FDI Summit 2011 Conclusion Paper Published by the Slovenia Times Prepared by Tilen Majnardi, M
Total Page:16
File Type:pdf, Size:1020Kb
Conclusion paper from the second Foreign Direct Investment (FDI) Summit 2011 Between Crisis Management & Sourcing Capital for Development Organised under the honorary patronage of the President of the Republic of Slovenia, Dr. Danilo Türk Conclusion paper from the second Foreign Direct Investment (FDI) Summit 2011 Between Crisis Management & Sourcing Capital for Development Organised under the honorary patronage of the President of the Republic of Slovenia, Dr. Danilo Türk FDI Summit 2011 Conclusion Paper Published by The Slovenia Times Prepared by Tilen Majnardi, M. Sc. Ljubljana, December 2011 FDI Summit 2011 Profile The FDI (Foreign Direct Investment) Summit 2011 Slovenia was a major international business event focusing on foreign direct investment and current development issues. The 2011 conference was held in Ljubljana on 13 and 14 October 2011 with more than 20 eminent speakers in seven round table discussions over the two-day period and with 170 participants from Slovenia and abroad attending. The conference speakers and participants included: - established international and domestic experts, - CEOs of domestic and foreign companies, - key representatives of government institutions responsible for shaping the business environment, - existing and potential foreign investors, - representatives of domestic and foreign international institutions from the fields of business and economics, - economic diplomatic representatives from several countries. The organiser of the conference was The Slovenia Times in partnership with the Public Agency of the Republic of Slovenia for Entrepreneurship and Foreign Investments (JAPTI) and the Ministry of the Economy. The programme partner of the conference was the Faculty of Economics, University of Ljubljana. The honorary patron of the FDI Summit 2011 was the President of the Republic of Slovenia, Dr. DaniloTürk. FDI Conclusion paper 5 FDI Summit 2011 Profile Moderating team – Chairpersons of the panels Prof. Marko Jaklič, Faculty of Economics, University of Ljubljana doc. Maja Makovec Brenčič, Faculty of Economics, University of Ljubljana Tine Kračun, Institute for Strategic Solutions Maja Dragović, The Slovenia Times Primož Cirman, Dnevnik newspaper Jernej Šmajdek, STA (Slovenian Press Agency) Tilen Majnardi, Solutia, co-organiser of the FDI Summit 2011 Speakers Žiga Debeljak, Mercator, Chairman of the Board Christof Droste, Hella Saturnus Slovenija, Managing Director Biljana Weber, Microsoft Slovenia, Managing Director Stephen Kai Wong, Director of the Hong Kong Economic and Trade Office Branko Žibret, A. T. Kearney Slovenia, Partner Luca Olivari, A. T. Kearney Italy Matjaž Rakovec, Zavarovalnica Triglav, Chairman of the Board Rudolf Klötscher, BSH Hišni aparati,CEO Igor Plestenjak, JAPTI, Director Thierry Villard, Goodyear Dunlop Central & South East Europe, Managing Director Giulio Bonazzi, Aquafil-Gruppo Bonazzi, President & CEO Saša Bavec, Knauf Insulation, Chairman of the Board Damir Kuštrak, Agrokor Group, Executive Vice President for Export Markets Marjan Hribar, Director Internationalisation Directorate, Ministry of the Economy Marko Voljč, KBC Group, CEO for Central and Eastern Europe and Russia Prof. Dušan Mramor, Dean of the Faculty of Economics, University of Ljubljana Iztok Lesjak, Technology Park Ljubljana, Director 6 FDI Conclusion paper Platform of the Conference “The detrimental years of doing nothing” The first FDI Summit, in the autumn of 2010, took place amidst modest post-crisis optimism which was characteristic of all of the world’s most developed countries as well as the emerging new global superpowers. It also held true that Slovenia, given the implementation of certain investment projects and the reorganisation of the state administration, aimed at achieving greater efficiency and effective service for the economy and citizens, had good prospects for a new economic cycle and even for attracting foreign capital. The first conference went far beyond addressing the issue of foreign investment, with the final outcome of the conference contained in its final report (Conclusion paper), “Integrated management of state competition and credible governance as a key element of economic development” which, based on domestic and international experiences and trends in the global economy, laid a solid foundation for the formulation of an effective development policy in Slovenia. Despite the modest optimism that marked the FDI Summit 2010 conference, it is clear that over the past year, despite some bold plans in the field of public infrastructure and acquisition of strategic partners for Slovenian companies, Slovenia has not made any headway in terms of actual project implementation. Conversely, in many areas, stagnation has turned into a disturbing lag and the common denominator of all the accumulated problems is the collapse of credible corporate governance of the State and its assets, from the highest to the lowest levels. The findings and guidelines from last year’s conference together with the conference partner, Peter Kraljič, were combined into practical guidelines for enhancing all levels of competitiveness, from national, regional and corporate to personal, have not been implemented by Slovenia, i.e. by its governing structures in the daily economic activities of the State, even to a minimum degree. The summer and even more so the autumn of 2011, heralded the possibility of a new rapid deterioration in the economic situation of Slovenia. Slowly, but steadily, credit rating houses began to punish Slovenia’s reform inability, the credit crunch grew worse, companies had increasing difficulty obtaining the funding necessary to maintain production and at increasingly higher prices, development projects were more or less at a standstill and the government was without a basic operational plan for possible anti-crisis State investments. The failure to eliminate the obvious shortcomings of the young socio- economic system. The inefficient and bureaucratic, over-regulated FDI Conclusion paper 7 Platform of the Conference public administration, incomplete preparation of various investment documentation, delays in launching economic projects, inadequate legal security, politically and regionally irrational fragmentation of the available investment potential, irrational politicisation of even simple economic facts and the inability to define the true national economic interest – are the elements pushing Slovenia down on all scales of international competitiveness. Despite the general strategy of encouraging and promoting foreign investment, the State is becoming increasingly inhospitable in systemic and political terms to potential investors (who are hard to find due to the escalating crisis in the EU and U.S. and are also much more cautious than in the years before the crisis) and to economic partners with its image increasingly becoming one of a friendly and nice but, a frivolous and unreliable partner. Over the last two years, the economic crisis fully revealed Slovenia’s unwillingness within the context of global expansion and unrealistic economic optimism, to assume the “post-independence” challenges of state governance, strategic guidance of the economy and identification of new trends in changed and unstable global circumstances. The accumulated problems escalated into an internal political crisis in the autumn of 2011 which led to a vote of no-confidence in the Government and the announcement of early elections in December 2011. The political crisis also put certain key reform projects on hold in terms of public finance and with regard to important national projects. The prospects of economic recovery in Slovenia and the European Union vanished in October and November 2011 with the escalation of the euro crisis and the unsuccessful and inglorious salvaging of Greece, indicating serious and long-term problems for the entire eurozone. 8 FDI Conclusion paper Core Theme of the Conference “The worsening global crisis does not allow for any more time to be wasted” The cornerstone of Slovenia’s new development strategy – utilising Slovenia’s potential as a regional “hub” or regional entry point for conducting business in South East and Central Europe. international platform FOR DOING BUSINESS IN SOUTH-EASTERN AND CENTRAL-EASTERN EUROPE GERMANY Prague Slovenia CZECH REPUBLIC Brno Member of EU, Eurozone, OECD and SLOVAKIA Stuttgart Bratislava Schengen Műnchen Vienna Bern AUSTRIA Budapest At the crossroads of the main SWITZERLAND HUNGARY European transport corridors SLOVENIA Zagreb ROMANIA Venezia Ljubljana Milan CROATIA Shortest connection from the Port of Beograd Koper to the Middle East and Far East Bologna BIH SERBIA Sarajevo ITALY MONTENEGRO BULGARIA Rome MACEDONIA ALBANIA 400 km Radius More than 45 mio consumers 11 countries, jointly representing more than 40% of the total GDP of the EU FDI Conclusion paper 9 Key Substantive Issues of the Conference How can Slovenia be more effective in utilising its strategic geographical location for so-called hub development projects, its infrastructure potential in the broadest sense, natural features, preserved environment, relatively well-educated workforce and what is still an enviable level of quality of life? Can we improve our image as a country that is not deemed interesting in terms of investment? Can Slovenia translate its numerous general decisions and theoretical projects into investments and economic practice in the relatively limited timeframe imposed by the deepening euro crisis? Where can investment capital be obtained