BRATISLAVA, November 7, (WEBNOVINY) — Slovakia’s business environment deteriorated again in Q3 2011. The Business Environment Index evaluated by the Slovak Business Alliance currently stands at 89.2 points, which is 1.35 percent less from the previous quarter. Its value has dropped below 90 percent for the first time since its inception ten years ago. The perceived deterioration is the consequence mainly of the unstable political situation triggered by the collapse of the center-right government. Persisting uncertainty on world’s financial markets and dissatisfying status quo of the judiciary, which has been criticized for long, also contributed to the decrease in the index, according to the Alliance.
The functioning of the political system saw the steepest downturn in Q3. “This component fell 7.59 percent from the previous year to 38 points. Its decline relates to the current political situation that directly influences stability of the economy and the business environment,” the institution elaborated. One of the most criticized negative aspects is the instability of political decisions because it afflicts the mood of entrepreneurs in the long term. Partial solutions, which are often politically motivated, instead of constructive progressive changes have also earned criticism.
Law enforceability and the functioning of courts lost 4.87 percent to 18.8 points, representing the second biggest decline. The judiciary is one of the most lambasted areas and has often been marked as one of the biggest unresolved impediments to business. The confidence in the judiciary as a whole has been shrinking for long. Enterprises are disappointed particularly by protracted trials and biased staff. They praise changes introduced recently but they call for comprehensive rectification although this goal is perceived as a long distance run, according to the Alliance. Reliability and financial discipline of business partners went down in the evaluation by 3.86 percent to 73.7 points. Other components of the index also reported a profound drop, e.g., equal treatment in court, price stability and steadiness and predictability of the exchange rate of the euro.
On the other hand, labor laws received the best assessment, going up by 3.35 percent to 69.3 percent. Entrepreneurs greeted mainly the contribution of the revised Labor Code that facilitated flexible responses to current requirements of clients. The second best evaluation went to regulation of cross border commerce, which bolstered 0.26 percent to 164.4 points. The functioning of state institutions such as the cadastre and tax offices, reported mild improvement. This may be attributed to the started financial administration reform. Information openness as well as investment and technological development of companies strengthened a bit, too.
SITA
