uticals and
medical technology production - and will continue efforts to
establish Singapore as Southeast Asia's financial and high-tech hub.

Slovakia
Slovakia has mastered much of the difficult transition from
a centrally planned economy to a modern market economy. The DZURINDA
government made excellent progress during 2001-04 in macroeconomic
stabilization and structural reform. Major privatizations are nearly
complete, the banking sector is almost completely in foreign hands,
and the government has helped facilitate a foreign investment boom
with business-friendly policies, such as labor market liberalization
and a 19% flat tax. Foreign investment in the automotive sector has
been strong. Slovakia's economic growth exceeded expectations in
2001-06, despite the general European slowdown. Unemployment, at an
unacceptable 18% in 2003-04, dropped to 10.2% in 2006, but remains
the economy's Achilles heel. Slovakia joined the EU on 1 May 2004.

Slovenia
With a GDP per capita substantially greater than the other
transitioning economies of Central Europe, Slovenia is a model of
economic success and stability for its neighbors in the former
Yugoslavia. The country, which joined the EU in 2004 and joined the
eurozone on 1 January 2007, has excellent infrastructure, a
well-educated work force, and an excellent central location.
Privatization of the economy proceeded at an accelerated pace in
2002-05. Despite lackluster performance in Europe in 2001-05,
Slovenia maintained moderate growth. Structural reforms to improve
the business environment have allowed for greater foreign
participation in Slovenia's economy and have helped to lower
unemployment. In March 2004, Slovenia became the first transition
country to graduate from borrower status to donor partner at the
World Bank. Despite its economic success, Slovenia faces growing
challenges. Much of the economy remains in state hands and foreign
direct investment (FDI) in Slovenia is one of the lowest in the EU
on a per capita basis. Taxes are relatively high, the labor market
is often seen as inflexible, and legacy industries are losing sales
to more competitive firms in China, India, and elsewhere. The
current center-right government, elected in October 2004, has
pledged to accelerate privatization of a number of large state
holdings and is interested in increasing FDI in Slovenia. In late
2005, the g