Next Step : Year Later, Slovenia Is Above Fray : New nation is glad it bolted from Yugoslavia. Now, it’s linking up with Western Europe.

True to the national boosterism that claims Slovenia as “The Sunny bright Side of the Alps,” Jasmina Velkovar shrugs off her joblessness and chooses to look on the bright side.

“Maybe I don’t make as much money as I used to, but all I have to do to feel better is look at what is happening in the south,” says the engineer who now peddles jeweled T-shirts from a sidewalk kiosk. “We were fortunate. Our war wasn’t so long or so destructive, and now we are free.”

Like most of the 2 million residents of Slovenia, Velkovar is counting her blessings and looking ahead. The republic that declared independence a year ago and suffered the first angry blow of the Yugoslav army may be mired in economic troubles, but it is all the more determined to tough out the hardships of breaking away.

The Balkan war that began here with a federal army invasion on June 27, 1991, is now raging in Bosnia-Herzegovina and poised to engulf nearly all of former Yugoslavia’s south.

Its passage through the serene landscape of tiny Slovenia was brief, and some now see the attack as having galvanized public support for abandoning Yugoslavia.

“People were skeptical about the need for independence until the army that they had supported turned against them,” recalls Miha Roth, a young government clerk. “As events unfolded, they realized they had done the right thing.”

Seventy deaths and $2 billion in property damage were the costs of the short-lived and half-hearted federal attack on the republic that was the most prosperous in Yugoslavia. The invaders suffered the brunt of the casualties and limped off the battlefields after less than two weeks.

Slovenia’s relatively easy exit from troubled Yugoslavia is unlikely to be repeated by the other republics, which still face opposition to their independence from Serbian minorities within their borders and from the Republic of Serbia itself. Only a few thousand ethnic Serbs live within Slovenia, depriving Belgrade of a cause for protracted resistance to its secession.

Free of the other republics that were an economic drag on bustling Slovenia and relatively confident that no further Belgrade aggression lies ahead, Ljubljana officials are turning their attention toward Western Europe.

Slovenian Foreign Minister Dimitrej Rupel has dispatched his young, polyglot emissaries to Brussels, London and Washington with orders to put Slovenia on the international map.

Though too small to be of much interest to foreign investors for its domestic market, Slovenia is pushing itself as the best bargain in Eastern Europe for joint production of export goods. Wages are low, productivity is high, and Slovenes share more of the work ethic espoused in industrious Austria than the more lackadaisical pace of some of their southern neighbors.

Slovenia’s decision to secede after Serbia refused to allow Yugoslavia to be restructured into a looser alliance inflicted the first tear in the federal fabric that has come thoroughly unraveled over the past year.

Bosnia-Herzegovina, fearful of remaining in the Serb-dominated rump Yugoslav state, has been shattered by a Serbian offensive since following Slovenia’s lead in voting to secede. Macedonia left the alliance without bloodshed, but remains unrecognized because of a dispute with Greece over its right to the name also claimed by a Greek province.

Both Slovenia and Croatia, which pulled out of Yugoslavia in tandem, are now internationally recognized and have seats in the United Nations.

The price Croatia has paid for its freedom has been considerably higher than that exacted from Slovenia. At least 10,000 have died in a year of fighting between Croatian national guardsmen and the federal army, which backs Croatia’s Serbian minority in opposing secession. Tens of thousands have been wounded, one-third of the republic has been seized by Serbian rebels and expunged of non-Serbs, and vast stretches of Croatia’s splendid Adriatic Sea coast are still too unstable for tourism to resume.

A U.N. peacekeeping deployment has scattered 14,000 “blue helmets” throughout the occupied areas of Croatia, curbing new outbreaks of violence but also firming up Serbian control of the territory.

By contrast, Slovenia is now thoroughly free of the Yugoslav turmoil and has overcome what was initially a Western tendency to see its secession as a cause of the conflict rather than a move to escape it.

“I have the clear impression that Western leaders now distinguish Slovenia from the other Yugoslav republics,” says Prime Minister Janez Drnovsek, recently returned from a round of international elbow-rubbing at the Earth Summit in Rio de Janeiro. “We are out of the crisis, if I may say so.”

Western countries, particularly the United States, at first blamed Slovenia for Yugoslavia’s breakup. For months after the June 25 declarations of independence, they withheld recognition of Slovenia and Croatia in deference to Belgrade’s professed desire to preserve the six-republic federation.

But after the Serbian land grab made it clear that Belgrade’s aims were territorial instead of defensive, the 12-nation European Community extended ties to the secessionist states in January, and Washington granted recognition three months later when Serbian guerrillas redirected their aggression toward Bosnia-Herzegovina.

The war and the struggle for international acceptance dominated the first year of Slovenian statehood.

“We were nobody up until January of this year, and the most influential country in the world, the United States, didn’t recognize us until April,” says Andrej Kumar, a senior government economics adviser, explaining that Slovenia’s exclusion from international business organizations hampered its recovery.

Now, Ljubljana officials say, they must buckle down to the task of building a free-market economy from the remnants of a failed socialist system.

Housing has largely been transferred from public to individual ownership, but the bulk of Slovenian industry remains in the hands of the state. Economists and government ministers are pressing for swift passage of a new law on privatization to spur much-needed foreign investment.

Delays in market-oriented reforms because of the war and the battle for recognition have contributed to the economic stagnation that has caused Slovenia’s gross national product to drop 20% over the past two years, leaving 12% of the work force idle.

Although successful in preserving lucrative foreign trade, Slovenia has seen per capita income fall from $500 a month to just over $350 while last year’s inflation of 250% sent prices for all goods soaring.

While those figures tell of erosion in Slovenian living standards, the hardship is relative if compared with the devastated remains of Yugoslavia. Serbia and Montenegro, the only two republics still united in the Balkan federation, have per capita income of less than $50 that declines daily.

“In general, people are still very much supportive of independence and believe we can manage it successfully,” says Kumar. “It’s in the nature of the Slovenian people to stick with something. We are a hard-working nation. The average Slovene is really convinced we’ll overcome the present difficulties.”

That claim of persevering optimism is reinforced by the people. Those made redundant by the economic changeover tend to hit the streets with primitive capitalist ventures rather than bemoan their misfortune.

Branjo Vidas, a waiter by night, grows mushrooms in his basement and sells them from a roadside stand to supplement his income. Tanja Djuric, a 17-year-old art student, helps her family make ends meet by selling imported sports clothes from a sidewalk kiosk like Jasmina Velkovar’s. The enterprises are not technically legal as the vendors are untaxed, but officials are deliberately looking the other way.

“We have a lot of problems, but we are still so small that the problems are under better control,” says Ivan Majcen of the Slovenian Chamber of Economy, which three years ago coined the advertising slogan asserting that Slovenia sits on “The Sunny Side of the Alps.”

“People understand the difficulties and are still behind us,” says Majcen, who believes most Slovenes expected hard times for the first couple years of independence.

But he cautions that public patience shouldn’t be tried by political squabbling, such as the current parliamentary battle over details of privatization.

“Slovenes are ready to sacrifice something,” says Majcen, “but they want clear progress and light at the end of the tunnel.”

Slovenia--Free at Last

Slovenia is richest and most Westernized of six republics that composed Yugoslavia. It was also first to break away from Communist-led federation last year.

HISTORY: Slovenes arrived in 6th Century from Slav lands north of Carpathian Mountains and settled in Julian Alps and fertile Sava River region. They were absorbed by Roman Empire, then by Hapsburg Empire until World War I. Between the world wars, Slovenia was battleground between new Yugoslav state and fascist Italy.

PEOPLE: 2 million. More than 90% ethnic Slovenes.

ECONOMY: Produces durable goods such as cars, refrigerators, furniture. No major natural resources. Currently in depression.

QUOTE: “We pretend to be European, but we are very much Balkan. We can be just as violent and irrational as our neighbors to the south. We have also never been a bastion of free thought.” --Robert Botteri, editor of Slovene magazine “Mladina.”

SOURCES: Times Staff and Wire Services