Weekly Review

Economy growing like never before
Historically best results make economists rewrite prognoses
In the third quarter of this year the Slovak economy increased by the fastest rate in its history. The gross domestic product grew year-on-year by 9,8 percent, which no-one had foreseen. According to a new assessment by the Statistics Bureau, Slovakia will most likely stand at the head of the Central European region, but should also rank among the three fastest-growing economies in the whole European Union. Thus, its economy is hot on the heels of the traditional favourites - the Baltic countries. Since Slovakia has already surpassed Lithuania, only Latvia and Estonia stand in the way to first place.
The economy's positive development should also translate into an increase in the standard of living. According to the Statistics Bureau, between two and two and a half percent more Slovaks found work in the third quarter than in the same period of the preceding year. Wages should increase in the course of the coming year by more than seven percent, if prognoses from the Ministry of Finances hold true. Inflation impacts however mean that consumers will be able to purchase four percent more goods and services from their pay increases.
Even though statistics on what is behind the rapid and unexpected growth have not yet been published, it is clear that exports of new products are the main driving force. Since economists were expecting production figures about two percent lower, the publication of the new data have forced them to adjust their expectations for future advances. These forecasts refer to at least 7.5% GDP growth for this year. "Even this is a conservative estimate," maintains Tatra banka analyst Robert Prega.
The majority of the revamped estimates rather approach the eight percent mark. UniBanka analyst Viliam Pätoprstý explains, "Behind the rapid growth of the economy was in particular net export and reserves, and from the offer side these came primarily from the automobile industry, which was stronger than we had expected."
The financial markets also saw similar figures, with the crown exchange rate strengthening to a new historic value of 35,690 crowns to the euro. "During the day, foreign banks operating in Slovakia helped it by buying crowns and selling euros," said ČSOB dealer Richard Brza. He too was surprised by the strengthening of the currency, but felt that the good economic results supported this development.
November 15

Russians fighting over Transpetrol
Although the official program for Monday's Transpetrol General Meeting was the change of Slovakia's representatives on company bodies, it was in fact a struggle by the Russian side for control over the 49-percent share originally owned by Yukos Finance under Michail Chodorkovský. Following his arrest, the Kremlin took over control of the bankrupt company's assets.
So both competing groups - the Russian administration and unseated managers from the time of Chodorkovský- came to Bratislava to defend their interests. Unofficial discussions on whether the Meeting would be held at all, and who would vote in the name of Russian interests lasted two and a half hours, according Economy Ministry spokesman Branislav Zvara.
"With our help in the end both sides agreed that the group would be led by Sergej Šmelkov," Zvara revealed after the shareholders' meeting. Šmelkov was nominated to the executive of Yukos Finance by the Jukos bankruptcy trustee after Chodorkovský's arrest and sentencing. This means that yesterday in Slovakia the Kremlin won the right to stand as the owner of the 49-percent package. Now Economy Minister Ľubomír Jahnátek will have to negotiate with Šmelkov as to who will finally get the Transpetrol minority share.
At the General Meeting, the change of Slovakia's representatives on the Transpetrol Board of Directors and the Supervisory Board was approved by shareholders. So far a strengthening of the influence of the Slovak side on company bodies, a key condition by the Economy Minister, has not occurred. November 20

Risk capital searching projects
Now that risk capital is slowly finding its way to Slovakia, it still lacks projects in which to invest, while many starting-out entrepreneurs with good ideas have been finding it hard to gain the resources to finance their plans. This situation could be helped by, for example, the Slovak University of Technology's University Technological Incubator, which searches out sustainable projects.
The university managed to engage VUB Bank as the Incubator's partner. "We are dealing with firms without any history, but we have even for these a number of programs. The most important thing is for them to have a quality business plan, based on reality," explained Martin Kello of VÚB. The firms working within the university's Incubator are chiefly oriented towards IT. November 21

Mine safety improving
Safety costs mining firms tens of millions of crowns every year. They are not only allocated to personal protective working aids, but also to machines, technologies and organization of work. For example Slovak Magnesite Works Jelšava has over the years invested more than 35 million crowns in the most modern mining technologies. Mine construction, driving shafts, extraction methods, geological conditions, below-ground transport, ventilation, water pumping, explosive work - these are all factors influencing safety, the experts state. Through regular inspections, the State Mining Administration and its inspectors oversee mines' conformity with the mining law and other related regulations. According to statistics of the Main Mining Office, the accident rate in mines has decreased over the last few years, which reflects both a lower number of employees and also improvements in safety. This is attested to by fewer serious or fatal injuries and accidents. Lat year inspectors recorded one fatal, eight grave and about four hundred and fifty other working injuries, along with five operational incidents. The preceding year five persons died underground, and in 1998 as many as eight. Analysis of injuries shows that the majority were caused by individual faults such as a lack of personal preparation for normal work assignments In the last year there were more than six hundred breaches of the law, for which sanctions and fines amounting to almost five hundred thousand crowns were imposed. November 22