechanical analysis of the land in an extremely short period of time – in two days, the investor received the document compiled in the English language. Doing so, we proved our capability and understanding of the matter.

Q What were the course of events and the timeline like? A We started our negotiations with the investor in autumn 2016. Yaskawa’s decision to purchase the land followed in January 2017. We signed the sales agreement in March 2017 at the Kočevje Cinema. People wanted to be there as this was a brand new opportunity for the local community. We laid the foundation stone in November 2017 and, in four months’ time, the investor obtained the building permit and all the necessary paperwork to commence construction. It is important to mention that the land was entirely owned by the municipality.

Q Has the arrival of a multinational company in the area affected the local labour market and how? A It most definitely has. Workers in our area were presented with a new job opportunity, which reflected in the raising of salaries within the municipality. On the other hand, entrepreneurs who have not invested in a number of years started making investments once again. This year, we are expecting five new companies who have entered new investments to open, totalling to approximately EUR 20 million of investments by other entrepreneurs in the local community. What we are dealing with is a positive spill-over. Another synergic effect is that entrepreneurs have started integrating with and talking to one another.

Q Do you aspire for other, similar investments in the municipality? In what ways are you adapting the municipal infrastructure – e.g. apartments and the qualified labour force? A We believe it is important to create a highly encouraging environment for the economy. Anyone who creates stable job vacancies with high added value and makes green-field investments is more than welcome. The municipality is working on several projects at once. For instance, we have restored the entire watersupply and waste-water system – not just in our municipality, but also in the municipalities of Sodražica and Ribnica. The total value of the project amounted to EUR 32 million, of which 85 % was covered by European funds. Today, the infrastructure in the city of Kočevje can support 30,000 people, which means we can expand threefold without the necessity to attract any new investments, for we already have it all (including sewage treatment plants, public lighting, roads, etc.). In the field of housing, there are two locations where a private investor has already begun the construction of residential buildings with 70 new apartments. At the same time, we are opening new study programmes, e.g. the programme for mechanical technicians, which we stopped implementing 17 years ago. The number of students enrolling in the Kočevje Grammar School has increased dramatically.

Q How would you describe the general attitude of your municipality towards foreign investors? What business culture are you working on and what are the opportunities you can provide the investors with? A In parallel with the economic development, we are investing in tourism and culture at an accelerated rate. In my opinion, high added value is the basic principle, which comes with

Economy technology-oriented and clean companies that abide by the principles of sustainable development. In the Municipality of Kočevje, where 90 % of land is protected under the Natura 2000 network, this is the basis. I do not consider this to be a limitation, but rather an advantage. The municipality has invested EUR 4 million of its own resources into tourism. We set up a hostel, multiple huts and a campsite. We would like to develop a non-mass tourism that is in harmony with nature. What we are looking for is the type of tourist who comes to the municipality, straddles a bicycle and explores the surroundings as well as our forests with their GPS. Companies have to be compatible with this kind of economic development.

Q What development aids has Kočevje received from the state in the past years? A We received no direct financial aid, but we did receive help in terms of infrastructure upgrades. After 50 years, we will finally get a railway connection to Ljubljana. We have managed to push certain projects, such as the crossregion bicycle track currently in construction. In a nutshell, we have always been doing our best in drawing up and implementing the projects which we acquired the funds for. At the moment, we have EUR 100 million worth of projects at the ready, and we are waiting for the opportunity for their implementation to arise. In the past five years, the state has invested approximately EUR 70 million in the region (namely for the construction of the railway, roundabouts, roads, broadband connections, bicycle tracks, etc.).

Q Kočevje is the most forested municipality (and region) in Slovenia. In what ways is the municipality supporting the wood industry and the Kočevski les company (a public company that manages the entire wood processing line)? A When I took over the leadership of the municipality and found that the municipality owns 4,000 hectares of woodland, I was interested in the profits, which at the time amounted to EUR 5,000 annually. I hardly believe it at first, but it truly was the case. In the first phase, we took care of the records, studied the situation in the field, etc. Then, we asked ourselves how we can use the situation to our own advantage. I decided for sales on the forest road. We got a purchaser through a public call for tenders, who cut down a proportion of the forest that was scheduled for felling by the Slovenia Forest Service. In one year’s time, we increased the annual profits from EUR 5,000 to EUR 500,000. As the wood was sold, I asked myself about the added value for the environment – the funds trickled into the budget, but no job vacancies

Dr. Vladimir Prebilič, Mayor of the Municipality of Kočevje

were created. The forest was purchased by an Austrian entity who cut it down and left, leaving carpenters in Slovenia with no other option but to buy "their" wood in Austria. I decided that Komunala Kočevje (the public utility company owned by the Municipality of Kočevje) would found the Kočevski les company to find someone who would determine the areas that would be felled, someone else who would do the felling, someone to take care of the transport and, lastly, a person who would cross-cut the wood – all here, in Kočevje. The wood would be dried in the municipal wood-drying kilns, for the Municipality of Kočevje has its own boiler with excess heat. The dried-up wood would then be sold to our carpenters. This is how we established a circular economy in our environment, which has created 50 new job vacancies and increased the added value – from a single

log to the finished table. At the moment, the company with three employees is worth EUR 2.5 million.

Q What is the situation with the export of wood like? A 60 % of our wood remains in Slovenia and 40 % is exported. This is because we do not yet have the sufficient absorption capacity among our local stakeholders to use it up. Therefore, the municipality does not profit much from this business model. It is true, however, that we are generating new job vacancies and that we have involved the secondary wood processing school in the matter. In exchange for providing them with the wood required in their learning processes, they take care of the urban culture within the municipality. Spring Edition 2019 | The Slovenian Times

Economy

Foreign investors on the Slovenian investment environment Zmago Skobir

Managing Director of Fraport Slovenija

"Slovenia is facing a major shortage of large land suitable for production and logistics projects with an adequate spatial arrangement and utility infrastructure. With the added value of good road connections and the immediate vicinity of the airport, Brnik has it all. The idea of an airport city is decades old and our company (author’s note: Fraport Slovenija, former Aerodrom Ljubljana), which manages the airport, has been buying land near the airport for the purpose of setting up a commercial and logistics zone. Lately, the latter has been flourishing, which is partly due to the opening of the long-planned bypass around the airport area. Investment activity could increase if the zoning plans included an adequately placed railway connection to the airport." Photo by Peter Irman

Dr. Johannes Köth

Head of Asset Management at SES

Slovenia is a prospective market with a modern structure. The EU-friendly political environment makes it attractive to investors. Employees are highly qualified and purchasing power has increased. Strong growth in retail sales and rental income confirm the overall positive development. In recent years, numerous international brands have entered the sought-after Slovenian market. Competition for the best brands is tough. Locations offering variety in the shop mix, higher visitor frequency and well-planned transport solutions are in demand. SES has introduced new brands to the country, for example Reserved and Nespresso. Primark is set to open its first store in Ljubljana in 2019. We have also helped Slovenian concepts, such as XYZ and Lisca, expand to other European countries. In 2018, SES injected around 27 million euros into the refurbishment of Citypark and Center Vič in Ljubljana. We are expanding with a new district shopping center in LjubljanaŠiška, which will feature 90 shops, restaurants and service outlets. The investment volume adds up to EUR 150 million, and the GLA amounts to 32,000 m². Ninety percent of the space has already been leased. The completion is scheduled for 2020, and 700 new jobs will be created.

Viktor Kastelic

Managing Director of cargo-partner in Slovenia

"Slovenia is located right at the crossroads between Western and Southeastern Europe – you can’t get around it. Luka Koper is one of the main gateways for goods coming from Asia to Central Europe, and Fraport Airport in Brnik is the second most important hub in the country. In recent years, the state has recognized logistics opportunities as a strategic industry at the highest levels, and is beginning to make investments to fully utilize this potential. Our iLogistics Center is just one stone in this mosaic of opportunity!" Photo by Ziga Intihar "The opinions expressed in this section 'In the Spotlight' are solely those of the contributors and are not necessarily supported by The Slovenia Times or its associates."

The Slovenian Times | Spring Edition 2019

Economy Q Today, the KLS Ljubno company has 260 employees, a 15-percent market share on the global scale and a 50-percent share at the European level. Which were the important milestones on this path to expansion? A I started my work in the metalworking in-

Interview: Bogomir Strašek, founder, director and owner of KLS Ljubno

Since purchasing the first robot in 2007, we have raised the salaries by more than 100 % By Tina Drolc, M.Sc., MBA Bogomir Strašek has been affiliated with KLS Ljubno for 47 years, in which time he has propelled the company to global success. Since 2000, the company’s productivity increased tenfold, accounting for exceptional profits and achieving an added value of EUR 115,000 per employee, which is nearly three times higher than the Slovenian average. Their starter gear rings are built into the engines motors of 28 car brands. At the January Gathering of the Managers’ Association, which was held on 30 January 2019, Strašek received the Lifetime Achievement Award for 2018 in the field of management, presented by the Managers’ Association of Slovenia Management Board.

dustry in Ljubno back in 1972. The working conditions were extremely poor, which meant we worked in shacks and under a hayrack. The milestones were as follows: in the period between 1972 and 1979, we produced simple steel structures and trained employees for the processing and treatment of steel structures. In 1978, we started producing starter gear rings, our main product today, for the former Yugoslav markets. From 1979 to 1989, the company grew, and so did the number of employees. We began vastly diversifying our product range and made technological advancements in steel processing. We also produced machines. In the period from 1990 to 1992, our orders dropped by 90 % due to the disintegration of Yugoslavia and the markets in eastern countries. With 128 employees, KLS Ljubno was in tatters. As a result, the period from 1993 to 1996 was a struggle to survive. We sought new markets and clients in the west, and restructured the company in terms of ownership. In 1997, we shifted our focus to a narrow production and marketing specialization, namely to the production of starter gear rings for flywheels used in car engines. 2000 marked the beginning of an accelerated technological development, machines and the automation of production processes. We implemented targeted leadership to ensure a continuous progress. We commenced the robotisation process in 2007. In 2011, the Strašek company became the majority owner, and then the sole owner of the KLS Ljubno company. In 2016, we began digitalizing all of our business and production processes.

Q In your production line, as many as 97 % of all production processes are automated and robotised. What was the transition to an automated and robotised production like from the point of view of investments, and how were the employees integrated in this automation and robotisation process? A Automation and robotisation are the keys to an increased production and, consequently, global competitiveness. As we began to specialise in in engine-starting products, among which starter gear rings represent the largest share, we mostly invested in modern machines and the automation of production processes. The first steps were difficult to take, so we started out by making small ones. We created little profit with our business at the time, which meant we had to get indebted to be able to purchase the machines and equipment re-

quired to increase our production. This is how we went about our business up until the crisis of 2008. Because we had invested in modern technology and production processes, we were well-prepared for new business opportunities after the crisis hit in 2008. We increased our production and sales, which also boosted the added value. The company debt was redeemed, so we were able to finance the development and investments with our own resources. Employees contributed a great deal in this development. A vast amount of time and money was allocated to employee training. They sensed that such a progress-oriented business strategy was right for the company and were highly motivated. Since purchasing the first robot in 2007, we have raised the salaries by more than 100 %. A high degree of robotisation and digitalisation in our processes demands highly skilled workers with extensive knowledge. Our average salary surpasses the Slovenian average by 23 %.

Q The starter gear rings produced at KLS Ljubno are built into the engines of 28 car brands. Can you briefly present your global operations, tell us where your company is present and where else you would like to expand? A KLS Ljubno and our products are present on all the important markets. Our market share in Europe surpasses 50 %, and our global market share equals 15 %. We export 15 % of our sales to China. This year, we will increase our exports to North America. We intend to increase our global market share of starter gear rings in the future. As the automotive industry is focusing on electric and hybrid motors, we intend to develop and increase the production of products for pure electric and hybrid vehicles, where we are planning to achieve a significant global market share.

Q What is your leadership philosophy like? Do you think that the leadership of businesses and people is changing with time? A My “leadership” is based on mutual respect towards everyone we cooperate with. This mutual respect represents our business culture, and our entire business policy is based on it. I lead by personal example, set high goals and demand a continuous progress. As people, global environments and values are changing, company leadership must adapt and change accordingly. In being a leader, a situation often arises when you have to test what works best in the given circumstances.

Spring Edition 2019 | The Slovenian Times

Economy

Ljubljana seen from the air. Photo: Tamino PetelinĹĄek/STA

Will a sunny forecast attract more foreign investments? By Simon Valentan

The value of foreign direct investment (FDI) in Slovenia has grown since 2013, when it fluctuated for several years during the economic crisis. In December 2017, FDI increased by EUR 174 million, and it totalled EUR 1.2 billion in 2018. As disclosed in the annual publication Direct Investment issued by the Bank of Slovenia, TNI reached EUR 13.7 billion at the end of 2017, which was 5.4% up on the end of 2016. In 2017, Austria was the most important investor, accounting for 25.6% of all FDIs, followed by Luxembourg, Switzerland, Germany and Italy. Slovenia wants to increase FDI to EUR 15 billion by the end of 2020. 16

The Slovenian Times | Spring Edition 2019

With the Fourth Industrial Revolution (4IR), humanity has entered a new phase. The 4IR has become the lived reality for millions of people around the world, and is creating new opportunities for businesses, governments and individuals. Where on this map of new opportunities is Slovenia? Virtually every country on the planet is striving to lure foreign investments. International rankings conducted by the World Bank, the World Economic Forum and others are in this regard an important factor, which can weigh in favour of or against an investment. The business environment, taxes and state incentives also play a crucial role. According to the World Competitiveness Report, which measures business regulations and their enforcement across 190 economies and selected cities at the subnational and regional levels, Slovenia ranks 40th in 2019. The projections of economic growth for Slovenia remain favourable. Real GDP growth is expected to be 3.4 % this year and around 3 % in 2020 and 2021, according to the Bank of Slovenia.

Fierce regional competition Slovenia, a natural jewel, has quite a fierce competition for FDI. Last year, American high-tech company EON Reality, which develops virtual reality software and could employ around 250

Economy high-tech personnel in Maribor, moved to Hungary due to refusal of state subsidies for the investment. Two years ago, we also fell short on the IBM’s centre for technological support. IBM chose Croatia, which was major publicity for our southern neighbour as an investment destination, according to Večernji list. Slovenia experienced first-hand that foreign investment is like trade and that if we could not attract it, investors would go elsewhere. "Even if the current geopolitical climate might seem less welcoming to international investment, Slovenia has made an effort to be more attractive in the past few years. There were a few instances a couple of years ago where Slovenia clearly left sight to international competition to attract major foreign investment. However, this was taken as a warning sign by most stakeholders in the country," says Jure Stojan, an economist and the Director of Research and Development at the Institute for Strategic Solutions. Therefore, Stojan thinks there is currently a great consensus in the broader political spectrum that Slovenia would be well advised to make itself more attractive to foreign capital. And to some extent is already has. The majority of foreign investments on the sunny side of the Alps are in sectors where Slovenia is traditionally strong or shows some competitive advantages in. For example, in automotive, electrical and machine-processing industries. Recently, there has been an increased interest in wood-processing and tourist industry investments. One of the most visible and highly anticipated investments was by the Canadian-Austrian automotive multinational Magna Steyr, which at the end of 2017 began building a paint shop in Hoče. The launch of experimental production was planned in early 2019, and regular production is expected in spring. Due to the favourable economy as well as highly educated workers, Slovenia also gained an important investment in the field of robotics. Namely, the Japanese company Yaskawa is setting up the first factory of industrial robots outside the Japanese and Chinese borders. In Kočevje, about 500 workers will be producing seven different types of robots.

an increase in liabilities from debt capital and revaluations of equity. The largest investor in the country is Austria. According to a survey by Advantage Austria Ljubljana, the official representative office of the Austrian economy in Slovenia, Austrian companies are the largest foreign investor in Slovenia with approximately EUR 3.5 billion in investments, which represents as much as 25.6 % of all FDI. Companies are active in virtually all sectors of the economy. Currently, there are more than 1,000 branches with majority Austrian capital in Slovenia, employing approximately 20,000 people. Economic cooperation between the two countries has traditionally been very successful, dynamic and has been increasing steadily to this year. About 60 % of respondents believe that the economic situation has improved in the previous year and will remain unchanged in 2019. The second largest investor country in terms of FDI value was Luxembourg, investing predominantly in the financial and insurance industry, but also information and communication as well as manufacture. Switzerland is no stranger to Slovenia either. The third largest investor can attribute the increase in the stock of FDI in reinvested earnings in the amount of EUR 83.1 million predominantly to manufacture, where Swiss investors also invested the most (73.5%), according to the Bank of Slovenia report. Germany holds the majority of its indirect investments in Slovenia via its Austrian subsidiaries (EUR 880 million), while the same also holds true of Mexico. German firms mostly invested in manufacture, wholesale and retail trade, the repair of motor vehicles and motorcycles, transportation and storage, real estate and the environmental sector (wa-

ter supply, sewerage and waste management). The fifth most important investor country was Italy, whose inward FDI in Slovenia amounted to EUR 1,129.6 million (8.3 % of the total) at the end of 2017, which is EUR 16.6 million on the previous year. These are not the only investors in Slovenia. Investors from the Russian Federation also act indirectly in Slovenia via their branches in Austria and the Netherlands. The US as the ultimate investing country held EUR 1,812.2 million of inward FDI in Slovenia at the end of 2017, with the majority of the investments held indirectly via affiliates in Luxembourg, Sweden, the Netherlands, Germany and Switzerland. Foreign capital mostly flows to the region of Central Slovenia, accounting for 61.0 % of the total at the end of 2017, followed by the Drava Region, Coastal-Karst Region and Upper Carniola. How can Slovenia improve the investment climate? There are two ways to attract FDI, says Jure Stojan. The first, which has been taken many times, is to try offer some type of incentive not only for foreign but for domestic capital as well. "In the past few years, a major shift in thinking occurred based on the realisation that if Slovenia is to be sustainably attractive to foreign investment, it also needs to work on the overall performance of its economy," Stojan concludes.

Even if the current geopolitical climate might seem less welcoming to international investment, Slovenia has made an effort to be more attractive in the past few years.

Map of Slovenia; Photo: Tamino Petelinšek/STA

The big four Foreign investors are mostly interested in three industries: manufacture, the financial and insurance industry as well as wholesale and retail. The largest absolute increase in inward FDI in 2017 was recorded in manufacture (32.9 % of the total), with an increase of EUR 274.4 million or 6.5 %. In the financial and insurance industry, FDI increased by EUR 128.2 million or 4.4 %. For the second consecutive year, a relatively large increase was also recorded in construction, where FDI increased by EUR 62.6 million or 40.7 %, largely as a result of Spring Edition 2019 | The Slovenian Times

Economy

Photo: Wikimedia Commons

British-Slovene Trade:

The Future

On 15 January 2019, the Institute for Strategic Solutions prepared a new study on the future of British-Slovene trade. It reviews the current state of trade relations between Slovenia and the United Kingdom, and suggests how they can be strengthened. The Slovenia Times is publishing key takeaways from the report.

EU membership Trading relationships between Slovenia and the UK have not fundamentally changed with membership of the EU and the single market. When producing exports destined for the other country, both Slovenia and the UK have been using less and less input from other EU member states (e.g. materials, components, and technology, also known as 'foreign value added'). From 2000 to 2014, the share of EU-sourced value added in Slovenian exports to the UK decreased slightly from 23.7 to 21.8 percent. As for the share of EU-sourced value added in British exports to Slovenia, it has been falling continuously since 2011, from 11.0 per cent to 9.8 per cent in 2014.

Potential areas of growth in trade Slovenian exports to the UK should grow as the UK represents an attractive marketplace

The Slovenian Times | Spring Edition 2019

for Slovenian goods. Slovene businesses have untapped potential across several product categories where the UK market has provided a thriving destination for exports from smaller countries. For instance, beverages, spirits, wood and wooden products, leather goods, gastronomic products, pharmaceuticals, glass and glassware, and dairy produce all have promising opportunities in a post-Brexit UK. UK-based businesses are well-equipped to provide specialist services and support the Slovenian privatisation process. Furthermore, considering the challenges Slovenia is currently facing in upgrading its banking and financial sectors, the City of London is ideally positioned to help.

therefore advisable that Slovenia attract more FDI from the UK. It also suggests Slovenian businesses should consider investing more in the UK. The highly competitive British economy, with its multiple opportunities and specialised niches, is an ideal place to help Slovene brands launch globally. The whole report is available at http://www.bscc.si.

Investment Labour productivity of UK-owned companies in Slovenia is outstanding, well above the Slovenian average but also outperforming other foreign-owned companies in the country. It is

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Economy

Delight beyond satisfaction! As we are bombarded with choices and buyers become increasingly educated, quality matters more than ever. Through his vast knowledge and experience, Noriaki Kano—a world-famous quality guru, distinguished professor at the University in Tokyo, lecturer, writer and consultant—has developed a customer satisfaction theory best known as the Kano model. His rudimentary classification differentiates between basic and advanced attributes relating to the concepts of quality as perceived by customers. "There are many facts that need to be taken into account when discussing the proper attention to quality," he says. "In general, we could say that the trend is negative as today’s senior managements frequently (only) consider the lowering of costs – wherever possible – and quality management often makes this list. Such an approach is highly dangerous and I believe that the organisations who abide by it have no chance of survival in the long run. I think that organisations should invest in the retraining of their managers and quality managers." Many people forget that the final decision is up to the customer. While it may seem that the companies spread their messages are the ones getting the most attention, quality is actually a strong attribute that simply cannot be denied. "Customer expectations are exceptionally high and their impact is so powerful that no com-

pany or organization can do business successfully without catering to their customers’ expectations," Kano says. "Aside from this, it has been proven that customer satisfaction is not enough for success in business—customers have to be delighted with our products and services. This calls for a giant step forward from customer satisfaction to customer delight."

Bureau Veritas, a brand with traditions spanning over more than 190 years, is organizing two events for everyone interested of the importance of quality. The traditional BV Quality Day will take place on April 17 at the Congress Centre in Brdo, where the participants will be familiarised with the novelties and success of practical solutions. The event will also provide an opportunity for mingling with customers certified in accordance with the ISO standards. Noriaki Kano will be a key note speaker, while several other lecturers will follow his introduction speech

covering customer satisfaction based on the Kano model. During the followig two days, Kano will deliver a comprehensive two-day Toral Quality Management seminar. It will be held in Radisoon Blu Plaza Hotel on 18th and 19th April. Kano strongly advocates for the concept of promoting and maintaining all kinds of quality. "With the dawn of the industrial era, quality assurance first became a major topic in the function of quality, and later in the broader management within the development environment, both in terms of sales and services. Thus, it has become part of the comprehensive mangement and leadership process. Moreover, in this century, customer satisfaction has become the objective not only in industrial companies, but also in all kinds of organisations, providing services including government authorities." The 24th annual event, Quality day organised by Bureau Veritas, has become the synonym for integrity and technical excellence—two notions advocated by the company. Participants, quality managers and everyone who works and deals with quality will get first-hand advice on how they can re-establish quality from the top of to the bottom of their company hierarchies.

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Spring Edition 2019 | The Slovenian Times

Economy

Dimitrij Zadel, President of the Management Board, Port of Koper

Interview: Dimitrij Zadel, President of the Management Board, Port of Koper

Port of Koper business and competitive advantage depend on railway efficiency among other By Tina Drolc, M.Sc., MBA

In 2018, the Port of Koperâ&#x20AC;&#x2122;s earnings before interest and taxes (EBIT) amounted to EUR 70 million, which is 90 % or 33 EUR million more than in 2017. The net return on equity (ROE) was 16.1 %. As stated in the interview by the President of the Management Board, favourable results and record throughput at the Port of Koper in the past year were reported in both key categories of goods, namely containers and cars. This year, the Port of Koper is planning to build a new multi-storey car park. According to Zadel, the implementation of new measures in terms of vehicle storage could make it possible to increase total annual car transhipment by 162,000. Zadel claims that the Port of Koper Group is planning investments totalling to EUR 71.7 million, and touches upon the second track, "When we were accepting the new business strategy back in 2015, we speculated that we would tranship around 35 million tonnes of goods by 2030. We are currently developing a new strategy, which will be adapted in line with the construction plans for the second track."

The Slovenian Times | Spring Edition 2019

Economy Q What were the EBIT and ROE values in 2018? Were they higher than in 2017 and what could you attribute this to? A In 2018, the Port of Koper Group’s EBIT

first quarter next year. What this means for the Port of Koper is the optimisation of port logistics, as the area will be linked with a new cargo entrance which we are currently finishing and which will commence operation in April this year. Due to the overcrowded storage and handling facilities, an internal optimisation of traffic and logistics is more than welcome.

amounted to EUR 70 million, which is 90 % or EUR 33 million more than in 2017. Without taking into account the one-off event in which we received a compensation of EUR 9.6 million and without taking into account the provisions for liabilities arising from legal obligations from 2017, which amounted to EUR 15.7 million, EIBT increased by 15 % or EUR 8 million in 2018 in real terms when compared to 2017. The net ROE was 16.1 % in 2018.

Q You are also planning on building a new multi-storey car park this year. What is the value of this investment and the extent of the planned construction? What would you say the main motive behind its construction is?

Q The trend of growing container and ve-

A The multi-storey car park is part of a larger

hicle transhipment volumes continued in 2018. What were the numbers like last year and which markets dominate the two categories?

A In 2018, 24 million tonnes of goods were transhipped, which is 3 % more than in 2017, representing the record annual throughput in the history of the port. The highest-ever monthly throughput was recorded in March 2018, amounting to 2.3 million tonnes of goods. Excellent results and record throughputs at the Port of Koper last year were reported in both key categories of goods, namely containers and cars. The throughput of TEU containers increased by 8 % or 988,000, and the throughput of cars by 3 % or 754,000. In terms of containers, we still hold the primacy in the Adriatic Sea, and we have one of the largest terminals in the entire Mediterranean. Our key landlocked markets are the countries of Central Europe, primarily Austria which accounts for a third of our annual throughput. It is followed by Hungary, Slovakia, Italy, the Czech Republic, Poland and Germany. In the Far East, our key markets include China, South Korea and Japan. Traditionally, we are also bound to the Mediterranean markets.

Q The plans for the Port of Koper also foresee the construction of a third pier, which would provide two or three additional berths for RORO ships. The price for the construction of the accompanying railway tracks (3.4 kilometres total) is EUR 12 million, 30 % of which shall be financed by the EU. When will the pier be finished and what is its significance for the Port of Koper business?

A It is not a third pier per se, but an expansion of the multi-purpose terminal already in existence that will provide additional berths. The berth site and group of railway tracks, which will connect the coast to the railway network, are scheduled to commence operation in the

project aimed at increasing the capacities of the car transhipment terminal, which also foresees a construction of the new berth for RORO ships in the third pool, the construction of new railway tracks beside the pool and the acquisition of additional land lots for the storage of cars. All this will contribute to a more efficient operation and increase the transhipment of vehicles. It is estimated that the new multistorey car park and other measures relating to the storage of vehicles will make it possible to increase the throughput by 162,000 cars annually.

Q Are there any projects planned in the upcoming years that would require a foreign investor? A In accordance with the Concession Contract, only one concessionary may invest in the port infrastructure, and that is the Port of Koper. Nevertheless, this does not mean that we are not open to other forms of cooperation in the event of commercial interest.

Q What competitive advantage does the Port of Koper hold over the neighbouring ports? A The most notable difference between us and our neighbouring ports is the organisation of business itself. Koper is the only port in the region without a port administration. This enables a greater flexibility and synergic effects in the port, managed by a single entity (compared to other ports, which are divided among private terminal managers), and makes it possible to faster adapt to the demands and wishes of the clients. The business of the Port of Koper and its competitive advantage in relation to other ports also depend on the efficiency of the railway. After all, the Port of Koper has one of the highest railway transhipment percentages in Europe, despite the fact that it only has a single track connecting it to the railway network. To compare, Koper tranships approximately

The most notable difference between us and our neighbouring ports is the organisation of business itself. Koper is the only port in the region without a port administration.

24,000 trains annually, which is three times as much as the neighbouring Trieste. However, we are not fond of competitive discourse with our neighbouring ports, as it is in our best interest that the entire region develops together, becoming a viable alternative to the ports in Northern Europe.

Q On 24 January, The Slovenian Government has approved the investment programme for the construction of the Divača–Koper second track, which should be constructed by 2025. In what ways will the construction of the second track affect the business of the Port of Koper? Which numbers do you reckon will change the most?

A Koper is a transit port and around 60 % of the cargo is transhipped by trains. This means that our business depends highly on an efficient railway link. According to our development plans, the transhipments will increase in the port, thus we need additional railway capacities. When we were accepting the new business strategy in 2015, we speculated that we would tranship around 35 million tonnes of goods by 2030. We are currently developing a new strategy, which will be adapted in line with the plans for the construction of the second track.

Q Once the second track is completed, are you planning any infrastructure or market expansions?? A The Port of Koper Group is planning investments totalling to EUR 71.7 million. In addition to the new group of tracks, berths for RORO ships, multi-storey car park and the new lorry entrance into the port, another key project is the expansion of the first pier and, consequently, extension of the container terminal coastline. All these investments foreseen in our strategic business plan are aimed at increasing the port’s capacities. This will enable a larger transhipment of goods, a faster turnover of goods, an improved efficiency of the port operations and a higher competitiveness of the port. Spring Edition 2019 | The Slovenian Times

Regional Insight in Association with S&P Global Overview • We expect Slovenia’s economy will continue to expand over 2019-2021, but at lower growth rates of 3% on average. • The country’s current account is in a substantial surplus, while net government debt is set to fall below 50% of GDP by 2020. • We are affirming our 'A+/A-1' long- and short-term sovereign credit ratings on Slovenia. • The outlook remains positive.

Rating Action On 14 December 2018, S&P Global Ratings affirmed its 'A+/A-1' longand short-term foreign and local currency sovereign credit ratings on Slovenia. The outlook remains positive.

Research Update:

Slovenia 'A+/A-1' Ratings Affirmed; Outlook Remains Positive By: Ludwig Heinz, Primary Credit Analyst, S&P Global, Frankfurt Karen Vartapetov, PhD, Secondary Contact, S&P Global, Frankfurt Himani Joshi, Research Contributor, CRISIL Global Analytical Center, an S&P affiliate, Mumbai

* This article is a fragment of the report: "Slovenia 'A+/A-1' Ratings Affirmed; Outlook Remains Positive".

Outlook The positive outlook reflects Slovenia’s rapidly declining government and external debt burdens amid improving economic fundamentals. We could raise the ratings on Slovenia over the next 12-18 months if Slovenia’s economy continues to expand without any build-up of macroeconomic imbalances, leading to further income convergence toward the EU average. We could also raise the ratings if government debt continues to decline further or if contingent liabilities deriving from the large state-owned enterprise sector were to decline. We could revise the outlook to stable if imbalances emerged–for example in the labour and housing markets–with adverse implications for economic growth or financial stability. We could also revise the outlook to stable if we observed that the Slovenian economy were becoming increasingly unsynchronised with that of the eurozone, via higher price and wage inflation than its trading partners.

Rationale The ratings on Slovenia reflect the country’s educated workforce, its eurozone membership, and the benefits the country enjoys from the European Central Bank’s (ECB’s) monetary policy as a small open economy. The ratings also reflect Slovenia’s strong external performance, driven chiefly by its export-oriented manufacturing sector, as well as sound fiscal results. We also factor into our ratings Slovenia’s high GDP per capita, strong recent growth rates, and the broad stability and effectiveness of the country’s institutional framework.

Institutional and Economic Profile: Growth is set to moderate slightly, as focus shifts to domestic demand • We project Slovenia’s economic expansion will moderate to 3% on average over 2019-2021, following a brisk expansion in 2017-2018. • Despite increasing external demand uncertainties, export growth continues to exceed headline GDP, as does investment growth (since last year). • The government comprises five parties with different policy priorities following this year’s elections, but we expect broad policy continuity in the next two to three years. Over the next few years, there are grounds for cautious optimism. Despite slowing eurozone growth, Slovenia’s exports continued to rise at an elevated pace in the first three quarters of 2018, alongside rising imports. Exports of goods and services now make up over 85% of GDP

The Slovenian Times | Spring Edition 2019

Regional Insight in Association with S&P Global compared with 70% in 2011. At the same time, investment growth continues to be buoyant, with investments rising in the construction segment as well as in machinery and equipment, which confirms resilient confidence in Slovenia’s export-oriented manufacturing sector. Despite a tightening labour market, private consumption has, in contrast, remained sluggish. This partly reflects subdued wage inflation of 3% year on year (yoy) in Q3, 2018, alongside households’ high propensity to save. Despite this, we still expect a pickup of private consumption commencing in 2019, supported also by a somewhat looser fiscal stance. While a relatively high concentration of automotive-related exports remains a risk, we think that the third-quarter slowdown in manufacturing, especially in Slovenia’s auto sector, could prove temporary. As there was a similar slowdown in other countries, notably in Germany, related to the implementation of new emission standards, we anticipate that manufacturers will makeup delayed production toward year-end. Capacity utilisation rates in the Slovenian auto sector remain high. During the third quarter of this year, the unemployment rate fell to 5%. Nonetheless, nominal wage growth has remained sluggish, at just 3% yoy in the third-quarter of 2018. During the summer months, rising immigration from neighbouring countries accounted for more than half of the total employment increase. These workers, traditionally from former Yugoslavian countries, are often employed in sectors with belowaverage wages, such as construction. Other medium-term macroeconomic risks include rising real estate prices, given the inadequate supply response to high demand. The Harmonized Index of Consumer Prices indicated that inflation rose to 2.3% in October, chiefly driven by external price developments. We think that inflation will largely remain in line with the eurozone average, and the tightening labour market could drive core inflation up from its current level of around 1%, when wages pick up. The outcome of the June parliamentary elections reflects the fragmentation of Slovenia’s political landscape, with nine parties represented in parliament. The new coalition government consists of five parties and policymaking could be complicated by diverging opinions among coalition partners. However, we think that overall policy consensus is ensured, for example regarding fiscal policies. Progress might be slower in key reform areas such as health care, pensions, and long-term care. Further privatisation of government-owned entities is also likely to be unhurried because of limited approval from the electorate and in the political realm. We think that long-entrenched political patronage and only slowly improving institutional and corporate governance could hamper the pace and effectiveness of growth-enhancing structural reforms. Progress on structural reforms and on reducing the state’s role in the economy is likely to be sluggish. This could potentially slow Slovenia’s economic restructuring and prevent a more efficient allocation of resources in the economy, with negative implications for future economic growth.

Flexibility and Performance Profile: Fiscal and external balance sheets have significantly improved • Government debt remains on a firm downward trend. • We expect that the government will use proceeds from the recent sale of a 60% share in Nova Ljubljanska Banka (NLB) to reduce debt. • We expect that the current account will remain in a surplus exceeding 6% of GDP on average in 2018-2021. We project end-2018 net general government debt at 53% of GDP in 2018 versus 62% two years ago. In November, the government sold 60% of the country’s largest lender, state-owned NLB, with an option to extend the sale to 65% depending on the performance of stabilisation activities.

We expect that the government will use 90% of the sale revenues for debt reduction, which decreases net general government debt by over 1 percentage point of GDP. In line with its commitments to the European Commission, we anticipate that the state will further decrease its share in NLB to 25% by the end of next year, and corresponding sales revenues will further contribute to debt reduction. We think that contingent liabilities related to large governmentrelated entities (GREs) are still sizable, although we note that government guarantees are on a declining trend. Moreover, Slovenia’s strong economic performance also benefits the financial performance of its GREs and hence mitigates the risk for the government. As with our treatment of debt of all asset-management companies ("bad banks"), our estimates of Slovenia’s gross and net general government debt include obligations related to the Bank Asset Management Co. (BAMC) issued to purchase loans and other distressed assets from participating Slovenian banks at a discount-to-market value. At the same time, we exclude from the general government debt stock the guarantees related to the European Financial Stability Facility (EFSF). For 2019, we expect another small surplus as strong cyclical revenue growth will surpass expenditure growth. Therefore, higher expenditures for example on social spending or public sector wages, but also on investments coupled with higher EU fund absorption, will not endanger the goal of a small surplus, as buoyant employment growth supports tax revenues. We also note that Slovenia’s primary balance is set to remain positive until 2021. Nonetheless, we anticipate spending pressures to rise, resulting in contained general government deficits in 2020-2021 according to our projection. That said, we think that the new government will respect Slovenia’s fiscal rules, which set limits for general government expenditure. Despite currently sound nominal fiscal results, ongoing and upcoming budget discussions will be an indicator for the fiscal policy trend in the coming years, and we expect disagreements with the European Commission over Slovenia’s structural fiscal effort to drag on. The commission and the authorities have different views on the approach that determines the structural fiscal effort required by Slovenia. The authorities’ success in lowering the interest bill on government debt, supported by the interest rate environment and accommodative monetary policy, has supported fiscal performance. Slovenia reduced its interest payments relative to revenues to below 5% on average in 2018-2021 down from over 7% in 2014-2016. Active debt-management exercises over the past few years have helped lock in favourable interest rates. Slovenia’s high current account surpluses have enabled the Slovenian economy to improve its external balance sheets substantially. This, coupled with the export- rather than credit-driven growth in recent years is a key difference to the pre-crisis growth phase that led to the buildup of macroeconomic imbalances. Driven by resilient performance of Slovenia’s competitive export-oriented manufacturing sector, and rising services exports, the current account surplus will average around 6% of GDP in 2018-2021. Rising domestic demand and imports related to EU structural funds will contribute to a slight decline over the forecast horizon. That said, Slovenia is exposed to external macroeconomic risks via its exports. For example, Italy remains Slovenia’s second most important trading partner, but we think that risks through trade or financial sector linkages are relatively low, due to Slovenia’s economic and export diversification. Copyright © 2019 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 2019 | The Slovenian Times

Political Overview

Pahor tells Sky News EU short delay of Brexit possible London, 2 March - President Borut Pahor, who recently concluded an official a visit to the UK this week, has said in an interview with Sky News that the EU member states could agree with a short postponement of Brexit. "I think Slovenia and a lot of other countries would say yes" because "no one wants to see a hard Brexit in a chaotic way." Speaking to the British TV station, Pahor added that Britain needs to show "clarity and consensus" and come back to the EU with a plan MPs can approve. The Slovenian president’s comments come as the EU’s chief negotiator Michel Barnier said he was ready to give the UK more guarantees that the Irish backstop was only intended to be temporary. Pahor said he wanted a compromise on the Irish backstop to be found, but added that Slovenia would not approve a deal that Ireland disagreed with, according to the website of Sky News. "It is not clear at the moment if United

Kingdom has a clear position on some sort of compromise solution and if it fits the requirements of the majority in the House (of Commons)," he said in the exclusive interview. Pahor believes that a delay to Brexit would not make a compromise any easier to find and expressed concern the European Parliament elections at the end of May could cause problems. "If Brexit would become an issue of political campaign among the 27, I think this could even make more difficult the whole framework of negotiations between London and Brussels," he added.

Šarec accepts Leben’s resignation as environment minister Ljubljana, 27 February - Lavishing praise on the work of Environment Minister Jure Leben, Prime Minister Marjan Šarec announced on Wednesday that they had come to a conclusion that it would be hard for Leben to continue in his job whilst investigation is under way over his role in the previous term in a tender related to the Koper-Divača rail project. "We made this decision with a heavy heart," said the prime minister, underlining that they had made the decision together after a lengthy talk. He added that he would be happy to work together with Leben in any other capacity in the future if no fault is found with the outgoing minister for the tender for a scale model of the Divača-Koper track, a project Leben oversaw in his capacity as Infrastructure Ministry state secretary. Šarec said that Slovenia had not had an environment minister like Leben for 15 years. "He was the first after a long time to start moving things [at the department], the first to be out in the field, the first to regularly report to me about all activities, be it Saturday or Sunday or any other day of the week. He really cares about this department." The prime minister underlined that he would demand that Leben’s successor kept up the work he started and the pace he had set. He believes that the Modern Centre Party (SMC), which got the department in coalition talks, would provide a good candidate but "I will

The Slovenian Times | Spring Edition 2019

reserve my right to decide whether the candidate is appropriate for the job". "Minister Leben has done a very good job, he will continue doing it until his successor is appointed and I want the same work continue at the ministry." The prime minister also expressed surprise that the alleged wrongdoings had only been voiced now, wondering why the people who "now claim to have known a lot" had not acted earlier. Today’s announcement comes after weeks of speculations about a 2017 tender for the track scale model in which the more expensive of the two bidders got the order, only to hire the cheaper bidder to actually make the model, which had ultimately not been paid. Prime Minister Marjan Šarec; Photo: Bor Slana /STA

Interior Minister Poklukar attends Brdo-Brijuni Process conference Skopje, 26 February - Cross-border security challenges were in the focus of a conference as home affairs ministers from the Brdo-Brijuni Process, an initiative encompassing the Western Balkans, met in Skopje, North Macedonia, on Tuesday. They shared a view that such challenges could only be successfully addressed through efficient cooperation. Slovenia’s Boštjan Poklukar said initiatives such as the Brdo-Brijuni Process facilitated better cooperation and the search for common answers to the challenges in the region, the Slovenian Interior Ministry said in a press release. The 8th conference of Brdo-Brijuni Process interior ministers was held in collaboration with the Integrative Internal Security Governance (IISG) in the Western Balkans. The IISG is a new approach to internal security governance capacity-building and reform introduced by Brdo-Brijuni Process members with the support of international and European organisations, including the European Commission. "I’m glad the initiative effectively supports Western Balkan countries in transferring EU standards regarding police work, border security and the fight against the most dangerous threats to internal security," Poklukar was quoted as saying. "In this manner the IISG significantly contributes to improving the security situation in the region," said Poklukar, the presiding member of the Brdo-Brijuni Process. The IISG was also praised by his Macedonian counterpart Oliver Spasovski, saying it was a means of enhancing external cooperation, but noting that Western Balkan countries should more efficiently use the assistance coming from EU members. The director of the Slovenian intelligence agency SOVA, Rajko Kozmelj, bid farewell as the head of the IISG, and was replaced by Ramiz Huremagić.

Source: STA

Politics 2019 European elections:

The moment of truth for Europe and a window of opportunity for Slovenia By Charles Nonne

On 22 October 2014, in the wake of a painful continental debt crisis, the newly elected European Commission President Jean-Claude Juncker coined his team a "last chance saloon". Five years and several new crises later, with populists on the rise, the prospects of the Old Continent may not be as grim as they seem.

Painful challenges and discrete achievements Historians may remember recent years as the very moment when a member state left the European Union for the first time in history. The bloc’s unity is vacillating after having dealt from day to day with existential crises, from the rise of populism to the 2015–16 migration crisis, let alone the heated debate on the rule of law across Europe. Mistrust remains rampant. According to a 2018 Eurobarometer survey, 48 % of Europeans claim not to trust the EU, including 56 % of Slovenes. The EU’s eastern and south-eastern neighbourhood is prone to instability.

The current turmoil overshadows several good news stories on the economic side. The European sovereign debt crisis is now behind the bloc, with even Greece showing signs of solid recovery. Launched in 2014, the "Investment Plan for Europe" triggered more than EUR 315 billion of private and public investment in the real economy all over Europe. In July last year, Jean-Claude Juncker defused a looming trade war with the United States after meeting with US president Donald Trump in Washington. South of the Alps, Slovenia recorded sustained growth. Its handling of the refugee crisis, though not beyond reproach, did not wreak havoc. Its past and current governments have proven unexpectedly stable. Many prospects persist for digitalisation and the circular economy.

A chance for solid hard-fought compromises Less than a hundred days before the European elections, populist and Eurosceptic parties are on the rise. The political map of Europe is shifting towards the siren songs of nationalism and protectionism against the backdrop of disillusion towards traditional politics. The historic alliance between the moderate right and the social-democrats may well lose its majority for the first time. According to recent estimates, their MPs may plunge to 45 % of the share of seats from the 53 % today. The EU’s agenda has rarely been filled up with so many much-needed reforms, among which are also the reinforcement of the Schengen area, tough negotiations on the new Multiannual Financial Framework and increasingly impatient candidate countries. Other lessknown issues also abound, such as the need to elaborate a digital single market, the finalisation of the Banking Union and the struggle to reach a net-zero emissions target for 2050. In the aftermath of the Brexit saga and hitherto unseen rifts among member states, high achievements are not yet unlikely. Minority coalitions are sometimes prone to govern better, as the Slovenian case shows. Results may well hinge upon the personality of the future president of the European Commission, on the EU’s ability to bring together people from all sides of the political spectrum as well as on constructive states.

The rebirth of an "Adriatic Tiger" Slovenia will face its share of challenges. Among the first tests for the country is the choice of a new Slovenian Commissioner, which may well remain the popular Violeta Bulc or fall to another charismatic leading figure with a strategic portfolio. Yet, the major future opportunity for the country is Slovenia’s presidency of the EU

Charles Nonne is a political analyst and press correspondent based in Ljubljana, specialised in European affairs and the Western Balkans. He is currently working for media outlets and think tanks both in France and Slovenia, among which is also the French-speaking newspaper Le Courrier des Balkans. He co-founded a Slovenian youth association called the "Association for the promotion of European values and federalism – Društvo Mladi Evropejci", which endeavours to share knowledge and awareness about European issues among the Slovenian youth.

Council in the second half of 2021. Although less significant than in 2008, the event will be a unique occasion for the country to showcase its potential, to try and shape niche policies in which Slovenia could have a strong voice and to strengthen its presence and expertise in EU institutions. In the long term, the country must brace itself for unexpected new troubles and identify its weaknesses in the light of the threats Europe is facing. To some extent, the changes taking place in the Western Balkans might cause a decreasing interest in the matter in Brussels, which could be a new chance for Slovenia to take the lead on some regional issues. Europe may take a path that is perilous for the Slovenian economy or stability, with the country having little influence to change the course of events. For the six months to come, with a lame-duck European Commission, Brexit becoming a reality and a new balance of power being shaped, the ball is now in the court of Slovenian political parties. Spring Edition 2019 | The Slovenian Times

Politics

Khm?!

Column

The Day after the European Parliamentary Elections By Boštjan Lajovic

This year’s European Parliament eletions will be held on May 26, a day after which was not long ago celebrated as the Day of Youth. This day had a special meaning in Slovenia. Announcing election results is never an enviabletask, especially in the case of the European Parliament. These elections differ from others, such as Slovenian parliament or local elections because they concern representation in the European Union.

The Slovenian Times | Spring Edition 2019

The List of Marjan Šarec (LMŠ) came in second in last year’s parliamentary elections, lagging far behind the victorious Slovenian Democratic Party (SDS). Nevertheless, LMŠ has managed to form his government by being politically savvy. Two months later at the local elections, LMŠ failed to achieve better results. They even lost in Kamnik, the political springboard of the new Prime Minister, who successfully lead the city as the mayor for two terms of office. The elections to the European Parliament are fundamentally different from the Slovenian parliamentary elections because they are organized according to the principle of proportionality, meaning that each state is a single constituency in its own right and that voters have the option of a preferential vote, which they can use to express their support for a specific candidate. Thus, parties have a far lesser impact on the elected Members of the European Parliament (MEP’s) than they do in parliamentary elections, where a party can greatly influence who will make it into the parliament by selecting a constituency and a district. A well-known example dates back to 2004, the year Slovenia first elected MEP’s. While Borut Pahor came in last on the list of candidates proposed by the Social Democrat Party, he won due to overwhelming preferential votes. Hence, it only matters who the candidate is and not so much which party they were put forward by, which poses another problem for party strategists. Despite the tempting pay and other privileges enjoyed by MEP’s, there is a lack of prominent personalities in Slovenia who are interested in being politically engaged, even when it comes to the European Parliament. Another important element that always influences the results is voter turnout. Slovenia is among the EU member states where voter turnout is the lowest. In 2014, the turnout was just under 25 percentwhile in both 2009 and 2004 it was well over 28 percent. By comparison, the average among EU member states ranges between 42 percent and 45 percent. This is considerably higher than it is in Slovenia, but this still raises the question of legitimacy and the issue of the so-called democratic deficit which the leaders in Brussels have been tackling unsuccessfully for quite a while. In this regard, it is noteworthy that in the 2014 European Parliament elections, the voter turnout in Slovakia only amounted to 13 percent whichis below the legitimacy limit. Another problem relating to the voter turnout in Slovenia should be noted. Among the youthwho, according to a Slovenian saying, are the pillars of the world (or the future of the EU) only amounted to 15 percent. Nevertheless, there have been positive developments in terms of the Slovenian voter turnout. Both in the last parliamentary as well as local elections, voter turnout was sur-

prisingly higher than usual. The expectation that the positive trend will continue in the European elections this May is reasonable. The hopes for a better turnout are based on the general political climate in Slovenia, which has not been optimistic in a long time. As many as 70 percent of people have assessed the government’s work as successful, which is a record as far support goes. According to expectations, this should also reflect in a higher voter turnout, at least to some extent. This is where the trouble faced by Prime Minister Marjan Šarec, who voters quickly grew fond of, begins. In merely five months, Šarec took the first place in political popularity, even defeating Borut Pahor, the undisputed king of such rankings in the past decade. Marjan Šarec will not be running in the European elections. Without him, the LMŠ party is–at least for now–like a car without fuel. The party’s strategists will have to find some reputable names if they are to capitalize on their curent popularity and send at least one MEP to Strasbourg. A special clash is also expected in the run for the prestigious position of the European Commissioner, but this will only become topical in early autumn this year. Until then, the political state of affairs may change drastically, so it would not be reasonable to speculate as to who the Slovenian member of the European Commission in Brussels might be just yet. In the remaining 27 EU member states, this year’s elections are historically significant. While this is a pretty overused expression heard before each election, there is some truth to the matter. The current problems in the European Union are not related merely to the periodic sciatica attacks suffered by the President of the European Commission. They go further than that. After Brexit, the spread of Euroskepticism, the far-right and questionable directions that Hungary, Poland, and other states are headed in, the European Union is in dire need of a strategic deliberation on how to carry on. It also desperately needs credible leaders capable of navigating this highly decrepit boat in the right direction. In certain Slovenian media, there are rumors that Janez Janša, the long-standing president of the largest opposition party in Slovenia, is seriously considering the candidature for a Member of the European Parliament (MEP). As of writing this, let us once again emphasize that these are merely rumors. However, if they turn out to be true, this year’s elections in Slovenia will go down in history.

Real Estate & Investment Opportunities Interview: Matej Skočir, M.Sc., Head of the Internationalisation Division, Ministry of Economic Development and Technology of the Republic of Slovenia

MIPIM 2019:

Promotion will be based around the brand "Invest Slovenia – Green. Creative. Smart." This year, Slovenia will be participating in the 30th MIPIM international investment and real-estate fair in Cannes, where the SPIRIT Slovenia public agency and the City Municipality of Ljubljana will jointly present the country as a location suitable for foreign direct investment under the slogan "Slovenia – Green. Creative. Smart". As pointed out in the interview with Matej Skočir, investments are one of the most important factors in the national economy for accelerating economic development. Hence, the objectives of the draft bill are as follows: we should encourage and accelerate investments in Slovenia, preserve the competitiveness of Slovenia in comparison to other (nearby) countries in attracting investments, as the measures proposed are comparable to those in the competing countries, and establish a transparent, simple, predictable and investor-friendly system for granting investment incentives. Q MIPIM plays an essential role in developing cross-border deals and facilitating investment projects. What have been the benefits for Slovenia through the years of exhibiting at the event so far? A In the last decade, I’ve had the chance to attend both major investment and real estate fairs in Europe – MIPIM in France and EXPOREAL in Munich. Nevertheless, I have also seen their ups and downs, which were mainly associated with the global financial crisis. MIPIM, organised in the beginning of the year in March, is more of an international and promotion-oriented fair in the sense that it provides a platform which countries, regions, cities, national/regional agencies and private companies can use for their further promotion. EXPOREAL, on the other hand, which is organised in October, is more EU-oriented and industry-focused. The main advantage of the continuous Slovene participation at MIPIM is that several stakeholders are presented in the national pavilion: the country by the SPIRIT national agency, and the Slovenian capital Ljubljana by the City Municipality of Slovenia, regional development agencies and private companies. In a way, such a cooperation is a role model for participation in MIPIM. Thus, the stakeholders not only have the opportunity to present their development projects, but also to benchmark their projects with other locations and come to understand the trends that are occurring globally (sustainability, circular economy and global presence). The

most important elements of trade participation are stable and constant participation and building a network of leads, i.e. business contacts expressing an interest for cooperation. Through participation in MIPIM, all stakeholders received several business contacts which in one way or another increased the FDI stock in Slovenia. Just to summarise, the FDI stock at the end of 2009 was EUR 10.5 billion and the FDI stock at the end of 2017 totalled to EUR 13.6 billion.

Q What would you highlight from this year’s perspective in terms of Slovenia’s performance at the leading property market? What will be the focus? A The focus will be on the development projects in Slovenia and Ljubljana: the promotion will be based around the brand "Slovenia: Green. Creative. Smart." We will highlight the importance of Ljubljana as the crossroads between the regions in Slovenia, also stressing the importance of co-working partnerships among the Slovene regions. This is why all 12 Slovene statistical regions will be presented and further exposed to an audience of 26,000 international MIPIM visitors, 5,400 investors and 4,800 different developers looking for business and investment opportunities.

Q As the Head of the Internationalisation Division at the Ministry, what areas are going to pay a special attention to in promoting and attracting foreign direct investment in the future?

A The new Law on Stimulating Investments has equalised domestic and foreign investments. The focus will be on sustainable, longterm investment projects whose goal is to create quality jobs, increase added valued per employee and generate high multiplicative effects in Slovenia. We believe Slovenia can present a suitable environment for investment projects that build on talented labour force doing business globally.

Q What are the encouragements for investors? A As a novelty, the draft bill equalises the measures for attracting both local and foreign investors. It defines the types of investment incentives, the conditions, criteria, and the procedure for granting investment incentives, which are: subsidies, incentives in the form of loans, guarantees, and subsidised interest rates. The draft bill also introduces the possibility of purchasing property in self-managed local communities at prices lower than the market prices as an investment incentive, namely on the basis of a direct contract. By contrast to the existing legislation, this facilitates the procedure and reduces the time necessary to implement the processes. Additionally, the draft bill also defines the term strategic investment and the method of determining the fulfilment criteria for a strategic investment, which is done by means of a decision issued by the Government of the Republic of Slovenia upon the request of the Ministry. Ultimately, the draft bill also defines the general methods of attracting investments and internationalisation. Spring Edition 2019 | The Slovenian Times

Real Estate & Investment Opportunities

The future of real estate to be highlighted at groundbreaking 30-year edition of

MIPIM – the world’s leading property market MIPIM 2019’s central theme, "Engaging the Future," will focus on envisioning the next 30 years of the real estate industry with an emphasis on sustainability. The 30th edition of MIPIM will be held 12–15 March, 2019, in the Palais des Festivals in Cannes, France. 12-15 MARCH 2019

The world’s leading property market PALAIS DES FESTIVALS CANNES, FRANCE

PROJECT DIRECTORY

A selection of projects showcased at MIPIM 2019

selected by retail expert and journalist Graham Parker

1 28

The Slovenian Times | Spring Edition 2019

mipim.com

Every year, MIPIM brings together the most influential players from all sectors of the international property industry for a four-day event of networking, learning and insightful discussion through various conferences and exhibitions. MIPIM 2019 is expected to be attended by over 26,000 participants and more than 5,400 investors. "For the 30th edition of MIPIM, we have taken 'Engaging the Future' as our central theme and that includes addressing the issue of how upcoming generations will live and work in increasingly populated urban environments. Ban Ki-moon has championed sustainable development and his opening keynote address is expected to set the tone for this very unique MIPIM," says MIPIM Director Ronan Vaspart. Ban Ki-moon, the eighth Secretary-General of the United Nations, will raise the curtain on MIPIM 2019 on Tuesday, March 12 at 2:00 p.m. in the Palais des Festivals in Cannes, France. He will share his vision of the new global challenges, from climate change and economic upheaval to increasing pressures involving energy and water.

Building the future with real estate This special edition of MIPIM will highlight the global and societal topics that impact the real estate industry. The central theme will be explored by focusing on future economic growth, community cohesion and sustainabil-

Real Estate & Investment Opportunities ity. Revenue streams in the real estate industry are rapidly evolving in the digital era. On this account, companies and investors are changing their approaches to real estate as an investment and product service. At MIPIM 2019, panellists will seek to answer key questions such as "What are the best strategies for long-term benefits?", "What are the best strategies to ensure optimal quality of life?" and "What practices are the most environmentally responsible and how can we utilize existing resources optimally?"

Creating a sustainable real estate Industry Environmental sustainability will be a key theme at MIPIM 2019. High energy prices, climate change and new government regulations are actively changing traditional industry platforms and practices. The panellists will analyse how these factors are transforming the real estate industry and discuss the different strategies of adapting and investing into moving forward. Additionally, they will discuss how disruptive technologies such as virtual reality, artificial intelligence and big data optimize real estate management and profitability in the digital era.

Young Leaders Summit to focus on transitioning economy For the first time, MIPIM will feature a Young Leaders Summit focused on millennials and their impact on the real estate industry today and in the future. In the real estate industry, millennials are today’s end-users and tomorrow’s decision-makers. In addition to promoting a greater environmental awareness, the Young Leaders Summit will analyse the modern sharing economy and its focus on connections and new methods.

MIPIM 2018 - MIPIM AWARDS CEREMONY; Credit: © V. Desjardins - Image & Co

About Reed MIDEM: Founded in 1963, Reed MIDEM is an organiser of professional, international markets that are essential business platforms for key players in the sectors concerned. These sectors are MIPTV, MIPDOC, MIPCOM, MIPJUNIOR in Cannes, MIP China in Hangzhou and MIP Cancun in Mexico for the television and digital content industries; MIDEM in Cannes for music professionals; Esports BAR in Cannes and in Miami for the esports business; MIPIM in Cannes, MIPIM UK in London, MIPIM Asia Summit in Hong Kong, MIPIM PropTech in New York, MIPIM PropTech Europe in Paris for the tech and real estate industry; and MAPIC in Cannes, MAPIC Russia in Moscow, MAPIC Italy and MAPIC Food in Milan and MAPIC India in Mumbai for the retail real estate sector. www.reedmidem.com

About Reed Exhibitions:

"We are excited to be celebrating the 30 anniversary of MIPIM at this year’s conference," said Ronan Vaspart, the Director of MIPIM, "This year’s theme will look at the next 30 years of real estate and how the industry can contribute to creating a technologically advanced, sustainable and innovative future. We look forward to hosting the world’s leading experts from an array of sectors to explore this important topic."

Reed Exhibitions is the world’s leading event organiser, with over 500 events in 30 countries. In 2017, Reed brought together over seven million event participants from around the world, generating billions of dollars in business. Today, Reed events are organised by 38 fully staffed offices and held throughout the Americas, Europe, the Middle East, Asia Pacific and Africa. Reed Exhibitions serves 43 industry sectors with trade and consumer events. It is part of RELX Group, a global provider of information and analytics for professional and business customers across industries. www.reedexpo.com

"The real estate sector is in the midst of a technological revolution. Catalysts of this transition include shifting demographics, climate change and advanced technology. The value of a building now lies in its purpose, not its physical construction. MIPIM 2019 will inspire attendees to challenge their understanding of the future of the real estate sector through countless insightful discussions and presentations."

Details regarding the conference programme can be found at www.mipim.com and on Twitter profile @MIPIMWorld using the hashtag #MIPIM.

Spring Edition 2019 | The Slovenian Times

Real Estate & Investment Opportunities Because Slovenia lies at the crossroads of the Alps, the Mediterranean, the Pannonian Plain and the Dinaric Mountain Range, through the centuries, the individual Slovenian regions have developed various forms of economic activity, ways of living and cultural creativity. Among the greatest treasures of these regions are the diversity of Slovenian dialects, different lifestyles, gastronomic traditions, popular entertainment and other everyday-life aspects of the local people. This diversity is best presented through the traditional regions of the country: Gorenjska (Upper Carniola), Dolenjska (Lower Carniola), Notranjska (Inner Carniola), Primorska (Littoral Region), Štajerska (Styria), Koroška (Carinthia) and the Prekmurje region.

Ljubljana urban region

Janez Koželj, Deputy Mayor of The City Municipality of Ljubljana

Ljubljana,

more than a capital city! Connecting, supporting and activating regions. This spring, for the 11th consecutive year, the City Municipality of Ljubljana will cooperate with SPIRIT Slovenia, a public agency, to once again take part in MIPIM, the world’s largest investment and real estate fair in Cannes, where projects will be showcased to potential investors, end-users and real estate professionals. Janez Koželj, Deputy Mayor of Ljubljana, highlights that Ljubljana is setting the pace for regions. "Ljubljana is more than a capital city. The high reputation of the city contributes to its economic prosperity. Due to its central location at the crossroads of international, national and regional networks, Ljubljana is an important generator of overall regional development. Focusing on the role and function of Ljubljana in the processes of innovation, production, distribution and consumption, the city serves as a node of regional capital and labour flows. As the centre of high-skilled and high-wage work, the city is driving competitiveness and fostering the cohesion of all Slovenian regions. Therefore, we are presenting the agencies and municipalities from different Slovenian regions with an opportunity to partake in MIPIM."

The Slovenian Times | Spring Edition 2019

The Ljubljana urban region (LUR) encompasses 26 municipalities and has a total population of 542,447. The region covers an area of 2,555 km2, which equals 12.6 % of the Slovenian territory. The Ljubljana urban region is the Slovenian region with the biggest concentration of knowledge and creative potential, as this is where the key state, scientific, research, educational and cultural institutions are based. Owing to the large number of companies and jobs, the region generates more than a third of Slovenia’s GDP, meaning that it is also the most economically developed region in the country. Based on realising its development potentials, the Ljubljana urban region will maintain and strengthen its role as the principal carrier of economic development at the national level. It will develop human potentials as well as promote interdisciplinary cooperation and knowledge transfer. It will furthermore create conditions conducive to economic development and promote entrepreneurship, thus retaining and attracting both highly qualified labour force and investors. By establishing international ties and strengthening its role as a European metropolis, the region will also enhance its competitiveness in the international arena. The Ljubljana urban region is distinguished by its well preserved and easily accessible natural environment, high level of biotic diversity and variegated natural landscape. Its vicinity to quality nature areas and the intertwinement of built and natural environments make it unique among European metropolitan regions. The region’s activities will thus aim to build a positive, sustainable relationship with the environment that will position it as a bioregion both in Slovenia and internationally. Acting in harmony with the natural environment, the LUR will manage its natural resources prudently and strengthen the development of

Real Estate & Investment Opportunities green economy and green jobs – also through the use of green technologies. Sustainable and inclusive development will allow the region to provide its inhabitants with a high standard of living. The development objectives of the region are: • An efficiently internally connected region. • A region that uses space, natural resources and energy prudently. • A region that promotes the development of knowledge, creativity and innovation. • A recognisable and competitive metropolitan region. • A region that provides high-quality jobs. • A region that provides high-quality living.

Central Slovenian region The Central Slovenian region had the highest share of Slovenia’s population (26 %) in 2015, and on average they were the youngest (41.3 years). The mean age of first-time mothers was the highest (30.1 years). A third of people aged 25–64 had tertiary education, which was the highest share in the country. The share of people living below the at-risk-of-poverty threshold was the second lowest in the country (11.8 %). People living in the Central Slovenian statistical region were most satisfied with their lives (7.3 out of 10). The unemployment rate (7.3 %) was lower than the national average. A large majority of persons in employment in the region also worked within the region (91 %). The average monthly net earnings of persons employed in the region were the highest in the country (EUR 1,099). This region contributed the highest share to the Slovenian GDP. 37 % of the national GDP was generated in the region, which was more than EUR 26,000 per capita. The region has one third of all enterprises in the country; of all high-growth enterprises in the country in 2015, 32 % were registered here. High-growth enterprises in the region employed nearly 21,000 persons. The share of dwellings built after 2005 was the highest in the region (8.8 %), and the region stood out with the highest share of foreign tourist overnight stays (93 %). In the region, the highest share of separately collected municipal waste was perceived (73 %). Development projects of regional importance in 2022 include The Brdo complex, The Exhibition and Convention Centre Ljubljana complex and the Logistics Centre Ljubljana complex.

Brdo complex • • • • • • •

PROJECT NAME: Residential district Brdo II LOCATION: Pot Rdečega križa, Ljubljana, Slovenia GROSS PLOT AREA: 47.629 m2 GROSS FLOOR AREA: 42.819 m2 PROGRAMME: Housing PROMOTOR: SSRS – National Housing Trust, public fund ARCHITECTURE: Dekleva-Gregorič architects Aljoša Dekleva u.d.i.a., M.Arch. (AA Dist); Tina Gregorič u.d.i.a., M.Arch. (AA Dist); Lea Kovič, u.d.i.a.; Martina Marčan, mag. inž. arh.; Naia Sinde, arq.; Vid Zabel stud.arch.; and Martin Kruh, stud.arch.

The planned construction of two new faculties, namely the Faculty of Mechanical Engineering and the Faculty of Pharmacy, is the logical continuation of the decision made 15 years ago to move the Faculty of Chemistry and Chemical Technology and the Faculty of Computer and Information Science to the Biotechnical Faculty and Natonal Biology Institute area, which is zoned for the construction of the Biology Centre Building and the Natural History Museum. The further concentration of technical faculties at the location can be justified by developing a broader area which, aside from the existing Technology Park Ljubljana, is also zoned for the construction of commercial buildings for technological development and apartments for students and visiting researchers, together with the belonging social infrastructure. The relocation of two new faculties from the city centre can therefore be dealt with from the point of view of their development and synergic contribution to setting up a new technology centre in Brdo that, in a nutshell, functions as a micro-city community. The latter can be formed by expanding the neighborhood of apartments for lease, funded by the national and municipal housing trusts, and constructing new road connections to the bypass and the Park & Ride transfer terminal with buses and trains at Dolgi most. Spring Edition 2019 | The Slovenian Times

Real Estate & Investment Opportunities

Logistics Centre Ljubljana complex • PROJECT NAME: Logistics and distribution center Mercator • LOCATION: Slovenija, Ljubljana, Letališka cesta • GROSS PLOT AREA: 127.330 m2 • GROSS FLOOR AREA: Distribution facility 85.500 m2 Head office 23.500 m2 Underground garage 17.000 m2 • PROMOTOR: Mercatod, d.d., Ljubljana, Slovenia. • ARCHITECTURE: Studio Pirss, d.o.o., Ljubljana, Slovenia.

Exhibition and Convention Centre complex • • • • • • •

PROJECT NAME: Ljubljana Exhibition and Convention Centre Hall LOCATION: Dunajska cesta, Ljubljana, Slovenia GROSS PLOT AREA: 27.600 m2 GROSS FLOOR AREA: 3.340 m2 aboveground, 2.550 m2 underground PROGRAMME: Retail, hotel, residential PROMOTOR: Gospodarsko razstavišče ARCHITECTURE: Ravnikar-Potokar arhitekturni biro d.o.o.

Within the Ljubljana central business district, at the edge of the very city centre, the international fair and congress activity is actively maintained and developed. Based on a comprehensive urban design, the city is planning to develop an upbeat city district by concentrating various activities at a single site while simultaneously expanding the Northern Park and renovating the Baraga Seminary, which was designed by Plečnik. Aimed to condense the activities in the area, the large-scale project is linked to the planned construction of the Ljubljana Passener Station‘s traffic centre, which is being reconsidered on account of the decision to construct a station hall and a bus station using public funds, and on account of the OTP Hungarian banking group‘s takeover of the Emonika project. Within the Ljubljana Exhibition and Convention Centre, the contruction of a new multipurpose hall is foreseen. Three office towers, a hotel and apartments are planned beside Dunajska cesta, and a multipurpose commercial building will be constructed beside the inner road. Additionally, the Mladinsko Theatre building will be adjoined to the complex, which will diversify the activities in the multipurpose art and educational centre in the renovated Baraga Seminary.

The Slovenian Times | Spring Edition 2019

The project encompasses the construction of a logistics and distribution centre of the Mercator retail company with a new administrative building, the Intermodal Logistics Terminal of the Slovenian Railways at the edge of BTC and a distribution centre of the Lidl company in Zalog. With a total area of 170,000 m2, the Intermodal Logistics Terminal Ljubljana will be one of the largest land-based terminals in Central and Southeastern Europe. The demanding and extensive project for the construction of the Ljubljana railway hub is related

Real Estate & Investment Opportunities to the re-construction of the existing and the construction of new road connection between Zaloška cesta and Bratislavska cesta with an railway underpass, between Bratislavska and the northern bypass and between the reconstructed, extended Letališka cesta and the western motorway. All of these connections are being planned by the Motorway Company in the Republic of Slovenia (DARS). On the eastern side of the Ljubljana railway hub, the City Municipality of Ljubljana is planning the construction of the new Industrijska cesta with access to the eastern motorway, which will reduce the burden of freight transport on parts of Zalog and Kašelj that lead to the existing and planned economic and logistics zones. The agreement between the Motorway Company in the Republic of Slovenia (DARS), the City Municipality of Ljubljana and the Slovenian Infrastructure Agency (DRSI) foresees investments totalling to EUR 300 million in the BTC-10 area. Five projects are under the jurisdiction of the City Municipality of Ljubljana, four are managed by DARS and one is in the hands of DRSI. According to the timeline, the projects are to be be completed by 2020.

Dolgi most • • • • • • •

PROJECT NAME: Dolgi most LOCATION: Dolgi most, Cesta v Gorice, Ljubljana, Slovenia GROSS PLOT AREA: 8.800 m2 GROSS FLOOR AREA: 10.000 m2 PROGRAMME: Hotel, commercial premises and offices PROMOTOR: COPIA d.o.o. and MDM Invest d.o.o. ARCHITECTURE: COLONIarchitects

Four designs for one location and for one client, all made by the same architects, show how fluid the notions of time, space and existence are in our day and age. The immanent connotation of architecture is to strive for longevity. It has remained one of the brightest signs of our civilization throughout many periods in history. Our time, in the absence of greater truth, moves with immense speed, melting infinite possibilities, changes, differences and innovations into a single magma. Sometimes it seems the only aim left is to be "famous for five minutes." We endeavour to go through the creative design process every time we undertake a project, exploring the fundaments of architecture in its inner structure and researching new territories. The south entrance to the city of Ljubljana, the capital of Slovenia, has been the area of our design explorations for the past seventeen years: • 2001 Worm – an organic structure hanging above the ground or walking away. • 2007 Five Figures – a structuralist approach brings dynamic relationships into the design and its environment. • 2017 Crossroad – balancing volumes are a site transcription in its non-urban connotation. The traffic intersection and its pendant signal the entrance to the city of Ljubljana. • 2018 Butterfly – curved fragments floating over the motorway. Spring Edition 2019 | The Slovenian Times

Ljubljana Airport City: Attractive Opportunity Attractive investment Investment opportunities Fraport Slovenija, a group member of Fraport AG Frankfurt Airport Services Worldwide, is looking for investors to develop Ljubljana Airport City

LT1/21 approx. 2.6 ha

LT1/24 approx. 3.0 ha

LT1/2 approx. 0.8 ha LT1/2 approx. 0.5 ha

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2 Spatial 2 Spatial PlanPlan

3 Adaptability 3 Adaptability

4 4Infrastructure Infrastructure

5 Region 5 Region

6 Accessibility 6 Accessibility

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8 Vicinity 8 Vicinity

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9 Potential Industries 9 Potential Industries

Global operators as cargo-partner, Hangars, Hotel, Hotel, Global operators as cargo-partner, Logistics, Logistics, Hangars, Kuehne + Nagel, DHL, TNT, UPS, Offices and many more Kuehne + Nagel, DHL, TNT, UPS, Offices and many more Fraport Aviation Academy Fraport Aviation Academy

Venice 260km Trieste 120km

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S E S E Vienna 390km

Vienna 390km

Photos: Fraport Slovenija, Fraport Slovenija, Protim Ržišnik Perc

Protim Ržišnik Perc

Photos: Fraport Slovenija, Protim Ržišnik Perc

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pportunity to develop and ape space according to dividual needs

Real Estate & Investment Opportunities Q How would you assess the co-operation with Slovenian investors? Do they respect the work of architects? Which are the most frequently encountered obstacles? And what is the situation like abroad? A I mostly have good experience with inves-

Architecture

Sustainable construction no longer trend but a legal requirement An Interview with an Architecture Expert By Aleš Čakš

tors. I am normally approached by those familiar with my work and the work of architects in general, who know already what to expect. In the past several years, investors have matured and they know how to express their wishes. Of course, there are still those investors who see the architect as an unnecessary cost or someone who will fulfil their frequently unrealistic expectations. Many a time, it happens that land plots are unsuitable for the investor’s wish. An architect is a spatial expert capable of saving investor’s money on the investment if the investor lets them to. Most importantly, an architect knows how to determine the spatial and urbanist limitations and place a building in the environment. While working with an investor, it is essential that the architect and investor come clean as to their expectations before commencing the project. The best solution for this is a project assignment. That being said, it is essential that the architect does not promise the investor something which cannot be accomplished in the given situation. Conversely, the investor should respect the architectural profession and trust the opinion of the person they plan on hiring. What I learned from foreign investors is that they think the investment through thoroughly before approaching the architect. They know how to express their expectations clearly. An architect presents their design project, which has to be amended a number of times. Nevertheless, all solutions are done in the design phase, not at the construction site. On-site amendments are highly expensive, which is something foreign investors are well aware of. 02

I talked to architect Mika Cimolini, an expert in both theory and practice, about the challenges surrounding architecture, sustainability, the good and the bad practises in Slovenia and abroad, and how investors take architects’ plans and knowledge into account.) Q What is the state of affairs in Slovenian architecture? Has economic growth spurred additional construction? Do architects have more work now? And what kinds of construction projects have shaped the past several years?

A After a long while (a decade or so), economic growth has presented architects with an increased workload once again. At the forefront 36

The Slovenian Times | Spring Edition 2019

of demand are residential buildings financed by private investors, luxury apartment buildings, multi-dwelling units, apartment buildings, and commercial buildings as well. Public investments are just starting to make an appearance. But even in terms of private investments, there is no excess of optimism. Hence, investors are cautious to think their plans through and analyse an investment before its implementation.

Real Estate & Investment Opportunities

After a long while (a decade or so), economic growth has presented architects with an increased workload once again. At the forefront of demand are residential buildings financed by private investors, luxury apartment buildings, multi-residential buildings, apartment buildings and commercial facilities as well.

Q Could you point out a few examples of newly-built residential and business constructions, and elaborate on what makes them good or bad? A Firstly, I would like to point out the Terme Čatež commercial building, which was designed at the Budja Jereb Arhitekti bureau. It is an extension of the existing building, which would otherwise have been pretty boring, mundane and purely functionalist. At Budja Jereb Arhitekti, they designed the building in an original and interesting way. The starting point may be functionalist and the architecture humble and faithful to the programme (offices, storage facilities, etc.) and, in essence, the building is a prefabricated concrete hall. Nevertheless, both the interior and exterior were designed with the surroundings in mind. Fulfilling its social function as well, the building became the generator of life at the site. When it comes to residential buildings, I believe that private and public investors lack the necessary courage. Architecture is the consequence of a policy – it is not a consequence of contemplations on how people live, nor is it the result of experimenting or dealing with the housing typology. I am critical towards the Slovenian housing policy and the Housing Fund of the Republic of Slovenia, which is incapable of providing affordable housing for the middle class. Based on the lack of a housing policy, we are facing gentrification or a takeover of the market from private investors, who continuously offer "luxury experiences" in apartments that are not that luxurious, are completely standard or even sub-standard. Thus, the Housing Fund should dedicate more time to this issue instead of asking 3,500 Euros per square meter in the Brdo residential district. They could look up to the model of public-private partnerships in Vienna, where the city and the housing fund provide the land for construction, the necessary utility equipment

and a guarantee for favourable loans, while the private investor takes over the construction process. In fact, private construction companies team up with architects in a public contest where they compete on who can implement a better architectural project for a predetermined construction price. The price of a completed apartment is determined in advance. Additionally, the number of apartments available for lease in a public fund at a predetermined rent (which does not exceed 10 Euros per square meter of a new apartment), the number of apartments made available for long-term lease by the private investor at a predetermined rent, and the number of apartments that will be sold on the market are all known in advance.

Q Is sustainable architecture still a hit, or are there new architectural trends emerging on the horizon?

A Sustainable architecture is no longer a trend but a requirement stemming from legal acts which foresee that all buildings will have to become energy self-sufficient by 2020. Slovenia has passed the Energy Efficiency Action Plan for the period 2017–2020. The Action Plan predicts that the existing housing fund will be the sector with the highest potential for achieving energy savings. To meet the goal, it will require a 25 percent energy restoration by 2020. This will reduce the energy use in the buildings by nearly 10 percent. Additionally, these measures will also accelerate economic growth as they will generate investments crucial to the development of the society (instead of energy, they can also be used for education, health or development). In achieving environmental and energy efficiency, sustainable architecture is of key importance because it burdens the environment to a far lesser extent. In this context, the trend of green towers started by Italian architect Stefano Boeri is highly interesting. The towers, which

feature balconies equipped with large greenery pots, were named "Vertical Forests." The project was drawn up as part of the rehabilitation of the historic part of the Porto Nuovo city in Milan, which is one of the most densely packed commercial urban zones in Milan. Each of the two buildings features 900 trees, 5,000 bushes and 11,000 flowers that improve the quality of air, help prevent the intrusion of smog and produce oxygen.

Q I sometimes think that architects focus too much on the exterior image of a building and too little on the functionality of the interior. Am I wrong? A A spectacular exterior is important in commercial architecture, which is focused on selling. An average buyer of real estate, by contrast, takes into consideration the economic ratio of the price to the gross/net value. This means as much useful area as possible at the lowest possible price. An average investor is not looking for the interesting or unconventional because they consider it difficult to sell. In terms of the internal functionality of apartments and offices, we are still very much in the modernist era. I would even dare say that modernist floor plans by Arnautovič, Ravnikar, Mihelič, Kristl, and others were textbook examples of good practice in terms of space utilisation. The apartment building in Prule that was designed by Kristl, for instance, features small apartments. In fact, they are extremely small, but they were also built at an incredibly affordable price while still exhibiting all the features deemed necessary at the time. PHOTOS 01 An example of green architecture: The two Vertical Forest residential towers in Porta Nuova, Milan, designed by architect Stefan Boeri 02 Mika Cimolini, architect 03 An example of good architecture in Slovenia: The Terme Čatež commercial building

Spring Edition 2019 | The Slovenian Times

REAL ESTATE UNFINISHED COMPLEX FOR SENIOR CITIZENS ON THE OUTSKIRTS OF NOVA GORICA Complex for senior citizens The unfinished multi-apartment residential complex consists of two facilities: the senior citizens’ home and assisted-living apartments. • The senior citizens’ home has a net floor area of 6.065,23 m². • The assisted living facility has a net floor area of 3.549,52 m². The property is located in the peaceful outskirts of Nova Gorica. It is surrounded by lush greenery, creating a peaceful ambient in a small village community and is easily accessible and well-connected to Nova Gorica and nearby towns. The facilities are still unfinished, and can therefore be repurposed for other, similar activities. NET FLOOR AREA: 9.614,75 m² PLOT AREA: 10.948,00 m² YEAR OF CONSTRUCTION: 2012 INDICATIVE PRICE: 4.900.000,00 € + TAX

THE COMPLEX OF BUILDING LAND IN THE ELITE PART LJUBLJANA Invest in building land in one of the nicest parts of Ljubljana This complex of building land is situated in Rožna Dolina, one of the most attractive and popular residential areas in Ljubljana. The location boasts excellent utilities infrastructure and transport connections. It is accessible by public transport, located close to the ring road and motorway, while the city centre is in the near vicinity. An opportunity for investors looking for high added value The location is ideal for high-quality construction for demanding buyers who like a balance between the lively urban rhythm of Slovenia’s capital and the peaceful, green environment of Rožna Dolina. The location and the exceptional popularity of the area means that this is a great opportunity for major investors who want to create high added value. PLOT AREA: 16.669,00 m² INDICATIVE PRICE: 7.000.000,00 € + TAX

BUIDLING LAND FOR RESIDENTIAL AND BUSINESS BUILDINGS IN KILA DISTRICT IN SPLIT A unique investment opportunity An attractive land plot in a popular and pleasant neighborhood in Split • The buildable land plots are located in the east side of Split, Croatia, in the Kila district. The neighborhood is quickly growing into one of the more pleasant, new residential parts of Split, with a lively urban beat and comfort.

AN OPPORTUNITY FOR A HIGH ADDED VALUE: A NURSING HOME AND SERVICED APARTMENTS FOR THE ELDERLY The land is an excellent investment opportunity for development of additional accommodation capacity for appropriate elderly care, which is becoming increasingly required due to the rapid aging of the population. The object to be sold is a larger building land totaling 18,366 m2. The draft of the detailed municipality’s urban management plan SOČA J stipulates the following: Construction of a multi-occupancy accommodation (nursing home for up to 150 residents); Construction of serviced apartments (for up to 80 residents); Utilization factor is 1.2; Maximum leveling of facilities is ground level + 5.

• The neighborhood features new residential and business developments, a diverse choice of services, shops, and restaurants, with nearby schools and kindergartens. The community healthcare center and pharmacy are planned to be constructed. The residential neighborhood is easily accessible by road and has a nearby. Possible purchase of land plots or purchase of the SPV company (DZN Nekretnine - 100% ownership of DUTB, d.d.) PLOT AREA: 8.822,00 m² INDICATIVE PRICE: SUBJECT TO AGREEMENT

PLOT AREA: 18.366,00 m² INDICATIVE PRICE: SUBJECT TO AGREEMENT

More on: http://realestate.dutb.eu/ e real-estate@dutb.eu

DUTB, d.d., Davčna ulica 1, 1000 Ljubljana, Slovenia t +386 1 429 38 95

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REAL ESTATE LAND PLOT ON ELITE LOCATION NEXT TO MARINA IN THE CENTER OF IZOLA WITH BEAUTIFUL VIEW OF THE DOLOMITES OUTSTANDING LOCATION WITH GREAT POTENTIAL FOR DEVELOPMENT NEAR THE IZOLA MARINA In the heart of a pleasant Mediterranean town The land plot is nestled between the residential district of Izola, nearby green areas and the coastline and marina. Besides being connected with a road, a coastal promenade and cycling trail also connects it to the town center. The land plot offers exceptional views of the old town center and Italian Dolomites. Its immediate surroundings include commercial, residential and tourist facilities, which help create a lively local beat. The complex is part of the Marina zoning plan, which entails plans for revitalization of degraded industrial areas. Under the adopted municipal zoning plan, the land plot is mainly zoned for tourism capacities and parks to a smaller degree. NET FLOOR AREA: 3.597,00 m² PLOT AREA: 23.703,00 m² INDICATIVE PRICE: 8.860.000,00 € + TAX

PROPERTY BULGARIA Property is located in Vrazhdebna, which features mostly industrial and commercial developments. The immediate neighborhood of the subject property has started shaping as a commercial area in the past few years, because of the presence of Jumbo Plaza to the east of the subject property. However, it remains quite underdeveloped. Across the boulevard from the subject property are located Exalco warehouse, Diana auto center as well as a Shell petrol station. Two plots in the picture below marked as 6 in 7 in the sum surface 82.708 m2 have very good accessibility by car on account of their frontage on the Ring Road of Sofia and Botevgradsko Shose boulevard. One land plot in the picture below marked as 1 in the surface 2.216 m2 has good accessibility as it has frontage on Chelopeshko Shose street. The remaining four land plots marked as 2,3,4 and in sum surface 90.910 m2 have average accessibility due to the fact that they lack frontage on Botevgradsko Shose. PLOT AREA: 174.934,00 m² INDICATIVE PRICE: 9.995.000,00 € + TAX

UNFINISHED BUSINESS PREMISES IN THE EDA CENTER ON AN ELITE LOCATION IN NOVA GORICA

BUSINESS PREMISES WITH AN EXCEPTIONAL LOCATION IN LJUBLJANA A modern business building Real estate on sale, towers S1 in S2 were built in 2010. Both are of high quality and modern design. The buildings have an excellent location in the Ljubljana town district Bežigrad, along the Dunajska cesta, between the comfortable urban pulse of the center of Ljubljana and the peaceful surroundings of its periphery. The location is characterized by excellent traffic connections, in particular the proximity of one of the key urban slopes, the Dunajska cesta, and the Ljubljana bypass and thus the motorway. Property with other parts of Ljubljana is well connected with public passenger transport and many local roads.

Elite location and clever architectural design The EDA Center office building is located at the intersection of the commercial, administrative and social axis, in an elite central location in Nova Gorica. The building is easily accessible, it is very visible and it blends in well with the surrounding area. Thanks to its location, its own parking spaces, its generous floor plans and its well-designed and diverse architectural design, EDA Center offers an opportunity to develop one of the most visible business/ commercial and cultural centers of the entire Goriška region. NET FLOOR AREA: 1.981,09 m² YEAR OF CONSTRUCTION: 2011 INDICATIVE PRICE: 700,00 € / m² + TAX

NET FLOOR AREA: 6.189,00 m² YEAR OF CONSTRUCTION: 2010 INDICATIVE PRICE: 6.360.000,00 € + TAX

More on: http://realestate.dutb.eu/ e real-estate@dutb.eu

DUTB, d.d., Davčna ulica 1, 1000 Ljubljana, Slovenia t +386 1 429 38 95

REAL ESTATE WELLNESS HOTEL ARENA Established hotel, praised for its superb ski-to-door location, good food, and comfort Throughout the whole year the perfect location of the hotel fits all requirements of sportive and active tourists and families, as well as invites for relaxing moments in the untouched nature of Pohorje. The hotel has its own ski and bicycle rental located at the valley station of the famous FIS ski world cup slope and grants direct access to the 42 km long ski resort. The city centre of Maribor is in a 6km (10 minutes) driving distance from the hotel. NET FLOOR AREA: 4.871,00 m² PLOT AREA: 18.316,00 m² INDICATIVE PRICE: 3.000.000,00 € + TAX

HOTEL IN DEPANDANCE VIDEC Superbly fitted into the skiing and hiking tradition of the region Guests of the Videc Complex are allowed to share the amenities of Wellness Hotel Bolfenk: well-equipped wellness area with Turkish bath, sauna (herbal, Finnish), whirlpool, cooling pool and children‘s pool. Sports fans can enjoy the gym. There are 30 free parking lots available. Ski storage offers enough storage space for all skiers. Guests can enjoy good local food and regional wines in à la carte restaurant or the classic restaurant. Lounge & bar area invite for relaxation after exhausting day on the slopes. NET FLOOR AREA: 3.330,00 m² PLOT AREA: 18.672,00 m² INDICATIVE PRICE: 1.000.000,00 € + TAX

APARTMENT BUILDING »POHORSKE TERASE« Investment in tourist apartments and hospitality real estate Apartments with unique location: at the ski slope “the Golden Fox”, known for women’s World Cup alpine races. Apartments are located near Wellness Hotel Bolfenk**** and Hotel Videc***. The building comprises of 30 unserviced apartments ranging between 36.7 m² and 99.5 m². Combined area amounts to 1.724 m². All apartments have their own storage room and most of them either have a loggia, terrace or a balcony. The complex offers indoor (24) and outdoor (23) parking lots. NET FLOOR AREA: 3.110,00 m² PLOT AREA: 2.205,00 m² INDICATIVE PRICE: 1.490.000,00 €+ TAX

WELLNESS HOTEL AND APARTMENTS BOLFENK Celebrated for its superb ski-to door location and excellent service Wellness Hotel and Apartments Bolfenk share the same facilities, offered to all the guests. The well-equipped wellness area offers Turkish bath, sauna (herbal, Finnish), whirlpool, cooling pool, children‘s pool and gym. There are 30 free parking lots available. Ski storage delivers enough storage space for all skiers. Guests can enjoy delicious local food and regional wines in à la carte restaurant or the classic restaurant. Lounge & bar area invites for relaxation after exhausting day on the slopes. NET FLOOR AREA: 5.793,00 m² PLOT AREA: 3.911,00 m² INDICATIVE PRICE: 1.200.000,00 € + TAX

More on: http://realestate.dutb.eu/ e real-estate@dutb.eu

DUTB, d.d., Davčna ulica 1, 1000 Ljubljana, Slovenia t +386 1 429 38 95

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SLOVENIA: A DESTINATION FOR DEVELOPING TOURIST, HOUSING AND INVESTMENT CONSTRUCTIONS The Bank Assets Management Company (BAMC) was founded in order to restructure system-relevant banks. The BAMC is engaged in management of receivables, capital investments and real estate. In 2017, the BAMC reaped a net profit of approximately EUR 67 million, which is why its equity almost doubled to EUR 146.4 million. Since 2017, Slovenia has sustained a moderate economic growth, whereas its GDP increased by 4.8 % in the third quarter when compared to the same period of the previous year. Positive economic trends in the EU countries have had a positive impact on the Slovenian economy, which is also reflected in the continued growth of private consumption and building investments. The demand for both commercial and residential facilities has increased. Mr. Andrej Lazar, the real estate manager, states that the investors in Slovenia's real estate development come from all over Europe, the Middle East and China. The international investors in the country on the sunny side of the Alps value its exceptional geographical position and natural resources that have their tremendous business potential. Furthermore, Slovenia is also interesting for industrial investments, and the largest industrial building land with an exceptional strategic location near the town of Sežana is currently for sale. The BAMC offers investors unique opportunities to develop industrial, office, commercial, tourist and residential real estate projects. A comprehensive portfolio of land plots and real estate in all segments and in various development stages has been made available. The complete offering can be found at http://realestate.dutb.eu/.

outlining the construction of a premium family hotel as well as indoor and outdoor pool facilities has been conceived. Sales price of the land is 9.000.000,00 € + VAT.

A COZY RESIDENTIAL COMPLEX: BUILDING LAND FOR CONSTRUCTION IN PODUTIK Ljubljana is the capital of Slovenia, where there are more than 40,000 enterprises, which account for more than 25% of the Slovenian GDP. Education level of its inhabitants, employment potential, average salary level and development potential are well above the Slovenian average. The neighborhood in Ljubljana's Podutik area has an excellent utility infrastructure and good transport connections with Ljubljana downtown and the ring road. Kindergartens and schools, health, sports and culture centers are located near the large abandoned quarry and exposed to the sun. A facility spreading over 44,511 square meters with concave shape has the capability to transform into a modern residential complex boasting high quality of life. The land area is to be included in the adoption of the municipality's urban management plan having an allowed high utilization factor of 1.8. In 2009, the winning preliminary design for the land envisioned the construction of a multi-occupancy terraced buildings comprised of 360 apartments. Sales price of the land is 6.600.000,00 € + VAT.

OPPORTUNITY FOR DEVELOPMENT OF TOURIST INFRASTRUCTURE: BUILDING LAND IN LADJELDELNICA IZOLA (IZOLA SHIPYARD)

A NEW LOGISTICS CENTER: THE LARGEST BUILDING LAND WITH AN EXCEPTIONAL STRATEGIC LOCATION

Južna Primorska (Southern Littoral) is one of the most desirable regions in Slovenia. A huge swathe of land right next to the coast is one of the biggest potential development points of the town alongside the promenade and the cycle track which will eventually connect all Slovenian coastal municipalities.

Slovenia has an exceptional geostrategic location. Good transport connections via Slovenian highways, airports, the railway system and the ports of Koper and Trieste create a dynamic freight transport flows.

At the moment, a total area of 42,054 square meters is covered by older shipbuilding and industrial facilities expected to be torn down. Even under current circumstances, the land is easily accessible and developed. According to the latest proposal of the municipality's urban management plan, the area is designated for tourist activities throughout the year. A project

An opportunity for a larger logistics center or lightweight industry is arising at the edge of the developing industrial area in the town of Sežana. This is the largest building land in Slovenia equipped with all utility connections close to the land. The 334,297 of square meters of land is directly accessible from the local road. Sales price of the land is 8.000.000,00 € + TAX.

Global Pitch Interview: Julij Božič, Executive Director for Innovation and Digitalisation, BTC d. d.

Shaping the future in an innovative ecosystem of connection and cooperation by means of human-adapted technology By Tina Drolc, M.Sc., MBA

Thanks to digitalisation, every industry in the past 30 years has become social, mobile and global. With the dawn of sensorics, data collection, the Internet of Things, AI (artificial intelligence), machine learning, 3D printing and robotics, we are quickly transitioning into a new, hyper-digital world. With the arrival of Julij Božič to BTC, the company has established a Department of Digitalisation and Innovation, which is changing the company both on the outside and on the inside by means of technological transformation. In the interview, Julij Božič highlights the importance of repositioning the BTC business model and, within this framework, presents the BTC City as a "Living Lab" – a platform for cooperation with companies on the transformation of their business by means of digitalisation and constant innovation, testing of crossindustry innovative solutions and global promotion of mutual success stories. An ecosystem of connection and cooperation, BTC and its partner companies utilise an open-society strategy to create added value with a wide array of diverse activities and 21 million visitors annually. Q Aside from implementing new technologies to boost your own business, you also manage BTC City Living Lab, which is a unique ecosystem with a multi-branched physical and digital infrastructure. What are the main focus areas of your business department? A The Department of Digitalisation and Innovation was established upon my arrival to the BTC company, which was two and a half years ago. One of the important pillars at the department is the integration of employees in the culture of innovation within the company. To this end, we have established an innovation office, within which employees can present their improvement ideas and are also rewarded for proposing good ones. The second pillar is the renovation of business processes within existing business areas of the company (paperless business, warehouse automatization, etc.). The third pillar is the repositioning of the BTC business model, which means that we are updating our existing business, while at the same time reallocating resources to innovation in new segments, such as the ABC accelerator and BTC City as a "Living Lab", which is based on the concept of a smart city. The idea is that BTC City Living Lab is a place where companies can

The Slovenian Times | Spring Edition 2019

quickly test their solutions and get feedback from the market as to whether they are the right ones or not.

Q What kind of business model testing are we talking about? A The focus is on the energy, mobility, retail and smart city segments. BTC City Living Lab is an ecosystem with a physical infrastructure, which is upgraded with a digital infrastructure that collects data on what is going on in the area. Together with our daughter company, AV Living Lab, we are offering so-called testing grounds and packages to companies around the world. We are mainly in contact with innovation departments, such as the one at Magna Steyr. They have decided to test new mobility solutions, within which they will put in place shuttle vehicles that transport visitors in BTC City, tracking their travel habits, entry and exit points, driving time, etc. With the Toyota corporation, we will test new business models of car and ride sharing for the business-tobusiness segment. The thing is that all the industries in today’s world are being faced with many challenges. In the automotive industry, for example, there is a lot of discussion as to what the car of the future will bring – a car

as a platform, a car as a digital assistant, new mobility business models like mobility as a service, integration into new energy grids, shifting ownership models, etc. In a nutshell, it could transform human mobility itself. And the challenges are not limited to within particular industries only – they also pertain to overcoming cross-industry issues by finding new future business models. Our concept offers a unique place for large companies to discover new segments and connect with companies from other industries through our innovative ecosystem.

Q What are your plans for the future of retail segment development? A We are approaching it strategically. For this reason, we have established BTC Phoenix, our own internal start-up, which is developing a platform for the so-called BTC City digital marketplace. The platform will be launched in a couple of months. It is a project that brings together offline and online stores in a single digital platform that will connect all the partners in BTC City. The platform will enable visitors to easily find where certain products and services are sold, while at the same time giving them the option to compare them in terms of

Global Pitch price. We are also thinking of an additional upgrade later on – for example a Click & Collect service, which will enable visitors to collect their selected products at a single pick-up site.

Q In cooperation with the SlovenianJapanese business world, you organized the 5th Forum Society 5.0 in Slovenia. The event dealt with the Japanese development initiative Society 5.0 which aims to create coexistence between the virtual and real worlds, balancing economic development and addressing the challenges of society to create a better, super-smart and more comfortable society with people at the forefront. How far or close to realisation is the idea of Society 5.0 in Slovenia? A With Japan, we are connected through the

cooperation on the NEDO (New Energy and Industrial Technology Development Organization from Japan) project. The main partner on the Slovenian side is the ELES company, and BTC City is one of the locations chosen for the implementation of two powerful batteries as well as a control management system for electricity management. In case of power shortage, the batteries will serve as backup. In light of the growing business relations between Japan and Slovenia, we have decided to jointly organise the Society 5.0 event together with the ELES company, the Slovene-Japan Business Council and the Embassy of Japan. Society 5.0 is a highly profound idea to develop the human society. By means of work and technology, which have always been a basis for humankind’s existence, we can finally build a world of justice and equality, create a good and healthy environment, deal with hunger and, what is most important, provide a basis that will allow for further global economic growth. This year’s Forum Society 5.0 was also attended by Yoshiaki Ichikawa, who is a visiting professor at the Japanese universities in Tama and Tokyo. He is an expert in advanced technologies and standardisation, the head senior engineer at Hitachi, the President of the ISO/ TC 268/SC 1 Smart Community Infrastructures technical subcommittee and the IEC/ TC 111 Environmental Standardization for Electrical and Electronic Products and Systems technical subcommittee. When we first hosted the professor at BTC City, we presented the BTC City Living Lab model to him and we agreed that we could become the testing ground for the Society 5.0 model in Europe for Europe.

Q The Society 5.0 initiative thus presents an opportunity to strengthen the cooperation between Slovenia and Japan. At the same time, it allows Slovenia to become the European partner for Japan in the development of this extremely complex con-

Julij Božič, Executive Director for Innovation and Digitalisation, BTC d. d.

The concept of Society 5.0 emphasises this notion – how can people be happy with all the existing technology? Can we expect it to become custom-made for humans or will it enslave us? cept of Society 5.0. Could you tell us more about the role that the BTC company will play in this?

A There are a couple of important milestones and one of them is Slovenia’s presidency of the Council of the European Union in 2021. This will allow Slovenia to position itself with a view of the future and the Society 5.0 by preparing a concept legislative framework and proposals that would justify the term Society 5.0 and its operation. The next important milestone is 1 February 2019, which marks the day that the EU-Japan Trade Agreement enters force, establishing an open trade area that covers more than 600 million people and almost one third of the total world GDP. Synergy therefore shows at the highest levels and BTC can serve as an environment that can provide support in terms of testing and the implementation of certain pilot projects. On the side of Japan, we have global companies, such as Hitachi, Mitsubishi, Toyota, Yaskawa and similar, as well as their government institutions. In Slovenia, what is important is the support of the government and organisations who wish to support this kind of cooperation: the BTC company, ELES, the Jožef Stefan Institute, the University of Ljubljana, etc. Thus, it is important to have an ecosystem of Slovenian and Japanese companies as well as inter-connected departments implementing concrete projects that will function as a sort of showroom for the entire Europe.

Q In what way does Society 5.0 address the challenges that the humanity is facing today and how does it differ from the Industry 4.0 concept? A Society 5.0 is a highly broad concept that comprehensively covers the challenges of today. It is a fair society of the future which integrates technology aimed at improving the functioning of people, while at the same time putting emphasis on protecting the environment and nature. It answers the question of how technology can serve people in order to improve their functioning and enable a better living. A great emphasis is also placed on support for the physically handicapped and on intergenerational cooperation. The difference between the concepts of Industry 4.0 and Society 5.0 is, therefore, that the first one focuses primarily on the technologic perspective: robotics, artificial intelligence and the Internet of Things – the integration of devices and their operation based on big data. The sociological aspect, however, might be somewhat neglected. Hence, the concept of Society 5.0 emphasises this notion – how can people be happy with all the existing technology? Can we expect it to become custom-made for humans or will it enslave us? Therefore, Society 5.0 integrates the individual and all groups of people, focusing on creating a fair society of the future and finding an answer to how technology can be of help.

Spring Edition 2019 | The Slovenian Times

Global Pitch

Thinking about the future, but dealing with the past By Petra Godeša Heritage Lab, a project developed within youth association Idrija 2020, focuses on cultural heritage development in smaller local environments. The triangular concept connects a youth group, a business mentor and a cultural heritage professional with the intention of revitalising long forgotten heritage treasures.

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Matevž Straus, urban sociologist and one of the key initiators behind the idea that asserted itself as one of the three winning projects of the EU Commission Social Innovation Competition in 2018, clarifies the importance of culture and heritage. "Cultural heritage makes us what we are today. It is the basis of our identity. Yet in the emerging world of virtual, augmented and mixed reality, it might as well happen that our roots and our heritage will be left behind. We should thus make sure that cultural heritage lives on as part of the 21st century. Not as old artefacts in museum collections, but incorporated in new experiences, analog and digital." Four main pillars construct HeritageLab blueprint: the extensive research of heritage possibilities in local environments, the mentor triangle, the pilot setting for quick testing of ideas and the community of members where everybody benefits. Since the heritage sector is quite closed and rigid, mostly focusing on conservation instead of innovation, there is often a lack of people with hybrid skill-set that merges contemporary business skills and a deep understanding of cultural heritage. With HeritageLab model, all parties could learn from each other and gain valuable knowledge. "Idrija 2020 association worked on several projects regarding Idrija’s cultural heritage in the past eight years," says Straus. "The EU Commission competition was the perfect incentive for us to structure our thoughts and ideas that emerged quite spontaneously, but proved to be successful through time," he continues. "The main theme of the 2018 competition was Re:Think Local, which fit perfectly with our previous work. Our group was selected among 720 contestants as one of the three winners, receiving €50,000 award. While there is no obligation for us to pursue the project, we decided we would like to see it alive and start to work on it right away." The team partnered with Slovene company Arctur, innovative and user-friendly IT solutions provider and initiator of the Tourism 4.0. paradigm, with the goal of expanding HeritageLab’s technological scope. Working on the research as well as product development, they are discovering ways to successfully implement technology in different aspects of the heritage sector. "Digitalisation of cultural heritage has already started – but this is just the beginning of the possibilities digital solutions can offer. By combining cultural heritage, creative approaches and digital innovation, we can help society pass on cultural heritage to new generations. We call this Heritage+." Idrija, an UNESCO World Heritage site, presents the perfect environment for the groundwork. Many projects were already executed. The traditional culinary festival, Idrija žlikrof Festival, was elevated with modern trends in culinary approaches, becoming a sustainable event, presenting several unique food choices

and strict no-plastic waste approach. "Sustainability is quite popular in this age, but it actually derives from a well known traditional practice of efficient usage of all local resources people had in the past. This is what it’s all about, making longestablished practices running again." Another activity the team is working on is an outline for a renovation of traditional mining houses, typical local buildings with a distinctive architectural design. Through thoughtful on-site transformations, they will try to prove the premise that historic architecture can not only be habitable but can achieve modern living standards as well. Straus emphasizes the importance of such projects for tourism. "The cultural and natural heritage is the main distinction between individual destinations," he says. "Generic activities are the same everywhere one goes, while heritage is something that cannot be invented or transferred. Tourists search for local specificities, connections with local inhabitants, a local way of live, and there is also more and more interest in under-the-radar areas. Within Tourism 4.0. initiative at Arctur, we are researching a tourism ecosystem and developing collaborative and technological solutions that would tackle the issues of overtourism in some places and slow tourism development in others, and provide personalised tourist experiences that benefit the local communities."

The main theme of the 2018 competition was Re:Think Local, which fit perfectly with our previous work. Our group was selected among 720 contestants as one of the three winners, receiving €50,000 award.

4-5 April 2019, Bled Festival Hall, Bled, Slovenia

Hosting speakers from all around Europe

Tom Haak HR Trend Institute Netherlands

John Amaechi Amaechi Performance System Great Britain

dr. Pierre Casse IEDC Poslovna šola Bled France

Wouter Van Linden KPMG Belgium

Emil Tedeschi Atlantic Grupa Croatia

Luka Babić Orgnostic Serbia

Natal Dank Agile HR Community Great Britain

Richard Farkas CultureConnector Finland

Martin Klaub IBM Germany

Bob Morton CIPD Enterprises Great Britain

Mojca Domiter Atlantic Grupa Croatia

Laura Klančnik BSH Home Appliances Slovenia

Aljoša Valentinčič Faculty of Economics, University of Ljubljana Slovenia

Lucija Mulej Mlakar Budnjani Slovenia

Luka Villa Acciai Speciali Terni Italy

www.love-hr.com Organizers

Human Resource Management Interview: Tom Haak, the director of the HR Trend Institute

It is not one-size-fits all – choose your recipe By Tonja Blatnik

Between 4 and 5 of April Slovenia will turn into the center of HR excellence. Around 500 HR leaders from business and public sector will gather on the occasion of the 29th European HR Congress, titled "The Future is now choose your recipe from around the world", supported also by The Slovenia Times. For the first time, European Association for People Management (EAPM), which connects 250,000 connected HR professionals from 31 countries, entrusted the co-organisation and hostage to of European HR Congress to Slovenia. With Slovenia, it will now be an Eastern Europe which will organize such an event for the very first time! This is an important milestone for local HR community, and a great honour for Slovenian Human Resource Association, led by Gregor Rajšp, especially if we take into consideration that EAPM. One of the keynote speakers is Tom Haak, the director of the HR Trend Institute, that follows, detects and encourages trends. Tom has an extensive experience in HR Management in multinational companies. He worked in senior HR positions at Fugro, Arcadis, Aon, KPMG and Philips Electronics. Tom has a keen interest in innovative HR, HR tech, workforce analytics and how organizations can benefit from trend shifts. Q What defines a good HR professional? Are those characteristics/competencies changing over time? A It is not one-size-fits all. Let’s not try to capture all the characteristics

Tom Haak, the director of the HR Trend Institute

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of the ideal HR professional in one person. The composition of the team, with a good level of diversity, is important. There are some characteristics though, I would expect in all HR professionals. My top 6: • A business orientation, and loving the business you are working in. • Being independent and not too submissive. • The ability to design and implement high impact HR interventions. • A real people focus, not too much oriented towards management. • Able to deal with ambiguity. • Curious and keen to learn a lot.

Human Resource Management Q Every year The HR Trend Institute publishes predictions of HR trends. Which did you choose for 2019? A You can find the extensive answer in my blog post "10 inspiring trends for 2019." There is one I would like to highlight. Number one is "personalization." Historically HR has focused very much on standardization and "one-size-fits-all." Making the shift to an approach where the individual’s needs, wishes and capabilities are the starting point is difficult, but very important. HR can learn a lot from marketing here. All areas of HR can benefit from personalization.

Q You are one of the keynote speakers at 29th EAPM Congress, giving the lecture "Future is now". Which will be the main takeaways for the audience? What are key messages you would like to stress in Bled?

A The current trends, especially the fast technological developments, create a lot of opportunities for HR to increase its impact. Traditionally HR is rather slow and conservative. If you focus too much on the future, you often loose a lot of speed. I often see projects called "The Workforce of the Future", but maybe it is better to first focus on the workforce of today! I generally observe the following. HR interventions are not clearly related to the most burning business issues. HR wants to do too much and is not focused enough. HR does not use the power of people analytics and the implementation skills of HR can be a lot stronger. In Bled I will outline how to improve these areas, and how the impact of HR can be increased a lot, also by using current trends and innovative technology.

Q Which questions should be "on the leader’s table" every day? What are the most urgent HR issues in Europe?

Q Which organizations and companies are, in your opinion, leaders in is advanced HR practices? Could you give some concrete examples of inspiring business cases? A Luckily there are many examples. Of course, there are the usual suspects, like Google, Netflix and Booking.com. As these organisations become bigger, they sometimes struggle to keep their focus on people. High ethical standards are very difficult to sustain. It is also not easy to avoid complex processes and rigid structures. When I worked at Arcadis, we launched a big program for high potentials in the world. It was called Global Shapers, and it is still running. They key question was not "what should the high potentials learn," but "what can we learn from the high potentials?" The power of the new generations globally was used to tackle important strategic issues. Tilting the question can help in many areas, also, for example, in onboarding. Not "what do the new employees need to learn?" but "what can we learn from the new employees?" Some big companies are doing very cool things, like Deutsche, Telekom, and ING.

The power of the new generations globally was used to tackle important strategic issues. Tilting the question can help in many areas, also, for example, in onboarding. Not "what do the new employees need to learn?" but "what can we learn from the new employees?"

A The starting point should not be HR issues, but the urgent business issues that HR can help to address. Important themes for many organizations are related to questions like: • How can we continue to grow in a sustainable way? • How do we accelerate our digital transformation? • How do we increase our capacity and productivity? • How do we stimulate innovation throughout the organization? HR managers should be very skilled in asking the right questions and determining what way HR can help to address the key issues, and focus on high-impact interventions. An example: increasing capacity, necessary for growth, is often too quickly solved with recruiting more people. There are many ways outside recruitment that can help to increase capacity. Use the potential of people better. Organize in a different way (less managers, more self-managed teams). Focus on connecting learning solutions to individual employees and connect them to the actual work. One generalization: the potential of many people is under-utilized and a lot more people could be thrilled by the work they do. Using the potential to strengthen and develop the skills of people that are "future proof" is a European and, in fact, a global priority.

Q The slogan of EAPM congress is "#loveHR," why do you love it? A I love HR for several reasons. The domain fits very well with my interests. I am an experimental psychologist interested in people, technology, methodology and how scientific insights can be used in the workplace. For me, the HR domain gets more interesting every day. I love HR as well, as we can really make a difference in organizations, and as we can contribute to the digital transformations organizations are going through.

Q What was the most important lesson in your life? A I would like to mention three. One: be persistent and never give up. Two: go with the flow. Three: think and act independently. And overall: make sure you have a lot of fun! Don’t take yourself too seriously.

Q In order to run company successfully, but also responsibly, and to have more impact with less effort, what advice would you give to managers? And what would you advise to the employees?

Q What are you inspired by? Which is your favorite book, your role model, and your motto of life?

A Managers: show a real interest in your people and help them to fulfill

neman is one of the greatest psychologists ever, and I recommend you read "Thinking Fast and Slow". Peter Senge wrote, in 1990, "The Fifth Discipline", about how to apply systems thinking in organizational life. Great insights, useful for everybody.

their potential. Employees: do not make yourself too dependent on your managers. Ask "how can I improve myself, and how can I contribute to the growth of the organization?"

A Inspiration I got a lot from Daniel Kahneman and Peter Senge. Kah-

Spring Edition 2019 | The Slovenian Times

Human Resource Management

Scrum your life. By Saša Fajmut, M.Sc.

From time to time, we need to let others teach us something new. Of course we all think we have everything pretty much figured out. But what if there was a way to live our lives better, smarter and easier? Sometimes we just need to take off our usual "glasses" and put on new ones to look at the way we work, think and live from a different perspective. It happened to IT guys about a decade ago. In a nutshell, software developers thought they have everything well planned out while building new IT solutions, apps, etc. But in reality, nothing happened as they planned. So a very smart guy called Jeff Sutherland co-created a method called Scrum, which shifted the paradigm of work in favour of the software development community. A couple of years later, the rest of the world also started changing extremely fast due to digitalisation and nothing went according to plans anymore. Businesses rise and fall so fast it is beyond imaginable. The amount of information available in any second is unprecedented. Business strategies which were previously set for at least 5–7 years in advance are now changing every two years. So now we are all starting to wonder how to adapt in this fast changing, agile world. What does it actually mean – scrum, to be agile? Does it mean working faster, harder and more? No. It is about working smarter, with a little less planning and a tiny bit

more self-confidence. Because we already know today that we don’t know what tomorrow will bring. Hence, to feel uncomfortable about the future should become the new comfort zone. It means being flexible, bold and to touch new things faster without hesitation. You know, to tick-off all those intimate to-do notes you’ve been promising to yourself but never brought to

life so far. So why not just move from "to-do" into "doing" or even "done"? Let yourself try and fail fast, so you can fix it quickly. Why wait? Life is too short. Customers and competition do not wait. That new business idea you’ve been thinking of will may soon be someone else’s huge success. Things you’ve always wanted to say to your boss, colleague, friend or partner need to be said. Try, fail, change and evolve. Repeat. In work and in life. As Jeff Sutherland put it, "no one should spend their lives on meaningless work. Not only it is not good for business, it also kills the soul." The reason why I am so thankful for digitalisation and automatization is because technology will truly save us from boring, routine jobs. No, it will not make people unemployed because new, exciting jobs are being created daily. Who said we will work from 8 to 4 in the future? Simple tasks and jobs will be soon replaced by AI. What we will contribute is complex problem solving, creativity and intuition. People touch. It does not require a fixed working time, sitting at the same desk every day or drinking coffee from the same mug and with the same team. Living life to its fullest also does not necessarily include finishing school, getting a job, getting married, having kids and retiring after 40 years of work. Previously normal work and life plans might become scrumbled very soon. The new way of thinking and living is just around the corner.

To feel uncomfortable about the future should become the new comfort zone. So eliminate waste from your life, work and mind. Change your perspective. Try working in a different office or getting a new job. Travel. Talk to new people. Read a book you know nothing about. Move and be agile on the move. Scrum your life. The effect can be dramatic. 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.

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Source: • Sutherland, J. (2015). Scrum. The Art of Doing Twice the Work in Half the Time. London, Random House Business Books.

Human Resource Management

Can we Turn Corporate Culture into Competitive Advantage? Customers will never love a company until the employees love it first. – Simon Sinek This year's Slovenian HR Congress will touch an important part of HR professionals' responsibilities, which is creating a competitive advantage through company culture. Can company culture be built deliberately? Where do we start? How can it be done? Let's take an example from the very competitive IT industry, where only a handful of companies stand out. One of them, Centiro, is repeatedly recognized as a Great Place to Work in Sweden in specific and Europe in general. Centiro is a logistic software firm from Borås who are transforming the world of technology. The Gartner Group calls them a "cool vendor." What makes them cool is their ethos ofcreating a competitive advantage through corporate culture. But what does it take to be among the best places to work for in Europe? According to Centiro CEO Niklas Hedin, "I always call the customer and ask them, why did we win? And they will most of the time say, It’s about your people, it’s about the way you interact with us and the feeling you create." According to Hedin, the company's culture and people in the organization are our competitive advantage. "We’re a technology company, and you could emulate our technology in no time these days, and you could copy a lot of stuff. But you cannot copy culture that easy. Culture for me is purposeful design. It’s not something you just get. It’s something you actually invest in every day." The formula for a great company culture is worked at. In Centiro, Hedin says, a "Culture of effectiveness was built in the organisation to support this implementation we cooperated with a worldleading company in creating lasting changes in human behaviour. The 7 Habits of Highly Effective People is our operating system. It’s the way we think, the way we talk, the way we deal with the customers and each other." Implementing an efficent culture across the organization and keeping that culture alive requires investment everyday, according to Hedin. "Culture for me is purposeful design," Niklas says. "It’s not something you just get. It’s something you actually invest in every day." "After the workshop we created an action plan of simple behaviours that create our culture for the next 7 weeks. Then we repeat it. We encourage people to sit down once a week to go through stage by stage, habit by habit, and talk to each other."

To learn more about 7 Habits culture, please contact us in Slovenia:

FranklinCovey Adria Prešernova cesta 5 1000 Ljubljana www.franklincovey.si info@franklincovey.si

There’s a difference between a nice place to work and a great place to work. It’s not just about nice people and a good environment. It’s about the principles people live by every day. Centiro has found in the 7 Habits a formula for greatness in an industry packed with companies less focused on company culture.. What would be the impact on your organization if it were a "7 Habits culture"?

Spring Edition 2019 | The Slovenian Times

Human Resource Management Column

TRUST, The NEW ADVOCATE OF a FUTURE HR-Centered ECONOMY By Prof. Lucija Mulej Mlakar

Mlakarâ&#x20AC;&#x2122;s passion is vivid. She is full of insights for the 21st century economy. Her moto is "Perceive. Awaken." At the conference she will, among others, address the question of trust, which is essential to HR and the future of all of us. When due to obvious or less obvious reasons trust is broken, inner safety is lost. While the inner safety lack turns out to be a wide institutional problem, bringing our consumption appetites to minimum, which poses a great risk to international economy, we invented solutions. We see from here trust can easily become a new target, a new currency and value for money. Thus, we have created and used institutions for yielding trust alongside laws and other official manners of agreement. Since we know how hard it is when we suffer inside and out, we are trying to prevent pain we experience when we lose trust.

When trust is questioned?

Prof. Lucija Mulej Mlakar is a speaker at the EAPM Congress 2019 in Bled

Evolving form a geocentric to an anthropocentric economy, contemporary HR deals with many subtle issues. It seems trust is a new currency, prevailing among others, non-material and intangible ones. Is trust something we control, manipulate or create? Yes and no. Inside our mental constituents we have installed during our childhood years, trust in ontological safety was prevailing self-evident value, hopefully almost never questioned. Believing things are fine, trusting that sun will rise each morning, parents will create solutions to the many challenges life brings, we co-created beautiful, peaceful and harmonious idea of life that seemed obvious and overwhelming.

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Is trust a license never questioned? Of course not. Life can be a struggle or a bubble. It seems we need to trust in order to act as creative humans; and on the contrary, if we need to take care of essential needs, like water, food and primary safety, we only struggle. Without the currency of trust, we cannot live as humans of high cognitive, emotional, and intellectual potentials, waiting to be revealed in harmonious environments where struggle is embedded only in job problem solving while result of it is never life threatening. Maybe we have forgotten to question what is trustworthy and whom we should trust and why? Is it possible the future we are headed towards is going to be full of trust? Is it possible that in the era of new social media and virtual reality business and life trust is rising and not diminishing? Often we see that technology, like Airbnb, supports trust among strangers, relying only on inner feeling everything is going to be ok. Of course, they have a choice to trust in platform and brands as well as in inner faith of overall goodness of people. It seems we trust in the good of humanity, which might explain higher trust in

strangers and lower trust in institutions, like governments and alike. What we are facing nowadays is a transformation of trust all over the globe. Companies, entrepreneurs and workers can use technology to accelerate trust in humankind, where classical borders are just a memory, where coalition of ambassadors of life and good will be placed at the forefront. "The Internet of things", smart cities and biotechnology, to mention just a few, will replace trust in something usual, standard and obvious. HR will change inside and out. We might be awaiting an era that will enable us to open up to our full potential, the foundations of which might have been shaped and put in place by Apple and Microsoft almost four decades ago.

Future scenario New agendas brought by technological and productive development, seeking new challenges where ontological safety is no longer accompanying value, are more and more apparent every day. If trust is something we consciously and subconsciously share, we have a go. If we control earth and seeking to control the sky, values like new synergy, economy of insight and humans as trustworthy are not just fairy tales of wishful thinking. Anthropocentrism [the idea that humans are central to existential questions], ruining core values amongst others faith in goodness, can be overcome by a leap of trust. We need to make a leap into human divine nature and elusive concepts of freedom, waiting for us to harness and, in this way, experience the best of humankind. Maybe digital age and new biotechnology can assist our ambiguous nature? While ethical dilemmas are prevailing in all domains of our lives, digital age is addressing and questioning each step we make. If concepts and ideas are not installed and if the possible reality is not created, in the social media world, it does not exist. And we create misfortunes, doubts, negative visons and projections of the future. Who is delivering hope for humanity? Who is invictus seeing bright future and being aware of our potential power and hidden abilities we can harness in order to co-create the future we will all enjoy and share? Whatever we do, however we act or react, we do it because somewhere deep down we trust that life is fair. Trust the good of the world. Trust the best versions of us, when we meet and work together. The resulting digital age is a possible reward for us all, despite the supposed side-effect of diminishing social skills currently facing. We need to discern whether our trust is placed in worthy men and along the way observe and assess if the authenticity of fellow men and women is aligned with the values trustworthiness is defined by.

Education Perspective

Interview: Professor Jakki Mohr, University of Montana, USA

Companies use biomimicry to solve intractable problems that nature has already solved By Tina Drolc, M.Sc., MBA

Dr. Jakki Mohr is the Regents Professor of Marketing and the Gallagher Distinguished Faculty Fellow at the University of Montana. Before beginning her academic career, she worked in Silicon Valley for both Hewlett-Packard’s Personal Computer Group and TeleVideo Systems. Jakki studies challenges companies face in developing and commercialising break-through innovations, including a broad range of technologies ranging from scientific innovations to innovations in restoration and ecology. In the interview, the winner of numerous teaching awards also explains the term biomimicry. In other words, the conscious imitation of the models, systems and elements of nature for the purpose of solving complex human problems. Q Technology continues to transform business: whether it is artificial intelligence (AI), blockchain, cloud computing or augmented reality. Managers must understand both the potential as well as the risks these technologies pose. How can companies leverage innovative thinking to transform themselves? A Every company today faces opportunities and threats from technologies, even if the company itself is not a high-tech company. A large body of evidence shows that companies must innovate or die—they must be willing to adopt

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new strategies even if those new strategies are in conflict with their existing ways of doing business. Because, if they stick with statusquo thinking, new forms of competition are likely to make their existing business obsolete at some point—in other words, the unwillingness to cannibalize existing strategies can lead a company to being "Amazoned"—i.e., outcompeted by new business models leveraging new technologies. Hence, companies must cultivate and maintain a culture of innovation, which is exhibited through a variety of organizational values and beliefs, such as:

• Having a process for conducting mini-experiments with novel techniques and products, • Not penalizing failure, but instead learning through failure, • Developing a healthy risk tolerance capability, • Enhancing interdisciplinary thinking in teams. These values and beliefs must start with top management, through a clear vision and mission, and be diffused throughout the organization with appropriate procedures and policies that reward innovation and creative thinking. As a final example, companies are increasingly relying on a new form of business strategy, called "platform competition;" platforms provide a place where two groups –say providers and users – can offer and find solutions to their mutual needs. Two classic examples of platform companies are Airbnb and Uber. Given the transformative power of platforms in the marketplace, many companies (Nike, GE, and others) are transitioning their business models to leverage the power of platform thinking. Because they rely on technology to connect providers with users, platforms are a uniquely high-tech topic that is relevant for all types of companies.

Q You study challenges companies face in developing and commercializing breakthrough innovations, including a broad range of technologies. What are the main challenges for the companies from this perspective? What is important when hightech companies develop and implement marketing strategies? A Companies developing and commercializing breakthrough (radical) innovations face more risk than other companies. This risk comes from many sources, including risk arising from product development, risk arising from uncertainties in the market/customer needs and risk arising from business networks and partners that will be required to provide key elements of the solution. For example, technology companies experience difficulties in knowing the best use cases for new technologies, in crafting compelling value propositions tailored appropriately for specific market segments and in lacking a customer/market orientation. Not only do high-tech companies face greater risks, but they also face additional obstacles, including (for example) a technology (product)centric orientation with a corresponding tendency to under-value/under-appreciate the necessary marketing capabilities for success. Studies show that success in high-tech markets requires strengths in both product/technology development AND in marketing competencies. Without both of these capabilities working in

Education Perspective tandem, high-tech companies are not likely to succeed.

Q According to the previous question, what is the logic behind the technologies ranging from scientific innovations to innovations in restoration and ecology? A The idea here is that new technologies come in myriad forms and from a range of contexts. Naturally, when most people think of technology, they think quickly of product categories such as consumer electronics (games, phones, TVs, etc.), information technology (hardware, software, cloud computing), industrial equipment (robotics), medicine/bio-tech (genomics), AI (cuts across industries), photonics/lasers, automotive tech (self-driving cars) and telecommunications (5G networks). What is important to know, however, is that even traditional companies—say consumer products companies and fast-moving consumer goods such as beverages or food products—develop innovations in ingredients, materials, business models and marketing strategies that also would be considered breakthrough innovation. Companies that provide services see innovations in their strategies as well. Hence, all companies can benefit from learning about best practices in developing and diffusing innovations. In my own research, which increasingly exists at the intersection of business and nature, I’ve been studying how innovations and technology can be used to restore degraded landscapes and preserve biodiversity—harnessing the power of drones, genomics and machine learning to better identify where to invest resources and to monitor the effectiveness of ecological restoration.

Q Your TEDx talks also deal with biomimicry, which means Business Innovations

Inspired by Nature. How can companies use biomimicry to solve technical and engineering challenges?

A Biomimicry is the process of learning from and then emulating nature’s forms, processes, and ecosystems to: a. Create products and materials with more sustainable designs, b. Develop processes and policies (structures and systems)—new ways of living—that leverage nature’s approaches, c. Produce materials, buildings and structures modelled on biological entities and processes. Companies use biomimicry to solve intractable problems that nature has already solved— such as how to remove salt from water, how to create materials that are both lightweight and strong, how to prevent impact concussions or how to design urban structures to use less energy, to name just a few. I continue to research innovative industrial uses of biomimicry and the creative ways companies are harnessing this new tool for creativity, sustainability and innovation.

Q Your recent book Marketing of HighTechnology Products and Innovations (3rd Edition) deals with the topic how to successfully market high-tech products. Is that related to the specific industries or the products? Any best practices from that perspective? A The frameworks for best practices marketing in my book are appropriate for companies who face turbulent environments—those characterized by risky investments in R&D, the emergence of new forms of competition and disruptive business models and, importantly, the difficulty to accurately gauge customer

needs for adopting new technologies. Hence, the way companies conduct market research in these environments requires a new toolkit, including customer visits, ethnographic design/ observation and scenario planning, to mention a few. Best practices in high-technology marketing also include a unique approach to market segmentation (called "crossing the chasm"), crafting compelling value propositions that are much more quantitative in nature (emphasizing cost savings, revenue growth, etc.) and a marketing communications strategy focused more on thought leadership (content marketing and earned media) than paid media strategies. Is there a difference between marketing of high-tech services on one hand and products on the other?

A Because services are intangible, they face unique challenges that exacerbate the challenges high-tech environments pose. From a customer perspective, services cannot be reliably evaluated prior to purchase—instead, customers must rely on the service provider’s reputation and credibility. In addition, from a provider perspective, services (such as Information Technology consulting, for example) scale very differently than products (that can be manufactured and then inventoried). There are other differences as well, but the key point is that services marketing tends to involve additional consideration that product marketing does not. Technology companies as well as a wide range of more traditional companies are increasingly moving to a service-model of delivery—think cloud computing, software as a service, open source AI tools, etc. "Servitising" products is an important way to offer new value to customers.

OPEN SEMINAR

Marketing of Innovative Products and Services Jakki Mohr, May 14 - 15, 2019 Spring Edition 2019 | The Slovenian Times

International Business Partners Interview: Gertrud Rantzen, President of the Slovenian-German Chamber of Commerce

Wirtschaftstag 2019 deals with on-the-go trends in the industry and the main challenges ahead Based in Ljubljana, the Slovenian-German Chamber of Commerce (AHK Slowenien) is part of a global network of bilateral German Chambers of Commerce, located in more than 90 countries worldwide. With the aim of promoting trade and business relations between Slovenia and Germany, AHK Slowenien has been the first address for German companies and associations regarding information on the Slovenian market and vice-versa ever since its establishment in 2006. In the interview for The Slovenia Times, AHK Slowenien President Gerturd Rantzen highlights the importance of adapting the industry 4.0 trends and good cooperation between Slovenia and Germany. TST: 2018 was somehow the weakest year for the German economy since 2013. What are your thoughts and how do you see 2019?

Gertrud Rantzen: From the broader perspective, I would say that the global environment – not only economic but also political – has been challenging in the recent years. This has produced trade tensions, turmoil in emerging markets and, ultimately, also the economic slowdown in China. From the EU perspective, we have been confronting the uncertainty over Brexit, and regarding the up-coming EU elections, for the first time in 40 years, EU-skeptic parties are getting quite a lot of attention within the politics at the European Union level. All this has contributed to the weakening. From the German perspective, interestingly enough, the Federal Labor Agency has reported that the average number of job seekers in Germany was lower in 2018 than at any time since reunification in 1991. According to the country’s Federal Statistics Office (Destatis), the economic performance in the fourth quarter of 2018 was achieved by 45.2 million persons in employment, which was an increase of 507,000, or 1.1%, on a year earlier. Over 2019, however, the economy is expected to grow, but at a slower pace.

TST: Generally speaking, Germany has been Slovenia’s biggest trade partner. In April, AHK Slowenien will organise its traditional conference, the so-called Deutsch54

The Slovenian Times | Spring Edition 2019

Slowenischer Wirtschaftstag 2019 (The German-Slovene Economy Day). What will you highlight?

Gertrud Rantzen: The topic of the 2019 conference will be "Artificial intelligence (AI) – an inspiration for the digital future", with a strong emphasis on the German-Slovenian economic and wider relations. The conference is organized in cooperation with the AI Laboratory at the Jožef Stefan Institute. The German government has recently approved a strategy on AI by which it will invest EUR 3 billion in research and development in AI by 2025, EUR 500,000 of which in 2019. As the Slovenian industry is closely connected with Germany, it is important to adapt the trends that will affect the industry in the nearest future. The conference will host renowned guests from German companies, who will discuss the impact of AI on business processes and productivity in enterprises, and present the insights on R&D and good practice in the field of AI in Germany. Today’s pace of change is fast and to cite Darwin, "It is not the strongest species that survive, nor the most intelligent, but the ones most responsive to change." Thus, the Deutsch-Slowenischer Wirtschaftstag 2019 is for sure the event of the industry in Slovenia, as it will deal with on-the-go trends in the industry and the main challenges ahead. TST: How near of far are the companies in Slovenia in the field of artificial intelligence?

Gertrud Rantzen: Every year, AHK Slowenien sets the annual theme. For 2019 we have chosen "Industry 4.0 – Artificial Intelligence", within which we will organize events and activities of various formats. In January, we published the results of the "Industry 4.0 survey", conducted by the Chamber at the end of 2018, which offered an insight into the current state of digitisation and the industry 4.0 in companies in Slovenia. The results show a good basic understanding of the concept of industry 4.0 in companies in Slovenia and its importance for the future development of the industry. Moreover, the respondents confirm with great satisfaction that they are creating new business models with industry 4.0. The challenge arises in the field of awareness of the need to measure the implementation of the industry 4.0 strategy in companies in Slovenia. The survey shows that the reasons are mainly due to the lack of knowledge, competences and qualifications, and a little less due to the lack of financial resources. With high probability, the current state of awareness may mean that problems will arise in monitoring the effects of implementing the strategy in companies in Slovenia. In this context, it is necessary to point out that for good strategic decisions, a key overview and anticipation of the expected effects and consequences of decisions in advance – therefore, the measurement of the implementation of the strategy – should be done on the corporate side on a regular basis and on the basis of monitoring real data.

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05/03/2019

10:23

International Business Partners TOPIC: Investment environment in Slovenia

American Chamber of Commerce â&#x20AC;&#x201C; AmCham Slovenia The AmCham Investment Committee is aware of the importance of sustainable and highquality investments that would enable the state to develop further and bring new jobs with higher added value by opening of hightech companies and development centres. We emphasize that FDI should not mean foreign direct investment alone, but foreign and domestic investments combined, so we are pleased that the law has equalised both types of investment. An investor is an investor regardless of where they come from, and it is only right that they all enjoy the same benefits. At the same time, we emphasize that it is nec-

essary to address attracting and creating new opportunities for investment strategically and with concrete steps. The steps we consider necessary include an increase in the efficiency of institutions, especially agencies, an increase in the efficiency of bureaucracy and an increase in the predictability of the legal system. Investors are also concerned with the decreasing talent

pool in Slovenia, which is due to population ageing and the emigration of young people. In addition to making changes in the financial markets and the tax system, which should be more pro-business, it is crucial that we manage talents efficiently and that we are in line with the changes that are necessary in the labour market.

and transparency. We welcome the recognition of the role for privatisation in Slovenia and

hope to see this matched with concrete initiatives in the near future.

British â&#x20AC;&#x201C; Slovenian Chamber of Commerce â&#x20AC;&#x201C; BSCC The Institute for Strategic Solutions has recently conducted a study on the future of BritishSlovene trade. One of their conclusions was that the labour productivity of UK-owned companies in Slovenia is not only outstanding and well above the Slovene average, but also outperforming other foreign-owned companies in the country. This is a good argument to keep fostering more British investment into Slovenia. Yet, investors from the UK are looking for clarity and predictability, especially when it comes to deadlines on permits necessary for their operations. This is an area where Slovenia could improve, especially in terms of red tape

The Slovenian Times | Spring Edition 2019

International Business Partners

The German-Slovene Chamber of Commerce and Industry – AHK Slowenien

Slovenia is the first among the countries of Central and Eastern Europe in attracting investments from companies with German capital. Data show a stable investment policy for companies with German capital in Slovenia which will focus on further education of personnel, digitisation, product development and

expansion of production. Despite an improvement in most of the factors, Slovenia is still the most heavily constrained by the labour legislation and high taxation among its competition. The Central European trend of labour shortage can also be felt in Slovenia and companies are addressing it by means of retraining, rationali-

zation, employment of foreigners and further education of employees. Just these days, AHK Slowenien is conducting a survey on the business environment in Slovenia. The results will be revealed in spring.

Advantage Austria

Photo: Dr. Peter Hasslacher, Director, ADVANTAGE AUSTRIA Ljubljana, presenting the survey results about the economic climate in Slovenia.

Slovenia – A top location for investment on Austria’s doorstep Austrian companies are the largest foreign investor in Slovenia. At approximately EUR 3.5 billion, their investments represent as much as 25.6 % of all foreign direct investment. Currently, there are more than 1,000 companies with majority Austrian capital in Slovenia, employing approximately 20,000 people in nearly all industry and service sectors. Every year at ADVANTAGE AUSTRIA Ljubljana, we conduct

a survey on the topic of the current economic climate in Slovenia. Representatives of Austrian subsidiaries in Slovenia have expressed their views on the state of the Slovenian economy and their business outlook. The results of the survey are very positive and encouraging: more than 90 % of Austrian companies believe that Slovenia will remain an attractive investment location in 2019. More than half of respond-

ents predict that their revenues will further increase next year. Austrian companies are also highly satisfied with the quality, education and motivation of the labour force in Slovenia. The tax burden on companies, inefficiency of the labour law and low availability of labour remain the critical points of the Slovenian investment environment.

Spring Edition 2019 | The Slovenian Times

International Business Partners Economy

Luxembourg-Slovenian Business Club (LSBC) Who is an investor? By Iztok Petek, NataĹĄa Zajec The general picture we notice is that being an investor is a full-time job with an office and an "investor" name plate on the door. The truth is that every single company or person who has extra money to spare can be an investor. There is no need to go as far as China, for investors can already be found a few kilometres across the border. Thus, the question is why only a few make the mistake of knocking on the Slovenian door. Considering that the interest rates are the lowest in history, there is a lot of money moving around globally and looking for placement. As legal security and protection of an investment is of the utmost importance in making the decision, the main problem we see is the lack of liability. The

The Invest in Slovenia event in Luxembourg in September 2018, organized by LSBC

second thing are the marketing quality and innovative potential of the projects as the investment opportunity has to be sold at the end. For the past two years, the Luxembourg-Slovenian Business Club has been systematically mediating between all the parties involved. We encourage foreigners to consider Slovenia a good place for investment as we believe the situation is better and improving despite the general perception in the world. At the same time, we have been advising investment seekers on how they should prepare their projects. There is still a lot to be done and, hopefully, our politicians will read this article.

Your Daily Source of Information www.sloveniatimes.com 58

The Slovenian Times | Spring Edition 2019

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13/09/2018 10:06

Active Lifestyle

Photos: Urban Praprotnik

Slovenian Running paths By Jasmina Kozina Praprotnik

From Ljubljana center along Ljubljanica river and up the Golovec hill A 16 kilometers cirlce, also along the path of the barbed wire Let’s start our run on the Ljubljana’s central meeting point: the Triple Bridge. Here we can see the statue of our most famous poet, France Prešeren with his muse upon him, take a quick look on the open market square behind him on the other side, which we might consider visiting after our run and then turn right and start our journey in the search of our muses along our way. Let’s run along the Ljubljanica riverside, both sides are mostly traffic free, so running friendly and very charming. We will pass five bridges: the footbridge Ribja brv and than the Cobblers, Šentjakobski, Hradeckega and Opekarski bridge. On the last one let’s choose the right side of the river, that will lead us to the point, where Ljubljanica splits into two. We are on the 1,5 km. The cape is called Špica and here, if we are in need, we can use the free public toliet, that is just under the foot bridge we won’t take, before leaving the city and heading into the woods. Let’s continue along the other river, along the wooden construction where the ship berths are. We will pass the Croatian embassy, under go a newest bridge and cross the old Karlovški bridge. Then we will turn left, run 150 meters along the road and then turn right: steep up the

The Slovenian Times | Spring Edition 2019

cubes floor way in the direction to the Golovec hill. We will pass some private houses on both sides and then quickly enter the woods. There we will just follow the macadam path, which is interestingly marked. On every kilometer we will encounter a sign, that was build in the memory of the barbed wire, a wire fence, that between the Second World War went all around Ljubljana. Italian and later the German occupiers used it to control the Ljubljana’s citizens and enable them to come in contact with the Partizan movement. This path is of a special importance for Slovenians: every year in May, this year already for the 63rd time, around 30.000 people will walk and run on it. This traditional event is organized by the Municipality of Ljubljana and is called The march and run along the barbed wire and will be held from 9th to 11th May 2019. The circle goes on for 33 kilometers and offers a great opportunity to meet Ljubljana from the hiking perspective. But the event offers something for runners, too: a unique running event, a three-member team run, that can compete on a 12.5 or 29 km long route. Men, women or mixed team must run together all the time and their result is signed when the last competitor crosses the finish line. It is a special occasion,

that between runners promotes solidarity. Faster runners can help and motivate less prepared members like Partizans once did. On the 1st and 3rd kilometer from Špica, we can have some water from a public pipe and on the 3rd kilometer from Špica we can even do some additional exercizises on the gymnastics tools. On the 4th kilometer from Špica we will reach the top of the Golovec. On the 6th kilometer the path will start to descend. When we will come out of the wood, we will run into a tree-lined lane. Than we will cross the street and continue straight on until crossing the Fužinski most bridge and encounter a castle: the Renaissance Fužinski grad. It hosts the Museum of Architecture and Design, with its many events, especially exhibitions on architecture, design, and photography. Now we will turn our way to the Ljubljana center: we will continue along the river side again. We will take the second bridge, pass it and that run for 2 kilometers along it. At the 13th kilometer, we will pass another bridge, cross the street and then continue along the river again. Before stepping into the city center, our path will bring us along the river barriers, designed by the most famous Slovene architect, Jože Plečnik, which is also the author of the open market place and the Triple Bridges, where on our 16th kilometer our run finishes. Let’s discover new running paths, alone or together – solidarily.

Jasmina Kozina Praprotnik is an anthropologist, a writer and a running trainer. With her housband leads the Slovenian largest recreational society called Urban Runners. She is the author of a biografical novel about a runner: The long running life of Helena Zigon. More: www.urbanrunning.org

Experience&Lifestyle Slovenia Food Bluz Top 5 Pasta in diVino restaurant from the world pasta vice-champion: Matjaž Cotič, head chef at diVino is also the world pasta vicechampion. In his kitchen, he emphasises Mediterranean flavours made from locally sourced ingredients. Panoramic view from the highest cafe in Slovenia: A breathtaking panoramic view of the city of Ljubljana and the Alps! Visit the Crystal Caffe at the top of the Crystal Palace, the highest business tower in Slovenia. Beer champagne and honey beer: Tavern, pizza restaurant, and brewery Kratochwill follows the tradition of central European craft brewing. In 2012, they began with the production of a new series of beer called champagne beer based on similarities with the wineproduction technology. The same year at an international fair in Tabor, Czech Republic, they placed 3rd among 108 European breweries. Also make sure to try the chestnut honey beer that placed 5th in the same competition. Open market BTC City: Discover and enjoy people, flavours, smells and sounds at BTC City’s open market. You and your travelling companions can enjoy fresh vegetables, fruits, meats, and flowers in a great and relaxing atmosphere. Delicious and vibrant open-air street food experience: Want to enjoy trendy cuisines from a range of cultures in a relaxed atmosphere? BTC City’s Open Air Food Court is the place for you to relish in authentic Spanish, Asian and vegetarian dishes, burgers and all sorts of meat and salad specialties without the formality and etiquette of restaurant dining. Immediately, spontaneously and in an affordable way!

Matjaž Cotič, world pasta vice-champion and head chef at restaurant diVino: "BTC City acts as a culinary nexus of many cultures, including ours."

BTC City Ljubljana

Food Bluz:

Flavours of Slovenia and the world Present-day BTC City is much more than just an urban shopping centre. This "city" offers a wide array of other content and events, including a wide selection of flavours from Slovenia and the world, joined under the single brand Food Bluz.

More than 70 food and drink vendors, who have been united under the common brand name Food Bluz, provide even the most demanding of customers with a charmingly perfect culinary experience.

Each and every day, visitors of BTC City Ljubljana can enjoy not only local dishes but also immerse themselves in the adventurous flavours of cuisines from all over the world. They can stop for a quick snack while ticking off items on their to-do lists, or treat themselves to a delectable experience à la carte in one of the selected restaurants. They can stop and sit down for a relaxed meeting with friends accompanied by trendy food, or stroll about the BTC City Open Market while thinking about their next home-cooked creation. More than 70 food and drink vendors, who have been united under the common brand name Food Bluz, provide even the most demanding of customers with a charmingly perfect culinary experience. BTC City Ljubljana with its brand Food Bluz was the first shopping center to present its offer as part of the project European Region of Gastronomy 2021. With this step, BTC City Ljubljana has further strengthened its position as an increasingly popular tourist destination.

Download the new Food Bluz book!

Spring Edition 2019 | The Slovenian Times

Event Guide

 Culture / Musical Performance  Sport

Planica FIS World Cup Ski Jumping - Planica 2019 21 – 24 March 2019, 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, which this year celebrates 50 years and without which we cannot imagine the annual World Cup of Ski Jumping.

Lenny Kravitz 27 April 2019, Stadium Stožice, Ljubljana Lenny Kravitz has chosen Slovenia to start the European part of his tour, his second tour in Slovenia. His Raise Vibration album, released in September last year, combines rock ‘n’ roll, funk, blues and soul. It is distinguished by youthful inspiration which, however, is subject to three decades of wisdom and experience. Lenny Kravitz is one of the most popular rock musicians of our time, in a music career of almost 30 years he has surpassed the frames of soul, rock and funk, and brought them into modernity from the 1960s and 70s, and at the same time received four successive Grammys in the category of male rock performers, setting a unique record.

 Culinary Event / Festival

Olive oil and Chard festival 27 – 28 April 2019, Padna The Olive oil and Chard Festival is celebrated at the beginning of summer, in the village of Padna, in Slovenian Istria. Padna is a small, picturesque village with less than 200 inhabitants, located in the hinterland of the beautiful coastal town Piran. Throughout history, the village has become famous for its natural products, notably olive oil and chard, both popular ingredients in Mediterranean cuisine. The festival will feature a farmer’s market, art program, free guided tours of the village, hiking tours, events for children and, of course, opportunities to taste the local delicacies.

 Sport / Exhibition  Culinary / Food Market

Open Kitchen 22 March - October 2019, Central Market, Ljubljana The Open Kitchen is a food market where you can experience the delights of freshly cooked food prepared by different Slovenian chefs right in front of you. The choice of food on offer is wide and varied. Each Friday, the market features around thirty different food providers, from modern and traditional restaurants, tourist farms, and independent chefs wanting to promote their offerings. The cooking is done to the accompaniment of music and entertainment. In case of bad weather the market may be cancelled.

The Slovenian Times | Spring Edition 2019

Internautica - International Boat Show 16 - 19 May, 2019, Koper The 24th annual, Adriatic, premier international boat show, Internautica, will move to a new venue in the heart of Koper – Capodistria, the fifth largest city and the largest coastal city in Slovenia. The new venue will allow expansion of the exhibition program. Exhibitors will meet thousands of customers (old and new), and be able to trade, network and collaborate with a variety of marine experts at the start of 2019’s summer season.

Event Guide

 Music Festival

35rd International Druga Godba Festival 21 – 25 May 2019, Ljubljana, Maribor Druga Godba is one of the most prominent music festivals in Central Europe with a concept and approach that sets it apart from other festivals in this part of the world. Primarily started in the socialist days as an alternative to the drab offerings served up by the state-run festivals, this festival has always prided itself on being cutting edge. Druga Godba 2019 will feature at least 15 artists with different music genres stretching from the north of Europe to the south of Africa, with wonderful views from across the Atlantic as well.

 Lighting Festival

 Culture

13th Medieval Days at Bled Castle 1-2 June 2019, Bled It has been more than 1,000 years since, on 10 April 1004, German King Henry II conferred the estate of Bled, located in the Carniola province, on Bishop Albuin of Brixen and his church. In 1011, Henry II awarded Albuin’s successor, Adalberon, the castle on the cliff (castellum Veldes) in a charter in which the castle was first explicitly mentioned. The Bled Castle was the administrative seat of the Brixen estate in the Gorenjsko region, although medieval documents refer to Bled by its German name, Veldes. According to written documents, Bled Castle is the oldest castle in Slovenia, its buildings are arranged around lower and upper courtyards.

Photo: DK

International Lighting Guerrilla festival Mid-May to mid-June 2019, Ljubljana The International Lighting Guerrilla Festival, which has been held in Ljubljana since 2007, is dedicated to the production and presentation of works of contemporary visual and newmedia art, and the main medium of expression is light. Galleries, streets, squares and parks in the city centre come to life through lighting elements of all kinds, exhibitions, video and spatial installations, screenings, performances and art workshops. The festival, each time with a different theme, is renamed as Re:Action in the autumn and hosted as a smaller version in other towns in Slovenia.

 Culture / Musical Performance

Sting 4 June 2019, Stadium Stožice, Ljubljana My Songs European Tour will be a rollicking, dynamic show focusing on the most beloved songs written by Sting and spanning the 16-time Grammy Award winner’s prolific career with The Police and as a solo artist. Fans can expect to hear "Englishman In New York," "Fields Of Gold," "Shape Of My Heart," "Every Breath You Take," "Roxanne," "Message In A Bottle" and many more. Sting will be accompanied by an electric, rock ensemble.

Spring Edition 2019 | The Slovenian Times

KNAUF INSULATION EXPERIENCE CENTER

Regional Sustanable Building Center

Demonstration and training center

Attractive architecture

Built according to sustainable construction standards

Practical training workshop and demonstration of applications in practice

The first Slovene DGNB-certified new building

Lecture halls for education and digital experiences

Active House Certificate holder

Various events to increase the importance of raising awareness and promoting sustainable living

The European Commission pilot project for sustainable building guidelines â&#x20AC;&#x201C; Level(s)

Venue for hosting various events â&#x20AC;&#x201C; even yours

www.kiexperience.si www.knaufinsulation.si

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01/03/2019

10:58

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The Slovenia Times Slovenian Magazine in English Language Spring Edition 2019, Volume 16, EUR 4.90

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SPECIAL INSERT: Real Estate & Investment Opportunities

12-15 MARCH 2019

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PROJECT DIRECTORY

A selection of projects showcased at MIPIM 2019

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DAZZLING COMFORT

Alenka Bratušek, MIRS, on the EUR 1,194m investment for largest regional project

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