SLOVAKIA earned the distinction of showing the greatest progress in business reforms in the world in 2003.
The World Bank's superlative message reached the government of Mikuláš Dzurinda in the thorniest of times: just when it is about to reform the country's healthcare system.
Roger Grawe, the World Bank's Country Director for Central Europe and the Baltics said that Slovakia ranked highest among twenty leading world economies in creating the most beneficial conditions for doing business."
In its analysis "Doing Business in 2005," which evaluates laws and reforms of 145 countries, the World Bank concluded that Slovakia's ambitious reforms in the tax system, labour market and social system are responsible for its success.
The time needed to establish a business in Slovakia has dropped from 89 days in 2001 to 52 days in 2003. Small-sized businesses and entrepreneurs are carrying a greater share of employment, climbing from 56 to 66 percent.
According to the bank, cutting layoff expenses was the single most important factor in maintaining the health of a robust business environment.
"This result reflects the political stability that has gradually emerged since 1998, and radical reforms which we stepped up after the general election in 2002," Prime Minister Mikulás Dzurinda told news wire TASR.
Slovakia has also improved business conditions for creditors. However, the World Bank report suggests that there is room for improvement in bankruptcy proceedings.
According to Grawe, Slovakia will keep its ranking next year, when the World Bank expands its assessment to include taxation of companies, business licensing and foreign trade.
Slovakia also ranks among countries providing the highest protection to investors.
Slovak Finance Minister Ivan Mikloš said it is crucial to sustain the headway the country has made and continue in its efforts to improve the business environment.
Of the ten new European Union members, only Lithuania and Slovakia have managed to rub elbows with the best-performing countries in terms of business environment.
In late May, the International Monetary Fund praised Slovakia's reforms and economic performance. Although the general Slovak public appears reform-weary and polls rarely reflect the enthusiasm of international institutions, Slovakia remains attractive to foreign direct investment. The country continues to perform well in competition with other central and eastern European countries for investors' money.
One weakness the Slovak government needs to address is its failure to communicate and explain reforms to the general public, who remains largely hostile to new reforms. The World Bank has approved a grant worth Sk11.6 million (€291,303) that will use to improve public relations.