Business, January 2012

Opportunities for new development models and green technologies

January 2012

Only a few economies have experienced a crisis as severe as that in Slovenia. On average, the cash flow of Slovenian companies has fallen by twenty to thirty per cent. Difficulties in financing and obtaining new loans have not helped the situation; however, those export-oriented companies that are not heavily in debt and can afford to invest in development and explore new development models are somewhat better off. Alenka Avberšek from the Chamber of Commerce and Industry of Slovenia  says that thriving companies have introduced green technologies, and points to the young entrepreneurs who have succeeded on the global market. The situation is more difficult for some labour-intensive sectors, particularly the construction industry, which has endured an almost twenty-year low; more than 25 000 workers have been left without work and another 20 000 jobs are said to be at risk. Many large construction companies have gone bankrupt, while some of the companies that have survived are now offering new and integrated solutions on foreign markets. The forecasts made by the Slovenian business sector for 2012 vary considerably depending on the sector and the development ambitions of the companies concerned.

Unemployment: An increase in the number of job-seekers

Photo: STA

According to the National Employment Service, there were 112 754 unemployed persons registered in Slovenia at the end of last year. The number of first-time job-seekers younger than 24 years of age as a percentage of the total unemployed slightly declined, as did the percentage of women and those aged 50 and over. The share of unemployed in the 25–39 and 40–49 age groups has continued to increase. A rise has also been recorded in the proportion of long-term unemployed and those with lower levels of education. According to some forecasts, a new crisis might prompt a rise in the number of registered unemployed in Slovenia to 130 000 or even higher.

Robotics: Slovenia lags ten years behind developed countries

Photo: STA

The Chamber of Craft and Small Business of Slovenia carried out a survey on robotics in Slovenia in 2009 and 2010, which showed a considerable increase in the number of robots. They can be found not only in the automotive industry but also in numerous other industrial activities ranging from food to electro-technical and other industries. Experts assess however that Slovenia lags ten years behind the most developed countries. This gap has not reduced in recent years, despite successful craft and tradesmen introducing robotics to their production lines. The rise in the number of robots has been slower than in the industrial sector because of their high price. Robotics results in a reduction of the number of workers required. Janez Škrlec, the chair of the science and technology committee, explains that automation and robotics contribute strongly to competitive advantages, increased profits, as well as facilitating unhindered manufacturing production and precision. He says we are beyond the point of no return, but that we should strive to achieve synergy between man and machine.

Real estat: Total value of EUR 139 billion

Photo: STA

According to data from the Surveying and Mapping Authority of the Republic of Slovenia, there are some six million units of real estate in Slovenia worth €139 billion. Land plots represent 41 per cent or almost 9 per cent of the total real estate value. Houses represent seven per cent or EUR 52 billion, while the total value of flats has been assessed at EUR 32 billion. The first real-estate mass valuation was carried out by the Surveying and Mapping Authority. It provided information about the values of real estate to real estate owners and received a deluge of comments in response, the majority of which were taken into account. A building register is envisaged to provide the basis for a property tax, but there are serious doubts as to whether this register, set up by the Mapping and Surveying Authority by combining records, can serve as a suitable basis. The information commissioner, Nataša Pirc Musar, is opposed to the public access of detailed data on real estate owners, including their age; therefore the Mapping and Surveying Authority withdrew these data; an administrative dispute challenging this decision is expected. The Mapping and Surveying Authority believes that all these data should be made available to the public saying the public curiosity about who owns what should be satisfied as those who have acquired their real estate fairly have nothing to hide.

Public finance: A serious and credible stabilisation programme is needed

The Slovenian financial, banking and economic experts who met at the Parliamentary Committee on Finance and Monetary Policy stressed the need for a firm budget saving approach. The departing finance minister Križanič said that approximately EUR 400 billion should be saved in 2012. According to the governor of the Bank of Slovenia, Marko Kranjec, this year's savings should be much higher, amounting to between EUR 700 million to EUR 1 billion. The chair of the Fiscal Council, Marjan Senjur, took a different view and assessed that, in the event that Slovenia did not exceed the previous year's spending, i.e. EUR 9.4 billion, no budget savings would be necessary. Senjur also called for a freeze on fiscal expenditure.

Governor Kranjec stressed that the global financial crisis was only partly to blame for Slovenia's difficulties and that the situation in the country also played a part; for that reason, a serious and credible stabilisation programme should be prepared. Kranjec said that, according to available data, only one third of companies were able to repay their loans. Kranjec further held that approximately EUR 4 billion euros for recapitalisation were required for the companies to become trustworthy borrowers.

Text by Vesna Bertoncelj Popit, Delo, Sinfo, January 2012