Background Notes: Slovenia

Contributed By RealAdventures

The majority of Slovenia's population is Slovene (more than 87%). Hungarians and Italians have the status of indigenous minorities under the Slovenian Constitution, which guarantees them seats in the National Assembly. Most other minority groups, particularly those from the former Yugoslavia, immigrated after World War II for economic reasons. Slovenes are predominantly Roman Catholic, though the country also has a small number of Protestants, Orthodox Christians, Muslims, and Jews. Slovene is a Slavic language, written in the Roman script.

From as early as the ninth century, Slovenia has fallen under foreign rulers, including partial control by Bavarian dukes and the Republic of Venice. With the exception of Napoleon's 4-year tutelage of parts of Slovenia and Croatia -- the "Illyrian Provinces" -- Slovenia was part of the Hapsburg empire from the 14th century until 1918. Nevertheless, Slovenia resisted Germanizing influences and retained its unique Slavic language and culture.

In 1918, Slovenia joined with other southern Slav states in forming the Kingdom of Serbs, Croats, and Slovenes as part of the peace plan at the end of World War I. Renamed in 1929 under a Serbian monarch, the Kingdom of Yugoslavia fell to the Axis powers during World War II. Following communist partisan resistance to German, Hungarian, and Italian occupation, socialist Yugoslavia was born under the helm of Josip Broz Tito. During the communist era, Slovenia became Yugoslavia's most prosperous republic, at the forefront of Yugoslavia's unique, mixed economic system. Within a few years of Tito's death in 1980, Belgrade initiated plans to further concentrate political and economic power in its hands. Defying the politicians in Belgrade, Slovenia underwent a flowering of democracy and an opening of its society in cultural, civic, and economic realms to a degree almost unprecedented in the communist world. In September 1989, the General Assembly of the Yugoslav Republic of Slovenia adopted an amendment to its constitution asserting Slovenia's right to secede from Yugoslavia. On December 23, 1990, 88% of Slovenia's population voted for independence in a referendum, and on June 25, 1990, the Republic of Slovenia declared its independence. A nearly bloodless 10-day war with Yugoslavia followed; Yugoslav forces withdrew after Slovenia demonstrated stiff resistance to Belgrade.

As a young independent republic, Slovenia pursued economic stabilization and further political openness, while emphasizing its Western outlook and central European heritage. Today, with a growing regional profile, as a nonpermanent member of the UN Security Council, a participant in the SFOR deployment in Bosnia, and a charter WTO member, Slovenia plays a role on the world stage quite out of proportion to its small size (population 2 million).

Slovenia is a parliamentary democracy and constitutional republic. Within its government, power is shared between a directly elected president, a prime minister, and a bicameral legislature (Parliament). Parliament is composed of the 90-member National Assembly (which takes the lead on virtually all legislative issues) and the National Council, a largely advisory body composed of representatives from social, economic, professional, and local interests. The Constitutional Court has the highest power of review of legislation to ensure its consistency with Slovenia's constitution. Its nine judges are elected for 9-year terms.

The present government is a "grand coalition," with the leftist Liberal Democratic Party (LDS) sharing power with the rightist, rural-based People's Party (SLS). This arrangement took some time to organize, and the delay in forming a government (together with the "teething pains" of this form of cohabitation) are widely held responsible for the delays in adopting and passing a budget. It also underlies the delays Slovenia has experienced in pursuing a host of pressing reform measures, such as privatization of large state holdings, property restitution, and some legislation needed for accession to the European Union. Notwithstanding these differences, the government -- indeed, most of the Slovenian polity -- shares a common view of the desirability of a close association with the West, specifically of membership in both the European Union and NATO.

In the course of 1997, elections were held for the presidency (a contest that the incumbent, Milan Kucan, won handily) as well as for the upper house of Parliament, the National Council. In November 1998, local elections were closely watched as a preview for general elections due by the year 2000 and as a gauge of the direction of policy as Ljubljana devolves authority to the local level -- a process that includes the recent creation of 45 new local administrative units (obcine), bringing that total to 192. The polls produced no major upsets, confirming the predominance of the LDS and, in second place, its major opposition rival, the SDS.

Slovenia's failure to be invited in the first round of NATO enlargement sent a tremor through its political establishment, prompted the resignation of the Foreign Minister, and led to a vote of confidence lodged by the opposition parties -- the Social Democrats (SDS) and the Christian Democrats (SKD). The ensuing debate resulted in the government articulating a general strategy for NATO enlargement, while leaving the governing coalition firmly in charge. The invitation by the European Union to begin accession negotiations soon thereafter calmed the political waters, as did the subsequent decision by the United States to waive visa requirements for most Slovenian tourists.

For all the apparent bitterness that divides left and right wings, there are few fundamental philosophical differences between them in the area of public policy. Slovene society is built on consensus, which has converged on a social-democrat model. Political differences tend to have their roots in the roles that groups and individuals played during the years of communist rule and the struggle for independence.

Slovenia maintains an embassy in the United States at 1525 New Hampshire Avenue, NW, Washington, DC 20036 (tel: 202-667-5363; fax: 202-667-4563). It also has a consulate in New York at 600 Third Avenue, 21st Floor, New York, NY, 10016 (tel: 212-370-3006; fax: 212-370-3581).

Slovenia was the most productive of the Yugoslav republics and today is the most prosperous country of transition Europe. Its high level of openness makes it extremely sensitive to economic conditions in its main trading partners and changes in its international price competitiveness. Keeping labor costs in line with productivity is thus a key challenge for Slovenia's economic well-being, and Slovenian firms have responded by specializing in mid- to high-tech manufactures. Agriculture, forestry, and fishing comprise a comparatively low 4% of GDP, while industry and construction comprise more than one-third of GDP. As in most industrial economies, services make up an increasing share of output (nearly 60%), notably in financial services. Slovenia's entry into the European Union, expected by the year 2005, will accelerate a host of economic reforms.

Economic management in Slovenia is relatively good. Public finances have only recently shown, so far, modest deficits, and the outlook indicates deficits on the order of 1% of GDP to persist into 1999. This outlook depends critically on the government reversing the explosive growth in pension expenditures. Other accounts are fairly robust: Slovenia usually has a balanced current account, and its overall debt/GDP ratio is a modest 23%. While the authorities have been successful in stabilizing the Slovenian tolar and bringing inflation down from more than 200% in 1992 to 8.4% in 1997, further progress on inflation will be modest in the medium term as the government liberalizes administered prices and introduces a value-added tax.

Slovenian enterprises have a tradition of market orientation that has served them well in the transition period, as they move energetically to reorient trade from former Yugoslav markets to those of central and eastern Europe. However, in many cases under the Slovenian brand of privatization, managers and workers in formerly "socially owned" enterprises have become the majority shareholders, perpetuating the practices of "worker management" that were the hallmark of the Yugoslav brand of communism. Difficulties associated with that model are expected to decrease under competitive pressures, as shares in these firms change hands and as EU-oriented reforms introduce more Western-oriented governance practices.

Slovenia presently occupies a nonpermanent seat on the UN Security Council and in that capacity has distinguished itself with a constructive, creative, and consensus-oriented activism. Slovenia has been a member of the United Nations since May 1992 and of the Council of Europe since May 1993. Slovenia signed an association agreement with the European Union in 1996 and is a member of the Central European Free Trade Agreement. Slovenia also is a member of all major international financial institutions (the International Monetary Fund, the World Bank Group, and the European Bank for Reconstruction and Development) as well as 40 other international organizations, among them the World Trade Organization, of which it is a founding member.

Slovenia's bilateral relations with its neighbors are generally harmonious and cooperative. However, there remain a few unresolved disputes with Croatia related to the succession of the former Yugoslavia, including demarcation of their common border. In addition, unlike the other successor states of the former Yugoslavia, Slovenia has yet to normalize relations with the "Federal Republic of Yugoslavia" (Serbia and Montenegro). Relations with Belgrade remain strained over succession issues, particularly concerning liabilities and assets of the former Yugoslavia.

As part of the former Yugoslavia, Slovenia was never a member of the Warsaw Pact. Today, the foreign policy priority of NATO membership drives Slovenia's defense reorganization. Once many countries lifted the arms embargo on Slovenia in 1996, the country embarked on a military procurement program to bolster its status as a NATO candidate and to aid its transformation into a mobility force. Active in the SFOR deployment in Bosnia, Slovenia is a charter member of the Partnership for Peace and a regular participant in PFP exercises.

Slovenia enjoys excellent relations with the United States and cooperates with it actively on a number of fronts.

The United States provides bilateral military assistance to Slovenia, including through the International Military Education and Training (IMET) program, the State Partnership Program (aligned with Colorado), and the EUCOM Joint Contact Team Program.

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