Archive of articles - October 2000, page 4

Constitutional reform stalled

After nine months of discussion and debate, reforms to the Slovak Constitution still appear to be months away. Although coalition deputies and constitutional experts agree that a revision is inevitable due to the faulty wording of the original version written in 1992, it is still not clear when the document is likely to be passed since all coalition partners have yet to throw their support behind the draft in its current form.The delay over constitutional reform is holding up work on other reform initiatives, such as changes to the way in which Slovakia is governed, and improving control over public spending, judicial independence and social justice.

Business Briefs

EFSAL loan to arrive in Slovakia in early 2001OECD invitation to Slovak entry signed in ParisAugust trade deficit highest this yearGlobtel's IPO put off as global market stalls

Railways job cuts may hit 16,000

The government and unions have disagreed bitterly over a transformation plan for rail monopoly ŽSR (Železnice Slovenskej Republiky) approved by cabinet October 18 that will see between 12,000 and 16,000 employees laid off over the next five years. The government has said that the massive lay-offs are a crucial part of ŽSRos future restructuring.The transformation process is aimed at revitalising the heavily indebted rail company and attracting a foreign investor for the firm. The process will start in July next year and will cost 1.1 billion crowns ($21.2 million), 950 million of which will be provided by the European Investment Bank in compensation to laid-off ŽSR employees. The rest will be covered by the government.

Culture Shock: Plenty of cultural veritas in Slovak víno

A tray of refreshments, borne by a matronly secretary, arrived as we were wrapping up an interview with the mayor of a southern Slovak town in 1997. Expecting coffee or juice, we were mildly surprised to find shot glasses brimming with hard alcohol placed gently in front of us."It gets rid of the germs," said the mayor's deputy, making downward sweeping motions with one hand as he passed a glass to his boss with the other. "Na zdravie."Cheers indeed. Toasts to health (and a speedy farewell to germs) ring from Revúca to Rajec, from Ša3a to Snina, and despite the initial surprise many westerners may feel at being offered a drink at 10 a.m. (particularly if they grew up in societies burdened by temperance movements such as Canada and the US), there is something downright jolly about having one's workday interrupted by recesses of boozy camaraderie.

Capital markets: Bullish market sees VSŽ, Nafta up

The Slovak capital market over the last month could best be described as bullish. Strong demand was registered for several blue-chips on the official SAX index, whose value was pulled up by a sharp rise in issues such as Nafta, SES Tlmaee and VSŽ. The SAX gained 10% over the past month to 98.74 points (as of October 23).The rise in VSŽ shares was in expectation of the results of an extraordinary general meeting at VSŽ, which was to decide on acceptance of a bid from US Steel to take over the Slovak flagship company. The bid, worth between $425 million and $475 million, was backed by 99.98% of shareholders from the 82.33% present at the EGM. Prior to this approval, VSŽ shares were traded at poor volumes.US Steel had bought an 8.68% stake in VSŽ before the meeting for 197 crowns per share. At this time, the market price was oscillating around 100-120 crowns. VSŽ President Gabriel Eichler also added fuel to the price fire by saying that the real value of VSŽ shares lay between 400 and 450 crowns. The share price jumped on the OTC market, trading at 251 crowns as of October 24.

Maximizing Performance: Feedback... before it's too late!

Three things happened last week that made me recall the vital importance of feedback in an organisation. The first was part of a client operational review to assess what was needed to improve performance. The emphasis was on training, but other things were glaringly obvious. One key element that emerged was the incredibly useless performance review approach that was being used. There was nothing relating to "performance" in the review format. Rather, it was all about virtues and behaviours.The managing team was frustrated because the form and exercise were supposed to produce information on performance, improvement made, and areas that needed attention... or training needs. But, for some reason, the criteria that had been selected for review had little to say about this. No one had checked prior to the meeting.

Frustration mounts with second-rate Vienna road corridor

"This is incompetence, this is an embarrassment, this makes no sense," says Peter Feith, managing partner of business and tax advisory firm Ernst and Young, gesturing at an intricate, multi-coloured map he had just drawn showing road connections between Bratislava and Vienna."There is not one good thing about this. It's the worst type of incompetence," he repeats. "I can say this, I am Austrian."Feith is not the only one complaining about road travel in the area. Austrian and Slovak businessmen alike are frustrated and confused at Austria's apparent inability to build an adequate connection between Vienna and Bratislava, which at only 60 kilometres apart are two of Europe's most proximate capital cities. They say that overwhelmed border stations and a lack of decent highways on the Austrian side are major factors in preventing Vienna and Bratislava from becoming a dynamic corridor of commerce.

Former SLK bosses fired, investigated

Former board members at Slovakia's only shipyard, Slovenské lodenice Komárno (SLK), are to face prosecution for massive tax and insurance fraud, putting a government guarantee on a vital company restructuring loan in jeopardy.Government figures, however, have said that the scandal may bring some good by hastening amendments to the commercial code aimed at ensuring better corporate governance in Slovakia's business sector.Press reports have said that the Police Regional Investigation Office in Nitra has started criminal investigations into the activities of former board members at SLK. Between September 1999 and April 2000, SLK failed to pay 42.6 million crowns ($822,000) in compulsory contributions to the Social Insurance Company. SLK also failed to pay penalties of 2.7 million crowns ($52,000) for not observing rules regarding the employment of partly disabled people between 1997 and 1999.

No 10-year holidays in new FDI package

A much anticipated investment incentive package received the final go-ahead from the government on October 18, raising hopes that Slovakia's FDI laws would finally put the country on a level playing field with its neighbours. But a crucial 10 year tax exemption was absent, despite promises since May this year that it would be included in the new legislation.The new bill, given preliminary approval by cabinet in May 2000, was supposed to counter criticisms levied at the former incentives package for falling short of what investors were offered by neighbours Hungary and the Czech Republic. The Finance Ministry, however, dropped the 10-year exemption for investors in a last-minute alteration to the bill, instead opting to stay with the five year holiday in the former legislation.

Lease or Buy? The former is becoming a software option

Most businesses are familiar with the "lease or buy" question. Whether it applies to premises, IT hardware or car fleets, the decision forms a fundamental part of business strategy. But while there are many things that can be leased by businesses, software has not traditionally been one of them.Software systems have always been bought, installed, built and managed by companies themselves, usually at great expense and with considerable effort. Over the last few months, though, another option has surfaced, and that is to lease software applications from an application service provider (ASP). But what can businesses gain from renting applications rather than owning them?ASPs are companies - software vendors or third parties such as telecoms firms - that provide services for packaged software applications from a centrally managed facility. Clients access the applications remotely, over the Internet or leased lines. The model is not suitable for everyone, as ASPs generally offer standard packaged applications with little customisation. Software leasing is therefore best suited to smaller organisations with relatively simple requirements.

This Week

Review: Teen thriller a well-filmed yawner with no villains

There's a lunatic-at-the-wheel car sequence in Final Destination that would be suspenseful in any other movie, but isn't here because of the film's premise. These kids aren't going to die from anything as straight forward as being reckless teens.So what is their fate? Well, only the main character knows, and not even he is sure.Blonde-haired, blue-eyed Alex can't exactly see the future, but he can sense death's approach. His premonitions send him screaming off an airplane in the beginning of the film and later on frantic missions to save the lives of his schoolmates, always a moment too late.Unlike other teen thrillers, Final Destination has no villains, aside from destiny and chance. Faced with Alex's gift and their own dwindling numbers, the characters are forced to consider what control, if any, they have over life and death. If Alex can help them escape death now, what then? Will death come back immediately? Or was a close call all that was in the cards to begin with?

Niche-seeking local couriers at peace with shipping giants

As many other business spheres in Slovakia, the courier and shipping sector has seen a great deal of market concentration since the initial boom of small firms that appeared after 1989. After a decade, the presence of world shipping giants such as DHL and UPS has taught tiny domestic couriers the folly of trying to compete with these behemoths, and the wisdom of seeking niches in the Slovak door-to-door courier market. This survival strategy has allowed them to coexist with the world's leading shipping players, and even to make a modest profit.Representatives of the Association of Slovak Forwarding Firms (ZZS) have said that although Slovak couriers do not have the kind of financial weight that big firms carry, especially in promotion through advertising campaigns, they are aware that local firms can still have a place on the market alongside international players.

Police declare new war on Bratislava Mafia

Five extortionists who since 1997 had collected over 800,000 Slovak crowns ($15,500) from the owner of the Bratislava Hysteria pub and night club in return for 'protection', were apprehended by police on October 4. Thus began an attack on the Bratislava underworld, said Police Presidium head Ján Pipta five days later, an onslaught which would cripple local Mafia groups."The police will take certain steps," the police chief said, "to break up [the local Mafia groups] within the next six months."Two weeks later, Interior Minister Ladislav Pittner met with his eastern European counterparts for a conference to discuss a common strategy in combating regional organised crime. At the meeting, Pittner said that organised crime represented the biggest challenge for security forces since the end of the cold war.

News Briefs

Róbert Fico tops latest popularity pollSE wants its own security at Mochovce nuclear plantGerman chancellor makes first visit to SlovakiaRoma leaders sign agreement on political programmeSD1 leaders bashed by colleagues at party congressSlovenský raj forest fire kills six

Top Pick: Halloween night at Montana Grizzly Bar

Halloween originated in Celtic Ireland, where villagers would dress up in ghoulish costumes and noisily parade through town in order to frighten away spirits looking for bodies to possess. A mainstay of Western culture, it has also caught on in Bratislava during the last decade.Halloween will be celebrated at Montana's Grizzly Bar, just a step above Michalská brána (Michael's Gate) in the Old Town. As soon as the last ray of sun disappears on October 31, the serving staff will turn into witches and ghosts, long-toothed Jack-o-lanterns will twist their evil faces from behind every corner, and the spirits of the dead will scare the wits out of the living.On hand that night will be a special bubbling 'witches' brew', while the outside seating area will be transformed into a nightmarish cemetery, and customers will compete for the best costume award, with the winner receiving a weekend for two in the beautiful Jasná region of the High Tatras. Runners-up will be awarded a barrel of beer.

New customs law to cut border waits

Queueing for long hours at Slovakia's borders may soon be a thing of the past for many freight shippers. The Slovak customs directorate has drafted a customs law which could slash waiting times at border crossings, which business leaders and EU representatives have criticised as far too long.The main aim of the legislation, which the Finance Ministry is currently reviewing, is to speed up checking procedures at borders by bringing in more efficient search and documentation methods common in western Europe. The ministry was unable to say when the new rules might take effect.Both company representatives as well as shippers have said that quicker verification procedures at the borders will help shipping companies on a microeconomic level, but also bring wider benefits to the country on a macroeconomic level through a more flexible exchange of goods.

Fixing the Meeiar legacy: Bad workmen blaming their tools

There are many of us who make up the rules as we go along: Parents, husbands and wives and all kinds of professional fakers like journalists, traffic cops, teachers and company managers. But governments, particularly in democracy-deficient former communist countries, cannot be seen to be playing fast and loose with the law.We can all understand the Slovak government's frustration with current Supreme Court Chief Justice Štefan Harabin. He was nominated to the function by the then-ruling Slovak National Party in late 1997, along with henchman Jozef Štefanko as deputy chief justice, and has since besmirched his reputation by refusing to fire Štefanko over the latter's alleged free stay at a health spa owned by former Meeiar-era Health Minister Viliam Sobooa. Oh, and Štefanko's hacking his way with an axe into a Justice Ministry flat earlier this year.But neither these charges, nor Justice Minister Ján Earnogurský's allegation that Harabin has lost whatever moral credit he had, really justify the government's decision to advise that parliament recall him.

Transients hurt English teachers' image

Do Slovaks want to learn English? "Yes. It's the world language," said Andrea Janeušková, a 28-year old English student and pharmaceutical firm employee with aspirations of heading West. "And if you know English, you can get a better job with a foreign firm."And how do Slovaks believe they can best master the language? "When learning English, it's better with a native speaker," she added. "I have had Slovak teachers and some are good, some are not. It's best with a native speaker because then I am forced to speak and express myself only in English."The Slovak appetite for the native speaker has, since the 1989 fall of communism, brought a flood of expat English teachers into the country. As any student, teacher or language school manager can verify, the rush of westerners has brought its fair share of dedicated and qualified teachers; it has also, however, brought the so-called 'backpacker', a sub-group of transient, unqualified teachers more interested in experiencing cheap beer and Slovak women for a season than in imparting knowledge of their mother tongue to their eager students.