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Factba.se: Australia DFAT Country Briefs - Slovenia


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Relations between Australia and Slovenia are based on strong community ties and small, but growing, trade relations. Australia recognised Slovenia as an independent state on 16 January 1992 and established diplomatic relations on 5 February 1992. The Australian Embassy in Vienna is accredited to Slovenia and an Australian Honorary Consul is based in Ljubljana. Austrade covers Slovenia from Warsaw. Slovenia has an Embassy in Canberra, and a Consulate-General in Sydney.

Australia has a small but active Slovenian migrant community, many of whom migrated to Australia in the 1950s and 1960s. The 2006 Census recorded 16,085 people of Slovenian origin living in Australia, with most living in Melbourne and Sydney. In 2010, Bostjan Žekš, Minister responsible for Slovenians Abroad, visited Australia and met with Australian Government representatives and Australians with Slovenian heritage.

Australia's trade with Slovenia is modest. Two-way trade in 2010 totalled A$52.9 million, with Australian exports accounting for A$6.9 million and Slovenian imports to Australia accounting for A$46.0 million. Australia's major exports to Slovenia included medicaments, perfumes and cosmetics, starches, as well as meters and counters. Slovenia's main exports to Australia in 2010 included trailers and semi-trailers, medicaments, household-type equipment and paper and paperboard.

Harvey Norman opened its first furniture retail store in Ljubljana in 2002. It has since expanded and will be opening its fifth store in Maribor in 2011. Business opportunities exist for Australian businesses in infrastructure development projects and sectors such as IT, pharmaceuticals, banking, insurance and telecommunications.

Australia has gained a distinct cultural profile in Slovenia through the artistic directorship of Festival Maribor by the Director of the Australian Chamber Orchestra (ACO), Richard Tognetti. First held in 2008, this annual two-week cultural event in Slovenia's second largest city has showcased Australian excellence by featuring artists such as William Barton, the Tawadros brothers, and photographer Jon Frank. In 2012, the ACO will be Festival Maribor's Orchestra in Residence, when Maribor will feature as one of two European Capitals of Culture.

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The President of the Republic is the Head of State and is elected by popular vote every five years, for a maximum of two terms. Dr Danilo Türk was elected President in November 2007. Dr Türk was Slovenia's first ambassador to the United Nations in New York and from 2002 to 2005, he held the position of Assistant Secretary General for Political Affairs at the United Nations Headquarters in New York. The President is the Supreme Commander of the Armed Forces who, despite having chiefly ceremonial powers, retains enough authority for the system to be characterised as a 'dual executive'. The powers of the President include nominating the Prime Minister after consultation with parliamentary groups and, in rare circumstances, the power to pass laws and dissolve the parliament.

Legislative power is vested in the Head of Government, the Prime Minister, and a Council of Ministers (Cabinet). Both the Prime Minister and the Council of Ministers are elected by parliament.

The bicameral Slovenian parliament is made up of the 90-member National Assembly, and the 40-member National Council. The National Assembly is elected for four years and comprises 38 directly elected deputies, 50 members selected on a proportional basis and two non-elected representatives of the Hungarian and Italian minorities. The National Council, which exercises an advisory function, has 22 directly elected members and 18 non-elected members representing various social, economic, trading, political and local interests.

Slovenia's current coalition government was sworn in on 21 November 2008. Prime Minister Borut Pahor's centre-left cabinet took office on 24 November 2008. Following the departure of two political parties from the coalition, Prime Minister Pahor is currently running a minority government.

The government's main focus during the remainder of its term will be to support the economic recovery, consolidate public finances and restore competitiveness. Other priorities include combating climate change and promoting the expansion of renewable energy sources. The Organisation for Economic Co-operation and Development's (OECD) 2011 Economic Survey of Slovenia emphasised the urgent need for pension reform, reform of the education system and policies to promote innovation, labour market flexibility and making Slovenia more conducive to foreign direct investment.

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Slovenia's economic performance has traditionally been stronger than the other former Republic of Yugoslavia states. Slovenia was one of the strongest economies of the countries that joined the European Union in 2004. Slovenia was also the first of the new EU members to join the Eurozone, which it did on 1 January 2007. Slovenia's economy is highly dependent on foreign trade, particularly on its principal export destinations (Germany, Italy and Austria).

Slovenia's gross domestic product (GDP) is set to rise modestly in 2011. GDP is expected to grow by 1.9 per cent in 2011, up from 1.2 per cent in 2010. Slovenia's budget deficit in 2010 was 5.6 per cent, and public debt rose to 38.0 per cent of GDP from 35.2 per cent a year earlier. Nevertheless, due to its macroeconomic stability, favourable foreign debt position, and EU membership, Slovenia consistently receives among the highest credit rating of all the economies that joined the European Union in 2004.

According to recent forecasts, GDP per head of population will be about 25 per cent higher in 2015 than in 2010. Services account for 66.4 per cent of Slovenia's GDP; industry 31.2 per cent; and agriculture 2.4 per cent. Public ownership and control of enterprises is still widespread in Slovenia. A considerable percentage of directly owned state enterprises can still be found in energy, ports, telecommunications, post and rail industries, as well as banking and insurance.

At the end of 2010, Slovenia's unemployment rate stood at 11.8 per cent by the national system of measurement, or 7.3 per cent by the EU's harmonised rate. Slovenia's employment protection is high compared to other European countries and its labour movement is not very active. While the government continues to gradually implement reforms to make Slovenia more business friendly, privatisation and increased investment opportunities remain key economic policy issues for Slovenia. Slovenia also faces an urgent need to reform its welfare system, particularly its pension and health system, in response to the rapid ageing of its population. However, reform in these areas is slow and difficult due to the consensus-based nature of Slovenian policy-making, where the broadest possible social consensus is sought before important reforms are introduced.

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Slovenia is a small, but active, member of the international community. Slovenia has been a member of the United Nations (UN) since May 1992. From 1998 to 2000, Slovenia occupied a non-permanent seat on the UN Security Council. It is currently lobbying for a seat on the UN Security Council in 2012-13. Slovenia is a member of the International Monetary Fund, the World Bank, the European Bank for Reconstruction and Development, as well as the World Trade Organisation. Slovenia served as the Chair of the International Atomic Energy Agency's Board of Governors in 2006-07.

Slovenia became a member of the European Union on 1 May 2004 and held the rotating Presidency of the Union from January to June 2008. Slovenia's European Union commissioner, Janez Potočnik, is currently serving his second term (2010-14) as European Commissioner for Environment. Slovenia is also a member of the Council of Europe, which it joined in May 1993 and chaired for the latter half of 2009.

One of the goals of Slovenia's foreign policy is to ensure stable relations with its neighbours – Austria, Italy, Hungary and Croatia. Slovenia works alongside other Central European countries within the Central European Initiative and Regional Partnership and contributes to the stabilisation of South Eastern Europe within the Stability Pact. In 2005, Slovenia chaired the Organisation for Security and Cooperation in Europe. In 2011, Slovenia's capital Ljubljana became the seat of the European Agency for the Co-operation of Energy Regulators.

Slovenia joined NATO in March 2004. Slovenia currently has several hundred troops deployed on foreign peace-keeping missions, a reflection of its commitment to international conflict resolution. Slovenia restructured its armed forces in 2006, primarily to participate in NATO operations outside of Slovenia. Slovenia takes an active role in the Balkans by participating in the EU Mission Althea in Bosnia and Herzegovina, and the NATO Force in Kosovo (KFOR). Slovenia has also deployed troops to Afghanistan, as part of the United Nation's International Security Assistance Force (ISAF), as well as other multilateral operations.

Established by the Slovenian Government in 1998, the International Trust Fund for Demining and Mine Victims Assistance (ITF) identifies and coordinates tenders for demining, mine-risk education and mine victims assistance projects, as well as small arms and light weapons and conventional weapons stockpile destruction projects. Its key focus in the Balkans region remains Bosnia and Herzegovina and Croatia. The ITF also continues to coordinate the South Eastern Europe Mine Action Coordination Council. More recently, ITF has expanded its engagement in the Middle East and Central Asia.

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Membership of the Central European Free Trade Area (CEFTA) and the EU make Slovenia attractive as a gateway to markets in Central Eastern Europe and the Western Balkans.

The port at Koper, modern rail and road transport networks that connect with central Europe, and traditional business ties with the other former Yugoslav republics give Slovenia a strong platform for businesses wishing to operate in the central and eastern European markets. By using the southern sea-route access to Central Europe, ships coming into the Mediterranean through the Suez Canal can save between 5 to 10 days, or up to 3,700 km, as compared to other major North European ports.

While productivity levels have climbed to close to the Euro area average since Slovenia's transition to a market economy in the 1990s, productivity remains low in a number of sectors. Privatisation of state assets is one area where Slovenia has lagged behind other Central European countries. A considerable share of the economy remains in state hands. Over the last 20 years, Slovenia's stock of foreign direct investment (FDI) has grown more slowly than that of other Central European Economies and will need to be strengthened further to stimulate economic dynamism and raise productivity.

An extensive infrastructure program will create opportunities for civil engineering firms.

Further investment opportunities exist in Slovenia in pharmaceutical and white goods firms, manufacturing industries, strategic services, shared services centres, logistics and distribution centres, as well as R&D and the energy sector, particularly renewable energy.

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Last Updated: August 2011

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