SLOVENIA COM'S FAREWELL CALL ON MINISTER OF LABOR

UNCLAS LJUBLJANA 000818 SIPDIS SENSITIVE DEPT. FOR EUR/NCE E.O. 12958: N/A TAGS: PREL ELAB PINR PGOV SI GTIP SUBJECT: SLOVENIA COM'S FAREWELL CALL ON MINISTER OF LABOR Sensitive But Unclassified. Please protect accordingly ¶1. (SBU) Summary. Ambassador paid a farewell call on Minister of Labor, Family and Social Affairs, Vlado Dimovski on August 30. Dimovski, who will not run for a seat in Parliament and does not plan to remain in government after elections, was openly critical of the last two years of leadership under Prime Minister Anton Rop, and he repeatedly mentioned the need for Slovenia to become more "open" and "modern." Dimovski was rightly proud of his accomplishments while in office, but his frustration with the over-all pace of reform in Slovenia was evident throughout the meeting. End Summary. Significant Accomplishments -------------- ¶2. (U) As Dimovski explained to the Ambassador, it took him three days before he actually got to his office after his appointment as Labor Minister 4 years ago. Dimovski's was a baptism by fire where he went directly from his confirmation to the negotiating table with Slovene labor unions. In the succeeding years, Dimovski was dedicated to preparing the Slovene work-force for entry into the EU. Slovenia's score for flexibility in the work-force went from 26 to 12 according the World Bank. He attributes his success on that front and with the reform of the pension system on the go-slow approach Slovenia has employed for reforms across the board since independence 12 years ago. "Changes that are too fast are like a boomerang. It is really an art to make changes in Slovenia." Political Reform Must Match Other Reforms -------------- ¶3. (SBU) Despite his advocacy of the go-slow approach on labor and pension reform, Dimovski was clearly frustrated by the lack of political reform in Slovenia. He feels the last ten years of transition have been merely a reallocation of wealth, and that now is the time to get serious about creating new wealth. In particular, Dimovski found unacceptable the continued high-level of involvement by the ruling political parties in companies and entities that should be privatized or at least run independently. He mentioned specifically the KAD and SOD, two government run investment funds, which were given a 25-30 percent stake in every Slovene company as they were privatized. Responding to the Ambassador's comment that powerful forces had a vested interest in the status quo, Dimovski predicted an institutional crisis by 2006/7 if nothing changed. One hope, he said, is that this is not acceptable behavior in the EU and this could be the catalyst for change. Good Cooperation with DOL on Pension Reform -------------- ¶4. (U) Dimovski was particularly pleased with U.S. Dept. of Labor assistance on the reform of the pension system. He claimed, and we can confirm, the formerly struggling pension systems are now major players in the Slovenian capital market. They have breathed some life into the Slovenian stock exchange. Dimovski's concern now is that the pensions funds can (and do) move markets, they be properly regulated. (Note: the Ambassador explained that this type of regulation is in the purview of the Securities and Exchange Commission in the US and that we would convey Slovenia's interest in any available programs. End Note.) Trafficking in Persons -------------- ¶5. (U) In closing, the Ambassador thanked Dimovski for his Ministry's role in promoting Trafficking in Persons legislation to which Dimovski replied that it was topic that need continuing visibility and exposure. His hope is that the agreement his ministry will sign to fund Kljuc, an NGO involved in trafficking issues, will aid in this effort. YOUNG NNNN