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From Black Hole to Leading Light

Slovakia has done more than any other country to improve its business environment in the past year. That, at least, is the judgment of the World Bank: in a report produced on 8 September, it lists Slovakia as one of the 20 most business-friendly of 53 developing countries surveyed. Cumulatively, reforms conducted over the past two years could add 2.5 percentage points to the Slovak economy’s annual growth. Already, the World Bank argues, the reforms have created more jobs for women and reduced the size of the black market.

A decade ago, Slovakia was unused to receiving such positive messages from abroad. Some seven years ago Madeleine Albright, then U.S. secretary of state, called Slovakia a “black hole in the heart of Europe” and Bratislava was criticized on several occasions by EU and U.S. diplomats, who pointed particularly at Slovakia’s “democratic deficit.”

Both sets of messages might be exaggerated, even hyperbolic. Nonetheless, they illustrate the transformation that Slovakia has undergone internationally as well as domestically. In the mid-1990s, Slovakia was the worst example of transition in Central Europe; now, many foreign analysts and politicians cite it as a model for economic reforms. The Washington Times called the new Slovak tax system “one of the best systems in the world” and many analysts, politicians, and businesspeople compare Slovakia to Hong Kong and Ireland. How has Slovakia managed this immense change, from the black sheep of Central Europe to a “Tatra tiger”?

(TOL 11.x.04)

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