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SLOVAKIA


 

 

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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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Update No: 119 - (30/04/07)

Reformers prepare the ground for the populists
Healthcare reform remains a political minefield in the ex-Communist states of central Europe. Reformers want to avoid the experience of Slovakia where the centre-right government of Mikulas Dzurinda implemented rapid changes in 2003-4 - including the introduction of charges and private health insurers - only to lose last year's parliamentary elections. 

The new centre-left administration has since partly rolled back the reforms. In Poland too, wholesale reforms in healthcare financing pushed through in 1999-2001 were later revised and diluted. Hungarian Prime Minister Gyurscany's insistence on negotiation and compromise shows that he too is intensely aware of the political dangers of healthcare reforms.

Czech Social Democrat (CSSD) leader Jiri Paroubek is trying to be an opposition leader, but he is failing in his effort. When Paroubek claims that the Social Democrats will abolish fees for prescriptions, visits to surgeries, and others once they are returned to power, he is just like Slovak PM Robert Fico, chairman of the leftist Smer-Social Democracy party. 

The attempt to follow Fico's recipe whose Smer won the elections and that is even more popular in government need not be successful, however. Slovakia is not the Czech Republic, and Czech PM Mirek Topolanek (conservative ODS) is far from being Mikulas Dzurinda, former right-wing government chairman. 

Dzurinda's reformers tightened Slovaks' belts too much to win the next elections, and enough for Slovakia to live well on the reforms even under Fico for another four, maybe eight years.

Seniors to pay less for gas
Some Slovaks who will benefit are the elderly. Clients of the gas utility SPP who are over 65 years old should pay SKK 600 less for gas annually, beginning on July 1 of this year. Prime Minister Robert Fico stated that representatives of SPP and the Cabinet have agreed on a new tariff for seniors. According to the volume of purchased gas, this price reduction would represent 1-14 percent, specified the Prime Minister. The prime minister is also going to negotiate motor fuel prices next week, but he did not want to be more specific about that issue. "We are preparing further steps, but at the given moment we are only reporting on concluded matters," he said. 

SPP spokesperson Dana Krsakova said that representatives of SPP and the Cabinet were seeking a model that could help socially weaker groups now, when energy prices are globally high. The talks resulted in the creation of the new Plus Senior tariff from consumer categories D2 and D3, which represents annual natural gas consumption from 200 to 6,500 cubic meters. Ms. Krsakova explained that particularly those pensioners who use natural gas as an energy source to heat water or produce heat in their households should be eligible for lower prices. 

SPP wanted to submit the proposal to the regulatory office (URSO) on April 30. According to the proposal the annual bonus regulator should be reflected in lower fixed monthly rates. SPP will reveal more detailed information only after URSO has approved the measure. None of the persons present, however, spoke about how SPP would cover the shortfall caused by reduced prices. 

The opposition hits back
There is nothing like turning the tables on one's opponents. To do so on the very subject on which they gained an advantage is an exquisite pleasure.
Nobody would deny that how old someone is and how healthy is of the first importance for assessing their future - all that matters. 

The opposition Slovak Democratic and Christian Union-Democratic Party (SDKU-DS) thinks that the government has no idea how to fulfil pre-election promises concerning the healthcare sector. Health Minister Ivan Valentovic lies and as Pontius Pilate he washes his hands over reduction of the network of healthcare facilities. Chairman and the former prime minister Mikulas Dzurinda and chairman of the Parliamentary Health Committee Viliam Novotny (SDKU-DS) reacted to the April 15th statement of Health Minister by pointing out that measures, which he proposed, do not have any logic. 

The minister said that he did not intend to shut down any healthcare facilities. He reminded that his competencies are restricted and only health insurance companies can decide which hospitals are ineffective. If health insurance companies come to agreement, Health Ministry can launch talks with Labour Ministry and counties to transform these hospitals them into other kinds of social or healthcare facilities. SDKU reminded that no reduction of healthcare facilities is possible without issuing a government regulation. 

SDKU thinks that steps of the government in the healthcare sector are hopeless. Mr. Dzurinda reminded people of the promise of the current Prime Minister Robert Fico given in the pre-election period, that his party SMER-SD will solve the crisis situation in the healthcare sector immediately after coming to power. "You can see that they do not have any idea what the measures in the healthcare sector should be," stated the former prime minister. He called on the current prime minister to return to the reform launched under the previous government, continue with good measures, correct the bad steps and complete, what there was no time for. 

Labour code in review
Pensions and other benefits to the elderly have to be paid for - and it is those in work who do so.
The Union of Chemical and Pharmaceutical Industry of the Slovak Republic (ZCHFP) has joined the ranks of companies disillusioned by the prepared amendment to the Labour Code that the Cabinet approved on April 18th. The union insists that the draft amendment is unbalanced and does not comply with needs of flexibility on the labour market. ZCHFP President Roman Karlubik says that changes proposed in the draft curb flexibility of the labour market and competitiveness of Slovak companies. He expressed regret that he Labor Ministry failed to accept a great portion of reservations voiced by employers though practically all employer organizations and companies agreed on them. 

Mr. Karlubik believes, however, that there is still a chance that deputies will be enough responsible to approve the amendment that will not contain the most controversial points. Mr. Karlubik thinks that first of all employers have responsibility for their employees, their wages and social programmes for them. Thus, they should have the right to influence the legislation that can cause damage to all. 
The cabinet voted to approve the amendment to the Labour Code that boosts the position of employees. However, parliament will have the final say. The draft got on the cabinet's table after Prime Minister Robert Fico and representatives of employers finally ironed out the most controversial points. However, 28 issues are still pending.

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FOREIGN DIRECT INVESTMENT

FDI reaches 57.7 billion crowns in 2006


Foreign direct investment (FDI) in Slovakia totalled 57.703 billion Slovak crowns last year, which is 2.5 times more than in 2005 when FDI totalled 21.883 billion crowns, Slovak Spectator reported on March 29th.
The corporate sector contributed to last year's increase in foreign direct investment with as much as 58.159 billion crowns. In contrast, the banking sector reported a decline in investment volume of 456 million crowns, according to information from the National Bank of Slovakia, cited by Slovak Spectator. Of the total volume of FDI in Slovakia, as much as 186.017 billion crowns went to industrial production, 91.598 billion crowns to financial services and 66.001 billion crowns to energy production and distribution.
Italy was the most significant investor in Slovakia in 2006, investing a total of 31.724 billion crowns. At the end of April 2006, Italy's Enel took control of Slovakia's dominant power producer, Slovenske Elektrarne, as its 66 per cent majority shareholder. Italy was followed by Austria, Korea, Germany, Cyprus and the Czech Republic. Most funds were invested in the Bratislava Region, which registered foreign direct investments of 42.515 billion crowns. The Zilina Region was second, followed by the Trencin, Trnava, Kosice, Nitra, Banska Bystrica and the Presov Region. The outflow of FDI from Slovakia totalled 9.5 billion crowns - most of which, 7.139 billion crowns, went to Luxembourg. As much as 3.068 billion crowns went to the Czech Republic and 568 
million crowns to Russia. FDI from Slovakia was mainly in the fields of real estate, trading activities and financial services, it was reported.

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JOINT VENTURE

Slovak-Korean JV Matador-DongWong to cut share capital

Slovak-Korean joint venture, Matador-DongWong, sro Dubnica nad Vahom is going to cut its share capital by 79,500 Slovak crowns to 213.7 million crowns, HN Online reported on April 10th.
The general shareholder meeting held on March 14th decided on the step. The company's financial director, Peter Veteska, explained that the firm is reducing its share capital in order to bring it into line with the Slovak legislation. According to the Slovak law share, capital has to be divisible by 1,000. The company also invited its creditors to come forward with their claims towards the company within 90 days of the second notice. The company Matador-DongWong was set up in March 2005. Matador Automotive Vrable controls 65 percent, while the rest is in the hands of the south Korean company DongWong Metal. Investment costs achieved 10 million Euro. The company produces car door structures and is one of the direct suppliers of the new Hyundai/Kia car assembly plant near Zilina. According to preliminary results, sales of the Matador group achieved 16.861 billion crowns last year. Preliminary pre-tax profit was 953 million crowns.

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TELECOMMUNICATIONS

Slovak Telekom to fulfil further obligations

Slovakia's dominant fixed-line operator, Slovak Telekom, will have to fulfil certain obligations demanded by the Telecommunications Office, based on an analysis of the public telecom market, Slovak Spectator reported on April 10th.
Based on the regulator's decision, Slovak Telecom will have to provide non-discriminatory and transparent access, keep separate accounts, enable access to specified network components and charge cost-based prices. These obligations aim to support competition and the development of the internal market.

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TOURISM

Visegrad Group countries sign tourism agreement

Representatives of tourism ministries of Visegrad Group (V4) countries recently signed an official agreement on cooperation in tourism at an international conference, focussing on overseas markets, held in Bratislava on the occasion of Slovakia's V4 presidency, Slovak Spectator reported on April 3rd.
According to the agreement, Slovakia, the Czech Republic, Hungary and Poland will continue joint promotion of the region's tourist attractions. Section Director of the Slovak Agency for Tourism, Zuzana Turakova, said that joint marketing would be geared toward the US, China, Japan and the Asian part of the Russian Federation. The attractions that have been chosen for promotion include historical monuments, capitals, UNESCO monuments, spas and Jewish memorials. The most favourable conditions for doing business in the V4 can be found in Slovakia, an Ernst & Young poll recently reported. Most businessmen in Slovakia agreed that business and innovations are the most important contributors to economic growth in the area. However, the biggest obstacles include the social and political environment, legislative and administrative measures and the accessibility of human resources, it was reported.

Tourism increasing mainly in Bratislava

The number of tourists in Slovakia increased by 4.5 per cent from the year 2005 to more than 3.5 million in 2006, while 840,800 tourists stayed in Bratislava region - an increase of 6.9 per cent year-on-year, Slovak Spectator reported on April 10th.
The number of foreign visitors to Bratislava region came to 511,300, which was an increase of 8.2 per cent year-on-year, the Slovak Economy Ministry's tourism policy department reported. 
Presov was the second most popular region, reporting over 647,000 tourists last year, followed by Zilina region with 652,800 visitors. The lowest number of tourists, namely 215,700, visited the Nitra County. Trnava region was visited by 237,000 tourists, Trencin region by 
260,800, Kosice region by 306,000 and Banska Bystrica region 423,700. Tourist accommodation facilities in Slovakia reported sales of almost seven billion Slovak crowns last year - an increase of 10.6 per cent in current prices as compared to 2005. From this amount, foreign tourists paid four billion crowns, which is eight percent more than in 
2005. Their share in total sales dropped by 1.4 percentage points to 62.2 per cent, the Slovak Statistics Office reported. Hotels and boarding houses reported revenues of 5.8 billion crowns, 66.8 per cent of which came from foreign tourists. At the end of December 2006, 2,490 facilities provided accommodation services in Slovakia. In total they operated 48,200 rooms with 124,300 beds.

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