At the Business Breakfast of the American
Chamber of Commerce – AmCham Slovenia, our guest Egon Zakrajšek, PhD, a Deputy
Associate Director in the Division of Monetary Affairs of the Federal Reserve
System in Washington, DC, revealed to many gathered leading Slovenian and
foreign economists and foreign ambassadors his personal views on global,
American, European and Slovenian economic and social situation.
In his opinion, immediate measures are
necessary, as are urgent the complete, constructive – and above all – long-term
solutions, that should base upon the analysis of past sore period and upon the
thorough and realistic analysis of the causes for the global crisis that has
been lasting for so long. He pointed out the consequences of such crisis, which
are reflected in social situations, large and growing unemployment (especially
in Europe, and in the USA as well), and consequently in lowering the standard
of living. He explained that the unemployment rate has at the global level
reached historic proportions and that the most problematic is the long-term
unemployment in particular. Furthermore, he made a comparison of the level of
GDP in Europe – the bad news is the recession in Italy and Spain, whereas there
is a surprising percentage increase of GDP in Germany, which is encouraging
news for all.
How to fill in the gaps in Slovenia in order it
becomes more attractive for foreign investments: Egon Zakrajšek, PhD, believes
it is of utmost importance first to find out and to get to the root of the
actual problem (i.e. find out what DOES NOT work) and then based on the
findings proceed. It has to be taken into consideration what do the foreign
investors as well the VC dislike. It is definitely the sense of uncertainty in
the market, high tax rates. »Slovenia has to generally change the environment,
reduce tax rates, amend the laws, maximally increase the rate of transparency
in operations at all levels – then the foreign investors will arrive!« is
convinced Egon Zakrajšek, PhD. He is also convinced that the savings cuts are
not adequate and expressed the necessity for the pension reform, the reform of
labor market and rehabilitation of the banking system, which is practically
insolvent. Egon Zakrajšek, PhD is aware that the problems are of course hard to
avoid, however at regained fundamental trust in law and financial system,
people will certainly recover again.
»Slovenia is a small market, but very highly educated,
with good infrastructure and I do not see any reason why it could not be
successful. The government must urgently invest in education, human capital and
economic capital. The Slovenian »know how« is great! You only need a different
manner of thinking«, is convinced Egon Zakrajšek, PhD.
»Parastatal tango«, where the state has too
much of self-interests, may limit the growth of investments, he explicitly
expressed his thoughts.
The 5 most important issues Slovenia has to
attend to with priority according to Egon Zakrajšek, PhD:
1.
»Cleanse« the banking system
2.
Increase the level of responsibility and flexibility of the labor market
3.
Solve the demographic problems and accordingly introduce necessary
changes
4.
Firmly change the pension system (the pension reform)
5.
Open to foreign ideas and foreign capital
»… and you will succeed!« Egon Zakrajšek, PhD
favorably concluded his thoughts.