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Business Profile
Economy: Of all the Soviet bloc economies, the former Czechoslovakia experienced the highest degree of state control. In the late 1960s, after the Prague Spring, the Soviet-backed government revamped the economy to build up heavy industry at the expense of traditional strengths in light and craft-based industries, such as textiles, clothing, glass and ceramics. After the division of the country in 1993, the newly independent Slovak government found these heavy industries to be something of a millstone but they continue to play a central role in the economy. In a few cases, they have benefited from foreign investment. The other major economic problem was a dearth of natural resources: the most important of these, especially oil, were formerly available cheaply from the ex-Soviet Union but now had to be bought at market rates. The agricultural sector – almost all of which is now privately owned – produces wheat and grains, sugar beet, vegetables and livestock. However, its relative economic contribution (five per cent of GDP, eight per cent of the workforce) is not substantial.
The bulk of the industrial economy has been transferred to the private sector, including the key areas of machinery industries, chemical industries, textiles, leather, shoes, glass, electronics, nuclear energy and car manufacturing. Slovak economic policy-makers chose a different path of development from their Czech neighbours, opting for a more gradual transition and retaining certain ‘strategic’ industries (notably the armaments industry) under state control. An estimated 85 per cent of the economy is now in private hands.
Despite criticism from abroad about the conduct of economic reform, by 1997, the strategy appeared to have been largely successful as Slovakia’s economy registered steady growth, low inflation and stable unemployment. However, in the last five years, the economy has stagnated, suffering a large budget deficit and external debt while unemployment has climbed rapidly to its present level of just under 20 per cent, from which it stubbornly refuses to move. Current annual GDP growth is a moderate three per cent.
In October 1993 Slovakia signed an association agreement with the European Union, as the first stage on the road to full membership. Despite its difficulties, Slovakia was able to meet almost all the accession criteria for EU by the end of 2002. Along with nine other countries, including seven others from East and Central Europe, Slovakia is expected to join the EU in 2004.
Slovakia maintains its major previous trade links with Poland, Ukraine and Hungary, while important new ones have been established with Germany, France, Austria and the USA.
Business: Businesspeople wear suits. A knowledge of German and English is useful. Long business lunches are usual. Office hours: Mon-Fri 0800-1600 (or longer).
Commercial Information: The following organisations can offer advice: Slovak Chamber of Commerce and Industry, Gorkého 9, 816 03 Bratislava (tel: (2) 5443 3291; fax: (2) 5413 1159; e-mail: sopkurad@sopk.sk; website www.scci.sk or www.sopk.sk) or National Agency for the Development of Small and Medium-sized Enterprises, Prievozská 30, 821 05 Bratislava 2 (tel: (2) 53 41 73 28; fax: (2) 5341 7339; e-mail: agency@nadsme.sk; website: www.nadsme.sk).
Conferences/Conventions: Information can be obtained from the Slovak Chamber of Commerce and Industry (for address, see above).
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