Czechs attract 17 times more FDI than Slovakia in 2005

THE INFLUX of foreign direct investment (FDI) to the Slovak economy slowed dramatically in 2005. According to the Slovak central bank, foreign companies invested Sk20 billion in the country last year, down 35 percent from 2004.

In the neighbouring Czech Republic, on the other hand, FDI doubled in 2005 to reach Sk346.5 billion, the Hospodárske noviny paper wrote.

According to analysts, the drop in FDI to Slovakia is mainly due to the fact that less was privatized.

"Virtually no state property was sold last year," said Miroslav Šmál, an analyst with Poštová banka.

"The slowdown could also have been caused by the replacement of the economy minister," he added.

Šmál also faulted the Slovak Agency for the Development of Investment and Trade (SARIO) and the Economy Ministry for not cooperating well on attracting investors to Slovakia.

"SARIO fails primarily in its initial contacts with investors," the analyst said.

Analysts estimate that FDI should reach Sk20 billion this year as well. Higher investments are being held back by the fact that Slovakia will hold national elections in June, and that the front-running leftist opposition parties have said they will roll back some of the right-wing Dzurinda administration's reforms.

"Investors are waiting to see how the elections turn out, which is why they are speculating a bit in deciding where to locate their operations," said Štefan Lednár, the general secretary of the Slovak industrial union.


Compiled by Martina Jurinová from press reports
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