News item: Massive 9.8 percent GDP growth in Slovakia in the third quarter of 2006 as reported by the national Statistics Bureau was beyond all expectations.
By Ivan Štulajter
In the history of independent Slovakia, we have never experienced nearly 10% economic growth, even if we are only talking about one quarter of the year (the third quarter 2006). Maybe the last time it happened was during the electrification of the country after the Second World War, when dams, railroads and the Iron Curtain were built.
The "far-right government" of former PM Mikuláš Dzurinda left Fico & Co. with an economy in such good condition that it immediately produced a Chinese-style rate of growth [9.8 percent year-on-year]. Predictions that the economy would one day be driven by foreign investments have been fulfilled, especially regarding the auto industry. But nothing like this would have happened if, instead of years of reform, this country had been dominated by moods such as those awoken by the current government.
As so often happens, one government is reaping what another sowed. For politicians without vision or imagination, it is always better to sit with the reapers. But good economic results are like opium - they can convince even bunglers and scoundrels that they had something to do with it. This is why these Chinese GDP figures are dangerous - they may encourage all those who think that a centralized state is the ideal. For example, this high growth could encourage those who regret, like the prime minister, that the government did not push through the tax on dividends; or those who want to minimize the role of the private sector in health care, who would prefer to rid the energy sector of foreign capital, who would kill the pension reform in the name of securing money to pay Christmas bonuses, and who would weaken the social system in such a way that once again it would not pay to work.
The Chinese data are easy to explain: wherever the needed material and cultural conditions are created, people are working like crazy. Wealth in Slovakia is increasing. The role of the government is to discern what this wealth is based on, and to try not to destroy it. Sometimes it's better if the government just takes a holiday for a season - like now.