Slovakia adopted the euro in 2009. (source: TASR)
Thirty years after becoming an independent state, Slovakia is a member of the European Union and the eurozone, as well as the world's biggest car producer when calculated per capita.
The bumpy yet successful path of reforms the country walked in the late 1990s and early 2000s has been praised, but to fully harness its potential, Slovakia now needs another wave of economic reforms.
“Then we would have a real chance of not getting stuck in the middle-income trap, and successfully manage the next transformation, from industrial mass production to an economy driven by innovations,” former government minister Ivan Mikloš, instrumental in the introduction of key economic reforms in the 2000s, told The Slovak Spectator. “Unfortunately, it doesn’t look like that yet.”
A successful transformation?
The achievements of Slovakia's economic transformation depends on the point of the view. Compared with Ukraine, Moldova, Belarus, or Serbia, it can be certainly considered a success. But the comparison with Estonia, Lithuania, or the Czech Republic puts things in a different perspective, noted Mikloš.
On the one hand, in the more than three decades since the fall of the communist regime in 1989, Slovakia has been through an unprecedented economic development. The economy has grown as has the standard of living and the quality of life. “On the other hand, we could have achieved much more and have gone much further, especially in terms of creating the conditions for further successful development and future growth,” he admitted.
Statistics give a clear picture. In 2012, Slovakia ranked third among the 11 post-communist countries that joined the EU since 2004 in economic terms, after the Czech Republic and Slovenia. In 2021, Slovakia dropped to second to last rank, followed only by Bulgaria.
Labour productivity tells a similar story. While in 2012 Slovakia was the best in this indicator, in 2021 it ranked ninth with only Hungary and Bulgaria behind, noted Mikloš.
Radovan Ďurana, of the Institute of Economic and Social Studies (INESS) non-governmental think tank, pointed to Poland and Hungary having a slight lead at the beginning of the post-1989 transformation, as small businesses were tolerated even under socialism. The Czech Republic, meanwhile, had the advantage of higher quality education, industrial tradition, and better infrastructure.
The Slovak economy experienced a radical jump between 2002 and 2008.
“People’s entrepreneurship, the effort to provide services and goods and make money in the process, was able to overcome the adversity of political interventions, especially in the 1990s,” Ďurana told The Slovak Spectator.
Despite the losses incurred during the privatisation process, Slovakia managed to overcome the pains of returning to a market economy. Today, the private sector dominates the economy and creates key values for both the consumer and the public sector. People in Slovakia no longer have to cope with a lack of goods or services, their purchasing power has increased, and the statistical rate of poverty is one of the lowest in the EU, the analyst noted.
“The better quality of life has translated into increasing life expectancy, which stagnated during the previous regime,” Ďurana said.
