New investment agency SARIO is hoping to attract more of the world's biggest companies like McDonald's (pictured above in Košice) and silence some of the critics of its predecessor SNAZIR.
SARIO, following the approval of its creation on June 26, takes over where SNAZIR left off, joining six government ministries along with the National Property Fund privatisation body and the office of the government. The agency, through greater resources and broader lines of communications between the different government bodies than its predecessor, hopes to address some of the criticisms levelled at SNAZIR in the past and attract more FDI to the country.
Roman Minarovič, former SNAZIR boss and now general director of SARIO, said the next step in SARIO's development was to sell shares to six ministries (Economy, Construction, Privatisation, Finance, Foreign Affairs, and Labour), and then link with the EU-sponsored PHARE fund (which will contribute 5.5 million euros over three years), a process expected to take four months.
SARIO also boasts double the yearly budget available to SNAZIR - 50 million Slovak crowns ($11 million).
"We hope that because we will have a bigger budget - mainly for marketing activities - we can be more aggressive and we can prepare more activities," Minarovič said. "The aim is to merge activities, to merge people, to merge money and not divide the [pro-investment] budget, but to bring it all together under one unit."
Some of the projects slated to be implemented under SARIO include increased marketing of Slovak investment opportunities with multimedia presentations, specialised publications and analyses for potential investors along with a more pro-active approach at trade shows and seminars abroad - something that observers had criticised at SNAZIR presentations in the past.
"SARIO will be a state institution that gives full service to foreign investors, including publicity, information on legislation and areas suitable for investing. I think that all things concerning foreign trade and foreign direct investment will be covered and will be joined under SARIO," said Peter Benčúrik, spokesman for the Economy Ministry.
SARIO representatives are determined to redress some of the bad press SNAZIR had from previous investment projects. Michel Lacombe of the company Arten - a French FDI consulting firm to Slovakia - was left frustrated after dealing with SNAZIR while acting for the French company Plastic Omnium. The automotive parts supplier was on the verge of investing in Hungary after a mix-up over investment incentives the company could expect in Slovakia, but was eventually persuaded to settle here following last-minute talks with the government.
Lacombe remained doubtful on the prospects of SARIO. "One of the main problems with SNAZIR is that they didn't have enough power to manage industrial projects in Slovakia. They only had the power to open doors, but not to be efficient or to manage real projects," he said. "I don't know if SARIO will have such influence or power."
Alan Sitár, chairman of the board at SARIO, said that SNAZIR did not provide as comprehensive a service as could be found in neighbouring countries as the Czech Republic, Hungary and Poland, but that this would be addressed under the new agency.
"If we want to compete with the other countries of the Visegrad Four [Poland, Hungary and the Czech Republic], we have to offer the same conditions, and we have to bear in mind that Slovakia is lagging behind. Our market is slightly smaller, and we were kind of pushed out during the years [former Prime Minister Vladim'r] Mečiar was in power [1994-1998], so we have had to work harder to get the same attention, and that is what we are trying to do," Sitár said.
Leighton Klevana, executive director for the American Chamber of Commerce, has worked with the vast majority of US companies looking to invest in Slovakia, and described his past SNAZIR experiences as positive. However, Klevana said that communication between governmental departments was lacking, citing a botched deal with the US automotive parts giant Textron, which recently by-passed Slovakia to establish itself in the Czech Republic.
"With the Textron deal, there were a number of ministries involved, everyone thought that someone else was doing the work, and it turned out that no one was doing the work - no one was attending to what Textron really wanted or needed. I think that is what finally put Textron off and they went to the Czech Republic," Klevana said. "The government needs somebody who is going to take that investor and hold on to them like when a bulldog does when he grabs your trousers and won't let go until you give up. That's what you need with an investor - you have to hold his hand and you have to answer him and you have to put a lot of stuff in writing."
Sitár said that because of SARIO's structure, communication between ministries would no longer be problematic. Once fully implemented, SARIO will take on the responsibility of navigating through the bureaucratic labyrinth linking land owners, ministries and legislation.
"When an investor comes to SARIO and says 'I need a list of information and I would like to learn about this law and this regulation, can you help me?' SARIO will formulate a document that will be sent to the responsible co-ordinators. For the investor, this means one-stop shopping. He is coming to one place, dealing with one project manager and getting all the information he needs more quickly and more efficiently," Sitár added.