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Slovenia Gains One Spot in IMD Competitiveness Rankings (adds)

Ljubljana, 18 May (STA) - After losing 20 spots in 2010, Slovenia gained one place this year to rank 51st in the competitiveness rankings of the International Institute for Management Development (IMD). The Swiss institute's World Competitiveness Yearbook for 2011, published on Wednesday, includes 59 countries.

Slovenia lost one place in the economic performance category to rank 43rd, preserved 53rd place in government efficiency, was up one spot to 56th in business efficiency, and climbed three spots in infrastructure to 31st place.

The director of Slovenia's Public Agency for Entrepreneurship and Foreign Investments (JAPTI), Igor Plestanjak, pointed out for the the press today that the ranking means that Slovenia did not regress compared to last year, but added that a detailed analysis of the results was necessary.

Peter Stanovnik of the EIPF Economic Institute, IMD's partner in the survey, explained that questionnaires - given to 121 entrepreneurs - were the prime method for economic and business performance indicators and reflected the "subjective negative atmosphere present when the poll was conducted".

Stanovnik added that the two spots gained this year - given that the United Arab Emirates entered the rankings in 28th place for first time - "does not yet guarantee a long-term trend" and that concrete measures will be necessary.

Slovenia has not reduced the gap to comparable new EU members, such as the Czech Republic and Estonia, he noted, highlighting business and government efficiency as the most problematic areas.

The IMD divided its recommendations for improving competitiveness into four groups: measures securing more flexibility on the labour market, public tenders, simpler administrative procedures, and an improved national innovation system.

The proposals include simpler procedures for laying off workers, a more flexible wage policy, an overhaul of regulated professions, the introduction of a cap on social contributions, protections for subcontractors in public tenders, simpler construction permit procedures, and more effective investment in research and development.

Development and European Affairs Minister Mitja Gaspari commented on the report by saying that it was a warning to Slovenia that it should move beyond debates about pension reform and social transfers to also discuss competitiveness.

Gaspari feels that the framework for wage negotiations, which he sees as obsolete, needs to change. He also sees the "cap on social contributions" recommendation in this context, arguing that educated workers would look for work abroad if no changes are made.

Economy Minister Darja Radic for her part noted that the competitiveness of the economy did not depend only on the government but also on the managers themselves.

Radic dismissed the results on innovation, saying that Slovenia had done a lot in this field and that the measurements were too subjective and based on the views of managers, who were repeating old mantras.

Gaspari agreed that the results of the report in general needed to be taken with a grain of salt, as it was not clear what weight had been given to statistical data and polls respectively. He pointed out that Slovenia for instance placed behind Greece last year.

In 2010, Slovenia recorded the biggest drop among the 58 countries included in the survey, with JAPTI director Plestenjak highlighting then the big drop in GDP and pessimism among business executives as the key reasons.

This year, the countries trailing Slovenia were South Africa, Jordan, Argentina, Bulgaria, Greece, Ukraine, Croatia, and Venezuela. Greece lost 10 spots.

Topping the IMD's rankings this year are Hong-Kong together with the US, followed by Singapore, Sweden, Switzerland, Taiwan, Canada, Qatar, Australia and Germany. The US was third last year, losing top spot for the fist time in decades.

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