Slovenia's economy has made a model transition to capitalism

Slovenia is among the most successful of the former communist countries set to join the European Union on May 1 in having made the transition to capitalism.
Many economists see Slovenia as the model that shows how things can go right if the proper economic reforms are implemented and if politicians keep their hands off the domestic market.
After declaring independence in 1991 and introducing its own national currency, the tolar, Slovenia began selling more goods to EU member states, which now take in more than 60 percent of the former Yugoslav state's exports.
Slovenia, an Alpine nation with a population of only two million, now has a per capita gross domestic product (GDP) that is 74 percent of the EU average.
It is the first state from the former Soviet bloc to have joined the World Bank's club of 28 donor members, which includes the world's most developed countries.
"We are so impressed by Slovenia's achievement that we are using this experience to help other countries," World Bank President James Wolfensohn said in March after signing the upgrading of Slovenia from borrower to donor member.
Although GDP growth dropped in 2003 to 2.3 percent from 3.2 percent registered a year earlier, the Slovenian government hopes for an economic recovery this year.
It is looking for 3.6 percent growth while continuing to reduce inflation towards 3.6 percent in 2004, down from 4.6 percent in 2003 and 7.2 percent in 2002.
Slovenia has also set a target for the 2004 budget deficit of 1.5 percent of GDP, compared to a 2.8 percent deficit in 2003.
Finance Minister Dusan Mramor told the newspaper Delo in an interview that Slovenia wanted to adopt the euro in 2007.
But foreign investors have warned Slovenia to take certain measures.
"A more efficient court system is needed, privatisation (of state-owned companies) is going extremely slowly, there is an opportunity to improve tax policy too, and the government must have a strategy as to which industries they wish to attract," the head of the tire company Goodyear's Slovenian subsidiary Sava Tires, Richard Johnson, said earlier this month.