The State of Slovenia

...This advantage, Minister of Planning Davron Kracun believes, has enabled Slovenia to withstand a "double shock...

...His ministry has supervised the establishment of camps at former Yugoslav Army facilities in Slovenia...

...the man said incredulously, "that is all of Slovenia.' A slight exaggeration, yet the point was well taken...

...After Slovenia's multiparty elections in 1990, the first in Yugoslavia since the '30s, the victorious demos coalition named the pacifist Jansa to his present post...

...Slovenia's annual inflation rate, 300 per cent a year ago, is 60 per cent today, and the Planning Minister predicts single digits in 1993...

...We have used up all the buildings that we could—old barracks, schools, people's homes," he says...

...In 1989, when Serbia cracked down on ethnic Albanian calls for autonomy in Kosovo, Slovenes took to the streets in protest, the first popular expression of what was to become an irreconcilable split...

...He also created two autonomous provinces within Serbia proper—Vojvodina and Kosovo—to further dilute its influence...

...Ales Bebeljak, Slovenia's leading poet, says the fact that his nation managed to avoid the bulk of the carnage has given people a sense of resiliency and accounts for their willingness to be patient with reform...

...The biggest postindependence economic problem has been caused by Parliament...

...it is expected to reach 15 per cent before beginning to drop...

...Slovenes may have left Yugoslavia behind, but they know it is a very short drive to the battlefield...

...Slovenia would go it alone...

...His first book, Premiki (Truce), was released this summer and details his role as commander of the Slovene troops during last year's fighting...

...Slovenia has gone from a near casualty in Yugoslavia's conflagration to a member of the United Nations, and a participant in free trade negotiations with the European Community...

...At the former Marshal Tito Barracks outside Ljubljana, Bosnian women eager to tell their stories quickly surround visiting reporters...

...At that point," says Kracun, "we trust that obstacles to privatization will be removed...

...An official report released in late July put the decline in average real wages at 36 per cent in 1990, and an additional 12 per cent in 1991...

...This has had two significant benefits...

...A trickle of tourists has even returned to the Alpine lakes at Bled and Bohinj, and to the resorts along the Adriatic coast...

...Jansa estimates that it will cost roughly $500 million to create a new system, but at the moment the money is not in the budget...

...Like many others, she readily relates harrowing tales of "genocide" that she claims to have witnessed in Bosnia...

...Unemployment climbed from almost zero in 1987 to 6 per cent in 1991 and 12 per cent in June...

...The authors were convicted and Jansa spent several weeks in jail...

...In the city...

...Speaking through a translator, Jansa told me that for the past year he has been trying to rebuild the Territorial Defense Force "from the ground up...

...It has its own currency, customs laws, Olympic team, and postage stamps...

...The government is hoping that elections that are expected to be held by the end of the year will break the impasse...

...When the Federal Army concluded its evacuation last October, it took all of the radar and air traffic communications equipment...

...Remarkably, since the new currency was introduced last October, it has not been devalued...

...In the upcoming elections, voters will choose a new, bicameral Parliament...

...The inhumanity and destruction next door, in a civil war Slovenia had no small part in touching off, have been beamed in nightly for the last year from such places as Osijek, Vukovar and Dubrovnik in Croatia, and from Sarajevo in Bosnia and Herzegovina...

...We have always been the economic powerhouse of Yugoslavia, and Yugoslavia, despite its other problems, was by far the most liberal of the Eastern European economies," he explains...

...To the world's surprise, Slovenia's amateur, upstart Territorial Defense Force had stood its ground: The Yugoslav Federal Army was pulling out of the tiny republic, humiliated...

...Hata Medencevic, a 58-year-old Muslim from Derventa, says her husband, daughter and son are being held by ethnic Serbs...

...Although Slovenia has not closed its borders to those fleeing the fighting, he observes, that day may be coming...

...The entire world just watches this," she complains...

...Profits and losses are something our managers already understood...

...No," Bob answered, "Cooperstown, about 50 miles north...

...Slovenia's comparatively successful transition to sovereignty can be ascribed to inherited blessings other newly independent states must envy...

...In Ljubljana, a beautiful capital of approximately 220,000 people, the newly privatized restaurants and boutiques inject a measure of vigor into the otherwise stagnant economy...

...References to "former Yugoslavia" and "entering Europe" are frequently heard...

...It could have been us, can youimagine...

...had put them to rest...

...Atall, 33-year-old man with a receding hairline, he has the kind of awkward yet endearing appearance associated with Abraham Lincoln...

...As time passes, moreover, the Slovenes are acclimating to their independence...

...Kracun notes that replacing the Yugoslav market, which once bought over two thirds of Slovenia's output, will take at least three years...

...Bojan Usenicknik, director of the Defense Ministry's agency for protection and rescue, says the country managed to accommodate an earlier wave of refugees from Croatian conflict zones, but has since been overwhelmed...

...So reform has been less of a jolt to us than to most countries...

...He says the discussions involve exchanging "mutual views on security and defense...

...As my colleague Bob McMahon and I walked along the streets of Ljubljana, a man passing out advertising leaflets near the capital's Three Bridges district inquired where we were from...

...The Defense Minister has also been holding talks with his counterparts in neighboring Hungary and Austria, and will visit Rome later this autumn...

...Given the deteriorating situation to the south, the growing concern over refugees and the inevitable aftershocks of independence, it is perhaps understandable that Slovenes retain a sense of vulnerability...

...In what was formerly Yugoslavia, a person born 50 miles away might be fighting for the opposite side in the civil war...

...All resources and possibilities are exhausted...

...Following the War, Marshal Josip Broz Tito, whose mother was a Slovene, recognized that the reconstituted nation would need Slovenia's industrial prowess...

...Furthermore, the government has limited imports to help build up hard currency reserves...

...To placate concerns about a renewed union with the Serbs, Tito gave each of the six republics a seat on a collective national presidency...

...He had less faith than many of his political colleagues in Belgrade's vow not to resort to force in its dealings with the separatist republics, so he worked to create a viable self-defense force...

...Like their neighbors in Croatia, the Slovenes are Roman Catholics and were subjects of the Austro-Hungarian Empire...

...When Slovenia and Croatia joined the Kingdom of Serbs, Croats and Slovenes in 1918, both were freed from the yoke of a foreign power for the first time in centuries...

...My God," says Feri Petric, a welder on break from a building site here...

...Kracun can even point to some genuine triumphs...

...Not that everything has been smooth sailing in Slovenia...

...Jansa had helped write an article in the Slovenian magazine Mladina (Youth) alleging that the Yugoslav Army had drawn up a contingency plan to topple the increasingly separatist republic's government...

...Most important, its population of 2 million is nearly homogenous, containing only tiny Italian, Croatian and Hungarian minorities...

...The most impressive to date is the performance of the tolar...

...For the average Slovene, living standards have plunged...

...Michael Moran, a previous contributor, is a free-lance writer based in Munich and a news editor at Radio Free Europe...

...The Nazi puppet state set up in Croatia, though, even if virulently anti-Serb, did not by and large have Slovene support...

...Nevertheless, at present an unmistakable air of normality, bordering on optimism, is pervasive...

...Meanwhile, Jansa must deal with the pressing issue of Bosnian refugees...

...The arrangement worked well enough until Tito's death in 1980...

...Kracun, a former university lecturer from the northern town of Maribor, maintains that the second shock, the introduction of market economics and democratic government, would have done much more to exacerbate the recession were it not for the Federation's previous policies...

...She wants U.S...

...Today, Jansa is the closest thing Slovenia has to a Lech Walesa...

...The Serbs, Montenegrins, Albanians, Macedonians, and Bosnians are Eastern Orthodox and Muslim peoples whose sense of nationhood was forged during centuries of Ottoman rule...

...These pictures of the fighting, as well as the tattered refugees who arrive daily, serve as inescapable reminders of the relatively charmed life Slovenes are living...

...First, the country has been freed from the effects of the eroding Yugoslav dinar...

...Second, a fairly stable rate of exchange with the Deutsche mark has allowed Slovenian firms to aggressively pursue new, primarily Western markets for their goods...

...Slovenia still operates under a three-chamber Parliament inherited from former Yugoslavia...

...New York," Bob said...

...Yet neither was pleased by Yugoslavia's first incarnation...

...Then the Slovenes began to voice long-suppressed resentments about what they felt was their uneven contribution to the Federal budget (more than 30 per cent, by some reckonings...

...A bill that would authorize the sale of large State-owned businesses to private investors and permit the repatriation of profits has been stalled by political bickering...

...Its legacy includes Yugoslav market leaders in telecommunications (Iskra), automobiles (Yugo), appliances (Slovenjales), and many smaller textile, furniture and metals companies...

...The Ljubljana newspaper he is reading, Dela, carries on its front page photographs of shells exploding in the Bosnian capital...

...Consequently, joblessness has soared...

...At the time, though, no one could have predicted the terrible turn events would take in the other independence-minded republics...

...As a result, small shops and restaurants have been privatized, but major production operations have been left in State hands...

...Indeed, Jansa may someday occupy a similar place in the pantheon of Slovenia's national heroes...

...Advertisements for Western and, more significantly, local products are common, while in cafes set amid a melange of Hapsburg and Venetian architecture the city's nightlife is fashionable and lively...

...If there were any doubts among Slovenes about leaving the Yugoslav Federation, the repulsion of the Serbian-led Federal Army's attack on the border posts-and the 60 people who died in the fighting...

...In 1940 German troops marched across the border from Austria and, with the help of a Croatian fifth column, quickly dismantled the country...

...That led to bloodshed, ruined the tourist trade and cut Slovenian industry's ties with what remains of Yugoslavia...

...forces to intervene and stop the fighting...

...They found that, in practice, they still suffered domination, this time by Serbia's monarchy, officer corps and culture...

...The first was, of course, independence...

...The episode won him considerable attention and galvanized the drive for sovereignty...

...His problems are daunting...

...Together, these now hold about 70,000 people...

...Slovenia, he points out, has no control over its own air space...

...In the months since last October, when the new state assumed de facto control of its affairs, it has endured a wrenching recession, a change in government, a refugee crisis, and the ever-present fear that someday the Federal Army might return...

...Since the ruling coalition controls only two of the chambers, Kracun observes, relatively small opposition groups in the third can block critical legislation...

...Discarding another institution left over from the years of federation will no doubt be a cathartic exercise for the Slovenes, who never felt at home in Yugoslavia...

...he would not say whether weapons purchases or pledges to come to Slovenia's aid were on the agenda, but the very fact that such talks are being held should give pause to Federal commanders...

...With about 9 per cent of former Yugoslavia's population, the republic manufactured over 20 per cent of the Federation's domestic products and virtually all of those exported for hard currency...

...In the meantime, an increase in exports to Germany, Austria and Italy, combined with the import barriers, has produced a trade surplus, and multiplied foreign currency stocks eight-fold since October...

...Communist authorities, led by Serbia's Party, were outraged...

...Fifty miles...

...The loss of business there, comparable to the Eastern Bloc countries' loss of the comecon market, contributed to a 21 per cent drop in industrial production in 1991, and only slight improvement is expected this year...

...Absent completely is the ethnic patchwork that has doomed Croatia and Bosnia to civil war...

...Its success in warding off the Federal Army in July 1991 speaks for itself...

...This has stunted development of the supply-demand relationship necessary to boost industry and attract outside entrepreneurs...

...Janez Jansa, the republic's current Defense Minister, was at the center of the independence movement...

...Another key attribute is Slovenia's substantial industrial base...

...It is a best-seller here, and the publisher's advertisements have made Jansa's face nearly as ubiquitous on the capital's streets as Tito's once was...

...When historians try to pinpoint the mistakes that led to the current crisis, one action that will loom large is the 1988 prosecution of Jansa and three others on charges of revealing State secrets...