Slovakia Is Fast Growing Market Economy in Central Europe

Asseco Slovakia contributed the following article on the occasion of Slovak Prime Minister Robert Fico's visit to Seoul. _ ED.

The economy of Slovakia is considered one of the fastest growing market economies in Central Europe.

Since 1989, the country has gone through important changes, of which the aim was to firstly transition it from a centrally planned economy to a market economy. Further numerous reforms (health care, pension system and tax) should improve the economic situation.

Thanks to several reforms, the competitiveness of Slovakia increased toward other countries of the European Union, of which it has been a member since May 1, 2004.

This is also a reason why Slovakia attracts more and more foreign investment. The investors are also interested in the 19-percent flat tax and the high quality cheap labor force.

In the next few years Slovakia expected to join the countries of the Schengen Agreement and from Jan. 1, 2009 the unified European currency, the euro, will be used.

There are significant differences within the country, regarding economic development. While the most developed regions like Bratislava slightly exceed the European average, the more backward ones _ especially the East _ struggle with several problems.

In the past during the period of the Austro-Hungarian Empire, Slovakia was one of the most developed regions _ especially in the 18th century when thanks to the precious metal mining, the Central-Slovak mining towns experienced their golden age.

However, the majority of the area was predominantly agricultural.

The industrialization process started in the 20th century. Within the Czechoslovak centrally planned economy, heavy industry was concentrated in Slovakia, especially the arms industry.

After the transition to a market economy the economic structure is changing.

The largest companies at present in Slovakia are the automobile factory Volkswagen Slovakia Bratislava, refinery Slovnaft Bratislava and the steel company U.S. Steel Kosice.

The inflow of foreign investments is confirmed with two new automobile companies _ Kia Motors Slovakia by Zilina and the PSA Peugeot Citroen in Trnava.

In Slovakia, the international trade chains, for instance Tesco and Ikea, have already successfully settled in and more are continually coming.

The main foreign partners of Slovakia are (according to data of the SR Ministry of Economy for the year 2006):

For imports: Germany, The Czech Republic, Russia, Italy, Poland, Austria, Hungary and France

For exports: Germany, The Czech Republic, Austria, Italy, Poland, Hungary and France

Approximately 75 percent of foreign trade is carried out within the EU.