Illustrative stock photo (source: TASR)
The current figure of the Business Environment Index (BEI) is 57.4 points, which is a decline of 1.75 percent against the previous quarter – slightly less than in the previous one, the Business Alliance of Slovakia (PAS) informed The Slovak Spectator on November 26. The negative evaluation has been caused mainly by past and current problems in judiciary and ineffective use of state finances.
The index, calculated based on PAS' own studies, has been declining continually for five years.
The biggest decline of Q3 2015 was because of the executability of law and functionality of the judiciary. The judiciary and courts are perceived as a long-term thorn in the side of the business community.
The second most negatively evaluated item in this quarter was the Effectiveness of State Management and the Accessibility of State Aid, mostly due to poor results of the state in the informatisation of society - despite the huge finances invested in the OPIS operational programme.
Other negatives perceived by PAS include the new governmental package of social measures (and the promised third package shortly before the March 2016 election). Businesspeople deem the measures not conceptional and non-systemic, while missing the point of addressing the core problems in society. Despite better tax collection, the state still manages a budgetary deficit, while most governmental measures are focused on increasing its revenues at the expense of entrepreneurs.
The third most worsening category is Equality before the Law, which PAS ascribes mostly to certain laws adopted; the expected coming of a new carmaker and the related amendment of the law on measures for preparing strategic investments is a blatant example of a different state approach than towards entrepreneurs. For foreign investors, the state adapts laws and offers tax reliefs, while especially small and medium-sized domestic businesses or the self-employed constantly struggle with ever worsening conditions for doing business. The amendment on VAT was accepted among businesspeople positively as a whole but its effectiveness for just some entrepreneurs is perceived as discriminatory.
Several items were perceived as positive in Q3, though: the influence of companies on the business environment, the access to financial sources (caused by central banks’ policy, gradual return of trust in markets and low interest rates), and record low inflation in the long term which results in price stability. Some other macro-economic factors were named by the entrepreneurs as well, like stability and foreseeability of the exchange rate for the euro and improvements in infrastructure.
