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Troubled Sario investment agency gets another director

FORMER Eurotel boss Artur Bobovnický has been named as the latest head of Sario, Slovakia's beleaguered investment agency. Bobovnický was appointed by Economy Minister Ľubomír Harach on January 29.
Sario, a key instrument in promoting exports and attracting foreign direct investment (FDI) to Slovakia has suffered a number of operational difficulties since its founding in 2000.
While significant increases in FDI were made during that time, conflicts with the Economy Ministry, a shortage of financing and the lack of a clear mandate have prevented Sario from becoming the one-stop investment shop that it was created to be.


Artur Bobovnický has promised to continue road shows.
photo: Courtesy Sario


"Sario was asleep for two years. In the near future it will have to strengthen its personnel as well as the foreign investment support division."

New Sario agency director Artur Bobovnický


FORMER Eurotel boss Artur Bobovnický has been named as the latest head of Sario, Slovakia's beleaguered investment agency. Bobovnický was appointed by Economy Minister Ľubomír Harach on January 29.

Sario, a key instrument in promoting exports and attracting foreign direct investment (FDI) to Slovakia has suffered a number of operational difficulties since its founding in 2000.

While significant increases in FDI were made during that time, conflicts with the Economy Ministry, a shortage of financing and the lack of a clear mandate have prevented Sario from becoming the one-stop investment shop that it was created to be.

While Bobovnický was unavailable for comment for this article, he has expressed optimism in the Slovak press for the new job. His plans for Sario include the promotion of Slovakia's highly skilled and inexpensive work force, as well as the high level of standardisation and certification in the country's industries.

Bobovnický said he would also be continuing established Sario promotion drives such as the Inwest Forum foreign roadshows. Sario will be visiting Washington and San Francisco in May and June to present Slovakia's automotive, chemical, engineering and information technology industries, the agency's director said.

While the challenges facing Sario are great, Bobovnický has had experience with foreign investment issues. In 1991, he received an offer from the government to co-operate with a group of Italian investors in Slovakia and later, from 1994 until 1999, Bobovnický worked as a division and later general manager for mobile operator Eurotel Bratislava. After leaving Eurotel, Bobovnický started his own company to help small and medium sized businesses restructure themselves and find new investors.

Bobovnický has described his last two years with Eurotel as: "Remarkably demanding, not only in the struggle to find customers in the competitive environment, but also in the struggle with shareholders over the implementation of our concepts. Our opinions did not always meet, but in spite of that, I consider this experience exceptionally important."

Sario has struggled since its creation in June 2000, when it replaced the now defunct Snazir. Introduced with much fanfare among the investment community, the agency still lacked the financial resources and the mandate to effectively and efficiently provide services for foreign investors.

Its woes came to a head in May 2001, when Sario faced bankruptcy following the government's delay in the transfer of its budget of Sk50 million.

The summer of 2001 brought allegations of conflicts of interest as the Economy Ministry claimed that top Sario officials continued to hold private sector interests contrary to sworn depositions they had made in December 2000.

The allegations were based on copies of the Slovak business register that had not been updated, and were easily disproved.

Tensions continued with the August 2001 resignation of Sario head Alan Sitár, who stepped down due to pressure from the Economy Ministry, saying that he felt "no longer needed".

The agency was restructured as a joint stock company at that time and ownership was transferred from the non-state National Property Fund (FNM) privatisation agency to several government ministries, leaving the Economy Ministry in effective control.

Less than two months later, Sario was dissolved as a joint-stock company and integrated into the Economy Ministry. While many analysts thought the move represented a backward step and cautioned that the expected increase in bureaucracy would put off investors, the ministry said the integration would make the process of receiving state funds easier.

Investors say they still see Sario as an important agency in the development of FDI into Slovakia, but stress the need for it to function effectively. Fabrizio Paoletti, general secretary for the Italian-Slovak Chamber of Commerce, said that Sario "could and should be useful," but that it needed to take more practical steps including more concrete co-operation with foreign chambers of commerce, as well as more care in determining the real interests and concerns of investors seeking Slovak partners.

Marek Jakoby from the Mesa 10 think-tank agreed that Sario has been impractical and said that Sario lacked the energy and the ideas of its Czech counterpart, CzechInvest. While attempts were made under Alan Sitár to model Sario on the Czech agency - a plan that included opening regional offices in other countries and actively promoting Slovakia as an investment opportunity - this effort was opposed by the Economy Ministry and was a major factor in Sitár's resignation.

But Paoletti said the situation around Sario was so confused that deciding how to improve the agency's work was "the million dollar question".

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