Transcript March 2002 - Slovenská ratingová agentúra

Is Slovakia a suitable
investment target ?
It certainly is!
March 2002
Summary
The presentation of the French-Slovak Chamber of Commerce and
the Slovak Rating Agency
General information on the Slovak Republic
The Governmental Program for the Support of Foreign Investments
Macroeconomic data
Microeconomic data
The most important French investors in the Slovak Republic
The presentation of the
French-Slovak Chamber of Commerce
Year of foundation
Member of l’UCCIFE since
Number of members
Mission of the Chamber
February 1994
December 1995
184
the support of mutual activities of Slovak and French companies
the organization of common communication platforms
the support of both parties in the area of collection and evaluation of information
the administrative and organizational support of the members
Contacts :
Address: Bratislava, Mierová 23, postal code 824 62
Phone/Fax: 421 2 5024 4274, 5557 2757
E-mail : [email protected]
web site: www.uccife.org/slovaquie
The presentation of the
Slovak Rating Agency, a.s.
member of the French-Slovak Chamber of Commerce
Mission:
to materialize and standardize the risk of Slovak companies and transactions for
needs of foreign investors
Products:
rating of communes and cities
rating of production subjects and subjects of services
rating of projects and transactions
analyses of macroeconomic environment and individual economic sectors
analyses of entrepreneurial subjects
Member of the French-Slovak Chamber of Commerce since 2001
Contacts:
Address: Bratislava, Ursulinska 3, postal code 811 01
Phone:  421 2 5464 5151
Fax:  421 2 5464 5152
E-mail: [email protected]
web site: www.slovakrating.sk
General information on the country I.
Geographical
position:
Middle of the Europe
Area:
49 035 km2
Population:
5 402 547
Borders:
Hungary, Poland,
Czech Republic,
Austria, Ukraine
Religion:
Catholic – 70 %
Ethnic structure:
Slovaks – 85,7 %
Hungarians – 10,8 %
Others – 3,5 %
Time zone:
GMT + 1 hour
General information on the country II.
Social system :
Republic
Official language :
Slovak
President :
Rudolf Schuster
Coalition government : SDK, SDKÚ, SDĽ, SMK, SOP
Electoral system :
proportionate
Electoral term :
4 years (next election in 2002)
General information on the country III.
Capital city :
Bratislava
Self-governing structure: 8 regions
The Governmental Program for the
Support of Foreign Investments
The minimum volume of investments in a region with the rate of
unemployment bellow 10 % - 400 mil. SKK (approximately 61.255
mil. FRF)
The minimum volume of investments in a region with the rate of
unemployment above 10 % - 200 mil. SKK (approximately 30.627
mil. FRF)
Tax holidays
Allowance for retraining of workers
Allowance for the creation of jobs – its value is fixed depending on
the rate of unemployment in the regions
GDP – Restoration of higher growth
7
6
5
4
3
2
1
0
F
01
20
00
20
99
19
98
19
97
19
96
19
95
19
94
19
In spite of reforms Slovakia
avoided a recession.
In the past, the driving force of the
growth was export, in this year it
shall be domestic demand too.
GDP per capita in Slovakia
corresponds to 11 260 USD (PPP).
The region of Bratislava already
achieves the EU average (GDP in
PPP).
Restructuring of economy is at its
final stage.
In 2002 the growth of GDP should exceed 3%.
The price level is stabilized
Average inflation in %
23,2
24
20
16
13,5
12
12,0
9,9
10,6
5,8 6,1
6,7
6,5
8
4,5
4
0
02
01
00
99
98
97
96
95
94
93
20
20
20
19
19
19
19
19
19
19
F
The inflation was stabilized on a
one-debit value.
The core inflation was stabilized
between 4 to 5 per cent.
The price level in the Slovak
Republic still reaches less than 40%
of the level in Germany.
The Central Bank intends to
decrease the inflation within a
medium-term horizon bellow 4%.
Slovakia need not to fear a two-digit inflation.
Internal and external deficit
0
1996
1997
1998
1999
2000
2001F
-2
-4
-3,6
-4,4
-4,6
-6
-3,4
-3,7
-3,7
-5,0
-8
Current account/GDP
(in %)
-10
Public finance
balance/GDP (in %)
-8,5
-9,6
-10,6
-12
-9,7
The external imbalance has been
successfully decreased.
The situation in public finance has
also stabilized.
With the growth in domestic
demand we expect a growth in
current account deficit, but actually
we have no problem to finance this
deficit.
Public finance is the Achilles´ heel
of the Slovak economy.
A macroeconomic stability was restored but this balance is
still fragile.
A strong offer on labour market
The rate of unemployment
reaches values close to 20 %.
Good news:
The labour productivity grows.
More good news:
The over employment decreases.
A foreign investor has no problem to find a qualified and
cheap labour force.
The most part of FDI was absorbed by
privatisation
mil. USD (cummulative)
FDI
4000
3500
3000
2500
2000
1500
1000
500
0
1994
1995
1996
1997
1998
1999
2000
The most part of FDI was linked to
the privatisation.
Almost 50% of capital comes from
Germany (France is on the 7th
place).
There are two areas, which have
absorbed more than 90% of FDI:
industrial
production
and
telecommunications.
Other significant investments were
made in finance and trade.
In 2000 Slovakia succeeded to achieve the highest growth of
FDI from the V4 countries.
The Slovak currency is relatively stable
46
45,5
EURSKK
45
44,5
44
43,5
43
42,5
42
41,5
41
I.02
X.01
VII.01
IV.01
I.01
X.00
VII.00
IV.00
I.00
X.99
VII.99
IV.99
I.99
System of rates: floating
Reference currency: 100% EUR
Macroeconomic stability has brought
relatively high stability of the Slovak
currency.
The Central Bank dispose of volume
of finance large enough to protect the
Slovak currency.
1 EUR = 41,725 SKK (1.3. 2002)
The exchange risk has decreased in the recent period.
Macroeconomic summary
Economic stability was restored
Slovakia faces a higher growth of GDP
The price level and the rate of crown were stabilized
Foreign direct investments are accelerating
The problem area: public finance
Opportunity: cheap and qualified labour force
Microeconomic data I.
Share of individual regions in the formation of GDP
Microeconomic development II.
Legend
Share of individual industries in the formation of GDP
A
Agriculture, forestry, fishing
B
Mining, industrial production,
power, gas and water
generation and distribution
C
Building industry
D
Trade, restaurants, transport,
posts, telecommunications
50%
40%
30%
20%
10%
0%
A
B
C
D
E
F
E
F
Banking, insurance business,
other commercial services
Other market and non-market
services
Structure of labour market I.
Average monthly wages in individual sectors
in SKK
25 000,0
20 000,0
15 000,0
10 000,0
5 000,0
0,0
Agric ulture
Total
indus try
Cons truc t.
Trade
Hotels ,
res taurant
Trans port Pos ts and
Bank ing,
telec om. ins uranc e
Tenement
anot.
s ec tors
Average monthly wages in Slovak enterprises with more than 20
employees : 11,864 SKK (approximately 284 EUR)
Structure of labour market II.
Economically active population
– 2,696.341 ten.
Number of registered
unemployed
– 533.652 inhabitants
Structure of unemployed
by sex
- women – 44.7 %
- men – 55,3 %
Number of unemployed
graduates – 23,659 (4.4 %)
Structure of labour market III.
Qualification structure of unemployed
35,00%
30,00%
25,00%
20,00%
15,00%
10,00%
5,00%
0,00%
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Legislative environment I.
High level of approximation of law to EU legislation
Double Taxation Treaty concluded
Treaty on the Support and Mutual Protection of Investments concluded
Option of free export of capital
Unallowed acquisition of immovable property by foreign entities
The most frequent legal forms of enterprising entities – limited liability company
and joint-stock company
Average duration of the foundation of a company – 2 months
Obligation to apply double entry bookkeeping
Obligation to audit financial statements for turnover exceeding SKK 40 mil.
(941.842 EUR) and assets exceeding SKK 20 mil. (470.921 EUR)
Average duration of commercial litigation – 18 to 36 months
Legislative environment II.
Joint-stock company
Minimum amount of stock capital – SKK 1,000.000,- (23.546 EUR)
Option of monetary or non-monetary contribution
It is headed by a Board of Directors – at least three members
Obligation of members of the Board of Directors to have a sojourn in the territory of
the Slovak Republic
Obligation to establish the Supervisory Council – at least three members
Limited liability company
Minimum amount of registered capital – SKK 200,000,- (7.709 EUR)
Option of monetary or non-monetary contribution
It is headed by an agent
Obligation of the agent to have a sojourn in the territory of the Slovak Republic
Obligation to establish the Supervisory Council –– not imposed
Upon foundation of a company we recommend to contact a local lawyer.
The most important investors
Crédit Lyonnais Bank
Dexia Kommunalkredit Holding
Danone
Alcatel
Rhône – Poullenc
France Télécom
Lafarge
Carrefour
This presentation was prepared by the French-Slovak
Chamber of Commerce in collaboration with the
Slovak Rating Agency, member of FSOK.
FRANCÚZSKO-SLOVENSKÁ OBCHODNÁ KOMORA
Miletičova 23, P. O. BOX 4
824 62 Bratislava 2
Slovakia
Tel./Fax: 00421 2 502 44 274, 555 72 757, 555 73 129
e-mail: [email protected]
http: //www.uccife.org/slovaquie
Ing. Igor SCHMIDT, director of the Office of FSOK
SLOVENSKÁ RATINGOVÁ AGENTÚRA
Uršulínska 3
811 01 Bratislava 1
Tel.: 00421 2 54 64 51 51
Fax: 00421 2 54 64 51 52
e-mail: [email protected]
http://www.slovakrating.sk
Rudolf AUTNER, chairman of the Board of Directors and executive manager of company