Business environment in Slovenia - how to improve it?

Ljubljana, 5 June 2015

Stratis KASTRISSIANAKIS

European Commission

Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs

AGENDA

State of play

Progress made so far

Further Unlocking Slovenia's potential

2

Remarkable turn around

3

Good export performance is fuelling economic activity growth

Investment in Slovenia severely lags behind its peers

Slovenia's investment dropped by 40% and has not yet recovered

FDI stocks have persistently lagged behind the benchmark countries

4

55

60

65

70

75

80

85

90

95

100

105

02 03 04 05 06 07 08 09 10 11 12 13 14

Rea

l GF

CF

, 20

08

=1

00

EA SI V4

Source: Eurostat

10

20

30

40

50

60

70

02 03 04 05 06 07 08 09 10 11 12 13

% o

f GD

P

EA SI V4

Source: Unctadstat

Slovenia ranks below average on competitiveness indicators

Slovenia ranks 51st in the world - lagging behind in the EU Room to improve on several areas

5

0

10

20

30

40

50

60

70

Den

mar

kN

orw

ayF

inla

nd

Sw

eden

Irel

and

Ger

man

yE

ston

iaS

witz

erla

nd

Au

stria

Latv

iaLi

thua

nia

Po

rtug

al

Net

herla

nds

Fra

nce

Po

lan

dS

pai

nS

lova

k R

epub

licB

elg

ium

Cze

ch R

epub

licS

love

nia

Italy

Luxe

mbo

urg

Gre

ece

Cyp

rus

Cro

atia

Source: Doing Business 2015 Source: WEF Global Competitiveness Report 2014-2015

But still Slovenia has many comparative advantages…

6

which make Slovenia an ideal FDI destination!

• geographic location – global value chains • Quality work force

Overall productivity, 2013 GDP (PPP) per person employed (in €). Source: IMD - World Competitiveness Yearbook, 2014

Rich on natural resources

AGENDA

State of play

Progress made so far

Further Unlocking Slovenia's potential

7

The importance of the business environment is widely recognised

8

2015 NRP

Bilateral meetings

• Reduction of administrative barriers: One of the key priorities in structural reforms

• Improve administrative capacity

• Harmonisation and prioritisation of policies

• Full implementation of SBP, single document

• Renewal of Regulated professions

• Inclusion in the agenda of all bilateral meetings with the government.

2015Country report

• Several areas highlighted including

• Reduction of administrative burden

• Access to Finance

• Regulated professions

• R&D and Innovation

9

Slovenian Business Point

Stop bureaucracy - minus 25% action program

Measures to mitigate impacts of grey economy

Progress has been made….

Reduce time to start a business in Slovenia

…but shift focus on prioritisation and implementation?

10

Single document• Priority I: 42 measures• Priority II: 52 measures

=> Few measures target directly business environment: Lack of prioritization

Several strategic documents• Industrial Policy, Innovation Strategy, Smart specialization

strategy, Internationalization strategy

=> Is coherence between various activities ensured?

Most of the measures have missed the original deadline

Clear responsibility and project organization for implementation and monitoring?

Implementation & monitoring

Prioritisation

AGENDA

State of play

Progress made so far

Further unlocking Slovenia's potential

11

Surveys and analysis provide indication of areas with highest priority

12

Regulatory burden

Access to finance

Institutional environment

• Streamline permitting processes – provide certainty to investors: reduction of time and cost for obtaining a building permit

• Better Regulation: Systematically assess impacts of new regulation

• Reduce overall burden of tax and social contributions on labour

• Pursue reforms on Regulated professions

• Build financial capability and improve the investment readiness of SME's

• Better assess the quality of borrowers and loans

• Assessment of existing instruments by SID Banka and SEF

• Increase transparency – reduce risk of over indebtedness

• Further increase alternative financing instruments – equity financing

• Enhance implementation capacity of the Public sector

• Improve administrative capacity

• Take effective measures to fight corruption

Illustration of priority areas

Focus on some big but easy wins

13

Time to implement:•1-2: 2015 – mid 2016•3-4: mid 2016 – 2017•5: after 2017

Cost to implement•1/2: low•3/4: medium •5/5- high

Size of bubble:Impact on investment

Illustration of possible measures

14