Area: 20,273 sq km, slightly smaller than New Jersey Population: 1,935,677 (2003 est.)
Annual Inflation: 7.4% (2002 est.)
Population Growth Rate: - 0.14% (2002 est.)
Gross Domestic Product (GDP): $37.06 billion (purchasing power parity, 2002 est.)
Life Expectancy: male 71.65 years; female ? 79.58 years (2003 est.)
GDP Per Capita: $19,200 (purchasing power parity, 2002 est.)
Infant Mortality: 4.42 deaths/1,000 live births (2003 est.)
Real Annual GDP Growth: 3.2% (2002 est.)
U.S. STRATEGIC INTERESTS
A Europe that is whole, free, and at peace remains an important national security interest for the United States. Slovenia is economically strong, politically stable, and active in Southern and Eastern Europe. Slovenia?s recent invitations to join the EU and NATO indicate the level of political and economic development the country has achieved during the last decade, and the regional role it can play in furthering the U.S. priorities of promoting stability, market liberalization, and anti-corruption. Slovenia?s strategic location, productive workforce, and solid, growing infrastructure with free access to the world?s second wealthiest market, make it an attractive venue for U.S. investments. As the new gateway to fledgling Southern and Eastern European markets, Slovenia, with its sound economic infrastructure, will continue to build bridges to the region through trade, investment, and direct assistance. Slovenia is the region?s largest investor and plays a leading role in Balkan demining efforts, humanitarian assistance, and peacekeeping operations. The USG will continue to encourage Slovenia?s involvement in the region, and to promote it as a regional model of political stability and economic development.
While no terrorist organizations are known to be active in Slovenia, its central location and short Adriatic coastline make it an attractive potential transit country for trafficking in drugs, persons, and weapons of mass destruction (WMD) by criminal and terrorist organizations. It is in the U.S. interest to provide training assistance and equipment, and to engage the Slovenian law enforcement community in efforts to detect, interdict, prosecute, and convict those involved in transnational criminal and terrorist activities. Slovenia already is actively promoting regional law enforcement cooperation, combating criminal activities, and providing technical assistance on economic, political, and judicial reforms.
OVERVIEW OF U.S. GOVERNMENT ASSISTANCE
In FY 2003, the U.S. Government (USG) provided an estimated $5,140,000 in assistance to Slovenia:
- $120,000 in Democracy Commission Small Grants;
- $4,940,000 million in security, regional stability, and law enforcement programs; and
- $80,000 for the Ron Brown Fellows program.
U.S. ASSISTANCE PRIORITIES
Democratic Reform Programs: In FY 2003, the main priorities for U.S. democratic reform assistance in Slovenia were the promotion of grassroots democracy and volunteerism in the country and the region; support for cultural understanding and ethnic tolerance; the forging of additional linkages among the countries of the former Yugoslavia; and encouragement to Slovenia to continue its mentoring role in the region.
Economic and Social Sector Reform Programs: Slovenia is not a recipient of economic and social sector Reform assistance. The Embassy has leveraged regional development assistance funds to host conferences promoting corporate governance through USAID?s Partnership for Financial Stability (PFS) program and has cooperated with other USG agencies, including the U.S. Export-Import Bank, Department of the Treasury, Department of Labor, and the Securities and Exchange Commission, to encourage development of the private sector and financial institutional supervisory development.
Security, Regional Stability, and Law Enforcement Programs: In FY 2003, U.S. security-related assistance focused on preparing Slovenia for full NATO membership and on combating terrorism by increasing U.S. cooperation with local authorities. The USG continued to promote regional stability by helping Slovenia enhance its interoperability with NATO forces. To this end, the USG provided the Government of Slovenia (GOS) with $4 million in Foreign Military Financing (FMF) and $940,000 in International Military Education and Training funds (IMET). In the law enforcement arena, the USG focused on strengthening Slovenia?s capability to detect and pursue money laundering, trafficking in drugs and persons, non-proliferation, and organized crime.
SECTORAL ASSESSMENTS
Democratic Reform
Slovenia has a well-functioning, multi-party democracy, independent judiciary, free press, excellent human rights record, and solid civilian control of the military. It is firmly committed to progress and democracy in the region, actively participating in regional initiatives such as SFOR, KFOR, and the Stability Pact. It also provides bilateral economic, commercial, and humanitarian assistance to several of the Yugoslav successor states. Presidential and local elections were held in late 2002, through which former Prime Minister Janez Drnovsek succeeded Milan Kucan as the country?s president. In the local elections, 15 Roma community members were elected to town councils around the country. In March 2003, Slovenians approved EU and NATO membership referenda, with full membership expected by May and June 2004, respectively.
According to the United Nations Development Program (UNDP), Slovenia continues to register one of the lowest levels of citizen participation among developed countries. Although the GOS has made some efforts to increase cooperation with NGOs, civil society remains undeveloped. Over 16,000 NGOs/NGO-type organizations were registered in Slovenia, as of 2002, but only a few were active. Most Slovenian NGOs have weak organizational structures, small memberships, suffer chronic resource shortages, and require continued external support. There is a growing recognition, however, of the importance of NGOs to society in promoting democracy and economic development. Membership in the Center for Non-Governmental Organizations (CNVOS), an umbrella organization of NGOs to develop, unite, and strengthen the sector (and a previous Democracy Commission grantee) continues to increase. Within a few years, CNVOS membership has grown from 27 to over 100.
USG efforts have focused on developing grassroots democracy and citizen participation in the region, promoting ethnic tolerance and social integration, and assisting refugees from the countries of the former Yugoslavia. Social integration of displaced persons, particularly from Bosnia, is a work in progress. Positive steps were made in 2003, including, after much delay, a local government permit to build a mosque.
SEED funding was used to support the participation of two Slovene lawyers in the Ron Brown Fellowship Program. Program participants focused their research in legal areas not examined frequently in Slovenia -- family and bioethics, and refugee and asylum law. Ron Brown Fellows continue to be some of the best and brightest participants in U.S. exchange programs.
The Democracy Commission Small Grants Program provided funds to indigenous NGOs for: strengthening and development of NGO capacity, grassroots democracy/volunteerism, the environment, and tolerance and cultural understanding. A grant raising youth awareness about the meaning and importance of democracy allowed high school students to participate in mock elections a week prior to the actual presidential and local contest. Funds supported the "Europe, Slovenia, Roma" project, promoting social awareness of the Roma community in Slovenia and disseminating information about international human rights and standards for protecting minorities. A priority of grants this year, such as a project with the Legal Information Center helping set up financial counseling services to NGOs, was enhancing the long-term sustainability of NGOs in Slovenia.
Economic and Social Sector Reform
Slovenia ranks highest in most economic indicators among the states slated to enter the EU in 2004. A recent EU review praised Slovenia?s macroeconomic performance, characterizing the country as being at the top of its accession class. With its export-oriented economy, Slovenia?s per capita GDP reaches nearly $11,000; unemployment stands at 6.1 percent; and at 3 percent, the annual growth rate remains above the EU average, even in the current world economic slowdown. Measures to reduce inflation have been successful, lowering the annual rate from 7.5 percent in 2002 to an estimated 5.1 percent in 2003. The GOS has made entering the Exchange Rate Mechanism II a priority, and Slovenia expects to adopt the Euro by 2007.
Structural challenges need to be addressed, including the privatization of parastatal companies, the removal of direct and indirect barriers to foreign direct investment (FDI), and the reduction in the role of the government in key sectors of the economy. After a banner 2002 for FDI -- due in large extent to the $900 million takeover of Lek Pharmaceuticals by Novartis -- direct investment has plummeted. Privatization procedures in key sectors, including banking, insurance, and telecommunications, have either been stopped or have yet to be carried out. The public sector continues to play a determining role in the economy, either directly, as sole proprietor, or indirectly, through shares. Transparency in government procurement remains an area of concern, particularly for foreign companies. Slovenia is not party to the WTO?s Government Procurement Agreement (GPA).
The Embassy has leveraged regional development assistance funds to host conferences promoting corporate governance through USAID?s Partnership for Financial Stability (PFS) program and has cooperated with other USG agencies, including the U.S. Export-Import Bank, Department of the Treasury, Department of Labor, and the Securities and Exchange Commission, to encourage private sector development and supervisory oversight of financial institutions. Democracy Commission funds helped several social service organizations encourage civic action by promoting volunteerism, public awareness of their activities and the populations they serve, and greater public support for and involvement in their social programs.
Security, Regional Stability, and Law Enforcement
Since March 1996, Slovenia has been eligible to purchase Foreign Military Sales (FMS) goods and services on a case-by-case basis and has been investigating the procurement of weapons systems in the U.S. and elsewhere. The principle of civilian control of the military has been accepted within both the government and the uniformed military. The Law on Defense defines the chain of command for the military and delineates the responsibilities between the Ministry of Defense (MOD) and the General Staff. The Defense Doctrine states the purpose of the armed forces is to deter aggression and to preserve territorial integrity. With its very small armed forces, Slovenia hopes to accomplish this by aligning itself with Western countries through NATO membership.
Slovenia's willingness to participate in regional military programs reflects both its rising confidence about its continued sovereignty and independence, as well as a calculation that it must assume a regional role as an invitee for NATO membership. Slovenia in the past year has in fact played a more active role in Southeastern Europe, a region in which it wants to promote stability and prosperity.
The primary U.S. security assistance programs benefiting Slovenia remain International Military Education and Training (IMET) and Foreign Military Financing (FMF). Slovenia has increasingly made the most of its IMET opportunities, since the FY 2002 program began, and continued emphasis on defense reform and restructuring led to maximum use of professional military education courses. In FY 2003, the USG provided Slovenia with $940,000 in IMET to train 82 military and defense-associated civilian personnel. Another 25 people took part in courses and seminars at the George C. Marshall European Center for Security Studies, in Garmisch, Germany. In addition, with current FMF cases, Slovenia completely expended its Warsaw Initiative Funds for the first time since becoming a recipient in 1996, with FMF totaling $4 million.
Slovenia?s overarching, short-term military objective is full NATO membership in 2004. Long-term, the Slovenian armed forces are in the midst of restructuring, with the ultimate goal of establishing, by 2010, a small, effective, well-equipped military force that conforms to NATO standards. As part of the process, it is reducing its territorial defense component and increasing the peacetime active duty (professional) strength of the armed forces. The intention is to build a combined arms capability and to transition to a more NATO-compatible force structure. The military will eventually be comprised of rapid reaction forces, main defense forces, and support defense forces. The MOD and General Staff are using the 2000 U.S. Office of the Secretary of Defense-sponsored Defense Assessment to refine and adjust their reorganization effort, in an attempt to meet NATO Partnership Goals. These efforts mesh well with primary U.S. objectives for Slovenia and the region. They are to promote regional stability, reduce the likelihood of further armed conflict, advance democracy, expand civilian control of the military, enhance military professionalism, build military capabilities, and develop closer relations with the U.S. and NATO. Slovenia has already proven itself a stabilizing force in the region. A professional, effective, NATO-compatible military force can only promote U.S. goals overall.
Slovenia is an active member of the Global Coalition against Terrorism, and is party to nearly to all international anti-terrorism conventions.
COUNTRY PERFORMANCE MEASURES
Economic Policy Reforms and Democratic Freedoms in Slovenia, 1991-2002
Ratings based on a 1 to 5 scale, with 5 representing the most advanced.
Sources: EBRD, Transition Report 2003 (November 2003); Freedom House, Freedom in the World 2003 (2003); and (various years).
Economic Structure and Human Development in Slovenia, 1991-2002 
The Human Development Index (HDI) is based on three indicators: longevity, as measured by life expectancy; educational attainment, as measured by a combination of adult literacy and combined primary, secondary, and tertiary enrollment ratios; and standard of living, as measured by real per capita GDP ($PPP). The HDI ranges from 0 to 1, with higher values representing greater human development. UNDP, Human Development Report 2003 (July 2003), and previous editions; EBRD, Transition Report 2003 (November 2003), and previous editions.
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