Primož Šeligo is the ambassador extraordinary and plenipotentiary of the Republic of Slovenia to the Russian Federation. In the interview, he spoke about the development of relations between Slovenia and Russia, and also about the situation in the areas of trade and investment between the two countries.
Mr. Ambassador, you have a long experience of working in Moscow, you have started your first job at the Embassy of the Republic of Slovenia in the Russian Federation in 1995. Has Moscow changed a lot since then?
Moscow is changing rapidly, and over the past 20 years it has become a city that is offering an incredible amount of activities, here everyone can find something to his taste. First of all there is an abundance of cultural events. In recent years, much attention has been addressed to the improvements in the city centre and the numerous parks, to the problem of parking facilities, bicycle lanes and pedestrian areas, many new shopping centres were built, etc. All that makes life in such a big city easier, but there are still some issues that have to be addressed as soon as possible. First of all, I would like to mention relatively high levels of air pollution and urban infrastructure not adapted to people with reduced mobility. But despite all the changes, the way of living has remained the same.
You have also been posted in the Slovenian Embassy in Turkey, for many years you have been the ambassador of Slovenia in Ukraine. How is working in these countries different to working in Moscow?
Each of these countries has its own characteristics, advantages and disadvantages, so it is difficult to compare. I can say that the nature of the work of an ambassador does not differ significantly from country to country. But since Moscow is one of the most important diplomatic centres in the world, the intensity and complexity of the work is much higher. In addition, we are also accredited in six Central Asian countries and in Belarus, which presents an additional challenge. In Ukraine, I was the ambassador at the time of Slovenia’s presidency of the OSCE and the EU, and during the Orange Revolution, which also represented a particular challenge for the functioning of the Embassy, as well as for the Slovenian foreign policy in general.
How would you describe the development of relations between Slovenia and Russia, and how are relations between the two countries at the moment?
Relations between Slovenia and Russia are traditionally friendly and diverse. Russia is our very important partner in many areas. In recent years, an increasing number of high-level bilateral visits have taken place and the intensity of the cooperation has increased significantly, particularly in the economic and cultural sphere. In 2010, the two countries established a strategic partnership.
In 2014, the EU adopted restrictive measures in connection with the Ukraine crisis, that affected the cooperation between Slovenia and Russia, but we are nevertheless committed to good cooperation with Russia in areas where possible. We want to continue the good cooperation in the humanitarian, cultural and economic areas, which are of great importance to us. In the near future we are planning to open a Slovenian cultural centre in Moscow, which will further develop and strengthen the friendly ties between the cultures and peoples of our countries. But, most importantly, is to find a solution to the Ukrainian crisis as soon as possible to enable the normalization of relations with Russia.
What is the current state of affairs in the field of trade and investment between the two countries?
Russia is one of the most important economic partners of Slovenia. In 2014, Russia was Slovenia’s seventh most important trading partner, at the moment it ranks fifth according to the value of the Slovenian direct investments abroad and fourth according to the number of over-night stays of tourists. In recent years, trade turnover between the two economies has grown steadily and reached a record level of nearly half a billion euro in 2013. Although the figures have fallen slightly over the last year (by 4.5%), decline was smaller than initially estimated.
What does Slovenia import from Russia and export to Russia?
The structure of the mutual trade turnover has remained largely the same over the years. Exports from Slovenia substantially overweigh imports from Russia; they make up for more than 70% of the turnover. Most Slovenian exports to Russia are pharmaceutical products, electrothermal equipment, electrical appliances and coatings; while Russian exports to Slovenia mostly relate to oil and gas products, aluminium and nickel goods.
Which Slovenian companies hold strong positions in the Russian market?
Many Slovenian companies have their representative offices in Russia. The largest of them are Krka, Gorenje, Iskratel, Rico, Helios, Komita, Gostol-Gopan, Hidria, Kolektor, Trimo, Duol and many others. There are also several Slovenian tourism companies in the Russian market.
Which spheres of economy in Slovenia are most interesting for Russian businessmen and which of them attract Slovenian businessmen in Russia?
Currently, the highest interest of Russian businessmen lies in the field of tourism; for example, Russians own “Rimske terme”, “Terme Maribor” and three hotels in the resort “Rogaška Slatina”. In other areas of the economy, it should be noted that a Russian company is the majority owner of Slovenian Steel Group “SIJ”, there is also a branch of Russian bank “Sberbank” operating in Slovenia. The number of Slovenian companies with direct investments from Russia is constantly growing; at the end of 2014, their number increased to 180.
Regarding the interests of Slovenian companies in Russia, I have to say that it is very diverse, so it is difficult to single out just a few areas. The lion’s share of cooperation can be observed in the areas of pharmaceuticals, household appliances, ICT, tourism and agriculture. Almost all major Slovenian companies are present in the Russian market; there are also some very successful small and medium enterprises.
What is the Russian view of the Slovenian business environment and vice versa?
What Russian businessmen value in Slovenia is the stability of the business environment, also the fact, that Slovenia is a member of the EU and the Schengen area, its advantageous geographical location, excellent connections with other European markets, good infrastructure and skilled labour force. All these are, of course, very attractive factors contributing to the development of the business activity.
Slovenian businessmen perceive Russia as a country with countless business opportunities, but at the same time as a huge market in which one has to invest a lot of time, energy and resources. Bureaucracy is often complicated and unpredictable, competition is strong. In communications with Russian partners it is very important to build mutual trust; strong business relationships and reputation cannot be obtained overnight. Most Slovenian businessmen are aware of this, but there are also the ones with unrealistic expectations.
When the Russian media is mentioning Slovenia, it is usually described as a country offering a very comfortable living. Have you been noticing an increase of interest in moving to Slovenia lately?
Over the past few years, we have indeed been noticing a growing interest of Russians for Slovenia. On the Internet and in magazines or newspapers you can find many promotional articles, which describe in detail the procedures and methods on how to move abroad. As you already mentioned, Slovenia is usually being presented as a charming, diverse country in the heart of Europe that has a good education and health system, well-developed infrastructure, attaches great importance to ecology, etc. And all that is, of course, very attractive for the Russians.
How are current difficult relations between Russia and the European Union and Russian economic situation affecting your work and the activities of Slovenian companies in Russia?
As I said before, we are committed to good cooperation with Russia in areas where possible. Despite the fact that there are less high-level contacts now, cooperation at the working level has remained unchanged. The Embassy is trying to find new opportunities for Slovenian companies and is providing them with assistance in establishing contacts with potential partners, both in Russia and in other countries of accreditation. For example, in December 2014, there was a meeting of the Russian-Slovenian Intergovernmental Commission for Trade-Economic and Scientific-Technical Cooperation; the next meeting is scheduled for September this year in Kazan. In addition, we also organize trips to Russian regions and other countries of our accreditation, for representatives of interested Slovenian companies.
Regardless of the situation, Slovenian companies still consider the Russian market as very promising and do not plan to leave. They are, however, as well as other Russian and foreign companies, facing diminished purchasing power of Russian consumers, reduced investment, the weakening of the rouble, late payments, etc. On the other hand, the current Russian policy of stimulating the development of the agricultural sector provides a great opportunity for Slovenian companies, which they should take advantage of.
Which are the biggest obstacles Slovenian companies encounter in Russia and vice versa?
Despite all the advantages Slovenia has to offer, Russian businessmen also see some drawbacks. For example, they are often complaining about the relatively high operating costs in Slovenia – high taxes and labour costs, sometimes they are criticizing bureaucratic procedures. For Slovenian companies in Russia, one of the major obstacles for doing business is complicated and unpredictable bureaucracy; they also often have troubles finding a reliable and skilled labour force. Russians as well as Slovenians often complain about the visa regime and procedures for obtaining work permits.
How does the Embassy contribute to the economic cooperation between the two countries? What are the activities in this area? What kind of support is offered to Russian and Slovenian companies interested in mutually beneficial cooperation?
I have already mentioned the Intergovernmental Commission for Trade-Economic and Scientific-Technical Cooperation, visits of business delegations to Russian regions and support in establishing contacts with potential Russian partners. In addition, we are providing information on legislation and business environments in Russia and Slovenia, investment and business opportunities in both countries, ways of entering the market; we are organizing joint trade fair appearances and other promotional presentations in Russia; assisting in inter-institutional cooperation between Slovenia and Russia and coordinating economic activities related to the EU and international organizations.
Embassy of the Republic of Slovenia in Moscow is also accredited in Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. What is the state of economic cooperation between Slovenia and these countries?
Economic cooperation with other countries of our accreditation is relatively modest, there are many untapped opportunities. The most promising markets are Belarus, Kazakhstan and Turkmenistan, with whom we have signed agreements on economic cooperation. Intergovernmental Commissions for Trade-Economic Cooperation with each of the countries are working on priorities and prospective areas of cooperation. The purpose of this mechanism is to find new industries for deepening of economic relations. In recent years, we have been intensifying contacts with Turkmenistan; there have been numerous visits by business delegations and we have updated the legal basis for cooperation. We are planning to appoint honorary consuls in all the countries of our non-resident accreditation, which will provide useful support to Slovenian companies in each of these markets through their network of contacts. One of our key objectives in strengthening the economic cooperation with these countries is signing of some essential agreements, such as the agreement on avoidance of double taxation and investment protection agreement. In addition, we are advocating for opening a representative office in Central Asia, which will undoubtedly help facilitate the support of Slovenia’s interests in these countries and give a new impetus to cooperation.