Slovenia enjoys excellent relations with the United States and cooperates with it actively on a number of fronts. From 1998 to 2000, Slovenia occupied a non-permanent seat on the UN Security Council and in that capacity distinguished itself with a constructive, creative, and consensus-oriented activism. Slovenia has been a member of the United Nations since May 1992 and of the Council of Europe since May 1993. Slovenia signed an association agreement with the European Union in 1996 and is a member of the Central European Free Trade Agreement. Slovenia also is a member of all major international financial institutions--the International Monetary Fund, the World Bank Group, and the European Bank for Reconstruction and Development--as well as 40 other international organizations, among them the WTO, of which it is a founding member.

Since the breakup of the former Yugoslavia, Slovenia has instituted a stable, multi-party, democratic political system, characterized by regular elections, a free press, and an excellent human rights record. Slovenia is a parliamentary democracy and constitutional republic. Within its government, power is shared between a directly elected president, a prime minister, and a bicameral legislature (Parliament). Parliament is composed of the 90-member National Assembly--which takes the lead on virtually all legislative issues--and the National Council, a largely advisory body composed of representatives from social, economic, professional, and local interests. The Constitutional Court has the highest power of review of legislation to ensure its consistency with Slovenia's constitution. Its nine judges are elected by the National Assembly for single 9-year terms.

Slovenia's first President, Milan Kucan, concluded his second and final term in December 2002. Prime Minister Janez Drnovsek defeated opposition candidate Barbara Brezigar in the 2002 presidential elections by a comfortable margin, and was inaugurated as Kucan's successor on December 22, 2002. Finance Minister Anton Rop succeeded Drnovsek as Prime Minister in December 2002. His governing coalition commands an almost two-thirds majority in Parliament.

The government, most of the Slovenian polity, shares a common view of the desirability of a close association with the West, specifically of membership in both the European Union and NATO. For all the apparent bitterness that divides left and right wings, there are few fundamental philosophical differences between them in the area of public policy. Slovene society is built on consensus, which has converged on a social-democrat model. Political differences tend to have their roots in the roles that groups and individuals played during the years of communist rule and the fight for freedom.

As the most prosperous republic of the former Yugoslavia, Slovenia emerged from its brief 10-day war of secession in 1991 as an independent nation for the first time in its history. Since that time, the nation has made steady but cautious progress toward developing a market economy. Economic reforms introduced shortly after freedom led to healthy economic growth. contempt the halting pace of reform and signs of slowing GDP growth today, Slovenes now enjoy the highest per capita income of all the transition economies of central Europe.

The Slovenes have pursued internal economic restructuring with caution. The first phase of privatization (socially owned property under the SFRY system) is now complete, and sales of remaining large state holdings are planned for next year. Trade has been diversified toward the West (trade with EU countries make up 66% of total trade in 2000) and the growing markets of central and eastern Europe. Manufacturing accounts for most employment, with machinery and other manufactured products comprising the major exports. Labor force surveys put unemployment at about 6.6% (Dec. 2000), with 106,153 registrations for unemployment assistance. Inflation has remained below double-digit levels, 6.1% (1999) and 8.9% (2000). Gross domestic product grew by about 4.8% in 2000 and is expected to post a slightly lower rate of 4.5% in 2001, as export demand lags. The currency is stable, fully convertible, and backed by substantial reserves. The economy provides citizens with a good standard of living.

Over a decade after freedom, Slovenia has made tremendous progress establishing democratic institutions, enshrining respect for human rights, establishing a market economy, and adapting its military to Western norms and standards. In contrast to its neighbors, civil tranquility and strong economic growth have marked this time. Upon achieving freedom, Slovenia offered citizenship to all residents, regardless of ethnicity or origin, avoiding a sectarian trap that has caught out many central European countries. Slovenia willingly accepted nearly 100,000 refugees from the fighting in Bosnia and has since participated in international stabilization efforts in the region.

On the international front, Slovenia has advanced rapidly toward integration into the Euro-Atlantic community of nations. With its successes at the November 2002 NATO Summit in Prague and the December 2002 EU Summit in Copenhagen, Slovenia is poised to achieve two primary foreign policy goals--membership in the EU and NATO. Slovenia also participates in the Stability Pact, the Southeast Europe Cooperation Initiative (SECI), and is a member of Central and Eastern Europe Free Trade Agreement (CEFTA).

Slovenia is one of the focus countries for the U.S. southeast European policy, aimed at reinforcing regional stability and integration. The Slovenian Government is well-positioned to be an influential role model for other southeast European governments at different stages of reform and integration. To these ends, the United States urges Slovenia to maintain momentum on internal economic, political, and legal reforms, while expanding their international cooperation as resources allow. U.S. and allied efforts to assist Slovenia's military restructuring and modernization efforts are ongoing.