OECD's review of investment policy in Slovenia for 2002. It finds that as the most advanced former Yugoslav Republic, Slovenia has managed since 1991 one of the most successful transitions to nationhood and to a market economy in Central and Eastern Europe. Slovenian GDP per capita has already reached 70 per cent of the EU average. In recent years, Slovenian annual real GDP growth rates have been in the 4-5 per cent range. Slovenia has a developed manufacturing sector, good infrastructure and a skilled labour force. Consensus-orientated economic reforms have fostered a favourable investment climate.

However, FDI inflows have been relatively modest (USD 180 million in 2000) due principally to the specific modalities of mass privatisation, the postponement of privatisation of financial and public utilities sectors and restrictions on foreign capital movements. But this has already begun to change. The 1999 Foreign Exchange Law has freed most capital and foreign direct investment operations transactions and practically all remaining entry restrictions will be lifted upon Slovenia's accession to the EU. The envisaged privatisation is expected to at least triple FDI inflows within the next three years, boosting FDI to around 3 per cent of GDP. Administrative barriers are being tackled with determination, in consultation with the business community. In addition, FDI outflows have started to play an increasingly important role in Slovenia's internationalisation strategy, notably in regard to the development of South-East Europe. In December 2001, Slovenia became eligible for adherence to the OECD Declaration on International Investment and Multinational Enterprises. This will help to consolidate Slovenia's achievements thus far and contribute to its expanding economic relations with OECD Members, as well as other adherents to the Declaration. This review is part of the OECD's ongoing co-operation with non-Member economies around the world.