Slovak Republic Country Brief
Introduction/overview
The Slovak Republic was formed on 1 January 1993 after the Czech and Slovak Federal Republic was split on 31 December 1992. The Slovak Republic (increasingly referred to as Slovakia) is land-locked and borders the Czech Republic, Poland, Ukraine, Hungary and Austria. It covers an area of 49,039 square kilometres (about two-thirds the size of Tasmania), much of which is mountainous. The population of Slovakia is 5.4 million. The Slovak Republic celebrates its National Day (Constitution Day) on September 1st.
Political Overview
The Slovak Republic is a parliamentary republic with legislative power vested in a unicameral parliament (the National Council of the Slovak Republic or NRSR) which holds responsibility for most areas of government policy. The NRSR is made up of 150 deputies elected for four-year terms. The head of government is the Prime Minister, who is appointed by the President and is accountable solely to the NRSR.
Slovakia's current Prime Minister, Robert Fico, was appointed on 4 July 2006, following general elections on 17 June 2006. Fico heads a three party coalition Government. He is the leader of the senior coalition party, the populist, left wing SMER-SD. Other parties forming the coalition are the far right Slovak National Party (SNS) and the centre left People’s Movement for a Democratic Slovakia (HZDS) of former Prime Minister Vladimir Meciar.
Current Slovak President, Ivan Gasparovic, was sworn in on 15 June 2004. While the president’s powers are largely representational and ceremonial, he also holds some important legal powers, including the appointment of the Prime Minister and the ability to veto legislation. However, the president’s veto can be overturned by a simple majority in parliament.
Slovakia became a member of the OECD in 2000, NATO in March 2004 and the European Union in May 2004.
Economic Overview
The Slovak Republic’s economy is one of the best-performing in the European Union and it is perceived positively by investors. Real GDP growth reached 10.4 per cent for 2007, up from 6 per cent in 2005, but is expected to slow to 7.5 per cent in 2008. Unemployment is around 8 per cent (source: Economist Intelligence Unit). The current account deficit is forecast at 3.2 per cent of GDP for 2008 - an improvement on the 2006 figure of 8.3 per cent.
Slovakia is on track to introduce the Euro on 1 January 2009. On 1 July 2008, Prime Minister Fico announced a €233 million package of measures to cushion the impact of Slovakia’s entry into the Eurozone. These measures include extra welfare payments to families and the elderly, but are designed to not affect the Government’s target of cutting public spending to 1.7 per cent of GDP by 2009.
This came after the National Bank of Slovakia’s decision to revalue the koruna (Slovakia’s national currency) in May, strengthening its parity rate against the Euro. The revaluation will assist in easing Slovakia’s transition to the Euro, but may also be aimed at reducing inflation. The fight against inflation (currently at 2.8 per cent) has, of late, been a major focus of the Fico administration.
Bilateral Relationship
Australia and Slovakia enjoy warm, albeit modest, bilateral relations. Bilateral trade and investment links remain limited, but are expanding gradually. Slovaks constitute a relatively small ethnic group in Australia, with approximately 8500 people living in Australia identifying themselves as being of Slovak origin.
Responsibility for diplomatic relations with the Slovak Republic rests with the Australian Embassy in Vienna. Visa and migration issues are handled by the Department of Immigration and Citizenship’s office in Vienna. Australia's Austrade office in Prague is responsible for fostering trade links with Slovakia. The Slovak Republic maintains an Embassy in Canberra and a Consulate in Melbourne.
A delegation representing the Trade Sub-committee of the Joint Standing Committee on Foreign Affairs, Defence and Trade, led by the Hon. Bruce Baird MP, visited Slovakia in April 2003 as part of an inquiry into Australia's trade and investment relations with Central Europe. Australia's then Minister for Immigration and Multicultural Affairs, the Hon. Philip Ruddock MP, visited Slovakia for official talks in August 2002. A Parliamentary Delegation, led by the Hon. Neil Andrew MP, visited Slovakia in April 2001.
Senior visitors from Slovakia to Australia have included the then Foreign Minister, Eduard Kukan and Slovak Secretary of State, Peter Brno, in 1999. The then Chairman of the National Council of the Slovak Republic, Jozef Migas, visited Sydney in 2000 for the Olympic Games. Jan Figel, State Secretary for Foreign Affairs, also visited Australia in 2000.
Bilateral economic and trade relationship
Slovakia is one of Australia's smaller trade and investment partners. However, two-way merchandise trade jumped dramatically from $47 million in 2006 to $139 million in 2007. This was mostly due to an $80 million increase in passenger vehicle imports from Slovakia over that period. Other imports from Slovakia included furniture, glassware and rubber tyres. Australia's exports to Slovakia (worth $3.5 million in 2007) were mostly made up of wool, but also included pigments and paints, integrated circuits and computer parts. Exports in a range of service sectors such as education have been increasing. There were around 1600 enrolments in Australian education institutions by Slovak nationals in 2007.
While Australian investment in Slovakia remains low, several Australian companies have expressed interest in entering the Slovak market. With increases in the level of foreign investment as a result of ongoing privatisation, further opportunities may arise for Australian businesses, including in the services, automotive, electronics, IT, engineering and infrastructure development sectors.
A Double Taxation Agreement and the bilateral Agreement on Trade and Economic Cooperation provide the legal framework for Australia’s commercial relations with the Slovak Republic.
Trade successes
QBE insurance is the biggest Australian business operation in Slovakia. In the first half of 2007, the company reported 26% growth in its total gross written premium compared to the same period in 2006.
The Australian company Crown Energy is carrying out a uranium survey near the Slovak villages of Zemplin and Vitartovce, while the Perth-based company GB Energy was granted uranium exploration licences for areas in eastern and southeastern Slovakia in November 2007. GB Energy is also exploring for oil and gas in the neighbouring Czech Republic.
Last updated: 17/07/2008