Slovakia has found itself in a middle-income trap. (source: SME - Jozef Jakubčo)
After Slovakia used up all the yields of reforms it adopted before 2009, it has found itself in a middle-income trap. This means that it has stopped converging with its peers in the European Union. Contrary to this, its growth dynamic began to slow down. To re-ignite economic growth, Slovakia needs to return to reforms.
“If Slovakia wants to make headway, it is necessary to constantly modernise the country,” said Ivan Mikloš, former economy minister and one reform initiator that earned Slovakia the nickname of the Tatra Tiger, during a panel discussion about the prosperity index compiled by Slovenská Sporiteľňa and Česká Spořitelna.
Mikloš sees present-day Slovakia as a country without a vision. Most political parties are not focusing on the country’s economic growth in their campaigns prior to the September 30 parliamentary election, luring potential voters with populist promises.
“Political parties are waging campaigns in a sophisticated manner,” Mikloš said, adding that they are saying what people want to hear. They promise that the government will help them, that they will give people guarantees, higher salaries and lower prices. “Reforms are not easy, people fear change.”
As part of the economic development, a mix of four areas is necessary, which must function together. These are sound sustainable public finances, the business environment, public services and public administration, as well as education, science and research, noted Mikloš.
“We can only be successful and grow in the long term if we can break out of the middle-income trap,” said Mikloš.
