Hot topics

Slovenia Business Week no. 12: IMAD: Slovenia Needs to Shore Up Competitiveness

The government's economic think-tank says in its annual development report that while important steps have been taken in implementing the Development Strategy, further measures are needed to shore up Slovenia's competitiveness, foremost in promoting innovation

The government's economic think-tank says in its annual development report that while important steps have been taken in implementing the Development Strategy, further measures are needed to shore up Slovenia's competitiveness, foremost in promoting innovation.

The Institute for Macroeconomic Analysis and Development (IMAD) says that the country's priority should be to bolster activities that will make Slovenia more competitive in knowledge and innovation, whilst retaining positive welfare trends and reducing the burden on the environment.

In its report IMAD says that the increase in economic growth seen over the last three years is in line with plans. An important contributing factor has been the successful economic stabilisation of the economy and a number of structural reforms, especially a reduction in the tax burden and the cutting of red tape faced by business.

In order to keep the positive trends, Slovenia must retain the achieved stability of its economy, says the report that the cabinet will debate at one of its upcoming sessions.

However, the think-tank sees a key challenge in fiscal sustainability. While Slovenia has managed to cut its general government deficit in recent years, the main task in the future will be increasing the adaptability of fiscal policies to the changing macroeconomic environment.

Moreover, a key challenge for quicker economic growth will be bolstering factors contributing to competitiveness in innovation and know-how. According to IMAD, Slovenia needs to improve institutional and financial measures aimed at promoting investment in this area, also through public-private partnership.

While Slovenia's economy is becoming more international, this has mainly been achieved through trade and Slovenian investment abroad. All the meanwhile foreign direct investment in Slovenia remains paltry.

As far as building a knowledge-based society goes, the situation is fairly good, although there has been a lack of progress in increasing the quality and efficiency of higher education and research and development institutions, says the report.

According to the document, Slovenia has achieved progress in increasing the efficiency of the state and the judicial system, while more work needs to be done in privatisation and ensuring development-minded public spending.

The quality of life in Slovenia and prosperity of its citizens is generally good, while certain groups are exposed to heightened social risks (foremost young and old people and those with a lower education). Improving the situation in this respect should be the goal of balanced economic and welfare policies, the report adds.

In its annual development report IMAD checks the progress in implementing the Development Strategy, whose main goal includes Slovenia bridging the development gap with the most developed EU countries by 2013.

Source: Slovenian Press Agency STA

Author: STA, Slovenian National Press Agency