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Slovenia's dangerous complacency

Slovenia is the wealthiest country to have emerged from communist rule, but is it losing its way? Exports are flagging, industry is becoming politicized and the stock market is shaky. Even the country's successful banking reforms have ground to a halt. Gavin Gray reports on the dangers ahead.

Slovenia is at a turning-point. Will it fulfil its potential of becoming the first central European state to reach the average level of living standards in the EU? Or will it stagnate - growing at the same slow rate as neighbouring Austria, and never edging much ahead of Greece or Portugal?

The outcome will depend on the speed of reform, which until now has been much slower than in the rest of central Europe. That's because Slovenia, unlike the Czech Republic or Hungary, has so far not seen the need for radical change. GDP per capita was $9,362 in 1996, about double the Czech and Hungarian levels. That is largely a reflection of achievements in the 1980s when Slovenia was the most developed republic of Yugoslavia, itself the richest of the east European states.

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