U.S. Deputy Secretary of Commerce Robert Mallett (left) confers with U.S. Ambassador to Slovakia Ralph Johnson during his visit to Bratislava in 1998.photo: TASR
Among the priorities of Slovakia's new government was to join Euro-Atlantic structures. The Organization for Economic Cooperation and Development (OECD) was one of them. Although the OECD membership would still require many structural and legislative changes in the Slovak economy, the new government appears very optimistic about quick accession for Slovakia, suggesting that entry could be achieved during the first half of this year. But the facts and expert opinions seem to weigh against the government's forecast.
When Finance Minister Brigita Schmögnerová presented Slovakia's case to representatives of the 29 OECD member countries on December 17, she said she expected to achieve OECD membership in the first half of 1999.
"This is not realistic," said Martin Barto, an analyst with the Dutch investment bank ING Barings in Bratislava. "The Slovak economy is not stabilised enough. The OECD will have to see [Slovakia's] ability to implement the necessary measures to our economy and our will to move forward with them. I don't think we'll get there sooner than by the first quarter of 2000," Barto explained.
Among the main obstacles to Slovakia's OECD accession are, according to Barto, macro-economic indicators, such as high fiscal and current account deficits, but also a weak banking sector, as well as slow corporate sector restructuring. "On top of that," he continued, "some important institutions in Slovakia are not yet sufficiently anchored. We are missing a committee that would control the capital market, our Anti-monopoly Office is weak, joining and leaving the stock exchange is very complicated, and so on."
Štefan Morávek, Director of the International Economic Cooperation Department at the Foreign Ministry, added that several new laws will be necessary. "We have already passed laws on securities, banks, exchange control, bonds, and others, but some of them will probably have to be amended," said Morávek. "We still have to pass the two big laws: one on strategic companies, and another on the insurance industry."
According Morávek, to be accepted into the OECD, Slovakia must pass through the two most important committees and meet OECD requirements concerning liberalisation codes. The two committees Morávek mentioned are the Committee on International Investment and Multinational Enterprises (CIME) and the Committee on Capital Movements and Invisible Transactions (CMIT). "These are the core ones; we shouldn't have problems with the other 20 committees [out of 22]," stressed Morávek.
One scheduling hurdle, however, is the fact that the OECD has shifted the sessions of the CIME and CMIT committees from June to September of this year, which makes Schmögnerová's accession timeline highly improbable. "Based on this shift, the earliest realistic term for Slovakia to enter the OECD is the first quarter of the year 2000," said Morávek.
Even more pessimistic in his forecasts was Peter Mihók, chairman of the Slovak Chamber of Commerce and Industry (SOPK). His prediction was two years. "This, however, will depend on the government's ability to stabilise the economy, restructure the entrepreneurial and banking sectors, secure the functionality of the stock market, and meet further OECD requirements," he said.
One of the most influential OECD players is the United States. Robert Mallett, Deputy Secretary of Commerce, who visited Slovakia last November, expressed the will of the United States to support Slovakia in its OECD bid. "The USA is interested in supporting economic and political reforms in Slovakia, as well as its accession ambitions towards the OECD," said Mallett. He added that the higher the tempo of economic reforms, the faster American money will come. "Investors are waiting for the steps that the new government will take in privatisation, respectively in re-privatisation."
Privatisation and the way the previous government executed it was, according to the Foreign Ministry's Morávek, one of the reasons Slovakia wasn't accepted into the OECD along with its former eastern bloc neighbours in 1995 and 1996. "We had the same chance, but we lost it. It seems that we did not consider OECD membership as important as EU or NATO membership," he said. "What's more, since that time the OECD has become even more cautious and it evaluates new countries more strictly now."
