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Capital's investment success highlights country's failure

Compared to neighboring capital cities, Bratislava is a city of little capital. For this reason, few people would call Mayor Peter Kresánek greedy for attempting to convince foreign businesspeople to invest their dollars, marks, pounds and shillings into Slovakia's largest metropolis. But while Bratislava's take of 14.7 billion Sk ($490 million) in foreign investment since the fall of Communism looks paltry relative to the money being poured into Prague, Budapest and Warsaw, it dwarfs all other cities in Slovakia. Sitting at a recent business breakfast next to his counterparts from Košice and Banská Bystrica, cities with only 478 million Sk ($16 million) and 550 million Sk ($18 million) of foreign capital, respectively, Kresánek looked like a man presiding over great prosperity.


Košice Mayor Rudolf Schuster.
Parlamentný Kuriér

Compared to neighboring capital cities, Bratislava is a city of little capital. For this reason, few people would call Mayor Peter Kresánek greedy for attempting to convince foreign businesspeople to invest their dollars, marks, pounds and shillings into Slovakia's largest metropolis.

But while Bratislava's take of 14.7 billion Sk ($490 million) in foreign investment since the fall of Communism looks paltry relative to the money being poured into Prague, Budapest and Warsaw, it dwarfs all other cities in Slovakia.

Sitting at a recent business breakfast next to his counterparts from Košice and Banská Bystrica, cities with only 478 million Sk ($16 million) and 550 million Sk ($18 million) of foreign capital, respectively, Kresánek looked like a man presiding over great prosperity. But while this disparity made clear that Bratislava has attracted more than 60 percent of Slovakia's total foreign investment, it is less a statement on the capital's success in drawing foreign interest than it is an indication of the nation's failure to do so.

After Bratislava, Žiar nad Hronom and Prievidza, districts with relatively small population and inferior infrastructure, rank second and third with 4 and 3.7 percent of Slovakia's total of 24 billion Sk ($800 million) in foreign investment.

When Bratislava's 8 percent share of the nation's population is taken into account, then only Bucharest, Romania, has a higher proportion of its country's foreign investment among capital cities in the region, according to a study done by Comenius University's Faculty of Management.

Keys to number one

As Slovakia's largest city and as its commercial center, Bratislava is the logical destination for much of the country's foreign money, but other factors are at work. Nationwide industries such as electricity, gas, and telecommunications are headquartered in the capital city; the infrastructure and location make it easier to do business with western Europe; and the local universities provide young, well-prepared job candidates. "We think we are incomparable in Slovakia," Kresánek's spokesman, Milan Vajda, said of Bratislava's investment conditions.

But even he admitted that the disparity is hurting more than helping. "It is very important for Slovakia that these other cities be developed," said Vajda. "It's not very good for so much of the foreign investment to be concentrated in one city."

But a little patience is required as the nation continues in its transition to an open market economy, according to Kevin Connor, the president of the American Chamber of Commerce in Slovakia and an attorney with Squire, Sanders & Dempsey in Bratislava. "I don't think [the geographic concentration of investments] is inherently unhealthy now. I think if it stays that way five years from now, it'll be unhealthy."

Yet patience was scarce as Kresánek, Košice's Rudolf Schuster, and Banská Bystrica's Igor Presperín gathered in an unprecedented joint appearance to woo foreign executives at a breakfast organized by the AmCham last month.

Although each mayor highlighted the features that make his city attractive for investment and Schuster said, "all three regions are now experiencing a revitalization," the collective message was that nowhere in Slovakia is foreign investment as high as it could be.

This low level of investment across the map means that one or two significant investors can skyrocket a town in the rankings. This is the case of Prievidza, a small city where the Swiss concern Nestlé and the Japanese joint venture Yazaki-Debnár invested into existing manufacturers.

Reality check

As Slovakia's second-largest city and home to flourishing education and industry, Košice would seem a likely candidate for investment, but it ranks only tenth among 38 districts around the country in terms of foreign investment. "Košice is difficult to get to," said Connor as an explanation. "With an autobahn, we'd be in Košice in three hours, which is a lot better than five by train."

Schuster himself sent the following message to potential investors: "There is nothing ideal, not in Bratislava, nor in Košice, nor in Banská Bystrica, but we must deal in reality. It may be a bit hard with transportation now, but if you come soon, you will have an advantage over others who come later, when everything is already distributed."

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