THE war in the former republics of Yugoslavia is forcing Slovene enterprises to find alternative trading partners among European Community countries as a means of compensating for lost markets in the region. However, Slovene officials warn that capital inflows will not increase unless Slovenia re-establishes trade links with its southern neighbours. Until 1990, over 30 per cent of Slovenia's exports were with the former Yugoslavia, while about 70 per cent were divided between Comecon, the now defunct socialist trading block, and western European countries. But following an embargo by Serbia on Slovene imports in 1990, and ensuing war in neighbouring Croatia last year, Slovene exports to the former Yugoslavia have fallen to 15 per cent of that previously. The loss of markets in the former Yugoslavia, and the war, has led to a sharp drop in industrial production, which last year fell by 15 per cent, and will fall a further 12 per cent this year. Unemployment has risen to 101,000, up from 9 per cent to 11 per cent of the labour force. However, inflation is falling thanks to a strong monetary policy implemented by Slovenia's central bank. Inflation was running at 25 per cent a month last October, but by April it had fallen to 5 per cent. Mr Feri Horvath, head of Slovenia's Chamber of Commerce, said Slovenia, which declared its independence last June, must seek new markets because the republic is too small to be able to attract large amounts of foreign investment to foster growth. Renault, French car manufacturer, which assembles cars in Slovenia, and Siemens, German-based mechanical and electrical goods maker, which has a joint venture with Iskra, Slovenia's electronic and telecommunications manufacturer, have used Slovenia as a base for exporting to other parts of Yugoslavia, as well as to western Europe. 'We have recently signed bilateral trade agreements with Croatia and Macedonia,' said Mr Horvath. 'We want to normalise relations with the other republics,' he added. In the meantime, Slovene enterprises, particularly those in the furniture, electronics, paper, and white goods sector, are exporting to European Community countries. Exports for the first quarter amounted to Dollars 941m (Pounds 513m), and imports totalled Dollars 752m. Last year, total exports of goods reached Dollars 3.9bn, and imports, Dollars 4.1bn. 'Our enterprises are beginning to find new markets,' said Mr Horvath, adding that Germany, Italy, France and Austria are now Slovenia's main trading partners. Mrs Vojka Ravbar, Slovenia's deputy foreign minister, who earlier this week headed a trade delegation to the UK, said enterprises will have to become even more competitive after privatisation. Parliament is now discussing a privatisation bill.
The war in the former Yugoslav republic is forcing Slovenia to look for new partners in the European Community to compensate for lost markets in the region. Exports are low, at only 15% of previous figures, and industrial production is down. Although unemployment figures are higher, inflation is lower thanks to a strong monetary policy. Foreign automobile and other manufacturers assemble their products in Slovenia and from there, distribute to other parts of Yugoslavia and Europe. Some Slovene products are exported to European community countries, mainly Germany, Italy, France and Austria. Parliament is now discussing a privatisation bill which will make their enterprises more competitive.