This thesis analyses the socio-economic and political transformation processes of Slovakia since its separation from Czechoslovakia. The main question to be answered is how successful Prime Minister Vladimír Mečiar’s policies were in attracting FDI into Slovakia.
After the Velvet Revolution in 1989, Czechoslovakia started to initiate fundamental democratic measures concerning the public administration in the country. Two interconnected reforms took place in 1990: decentralization and the civil service reform. In 1992 a new government was voted into office under the leadership of Prime Minister Vladimír Mečiar from the HZDS party.
On 1 January 1993 Slovakia became independent by non-violent means from the Czech Republic, with Bratislava as its capital. For a country, which did not have economic wealth as high as the Czech Republic and an increasing unemployment rate, the total change of their whole economy meant that much time was spent on the question of how to finance the state.
In terms of economic changes, the Prime Minister wanted to create a strong entrepreneurial Slovakian class that would be able to control the economy. But his privatization policies led to financial difficulties for the Slovakian state, its economy and its people. Although there was co-operation with Russia, the unemployment rate in Slovakia remained at 16.2% percent at the end of 1998. Constant discriminations in Slovakia and the fact that Mečiar excluded the opposition parties completely from parliamentary control organs, the Slovakian Secret Service (SIS), the media and the process of privatization, caused international protests against Mečiar and his regime. This caused the EU to warn Slovakia that it would no longer receive assistance, if the government continued to misuse its power.
Table of Contents
1. PREFACE
2. SLOVAKIA UNDER PRIME MINISTER VLADIMÍR MEČIAR FROM 1992 – 1998
2.1. HISTORICAL OVERVIEW OF SLOVAKIA
2.2. THE ECONOMIC SITUATION AND THE SOCIAL CONSEQUENCES FOR SLOVAKIA AFTER ITS SEPARATION FROM CZECHOSLOVAKIA IN 1993
2.3. AIMS
2.4. RESULTS OF MEČIAR’S POLICIES AND REFORMS
2.5. CONSEQUENCES FOR SLOVAKIA
2.5.1. Economic situation
2.5.2. Intercultural problems
2.5.3. International Relations
2.6. EUROPEAN UNION (EU) – RESERVATIONS
2.7. THE FALL OF MEČIAR AND PRELIMINARY EU-SLOVAKIA ACCESSION TALKS
3. FOREIGN DIRECT INVESTMENTS (FDI) IN EASTERN EUROPE
3.1. GENERAL FACTS ON FOREIGN INVESTMENTS
3.2. REASONS FOR INVESTMENTS
3.3. MOTIVES FOR AUSTRIAN ENTERPRISES TO MAKE FDI IN THE CEE
3.4. FDI BY ECONOMIC SECTOR
3.5. COUNTRIES ATTRACTING MAJOR FOREIGN INVESTMENTS
3.5.1. Foreign direct investments in Hungary
3.5.2. Foreign direct investments in Slovenia
3.5.3. Foreign direct investments in the Czech Republic
3.5.4. Foreign direct investments in Slovakia
4. FDI IN SLOVAKIA FROM 1993 UP TO THE START OF THE POST MEČIAR ERA
4.1. MACROECONOMIC DATA
4.1.1. GDP Growth
4.1.2. Annual inflation rate
4.1.3. Unemployment rate
4.1.4. Foreign exchange reserves
4.1.4.1. Foreign exchange reserves of the National Bank
4.1.4.2. Total foreign exchange reserves
4.1.5. National budget balance
4.1.6. Foreign trade balance
4.1.6.1. Foreign trade partners
4.1.7. Foreign direct investment
4.1.8. Summary of macroeconomic data
4.2. VOLUME OF FOREIGN INVESTMENT
4.3. DISTRIBUTION OF FDI BY COUNTRIES
4.3.1. FDI distribution in 1996
4.3.2. FDI distribution in 1997
4.3.3. FDI distribution in 1998
4.3.4. FDI distribution in 1999
4.3.5. FDI distribution in 2000
4.3.6. FDI by countries from 1996 – 2000 in SKK million
4.3.7. Summary of Distribution of FDI by country from 1996 to 2000
4.4. DISTRIBUTION OF FDI BY SECTORS
4.4.1. FDI distributed by sector in 1998
4.4.2. FDI distributed by sector in 1999
4.4.3. FDI distributed by sector in 2000
4.4.4. Summary distribution of FDI by sector
4.5. DISTRIBUTION OF FDI BY REGIONS
4.5.1. FDI distributed by region in 1999
4.5.2. FDI distributed by region in 2000
4.5.3. FDI distributed by regions from 1999 – 2000 in SKK million
4.5.4. FDI distributed by regions in percent to the total from 1999 – 2000
4.5.5. Summary of FDI by regions
4.6. PROBLEMS FACED BY FOREIGN INVESTORS
4.7. SUMMARY
5. CONCLUSION
Research Objective and Scope
This thesis examines the socio-economic and political transformation of Slovakia following its independence, specifically evaluating the effectiveness of Prime Minister Vladimír Mečiar's policies in attracting foreign direct investment (FDI) into the country.
- Analysis of socio-economic and political transformation post-1993
- Evaluation of Mečiar's privatization and economic policies
- Assessment of foreign direct investment (FDI) inflow trends
- Comparison of Slovakia's economic performance with other CEE nations
- Examination of obstacles encountered by foreign investors
Excerpt from the Book
2.5.1. Economic situation
On 4 October 1993 the Slovak Republic signed an association treaty with the EU in order to get access to the European market. Its Prime Minister stated that the most effective way for Slovakia, which was undergoing a transformation process was to gain access to the markets of the European Union. The speech was quite contradictory to what the Prime Minister said a few months later, when he stated: “If they don’t want us in the west, we shall turn east.”
The speeches were contradictory, because at that time Russia was still a communist country and the EU could not accept a future member country with an economy that was dependant on a communist country. The EU had the desire to bring post communist countries under EU influence, but not under these conditions.
The fact that between 30 to 40% of the Slovakian economy was still under major Russian influence explains why the Prime Minister spoke in contradictory terms. Ninety-four percent of the imported gas and 80% of the oil came from Russia in 1993. The bonds between Russia and Slovakia were much stronger than the bonds between the other post communist countries and its former controller.
In 1991 when Mečiar was Prime Minister of the Slovakian part of Czechoslovakia, he signed an economic agreement with Russia to manufacture weapons under Russian license in Slovakia.
Summary of Chapters
1. PREFACE: Provides an overview of the thesis objectives, the research question regarding Mečiar's policies, and the general structure of the work.
2. SLOVAKIA UNDER PRIME MINISTER VLADIMÍR MEČIAR FROM 1992 – 1998: Outlines the historical context of Slovakia's independence, the political environment under Mečiar, and the socio-economic consequences of his governance.
3. FOREIGN DIRECT INVESTMENTS (FDI) IN EASTERN EUROPE: Examines general definitions of FDI, motives for investment in transition economies, and performance comparisons across CEE countries.
4. FDI IN SLOVAKIA FROM 1993 UP TO THE START OF THE POST MEČIAR ERA: Details the specific macroeconomic development of Slovakia and the quantitative distribution of FDI by country, sector, and region during the studied period.
5. CONCLUSION: Synthesizes the findings, confirming that while FDI did increase during the Mečiar era, his policies were often counter-productive for sustainable growth compared to his successors.
Keywords
Slovakia, Vladimír Mečiar, Foreign Direct Investment, FDI, Economic Transformation, Transition Economies, Privatization, Macroeconomic Data, Central and Eastern Europe, CEE, European Union, Political Stability, Trade Balance, Industrial Production, Banking Sector
Frequently Asked Questions
What is the core focus of this thesis?
The paper primarily investigates the socio-economic and political transformation of Slovakia after it gained independence from Czechoslovakia in 1993, with a specific focus on the impact of Prime Minister Vladimír Mečiar's policies on foreign direct investment.
What are the primary themes addressed?
The research explores the intersection of political governance, economic reforms, privatization processes, and their influence on foreign investor confidence in a transition economy.
What is the central research question?
The study seeks to answer how successful Prime Minister Vladimír Mečiar’s policies were in effectively attracting foreign direct investment (FDI) into the Slovak economy.
Which methodology is employed?
The thesis utilizes a quantitative and descriptive analysis of macroeconomic indicators, such as GDP growth, inflation, budget balance, and FDI inflows, supported by historical and political context.
What is covered in the main section of the paper?
The main sections provide a thorough breakdown of macroeconomic data, the volume of investment, and the sectoral and regional distribution of FDI from 1993 through the end of the Mečiar era and beyond.
What keywords characterize the work?
Key terms include Slovakia, Foreign Direct Investment (FDI), Mečiar era, economic transition, privatization, and regional development.
How did Mečiar’s privatization strategy influence foreign interest?
Mečiar’s tendency to sell lucrative state-owned enterprises to political allies and friends at prices below market value created an unstable environment that often discouraged genuine foreign investment.
Why was the Bratislava region a focal point for investment?
According to the data, the Bratislava region consistently attracted the largest share of FDI, reflecting the concentration of infrastructure and administrative centers in the capital city.
How did political stability impact investor decisions?
Lack of political transparency, corruption, and the exclusion of opposition parties negatively impacted the country's image, making it less attractive to international investors during the Mečiar period compared to neighboring nations.
- Quote paper
- Thomas Kovacs (Author), 2006, Socio-Economic Transformation of Slovakia since its Independence, Munich, GRIN Verlag, https://www.grin.com/document/115909
