Why is Slovakia losing competitiveness?

The almost absolute dependence of Slovakia on the automotive industry remains its Achilles’ heel.

The autimotive industry is one of main pillars of the Slovak economy. The autimotive industry is one of main pillars of the Slovak economy. (Source: Courtesy of VW SK)

Slovakia’s competitiveness keeps dropping. The latest World Competitiveness Yearbook ranks the country at 55th place, down four positions compared to the previous year.

“This means that compared with neighbouring countries we are losing attractiveness in terms of business development,” Zdenko Štefanides, chief economist at VÚB bank, told The Slovak Spectator. “From the long-term view this may have a negative impact on the inflow of investments, the potential growth of the economy and thus also the growth of citizens’ living standards.”

Economists and analysts are calling on the government to reform the education system, reduce red tape, make public administration more effective, take firmer control over public finances, reduce the tax burden and improve the enforceability of the law.

“Such changes will not only gradually bring a better position to Slovakia in rankings but primarily a positive stimulus for the economy itself and the business environment,” said Martin Vlachynský, analyst of the Institute for Economic and Social Studies (INESS) think tank.

The Economy Ministry points out that the rankings reflect the subjective opinions of managers and that it has been adopting measures to improve the business environment. But these will reflect only in future rankings.

The rest of this article is premium content at Spectator.sk
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