During our trip to Slovenia and Croatia, I have the opportunities to learn different aspects in history, culture and economies. These two countries share many commonalities, and they are in transition.
The society and economy are transitioning from socialism to free market. Many companies are privatizing from previous state own, with production booming and financing marketing merging. They joined or partially joined European Union, staging them for further growth. However, there are also many challenges for their further growth.
First of all, the populations for these two countries are relatively small in size (Slovenia has 2.5 million people). This limits their domestic market size and needs, as well as the size of workforce. On top of that, their skilled workers may free flow to higher pay countries such as Germany, which further reduces their workforce. As a real example, the Slovenia’s exhaust company (Akrapovic company) has shortage of skilled welding workers, which limits their growth.
Second, these two countries’ economies are highly depending on tourism. Slovenia unemployment rate varies from 12-14% with wavy seasonal pattern. This dependency can be volatile for economy: if the world economy experiences recession, these two countries may be the first to suffer.
It is interesting to continue observing the progression of these 2 countries.
What do you think?