Q & A: Investors and Nafta

Q: How will foreign investors interpret the government's handling of the Nafta Gbely affair?

Q: How will foreign investors interpret the government's handling of the Nafta Gbely affair?

A: "Things like this basically make foreign investors want to pack their bags and move to the next country, where these sorts of things aren't happening. One thing the Slovak government doesn't understand yet is the market for international capital. This is fair enough for historical reasons - under the Mečiar years, with the cleptocracy and the crony capitalism and so on, which was basically redistributing largely imaginary funds around the country. They [the new government] haven't been exposed to the international market for FDI, whereas people like us have. I look at my map of Europe and North Africa... and I can see we could spend a million dollars developing something in Slovakia. But if they're constantly going to change the rules and we don't even know what assets we're likely to be offered or who the decision makers are and what the decision making process is and so on, it's just more hassle than it's worth. You build in the risk factor to your evaluation models, and eventually you can't find anything that makes sense, so you go to Hungary or to Poland or wherever. I'm perfectly mobile. I can turn up at an international airport in the morning and go to whatever country I like and I can wave my company's chequebook at any government or utility I like in Europe or anywhere in the world. I think the Slovaks haven't yet got the message that they're competing within that market. At the moment it seems to be a case that all the individuals are doing what Mečiar's bunch were doing, which is competing amongst themselves to see who can get the best deal."

This interview was conducted with a source close to the central European energy sector who spoke on condition of anonymity

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