Рефераты Country Study, Slovenia: Winning the Transitional Economies Race

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Country Study, Slovenia: Winning the Transitional Economies Race
. The tolar's introduction came with ease as more than 80 percent of household monetary savings were in foreign currency deposits. The Tolar's exchange rate quickly stabilized due to a highly restrictive monetary policy which was aimed at decreasing inflation, increasing stability and strengthening the domestic currency. Between 1993 and 1995 the Tolar was depreciated to reflect a real exchange rate. (See Appendix IX) This monetary policy aided in stabilizing the Tolar and making it fully convertible. On November 19, 1996, 1USD was equivalent to 137.69 Tolars. In addition, the stabilization allowed for foreign investors to conduct business in USD, DM or Tolar. Slovenia put tight controls on foreign currency movements in order to maintain the stability of the tolar. Since the introduction of the Tolar, total savings deposits have increased by over 494 billion Tolars. Savings in 1995 accounted for 23.3 percent of GDP. Also, Slovenia has a positive balance between the foreign debt and exchange reserves. By August of 1996, foreign allocated debt had reached $4.21 Billion and the exchange reserves were at $4.3 Billion. (See Appendix X) This positive balance shows that the country's economy continues to stabilize. Furthermore, Slovenia has managed to get credit ratings higher than those of Greece and other countries with longer histories of being democracies and having market economies. As of May 1996, Slovenia had the following Country Credit Ratings : Moody's Investor's Service A3 Standard's & Poor's A IBCA A-In addition, according to Institutional Investors, Slovenia ranks 47th among 135 countries, with regards to potential areas for investment. Expenditure Policies and Assignments In October 1995, the Parliament unanimously approved the 1996 draft budget presented by Slovene Prime Minister Janez Drnovsek. Expenditures are expected to be about 570 billion Tolars (about $5 Bill.). A significant portion of the expenditures are allocated for health, education and infrastructure. Revenues for 1996 were expected to be 582 billion Tolars, about46.5% of Slovenia's GDP. The surplus is allocated to cover the Pension and Invalidity Insurance Funds, this action preempts the expected expenditure of 42 billions Tolars in 1997 towards the Pension Fund which is a 20% increase from 1996. One-third of the budget will be spent on Civil Servants salaries and contributions, much higher that the 1995, due to the desire to increase public employees salaries. Nearly 11 billion Tolars will be spent on subsidies to exporters for social welfare contributions, technological development, and for maintaining current levels of employment. Although, there were no current figures available concerning defense expenditures figures from 1993 show 13.4 billion Tolars were allocated for the military, about 4.5% of the GDP. Finally about four million Tolars are allocated for liabilities in international agreements to members of the Paris Club and commercial banks; this is a new item in the budget. However, the current expenditures are being met by disapproval from the Slovenian businessmen, who wanted a budget for 1996 to be equivalent to the 1995 budget. This demand was not possible for Slovenia, as it tries to battle inflation, unemployment and provide for its' citizens welfare. Tax Structure and Administration Intergovernmental Financial Relationships Slovenia has had relative success with the administration and collection of taxes from its citizens and corporations at all levels of government.. Article 147 of the Constitution states very generally: " the state shall levy taxes, custom duties and other charges in accordance with statute. Local government bodies shall levy taxes and other charges in such circumstances as are determined by this Constitution and by statute." This constant flow of funds has allowed the government to continue to provide needed services, as well as end several years, since independence, with budget surpluses
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