1Three decades of an independent state are certainly a long enough period to give an opinion on the transition process, which formally ended with the accession to the EU, even from a historical point of view. Until its formal conclusion, the Slovenian economic transition was described primarily as a story of success, but after 2004, anything but positive opinions and assessments came to the fore.

2Ever since the symbolic beginning of transition, the fall of the Berlin Wall, the interest in the transition process has been increasing. A number of institutions have been established, the central task of which has been to study this process. In the 1990s, the transition process, which aimed at increasing economic performance relative to the performance in the socialist system, was one of the most studied processes, and the countries in which it took place were not able to rely on past experience. There were major differences between the transition countries, both political and economic, which is not surprising given that more than 30 countries were involved in this process. Naturally, these countries also had common characteristics - socialism and single-mindedness, the central planning system and socially-owned property. Depending on the level of development and similar factors, the success of the transition process varied across individual countries. Just as there were differences between the socialist ones, there are also differences between capitalist economies. Capitalism has several faces as well: one is more human, socially oriented and thus more friendly to people, while the other shows a great social stratification and similar occurrences. In any case, each country is a specific case and has unique characteristics. The Slovenian economic transition is thus not merely a success story, neither a story of failure. It has its pros and cons.

3In addition to nationalization and changes in the economic system, the new government retained its role in the field of production resources and finances after the Second World War. Industrialization and investments contributed to rapid economic growth, the average annual growth rate of social product in the period from 1953 to 1981 was 6.9 percent, while the average growth rate of social product per capita was about 6 percent, which was high even globally. On the other hand, systemic problems had accumulated over the years and decades, trade deficits had widened, investment targets had also affected indebtedness, which resulted in an ever-deepening crisis that finally escalated in the 1980s. Prior to the proclamation of an independent and sovereign state in 1991, Slovenia was part of the Yugoslav federation with an economic system that did not allow for sustainable economic development and progress of the state, although it should be emphasized that Slovenia's initial position was in many respects better than in any other transition country. Namely, Slovenia had already developed numerous marketing institutes. In the trade of goods, for instance, it was not limited to the Eastern market, politics did not play such a dominant role in the economy (pricing and production were largely based on the principles of a market economy, but in personnel policy the influence of politics was great until the end) and technological development was also at a higher level than in other socialist countries. Aspirations for change were louder from the second half of the 1980s onwards, and the spring of 1990 also brought them officially. With the plebiscite, the declaration of independence, the Ten-Day War and international recognition, Slovenia gained independence in 1990-1992. In the economic field, the decision for an independent and sovereign state enabled Slovenia to take the economic policy into its own hands and thus the responsibility for its own economic development. In the first phase of transition, Slovenia's task was to establish all the necessary elements and institutions for a successful functioning of a democratic and legal state. In the process of economic and political transition, some central processes took place. The process which deserves a positive assessment was Slovenia's entry into various international integrations. A very important novelty for the Slovenian economy was the shift from the market of the former Yugoslavia to the markets of more demanding countries in terms of price and quality. For a small national economy that broke away from a large domestic market, the focus on the external market was a path that ensured stable economic growth and development. After being recognized by a hundred countries by the end of 1992 and becoming a member of the UN and its specialized organizations, Slovenia also became a member of almost all major economic associations (European Bank for Reconstruction and Development, International Monetary Fund, World Bank and International Finance Corporation, GATT, WTO, EFTA, CEFTA) by 1996. Slovenia was thus “fastened with safety belts” to the West and thus also protected from the war that took place in the parts of former Yugoslavia. The greatest strategic goal of the Republic of Slovenia was full membership in the EU due to a close political, cultural and economic cooperation with Europe, which it achieved on 1 May 2004. The only organization which Slovenia failed to become a part of that quickly and successfully is the OECD, which unites the most economically developed countries in the world (Slovenia became a member in 2010). Another successful area was the process of macroeconomic stabilization, which was one of the priorities of the Slovenian politics in the first phase of transition. In the period from 1990 to 2004, Slovenia followed a relatively successful path of economic development. It was one of the first to overcome the period of transformational depression that characterized transition economies in the early nineties, as economic recovery with a revival of domestic demand began already in mid-1993. It relatively quickly exceeded the pre-transition level of economic activity - the level of pre-transition development of 1990, 1996, 1998 as well as the level of 1987. The success of transition can also be attributed to the banking sector; banking rehabilitation in the 1990s covered more than 50 percent of the banking sector, and the Bank of Slovenia played an important role in stabilizing the Slovenian economy. In any case, the economic policy pursued by the governments of Janez Drnovšek in directing Slovenia's economic development also greatly contributed to the successful stabilization of the Slovenian economy. The mentioned governments were characterized by gradualness and pragmatism. Some disagreed with this approach and were in favour of the so-called shock therapy. These critics also believe that we can observe many consequences of the gradualist approach to transition. From a historical point of view, however, we can say that, given the situation in which it found itself in the early 1990s, Slovenia had decided on the right path. The break-up of Yugoslavia and the wars required caution and were a sufficient argument to evade unnecessary shocks. Avoiding political turmoil, swift and reckless moves, as well as rejecting foreign advice were economically beneficial. It should be noted that certain cases nevertheless deviated from the gradualist characteristics and that some rapid changes were necessary. What we have in mind is the monetary reform and the liberalization of imports. Generally speaking, however, we cannot argue with those who believe that the so-called gradualist approach had run its course sometime at the turn of the millennium. One of them is Peter Kraljič, who believes that gradualism was positive only in the beginning, after which the state should have accelerated the development, strived for competitiveness, adopted structural reforms and, above all, created a vision of Slovenia. As already pointed out, the period of recession was followed by a transformational recovery in mid-1993. Despite the rapid transition to economic growth, we need to highlight two areas where matters were not resolved as hoped. The first is the already mentioned relatively high inflation, while the second is high unemployment rate, the consequences of which hit the citizens the hardest. In 2004, when Slovenia became a member of the European Union, and especially in the years that followed, there was a marked improvement in the macroeconomic picture. Improvements were carried out in the field of goods trade, economic growth increased, unemployment fell, but all this was short-lived, as a new shock for the Slovenian economy followed at the end of 2008 and especially in 2009, due to the global financial and economic crisis. The state was generating a current account deficit since independence, with the exception of 2018 and 2019. Slovenia's general government deficit markedly grew for the first time in 1995, mainly as a result of the posting of transactions related to the return of confiscated property after the war, while in 2013, the rehabilitation of state-owned banks pushed the deficit up to 14.6 percent of GDP. Immediately after gaining independence, public debt also began to rise, and the gross debt of the government sector at the end of 2020 already amounted to 80.8% of GDP.

4By far the most headaches in the process of economic transition (both to politics as well as to the economy and citizens) were caused by the process of privatization, which certainly proved to be the central and most demanding process of Slovenian economic transition. This is not a special feature of Slovenia, however, as the situation was similar in other post-socialist countries. The process of privatization of socially-owned property had a strong impact on the main economic categories in the national economy, as it caused changes in gross domestic product, industrial production, investments, changes in competitiveness, imports and exports, services, capital, etc. Legally, the privatization of the economy took place in several phases. In the autumn of 1991, the Housing Act (SZ) and the Denationalization Act (ZDen) were adopted. The third in a series of privatization laws was the Ownership Transformation of Companies Act (ZLPP), adopted in November 1992. The aim of the acts on housing privatization and denationalization was to clearly define ownership and redress injustices, but the latter two acts, in the form in which they were adopted, often caused new injustices. Regarding the manner of privatization of socially-owned apartments, many still feel deprived today. The same applies to the denationalization process, which has been one of the largest, most expensive and, above all, the longest-running projects since Slovenia's independence. The Housing Act or the so-called Jazbinšek Act divided the holders of housing rights into two groups, namely those who were able to buy socially-owned housing and those who did not have the right to purchase. The first group bought the apartments at favourable prices, which was especially evident in urban centres, as, for example, the price for a 114-square-metre apartment in the centre of Ljubljana was only around 16,000 Deutschmarks at the time. The second group did not have the right to purchase because the Housing Act prohibited the purchase of apartments that had passed into social ownership through nationalization. According to the latest housing census, on 1 January 2018, approximately 92 percent of all apartments were owned by natural persons, and more than 80 percent of these apartments are occupied by the owners of these apartments, 7.7 percent are rental apartments and the remaining 11.5 percent of apartments are defined by statistics as ‘user' apartments, which means that their owner does not live in them, while they are also not rented. We are facing a chronic shortage of non-profit rental apartments, and young people find it difficult to get housing. The Denationalization Act legalized the return of property that had been nationalized after the Second World War under the Agrarian Reform, Nationalization and Confiscation Acts. The confiscated property was returned to the former owners or their heirs in kind, and if that was not possible, with compensation. The return of property in kind caused a lot of hot blood already upon the adoption of the law, and even more later in practice. The Denationalization Act foresaw that all claims and proceedings in the first instance would be completed within one year. When the Denationalization Act was adopted in 1991, it was also planned that four billion Deutschmarks or two billion euros worth of property would be returned, while the data from 2007 already indicated that the costs would be much higher. According to the Ministry of Justice of the Republic of Slovenia, by the end of March 2007, EUR 1 billion 881 million worth of land, forests, buildings and movable property had been returned in kind. Where return was not possible in kind, the beneficiaries were entitled to compensation in the form of bonds and 6% interest. The Slovenian Compensation Company paid out more than 400 million euros by spring 2007 and is expected to pay out another 1.3 billion euros by the end of the procedure. Some proceedings are still pending, many linked to the largest denationalization beneficiary, the Roman Catholic Church (RCC). In connection to this, we may recall reproaches against the Demos government claiming that the latter chose to favour the return of property in kind primarily because of its close ties to the RCC. By the end of October 2007, RCC was granted claims totalling € 209 million, which means that it has been 96.9% successful so far. Among other things, the request of the Archdiocese of Ljubljana for the return of the Savica Waterfall, part of the shore of Lake Bohinj and the area of the Triglav Lakes Valley still resonates today.

5Privatization had a number of negative consequences. The first and most visible consequence of the changes were certainly the bankruptcies of companies. From July 1991 to March 1993, 1,522 companies with 125,698 employees met the conditions for initiating bankruptcy proceedings. These included 1,002 private companies with 2,306 workers. The National Assembly of the Republic of Slovenia adopted the Ownership Transformation of Companies Act as late as November 1992, after more than two years of coordination. After numerous compromises and amendments to the Act, a sort of intermediate model between the proposals by Jože Mencinger and Jeffrey Sachs prevailed. Sachs, the so-called miracle boy, who advised the first Slovenian government on the concept of privatization, which influenced the resignation of the then Deputy Prime Minister and Minister of the Economy Jože Mencinger, said in an interview with Večer last September that he ranks Slovenia among the most successful countries in the world in terms of the standard of living, life expectancy and low level of inequality. He also pointed out that we have no good reason to complain. According to him, we have a wonderful country that is peaceful and stable, and we live in prosperity, especially when compared to 1991. He considers Slovenia a great story of success, an important part of Europe and a good example; it is true that Slovenian wages are not at the Swiss level, but Sachs does not advise Slovenia to imitate Switzerland, as it is a rich country at the expense of its role as a tax haven.

6The basic model of privatization under the Ownership Transformation of Companies Act provided for 20 percent of shares to be transferred to parastatal pension and compensation funds, 20 percent to privately managed privatization investment funds (PIDs), which collected ownership certificates from the citizens, 20 percent were exchanged under favourable conditions for ownership certificates of internal owners (managers, employees and former employees) and 40 percent could alternatively be allocated for the buyouts by internal owners under favourable conditions, for the exchange with citizens' ownership certificates through public sale of shares, for the exchange with ownership certificates collected in privatization investment funds or for the buyouts by strategic partners. The so-called internal buyout was the most common method of ownership transformation - as much as 25 percent of socially-owned capital was distributed based on this method. This was followed by the transfer to investment funds and internal distribution, with which 19 or 18 percent of socially-owned capital was distributed. Ownership certificates were distributed according to the age key in the nominal value of 100,000 to 400,000 tolars. The majority of Slovenian citizens, thinking that they were worthless pieces of paper and also due to financial hardships, sold the certificates prematurely. When stockbroking companies were emerging in 1993, a handful of people who were better educated in this field were able to buy certificates at low prices (authorized investment companies had priority) and later exchange them for shares, the values of which were mostly increasing and their owners were becoming increasingly rich. In the process of privatization, 58 percent of ownership certificates were invested in authorized investment companies, 32 were placed in companies and some remained unused. Following the adoption of the Act Concluding Ownership Transformation and Privatization of Legal Entities Owned by the Development Corporation of Slovenia in 1998, which determined the official end of the process of ownership transformation of companies, the second part of the transition process had to be completed, namely the privatization of state property. With regards to the latter, we need to point out that in the period 1995-2005, many capital shares were sold nontransparently. The privatization method had a good purpose and enabled high involvement of workers and employees in the ownership transformation, but during the privatization process, the participation of internal owners (workers without management) and state funds was decreasing, while the participation of investment companies and managers was growing. This became clear as early as the late 1990s and even more so later. The share of the private sector in gross domestic product increased from 30 percent in 1992 to 65 percent in 2000 with the privatization of socially-owned property, but it still lagged behind other transition countries. In 2000, the processes of ownership transformation and privatization also began in the financial sector, where, after a long debate on the national interest, the state sold a 39% share of Nova Ljubljanska banka bank to foreigners.

7According to the data of relevant institutions, from 1 January 1990 to 31 July 2004, the damage to socially-owned property amounted to 104,352 million Slovenian tolars (in the revalued amount of approximately two billion euros), with the largest damage occurring in 1990 and 1992, mainly due to inadequate legislation. In 1991, some changes occurred in the collection of data regarding economic and general crime. Thus, the criminal offences of counterfeiting money, trafficking gold money and gold, illicit trade and criminal offences under the Customs Act no longer fell under economic but under general crime from that year onwards. Economic crime, however, did not yet include commercial fraud and those criminal offences of general crime (forgery of documents, evasion), which were dealt with in connection with commercial fraud and had been classified as economic crimes since 1991. From 1994 onwards, commercial fraud has been classified as an economic crime. The data show that the number of criminal offences of economic crime was significantly lower than the number of criminal offences of general crime. However, the damage caused by such criminal offences was much higher than the damage caused by other crimes. This was the practice at least throughout the 1990s. Changes occurred at the turn of the millennium. In 2000, non-economic crimes caused more damage than economic ones. In view of the damage caused, a balance occurred between economic and non-economic crimes in the first years of the new millennium. Given the presented data, the question arises as to whether these actually illustrate the prevalence of economic crime in Slovenia. Namely, economic crime is characterized by a large grey area all over the world, so statistics do not give a real picture of its true dimensions. What the police detect is just the tip of the iceberg. This is especially true for the complex and difficult to prove crimes of corruption, money laundering and modern forms of economic crime. Detecting such criminal offences requires a great deal of will and interest from the politics, capable and independent law enforcement agencies and appropriate legislation. Numerous economic scandals resonated in Slovenia and the cases of HIT, Šuštar, Rdeči križ, SIB banka, Dadas, Zbiljski gaj, Orion and Čista lopata certainly remained in memory. Among others, the directors of SCT, Vegrad, Primorje, Pivovarna Laško and Istrabenz were also sentenced to prison for various malfeasances.

8The restructuring of the Slovenian economy was gradual, dispersed and mostly without aid. Especially in the first period, a large part of restructuring included redundancies and retirements with occasional, usually unsuccessful state interventions. In the first period, we witnessed numerous bankruptcies and liquidations of companies. Similar restructuring, but to a lesser extent, continued later, when Slovenia had already reached the bottom of the transformation crisis. The process of restructuring of the Slovenian economy had been encouraged as early as the end of the 1980s, but in reality the new economic situation did not arise until the independence of the Slovenian state in the early 1990s. The change in the ownership and size structure of the Slovenian economy was especially noticeable, almost exclusively due to the establishment of new companies. The structure of value added by activities showed a decrease in the share of industry and an increase in the importance of the service sector. The period after 1990 or the so-called transition period is meaningfully outlined by the title of Zvezdan Martič's documentary, Where Did All the Factories Go (Kam so vse tovarne šle). The list of factories that went bankrupt in the late 1980s and after 1990 is very long. Prevent, Rog, TAM, Metalna, TVT Boris Kidrič, Mura, Tovarna sladkorja Ormož, Toper, Iskra Delta, Iskra, Tobačna Ljubljana and Industrija usnja Vrhnika (IUV) are only part of the list. In short, most large companies, the giants of the Yugoslav industry and beyond, bit the dust. Where the concentration of these companies was higher, for instance in Maribor, this meant an even greater economic, developmental and social impact. Let me just mention the example of Tovarna avtomobilov Maribor (TAM - Maribor Automobile Factory). Nevertheless, a few companies successfully overcame the transition, many of which went bankrupt later, after surviving the agony of the nineties, including Peko from Tržič and Merkur from Kranj. Due to wrong decisions of the politics and due to misunderstanding of the role of politics in companies, many once successful companies were poorly managed or even failed, while some good companies were sold. Because of the indecision and unclear strategy of the politics, distrust and disunity were and are present among the population as well. It is clear - the role of the state is also important in the field of economic policy. The list of brands Slovenia no longer owns is extremely long: Laško, Union, Mercator, Argeta, Perutnina Ptuj, Alpsko mleko, Fructal, Cockta, Čokolešnik, Barcaffe, Radenska ... We can take comfort that they will always be written in our collective consciousness nevertheless.

9During the transition period, interregional disparities did not decrease. Slovenian regions coped with the period of transition with varying degrees of success. The latter depended mainly on the initial conditions and the economic structure. The regions that had less trouble overcoming the problems of the transition period were mainly the Central Slovenia, Coastal-Karst and Upper Carniola regions. The Upper Carniola region, which was burdened with the old industrial structure, was in a somewhat more difficult situation. The Lower Carniola region was the most export-oriented of all Slovenian regions, the Gorizia region stood out for the lowest percentage of unemployed people in the working age population, while the Mura and Inner Carniola-Karst regions were among the less developed regions, but with a promising economic structure. The Drava, Carinthia and Lower Drava regions were among the medium-developed regions with a problematic economic structure and positively assessed development potentials. The Central Sava region was ranked last, both in terms of development and potential. The global financial and economic crisis, which also severely affected the Slovenian economy in 2009, further affected the regions. The Mura region, which was already one of the least developed areas, was particularly affected. There was no adequate restructuring of the economy in this region and, in addition, economic activity was focused on activities with lower value added per employee. With the desire for a more harmonious regional development, quite a few laws and measures were adopted, but the fact is that even today, significant regional differences exist in Slovenia. In 2016, GDP per capita in the Central Slovenia region amounted to EUR 27,644, which was more than 40 percent higher than the national average. In that year, the Central Slovenia region thus generated 2.6 times higher GDP per capita than the least successful region - the Central Sava region.

10Although Slovenia is not a ‘second Switzerland' today, it has achieved a major breakthrough in almost three decades. Among other things, the structure of the Slovenian economy has changed significantly, the average age of the population has increased and so has the purchasing power. Expectations of the transition to a market economy were high; I would dare to say too high (similarly as in other transition countries). Today, this is clearly manifested in the helplessness and hopelessness of people and in the lack of understanding of the existing system. It can be frequently heard that Slovenia has written in its Constitution that it is introducing a market economy, but has in fact entered the capitalist economy. Due to romantic ideas, it is all the more difficult to accept the fact that Slovenia has not merely opted for a market economy, but has also moved into the capitalist system and everything that belongs to it. Unfortunately, capitalism tailored to man, as we have imagined it in Slovenia, is only an illusion. Private property without owners, equal distribution of profits and capitalism without social stratification are just utopian notions. Social stratification is a consequence of the capitalist system and it is even more pronounced in many societies comparable to ours. The global financial and economic crisis that erupted in 2008 also proved that the market cannot be the only regulator of the system and that the role of the state is important and desirable; however, what is crucial is how the state or the current governing structure understands, defines and enforces this role. There are considerable differences between capitalist systems and the Slovenian one was fairly socially oriented. The year 1991 marks an important turning point in our history. Slovenia gaining independence, international recognition and joining various international integrations culminating in the accession to the European Union in 2004 are great achievements. If we draw the line, the process of economic transition or the transition to an open social market economy in Slovenia deserves a positive historical assessment with a black mark, which, as in other transition countries, points to certain wrong moves and missed opportunities. However, this can be understood because such a complex process cannot be carried out in a perfectly systematic and purposeful manner, as things in practice often do not go as written in textbooks and laws. What is often forgotten and not pointed out, especially because negative stories prevail, is that in the 30 years of independence, many globally renowned companies have been established, which have succeeded mainly with an original entrepreneurial idea and hard work. One of the basic indicators, GDP per capita, also shows progress. The latter was four times lower in 1991 than in 2020, amounting to 5,131 or 22,014 euros, respectively. Slovenian GDP per capita in purchasing power standards in 2020 amounted to 89% of the EU average.