Mixed Marks for Slovenia in World Economic Freedom Index
Slovenia has received mixed marks in the annual Index of Economic Freedom for a combined rating of "mostly free". The country came in 45th out of 161 countries scrutinised by the Heritage Foundation, a Washington think tank, and the Wall Street Journal.
The country's overall score on a 1 to 5 scale (one being the highest) is 2.64, slightly better than the 2.75 received last year. The score puts Slovenia last among the ten countries that joined the European Union on 1 May 2004 and second-last among the 25-member EU, ahead of only Greece.
Slovenia got its best scores in trade policy, wages and prices, and regulation; in each category, it got grades of 2. However, the study found improvement only in trade policy, based on the country's harmonisation to common EU regulations as part of its EU accession.
Of the ten categories studied, the country got its worst score in relation to fiscal burden of the government, where it was given a 3.4. Nevertheless, this is still slightly better than in 2004. The report concluded that Slovenia has very high income tax rates and moderate corporate tax rates.
According to the index, there is a moderate level of government intervention in the economy in Slovenia, as well as moderate barriers to foreign investment. The index highlights that the US Department of Commerce recently reported that "a number of practical impediments to increased FDI inflows persists".
The report also found a moderate level of restrictions in the banking sector, although the system is labelled as "sound" and "well capitalised".
Furthermore, there is a moderate level of protection of property rights, with the main problem still being the fact that "the Slovenian court system is marred by inadequate staffing and slow procedural progress, and is in need of further reform".
The report concludes that "Slovenia must complete its privatisation process and continue to liberalise its monopolistic industrial base" if it wishes to continue to outshine its neighbours.
Slovenia shares 45th place with South Korea. Topping this year's index is Hong Kong, followed by Singapore and Luxembourg. Estonia, which like Slovenia joined the EU last May, came in a high fourth, being labelled a model for the rest of Europe.
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