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SLOVAKIA


 

 

In-depth Business Intelligence

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 31,868 23,700 20,500 59
         
GNI per capita
 US $ 4,920 3,950 3,760 73
Ranking is given out of 208 nations - (data from the World Bank)

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REPUBLICAN REFERENCE

Area (sq.km) 
48,845

Population
5,423,567 

Capital 
Bratislava 

Currency 
Koruna 

President 
Ivan Gasparovic

Private sector 
% of GDP
60%


 
Update No: 094 - (24/02/05)

Bratislava hosts the summit
Ukraine is deservedly at the moment grabbing all the headlines. But a mention of Slovakia would also be in place.
Slovakia has done extremely well of late, notching up high growth rates and earning itself a very high reputation for political sagacity, in avoiding the temptation to go nationalist with the likes of former dictator, Vladimir Meciar, and sticking to the radical reformer, Mikulas Dzurinda, who was re-elected last year.
Under Dzurinda, Slovakia has come in from the cold. The bad old days of Meciar are firmly behind it. It is now courted on all sides. The February 23rd-24th summit meeting of the US and Russian presidents, George Bush and Vladimir Putin, took place at Bratislava Castle. Slovak President Gasparovic invited Putin to stay in Bratislava for one more day on a bilateral visit. 
"The three of us have unanimously agreed that Bratislava Castle should be the summit venue, also as a symbol," Gasparovic had said on January 18th after a meeting with Prime Minister Mikulas Dzurinda and parliament chairman Pavol Hrusovsky. Situated on a rocky outcrop above the Danube river, Bratislava Castle dates back to the early Middle Ages, but has been extended and reconstructed many times since. At present it houses exhibitions from the Slovak National Museum (Historical Museum and Music Museum), as well as the reception rooms of the Slovak president and parliament. It is a national cultural monument. 
The castle met the security criteria required for such an important event very well. Situated on a hill, not right in the historical centre of the city, it is accessible only through a few paths which could be easily closed to the public. It was for centuries the symbol of the power of the Austro-Hungarian empire of which Slovakia was a province

The Slovak 'miracle'
Twelve years ago in January 1993 when Slovakia broke away from the Czechs few would have predicted that it would do well out of secession. Most viewed it as a retrograde affair, motivated by the sinister ambitions of an unsavoury character, Meciar.
A turning point came with his ejection in parliamentary elections in 1998, whose verdict he did at least have the grace to accept. He had run a corrupt and racist regime, which discredited the country and debarred it from EU and NATO entry. 
Last year he made a surprisingly good showing in the first round of presidential elections. But the present incumbent, Ivan Gasparovic, beat him in the second round on April 19th, to the great relief of Brussels, for Slovakia was just about to join the EU, which it duly did in May, 2004.
The Slovak premier, Mikulas Dzurinda, is one of the most remarkable leaders thrown up by the transition from communism to capitalism. He has won two successive elections, the first time a prime minister has done so in Central Europe. Judged against the continuing corruption and economic stagnation of former communist bloc states in most of the former Soviet bloc that have not fully democratised, Central Europe, and notably Slovakia, has witnessed a decisive transition.
The economy is buoyant. Slovakia posted year-on-year GDP growth of 5.3 percent in the year to November, 2004 the latest figure available. The government intends to implement its approved reforms this year, aiming at improving citizens' standard of living, said Dzurinda, unveiling the government's priorities for 2005 in early January. "We expect 2005 to be a year of real-wage growth at more than 3 percent," said Dzurinda. The number of new jobs should also grow by 1 per cent, while consumer price inflation should slow down. The cabinet also wants to address the issue of regional disparities.
This year, the Slovak government has yet to push through the reform on university funding. Other priorities include attaining an active presence in the Euro-Atlantic structures, the drawing of European funds, and Slovakia's fulfilment of criteria to join the European Monetary Union (EMU) and the Schengen Agreement on outer EU border safety.

The grave Roma problem
Nevertheless, not everything is so hunky-dory in Slovakia - nor is the government above reproach in all its policies. The commemoration of the 60th anniversary of the liberation of Auschwitz and the Nazi death camps by Soviet soldiers on January 24th was a moving affair. Insufficiently stressed, however, was that two million Roma lost their lives in the Holocaust as well as six million Jews.
The Roma still live in a dismal plight, discriminated against in multiple fashion, as happened before the war - and there is no Romany Israel for them to go to.
The Ivan Krasko settlement - incongruously named after a famous poet - last February was the scene of the worst riots in Slovakia since the restoration of democracy in 1989. A force of 250 police with water cannon pushed a mob of 400 Roma back to the settlement and then made house-to-house searches, allegedly beating many of the inhabitants.
The food riots highlighted the desperate living conditions of Slovakia's 320,000-strong Roma minority, the poorest and one of the largest gypsy populations in the expanded European Union. For Western Europe, the target of Roma migration in the past, Slovakia's EU accession last May now raised fears of a new wave of migrants.
Half the Slovak Roma live in 150 settlements, where typically there are no tarmac roads, no running water, and one third of the homes are shacks. In Trebisov, where 4,000 of the town's 23,000 population are Roma, the settlement consists of a few rotting blocks of council flats, some rows of squat bungalows built by wealthier Roma during the Communist era, and a scattering of illegal wooden shacks. Each dwelling has been sub-divided so that every son's or daughter's family occupies a single room, with 15 people or more crowded into a four-room bungalow.
In the settlement, electricity is intermittent, water is drawn from street pumps, and excrement is thrown out of the window on to frozen mounds of rubbish.
The February riots were provoked by the rightwing government's closely watched experiment to encourage the long-term unemployed to search for work by slashing their benefits in half. The reform refuses to treat the Roma, who make up 80 per cent of the long-term unemployed, as a special case. Yet in the settlements there is 100 per cent unemployment and the whole community is dependent on benefits.
The cuts took effect just at the end of winter, when seasonal odd jobs, such as collecting scrap metal, had not yet begun. Moreover, public works schemes to soften the impact of the cuts were not yet up and running.
Now 120,000 unemployed are working typically twice a week for five hours. The payment of Sk1,500 (39 Euro, US$51, £27) per month can bring a typical large Roma family's benefits back up to two-thirds of the previous level. In Trebisov 400 unemployed, mostly Roma, are picking up and sorting rubbish, for example, and helping pensioners in their homes. In fact there is more demand than places available, because the town does not have enough co-ordinators or equipment.
"We can't employ all those who want to work," said Jan Krivy, mayor of the nearby village of Trhoviste, where Roma also rioted. "They've done a lot of good work and the village is as clean as it has ever been."
The schemes have given the Roma - many of whom have not worked since the compulsory employment of the Communist era - some of the basic disciplines needed to hold down a job. "They're just starting to learn how to work," said Mr Krivy. "At the beginning they had problems waking up early and with work itself, as they are used to doing nothing and sleeping through the whole day."
But the schemes have given Roma few worthwhile skills, nor have they opened up any real employment possibilities in a region of high unemployment and endemic racism. In Trebisov, where there is 18 per cent unemployment, just three Roma - all work scheme co-ordinators - have gone on to secure manual jobs as rubbish collectors and security guards.
"Even the whites don't have jobs, so how can we?" said Jozef Copak, a disabled father of seven. "Anyway, when an employer sees it's a Roma he rejects him."
Moreover the benefit cuts, together with rises in value-added tax and excise taxes, have impoverished the Roma further and created more social problems. Mayor Dusan Polacky says many Roma have stopped paying council rents and community charges, while local residents are improving fences and buying dogs to stop thefts from allotments and Roma searching through their bins. "We're the ones who are left to deal with this bad situation," he said.
Yet despite initial fears in other countries, few Slovak Roma have responded to the benefit cuts by migrating. Most are too poor to travel and those that have sought work abroad often return disappointed because they lack relevant skills and languages.

Slovak attendance at the Sofia conference on the Roma problem
The Slovaks sent a delegation to the conference in Bulgaria in early February concerning the European-wide problem of the Roma. Leaders from Central and Eastern Europe launched in Sofia on February 2nd the Decade of Roma Inclusion - an international initiative to improve the status of Roma, Europe's most vulnerable minority. 
While most of the countries involved were represented by their premiers, Slovakia only was by its deputy premier, Pal Czaky. Dzurinda has something on his conscience or fears the magnitude of the task in hand.

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AUTOMOBILES

Lombardini increased 2004 sales


Slovak engine producer Lombardini Slovakia posted sales of 12.6m Euro (500m Slovak crowns) in 2004, an increase of over 10% year-on-year, the company said in a statement, Interfax News Agency reported recently. 
Lombardini turned out over 8,200 diesel engines in 2004, an increase of some 300 units over the previous year, the firm's CEO Marian Themar told the CTK news agency. The firm plans to raise output by some 9% this year, with sales expected to top 500m crowns. Exports account for over 90% of Lombardini's sales. Lombardini began operating on the Slovak market in 1991.

Johnson Controls to build 20m Euro plant

US auto parts maker, Johnson Controls, will build a 20m Euro plant in Lucenec, central Slovakia, Slovak Economy Minister, Pavol Rusko, announced during a recent press conference, New Europe reported.
The plant, which should launch production in mid-2006, will employ roughly 350 people.
Rusko said it was important for his ministry to have secured an investor for a region that is not so prosperous. The new plant, which will produce seat pads, should lower the unemployment rate in the region from over 20% to 15%.
Johnson Controls was lured to Slovakia by the arrival of the South Korean carmaker KIA Motors, which is to start production at a new plant in Zilina, central Slovakia, in 2006. The company says it hopes to supply other car producers in Slovakia. The US firm picked Lucenec for its infrastructure and cheap labour. Johnson Controls already has a plant in Martin, central Slovakia, and in Bratislava.

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BANKING

NBS still in the red with 35bn crown loss

The National Bank of Slovakia (NBS) showed an unaudited loss of 36.4bn Slovak crowns in 2004, a 15% increase over the previous year, according to figures released by the central bank, Interfax News Agency has reported.
The larger loss was due mainly to the firming of the Slovak currency against both the US dollar and the Euro, NBS spokesman Igor Barat told the CTK news agency. The central bank put its exchange rate losses at 29.8bn crowns last year. The Slovak crown firmed by 5.75% to the Euro over the course of 2004 and by 13.44% against the US dollar, according to Barat.
The NBS first showed a loss in 2002 worth 25bn crowns, due mainly to the appreciating crown. In 2003 the central bank's loss hit 31.4bn crowns, thanks to the strong crown and the sterilisation of excess liquidity on the market.

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ENERGY

Elektrovod predicts solid sales

Energy services company Elektrovod Holding in Bratislava expects its sales to reach 880.25m Slovak crowns in 2004, SITA reported recently. 
Member of the company's board of directors, Ivan Benes, said Elektrovod has projected its 2004 after-tax profit at 5.05m crowns. The company should generate added value of 136.93m crowns. The expected economic result reflects two factors: a changed structure of contracts and a drop in the volume of clients' investment projects. The firm plans 2005 sales at 953.72m crowns and the profit after taxation should reach 6.75m crowns this year.

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FOREIGN AFFAIRS

Slovakia to host SEI Premiers summit

Slovakia, as the presiding country of the Central European Initiative (SEI), will host the summit of Premiers from 17 member countries in November 2005, Juraj Tomaga, spokesperson of the Foreign Affairs Ministry, said recently. 
The meeting of the Foreign Affairs Ministers of SEI will be held on May 26th and 27th, 2005 in the High Tatra mountains Slovakia, which took over the rotating chairmanship of SEI in January, sees the strengthening of international cooperation as a top priority. Last year's enlargement of the EU and NATO should assist this, Tomaga explained. Slovakia also intends to focus on providing other countries with experiences and knowledge related to social/economic transformation, New Europe reported.

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