Spectator on facebook

Spectator on facebook

Corruption biggest barrier to business

WIDESPREAD corruption and a lack of key economic and legislative reforms remain major obstacles to doing business in Slovakia, a survey of business leaders and analysts has concluded.
In a report carried out by one of the country's most influential think-tanks, 64 business leaders and 13 analysts identified lack of progress on the two issues as the key barriers to doing business in Slovakia.
Published in December 2001, a study by the Institute for Public Affairs carried out between April and June 2001 showed businessmen are unhappy with government's failure to implement election manifesto promises.


"Most respondents believed that the real extent of corruption was not declining and that corruption was only becoming more 'sophisticated'."

Institute for Public Affairs Survey



When they came to power in 1998, Dzurinda's coalition government promised to fight corruption. But businesses say the fight has yet to begin.

WIDESPREAD corruption and a lack of key economic and legislative reforms remain major obstacles to doing business in Slovakia, a survey of business leaders and analysts has concluded.

In a report carried out by one of the country's most influential think-tanks, 64 business leaders and 13 analysts identified lack of progress on the two issues as the key barriers to doing business in Slovakia.

Published in December 2001, a study by the Institute for Public Affairs carried out between April and June 2001 showed businessmen are unhappy with government's failure to implement election manifesto promises.

"The sharpest criticism was reserved for the fact that economic and legislative reforms were not advancing at the expected pace," the report said.

Given 43 different economic categories and asked to say in which of these fields had there been progress, respondents saw only seven areas in which changes had been "positive".

They also said that the biggest long-term problems were "low levels of law enforcement" and "the prevalence of corruption".

"Most respondents believed that the real extent of corruption was not declining and that corruption was only becoming more 'sophisticated'", the report said.

The report's findings reiterate the growing disquiet voiced by many businessmen and economists that the government has failed to deliver on some of its election promises.

Coming to power in October 1998 the present administration pledged to rid the country of crony capitalism, restore a respect for the law and introduce a set of economic reforms aimed to strengthen the business environment.

Although respondents in the report agreed that positive progress had been seen on some issues in the last year - such as lowering interest rates, corporate tax, stabilising the banking sector and monetary stability - much had yet to be done.

Some key reforms, such as in health care and pensions, have not been carried out at all, while important new legislation on bankruptcy and corruption has been insufficient, the respondents said.

"The legal framework for doing business in Slovakia, and everything even remotely related to it, was evaluated very negatively," said the report.

"The reform courage of parliament was evaluated negatively, with only 9 per cent of respondents praising the legislature's willingness to enact unpopular but economically necessary legislation, and 55 per cent criticising what they saw as a lack of courage. In last year's survey almost 40 per cent of respondents praised parliament's commitment to reforms."

Government officials have accepted some reforms have not been pursued vigorously enough, but deny there is widespread disquiet among businessmen over the business environment.

"The government did not do enough in some areas. Pension reform hasn't even been attempted. But businessmen are never completely happy with the business environment and they will appreciate the things that have been done, like lower interest rates, corporate income tax and a stable currency," said

Vladimír Tvaroška, advisor to Deputy PM for the Economy, Ivan Mikloš.

He added, however: "I understand that business people are not happy with overall corruption levels and would also say that not all that could have been done on corruption has been done.

"But there has been a lot of progress made in this area. Businessmen will be pleased to see that they no longer have to deal with banks that are in state hands and that all the sales of those banks were carried out transparently."

But while many of the respondents in the report were pessimistic on the progress made by the government on key economic matters, there was an overwhelming shift in emphasis from a similar survey in 2000 from concerns about political stability and Slovakia's image abroad to practical problems related to business.

"In total 65 per cent of all respondents observed a positive trend in the country's foreign political credit. Slovakia's economic elite began to take improvements in the domestic political climate and the country's international image for granted," says the report.

It also recorded a resounding level of support for one of the government's top priorities - EU accession.

"In general, Slovakia's economic elite unambiguously endorsed the country's accession to the European Union, with the only issue of disagreement being the timing of this event," the report said.

"Our respondents expected that the country's EU membership would bring about improvement in issues that bother them most, i.e. law enforcement, entrepreneurial ethics and morale, and corruption."

Top stories

Queues rigged at foreigners’ police, say clients

Not our problem, say police, who blame ‘cultural specifics’ and ‘habits’ of foreigners.

Queue in front of the foreigners' police department in Bratislava.

Legendary Luna bar to reopen Photo

The programme in the bar will focus on retro and oldies.

Luna Bar in the Kyjev Hotel

In praise of concrete

It was once notorious for its drab tower blocks and urban crime, but Petržalka now epitomises modern Slovakia.

Petržalka is the epitome of communist-era architecture.

Safari under High Tatras Video

Marek Stolarčík from Kežmarok filmed unique video.

Illustration stock photo