WHILE many economists worldwide challenge the notion that governments can be good owners of enterprises, the idea still seems to have its believers in many countries, including Slovakia. It certainly belongs among the legitimate political issues for which arguments and opinions can be freely presented anywhere – except perhaps in conservative economic forums and right-wing think tanks.
However the retro-believers in Slovakia aren’t pondering such ideas in the privacy of their living rooms, within the halls of academia or in forums for economic debate, but are making quick government decisions that will affect how businesses can operate in the supposedly free and private market of Slovakia. Moreover, these decisions are being made with an arrogance that does not see the need to engage in a public discussion – not even by asking those who might be most affected by this new economic reality.
And this is where much of the concern lies, not at the core of belief in or distrust of state ownership and management, but at the point where rules are quietly, one might say clandestinely, shaped in a way that put privately-owned businesses on shaky ground in order to prove the supposed ‘supremacy’ of state ownership.
Yes, there are businesses that have 'strategic' importance to the country and its citizens and it is crucial that the state keeps a watchful eye on these firms and sets appropriate market rules – this is why state regulatory bodies exist. However, when the state manufactures a legal device giving it the power to point a finger at certain companies, decide that they are now 'strategic' and then proceed to takeover any such company in bankruptcy, run it and subsequently decide about a ‘new’ owner, there is no wonder that the process has raised many an eyebrow by private investors who have come to Slovakia over the past 20 years.
While this new law is a crucial piece of legislation, the government did not see any need to discuss its particulars with those who might be impacted the most: its social partners, namely the trade unions and employers’ associations, and foreign chambers of commerce which represent the interests of many investors who have seen Slovakia in a different light over the past decade.
The fact that the ruling coalition turned a deaf ear to the arguments presented by the opposition parties, one of which called the law a “tragicomic attempt to nationalise private property”, does not come as a surprise and probably is only worth mentioning in order to signal to the reader that this tradition of Prime Minister Fico’s government has been maintained. Traditional, too, is the approach of President Ivan Gašparovič, who signed the bill into law despite a whole slew of credible voices asking him to send the legislation back to parliament with at least a feeble hope that there might be an opportunity for more public discussion and that deputies of the ruling coalition might see the need for at least some changes in its most obvious flaws.
Paradoxically, the law was signed only a few days before the local media broke another major story about questionable transfers of lucrative land plots which ended in the soiled hands of a firm with close ties to Vladimír Mečiar and his party, a junior member in the ruling coalition.
Likewise, it emerged soon after that the European Commission is now reviewing Slovakia’s so-called social companies, the pet project of the country’s Labour Ministry, which are subsidised from public cash, including that of the EU. The Slovak Governance Institute (SGI), a public policy NGO, had detected flaws in the way that social companies are being funded and has warned that the defects could result in the European Commission refusing to reimburse Slovakia for what it has spent on these enterprises.
The state, of course, is not an anonymous bunch of people; nor is it the proletariat or the working class as the communists declared it to be. The ‘state’ in this equation are the real people who hold top government positions, who have made some of these ill-conceived decisions, sold emissions quotas for a song, announced multi-million-euro tenders on bulletin boards, and founded social companies that don’t seem to actually do anything. So government officials should not be too surprised that private businesses are not over the moon at the prospect of being declared 'strategic' by that same state.
The government of Robert Fico has surely now entered the record books with the number of its controversial laws, decisions, tenders and regulations which have been the subject of examination and criticism beyond Slovakia’s borders. The real dilemma now seems to be deciding which deserves the most prominent place in the hall of shame: the Press Code, the ban on health insurers’ profits, the State Language Act, land expropriation for highways, bargain basement sales, secretive tenders or land restitution? Take your pick.
7. Dec 2009 at 0:00 | Beata Balogová