Short Overview of the Slovenian Economy and Foreign Investment in Slovenia

Abstract

In the 1990s, Slovenia started on the path of complete political and economic transformation. Compared to other formner socialist countries coping with the transformation into a market economy and a democratic political system and with the need to stabilize the economy, Slovenia's transition was further hindered by the following problems: * transition from a regional to a national economy; * loss of markets in the other countries of the former Yugoslavia; * establishment of a new state, with increased responsibilities for the organs of state administration due to the need for establishing international recognition for the new state with membership in major international organizations). The transition from a socialist to a market economy and from a regional to a national economy after 1990 caused deep structural changes, characterized not only by the transition from social to private ownership but also from a manufacturing to a more services-oriented economy, from the domination of large firms to an increasing role for small enterprises. These processes were further complicated by the loss of markets in the former Yugoslavia, which had to be replaced by more competitive Western markets. ' The immediate consequence of the introduction of market reforms, the imposition of a stabilization policy, and the loss of markets in the beginning of the 1990s was a sharp decline in economic activity,