‚Slovakia 21‘: grand reform plan or utopia? (The Slovak Spectator)

Radovan Ďurana z INESS komentoval pre The Slovak
Spectator dňa 14.4.2008 predložený modernizačný program Slovensko 21. Hodnotu a
význam tohto materiálu podľa neho ukáže až budúcnosť, to znamená, či implementačné
rezorty splnia svoje úlohy zaviesť navrhované opatrenia. Vzhľadom na to, že
opatrenia nezasahujú zásadne do výdavkovej štruktúry štátneho rozpočtu, mali by
byť realizovateľné.

FREE computers for deprived children; taxes waived for low-income citizens;
free universal pre-schooling; improved access to the Slovak education system
for students from Belarus, Ukraine and Moldova to ease pressure on the labour
market. Some or all of this may come to pass if the Fico government’s new grand
plan succeeds.

The plan, entitled ‚Modernisation Programme Slovakia 21‘, aspires to get the
country into shape for adoption of the euro and ready it for the post-adoption
era. State officials are confident that Slovakia 21 is a realistic plan which
will not over-burden the state coffers. While analysts agree that its
objectives are progressive and well-intentioned, they doubt its timing and
feasibility.

The document, which originated with the Ministry of Finance and Deputy Prime
Minister for Knowledge-based Economy and Minorities Dušan Čaplovič, is intended
to create conditions for sustainable development, increase social mobility and
access to education for low-income families, and increase employment
opportunities for the long-term unemployed. The state also plans to improve the
business environment and support small and medium-sized businesses, according
to the official document published by the ministry.

Miroslav Šmál, spokesman for the Finance Ministry, told The Slovak Spectator
that Slovakia 21 is designed to produce good public policies.

Socially-vulnerable families would get state support to finance the
education of their children, while the plan also floats the idea of compulsory,
free pre-schooling. Students from nearby non-EU member countries such as
Ukraine and Belarus might get easier access to Slovak universities in order to
ease the impact of the country’s greying population. Slovakia hopes to attract
highly-qualified foreign immigrants, the document reads.

The state also wants to boost citizens‘ mobility by reducing their
dependence on ownership of houses or apartments. The state would thus support
the construction of rental houses rather than supporting the housing plans of
individuals, according to the plan.

The lack of a programme like Slovakia 21, which involves five ministries,
might increase the risks inherent in Slovakia’s eurozone membership, and
influence the country’s readiness to adopt the euro in 2009, said Šmál.

While observers have questioned the programme’s potential impact on public
finances, the finance ministry says costs will be closely monitored and
adjusted to the funds available.

"The programme primarily focuses on changing the environment rather
than changing the volume of transfers from the public budget," Šmál told
The Slovak Spectator.

Points identified in the programme should become a priority for departments
when they draft their budgets for next year budgets, and also when drawing EU
funds, Šmál said.

Once the cabinet approves it, ministries will start working on the
short-term objectives encompasses by the programme and start applying them by
the end of the year. But while the Finance Ministry already has a timetable for
the plan, observers have some doubts about its feasibility.

"It is a progressive programme, but not a realistic one," Eugen
Jurzyca, Director of the Institute for Economic and Social Reforms (INEKO),
told The Slovak Spectator. "Putting the programme into practice would
require very professional management of reforms, but most importantly the will
to reform resolutely, which is an absent commodity worldwide."

For Jurzyca’s colleague Peter Goliáš of INEKO the objectives of the plan,
which he considers correct, seem to be at odds with the policies that the
government has implemented so far.

Goliáš in particular pointed to plans to make more effective use of public
funds while limiting cronyism and corruption.

"The document says that the government would increase the transparency
of public procurement, but the policies the government has been pursuing so far
do not indicate anything of the sort," Goliáš said. "On the contrary,
scandals with overpriced tenders tend to be revealed by the media rather than
by any internal system of control."

As for the government’s plans to apply employee bonuses or the so-called
negative tax for the socially vulnerable Jurzyca said that in principle it is
good to try out these tools but it all depends on how they are managed in
practice.

"There are risks inherent in making the tax system more complicated,"
Jurzyca told The Slovak Spectator.

He also said that in the globalised world the greatest demand is not for
poorly-qualified employees but rather for highly-qualified ones, and by giving
advantages to the former you run the risk of alienating the latter.

Radovan Ďurana of the Institute of
Economic and Social Studies (INESS) said that rather than opting for negative
tax, levies should be modified in such a way that they do not deform the market
for low-income and less-qualified labour.

However, Ďurana told The Slovak
Spectator, the measures do not sufficiently focus on cutting ineffective
expenditure by the public administration, which would allow further easing of
the payroll tax burden and provide important stimuli for economic growth.

"Despite the proclaimed
decentralisation, the document does not propose fundamental steps in this
area," Ďurana said.

However, for Ďurana the most
important aspect is that the plan promises not to boost public spending.

"Insofar as the measures do not
fundamentally intervene in Slovakia’s public spending, they should be
do-able," Ďurana told The Slovak Spectator.

Analysts however say that some of the proposals, while well-meaning, might
be arriving a little late.

Slovakia 21 suggests that the government will produce a method for
evaluating public private partnership (PPP) projects in comparison with
traditional ways of procurement. Goliáš said that such a method should have
been established earlier.

"In reality the government has launched huge PPP projects without
evaluating their effectiveness," Goliáš told The Slovak Spectator.
"After the contracts are signed with the winners of these tenders no
method will increase their effectiveness."

The programme proposes changes to
areas that have just recently been reviewed, for example the education law or
an amendment to the law on employment services," said Ďurana. "In
this sense, some of the measures are coming a little late. However, it is never
too late for increasing the effectiveness of the public administration and
decreasing the bureaucratic burden."

Ďurana also pointed out that that
many points of the proposal are not new at all as they had previously been
discussed by the government or the non-governmental sector.

Jurzyca of INEKO concluded that the programme might, after all, be the prime
minister’s way of trying to attract some additional, more pro-reform oriented
potential voters.

With files from Dominika Uhríková

The Slovak Spectator, 14 Apr 2008 , Beata Balogová

INESS je nezávislé, neštátne a nepolitické občianske združenie. Všetky naše aktivity sú financované z grantov, 2% daňovej asignácie, vlastnej činnosti a darov fyzických a právnických osôb. Naše fungovanie, rozsah a kvalita výstupov, teda vo veľkej miere závisí aj od Vašej štedrosti.
Naše ocenenia
Copyright © 2006 - 2026 INESS – Institute of Economic and Social Studies | All Rights Reserved