SLOVENIA COM'S FAREWELL CALL ON MINISTER OF LABOR

UNCLAS LJUBLJANA 000818

SIPDIS


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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


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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
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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


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