Slovenia looks beyond Europe, to East

Don't put all your eggs in one basket. That's what Slovenia, nestled in Europe's Alpine region, has come to realise.

Though it was the fastest growing member of the Euro zone before the recession, the country had to pay dearly for confining its trade largely within the European Union. Last year, 70 per cent of its exports and almost 80 per cent of imports were in its own region. Though on the slow road to recovery, the economy has been plagued by a rising unemployment trend (currently around 12 per cent), an ageing population and high public deficit . Add to this the pressure for reform from both the International Monetary Fund and the European Union. Slovenia has no choice but to take steps unpopular in a country with a largely socialist mind set. Also, it wants to make sure that it does not in any circumstance go the way of Greece or Ireland. Aggressively looking towards a combination of attracting investments and executing policy reform, the Prime Minister, Mr Borut Pahor, has been trying to bring about several changes, some of which the country's two million population refuses to stomach.

Pension reform

The most recent and the most controversial has been the pension reform that the Government mooted. It lost the referendum on June 5 with an overwhelming majority voting against it. The reform would have meant that the retirement age in the country increases from 60 to 65 and hence help bring the budget deficit to under 3 per cent of the gross domestic product by 2013. This is something that the European Union has been pressing for to ensure economic sustainability. But Slovenia's rights-oriented society, formerly part of Yugoslavia and used to pension from age 60, firmly rejected the move. And now its Socialist Democrat-led coalition government has to find other innovative means to balance its exchequer, even as the Opposition argues for early elections.

Look East

To harness investments and improve its growth rate, Slovenia has decided to look East. Even more so, explore the emerging markets of India and China for enhanced export avenues and to attract foreign direct investments.

Though West Asia and the Far East hold as much promise, and China has been on the radar for some time, India has come into the focus very recently. Though Slovenia is keen on close diplomatic relations with India being aware of the close relationship former President Josip Broz Tito had with Pandit Jawaharlal Nehru and the role both the countries (India and Yugoslavia) played in the Non-Aligned Movement, at this point of time it is mainly eyeing economic tie-ups and increased trade.

Hence, the visit of Mr Pahor to India has a great significance for the tiny nation as it explores investments and business opportunities in logistics, health sector, pharmaceuticals, and energy among others. It is, of course, keen to expand its trading pie in the Asian region and follow a more sustainable trade pattern. As of now, the country has limited trade with the region, with imports much higher than exports. With the country's twentieth independence anniversary coming up in the end of the month, more eggs in the trade basket will be of immense help to the coalition government facing criticism at home and pressure from the EU. It will also be of help if Slovenia can promise its people a more balanced budget without drastically cutting down on existing social measures.

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