A COMPREHENSIVE AUDIT OF BARRIERS IN DOING BUSSINESS IN SLOVAKIA.

Success of market economy rests on the initiative of private owners who take independent decisions as to how they use their property and under which conditions they enter contracted relationships with others. Although there is no precise definition of a favorable business environment, in a nutshell, it is everything that enhances free entrepreneurship, improves business environment or, seen from the opposite angle, every intervention or restriction in free entrepreneurship brings along a business environment decline.

Over the past 5 years, the Slovak government has achieved improvements in many areas of the business environment, ranging from new business creation, labor market legislative and tax regulations, to competition laws. However, several problematic areas continue burdening business operations with excessive or even duplicate administrative and financial requirements.

In view of significant changes implemented in past years, it was necessary to conduct a comprehensive audit and analysis of the current situation in terms of legislative and governmental requirements towardss enterprises and of the public administration processes with a direct impact on business sector with the goal of identifying inefficient processes, unnecessary bureaucracy and subsequent restrictions in doing business.

Business environment improvement has ranked as one of the main priorities of the Slovak government in recent years and likewise, it is the prime and long-term priority of the Republic Union of Employers and of the Business Alliance of Slovakia. Under the Minerva governmental program for strategies for increasing Slovakia´s competitiveness, the Slovak government developed a draft of a so-called action plan for the business environment. The Republic Union of Employers (RUE) worked on improving the draft of the business environment action plan and together with the Business Alliance of Slovakia (BAS) expressed their readiness to play a key role in developing the Audit of Restrictions on Doing Business in Slovakia (the Audit) – one of the principal elements of the action plan for the business environment.

On July 13, 2005, the Slovak government approved the draft of the action plan for the business environment under which it allocated state budget resources for and authorized RUE and BAS to conduct the Audit. The Audit was being developed between August 2005 and April 2006 and the results are presented in this publication. RUE and BAS invited the best experts in Slovakia in given areas, both institutions and individuals, to contribute to particular sections.

Questionnaire surveys and targeted interviews with entrepreneurs and managers on restrictions in doing business and possible solutions conductive to their elimination, became to form an important part of the Audit. Findings and conclusions resulting from the surveys post notable added value of the Audit and present an important part of particular sections.

In addition to in-depth analyses of current situation, the Audit proposes a set of measures designed to eliminate the identified barriers. In the process of its development, special attention was given to the compatibility of the public administration requirements and processes in different areas impacting business activities. At the same time, the Audit goes beyond the central government administration level and explores the situation at local and regional levels. The Audit focused primarily on the areas outside the framework of EU regulations; however, in several instances it aspires to identify also legislative and administrative changes Slovakia should enforce on the EU level.

We believe that the implementation of the Audit recommendations will be conductive to improved business environment, increased employment rates, competitiveness and investment attractiveness of Slovakia, ultimately leading to accelerated economic growth and faster pace towards higher standards of living for the citizens of Slovakia.

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Anton Jura
RUE President

Martin Krekáč
BAS President