Slovak Spectator 1727

8/6/2019 Slovak Spectator 1727

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Code vote stirs emotions; deputy alleges graft

THEVOTE on thekey legislation of theyear, the revision to the Labour Code,stirred tensions within the ruling co-alition and prompted a round of claimand counter-claim among parlia-

mentaryparties.The drama started before the vote

itself, when deputies from the rulingChristian Democratic Movement(KDH) and the Slovak Democratic andChristian Union (SDK) blocked three

out of four proposals tabled by inde-pendent MP Igor Matovi, who amongother things had sought to change thecode to give employees the option ofchoosing between meal vouchers andcashpayments.

Matovi at first threatened thathis four-strong Ordinary People par-liamentary faction all of whom,apart from Matovi himself, are mem-

bersof therulingFreedom andSolidar-ity (SaS) caucus would vote againstthe Labour Code amendment. Butthen on July 13 they all left the parlia-mentary chamber, allowing the bill topass. If the four MPs had stayed and

voted against it, the ruling coalitionwould not have had enough votes topushthe billthrough.

The bill, which introduces signi-ficant changes to the Labour Code and which was last modified underthe previous government, led byRobert Fico received the votes of 74MPs on July 13, with 70 MPs votingagainst, andno abstentions.

Smer boss Fico blamed Matoviand his Ordinary People for the pas-sage of the legislation, which he saiddamaged the interests of employees.Fico said that the group had not actedin a principled manner by letting the

bill pass and used real ordinarypeople to wipe their behinds eventhough they had stated they would

withhold support if their particulardemands werenotmet.

In return Matovi suggested thatthe ruling coalition made an agree-ment with Smer and the Slovak Na-tional Party (SNS) so that they wouldremain in the hall, saying that if the

opposition had left the hall, parlia-ment wouldnot have hada quorum: atleast half of all MPs must be presentforalawtopass.

SeeCLAIMSpg2

SELECT FOREX RATES benchmark as ofJuly 21CANADA CAD 134CZECH REP CZK24.41RUSSIA RUB39.70GREAT BRITAIN GBP 0.88

HUNGARY HUF 26793JAPAN JPY 112.09POLAND PLN 3.99USA USD 142

NEWS

DemocraticupgradeThe IVO Barometer surveygradedSlovakdemocracyat2.6for thefirsthalfof 2011.It marksan improvement,returningthe scoreto thesame levelas inearly2008whenIVO released itsfirstevaluation.

pg 2

Judicial changesJustice Minister Luciaitansk wantsto amendSlovakiasconstitution toensurethat oneperson

cannotsimultaneouslyfillthe positions of SupremeCourtpresidentandheadofthe JudicialCouncil.

pg 3

OPINION

Allmouth,no trousersIfpoliticswere nothing buta sourceof entertainment,thensome current parlia-mentarydeputiesmight beconsideredperfectlysuitedtotheirrolein thepoliticalrealityshow.

pg 5

BUSINESSFOCUSInclusivegrowthThechallengefor anyfast-growingeconomyis tomake theexpansionmoreinclusive:so saysIndianAmbassadorRajiva Misra,whosecountryis experien-cingrecord growth.

pg 6

Asian investmentSlovakiais seekingto at-tractmore Asianinvest-ment. There isalready asignificantgroup fromTaiwan:will mainlandChinesefirms follow?

pg 8

CULTURE

EnjoyingIndiaSeveralIndiandance andotherculturalevents havetouredSlovakiain recentyearsand thetwocountrieshave foundtheyhavea sur-prisingamountin common.

pg 6

Police directorJaroslavSpiiakwascaughtexceedingthespeed limitby over30 kilometresperhour. WhatSpiiakcalledhisbiggestfailurein officewill costhim a heavyfineandlossofbonusesforthepastsix months. Photo:Sme

Labour Code prompts

strong reactionsTHE PATH to create tens of thou-sands of new jobs has now beenpaved: this is how Labour MinisterJozef Mihl characterised the adop-tion of one of the most importantpieces of legislation pursued by thegovernment in 2011, its amend-ments to the Labour Code. PrimeMinister Iveta Radiov quickly

backed her ministers assessmentand added that the amendment,

which was still awaiting the signa-ture of Slovak President IvanGaparovi as of July 21, could boostemployment levels and improveemployees certainty about their

jobs.The legislation is more accom-modating towards employees andtheir families and it protects those

who need it, Radiov stated, in-

stantly attracting criticism from thehead of the opposition Smer party,Robert Fico, who insisted that thechanges weakenthe legalprotectionof working people in times whentheyhave to be protected.

While associations of employersand one foreign chamber of com-merce quickly saluted several posit-ives they see in the new code that

will bring more labour market flex-

ibility, Slovakias trade union con-federation maintained that the pre-vious Labour Code, amended underFicos government, should have re-mained unchanged.

The changes introduced by theamendment to the Labour Code, ina nutshell, include: cancellation ofparallel entitlements for a layoffnotice period and severance pay;longer periods for fixed-term em-ployment, which now can beagreed for up to three years, withextensions or renewals allowedthreetimesin a three-year period; alonger layoff notification period foremployees with long service in thesamejob; and greaterprotection formothers andpregnantwomen.

The amendment also restrictsthe voice of a small union within a

workplaceand sets a 3-percentlimiton the profit margin for companiesselling mealvouchers.

SeeCODEpg4

Fifth auditattempt

thwarted

THE FINANCE Ministry has attempted forthe fifth time in less than a year to con-duct an audit of the finances of the Su-preme Court. Even though the Constitu-tional Court imposed a large fine ontefan Harabin, the courts president, forrefusing to allow the previous audit at-tempts, the fifth visit did not go anysmoother.

On July 15 auditors from the FinanceMinistry were received by the adminis-trative director of the Supreme Court,Jozef Kaffka, with the intention to starttheir review of the courts accounts, butKaffka refused to allow the auditors to be-gin, stating that to do so would be a viola-tion oflaw.

Due to the existing legal obstacle,represented by the ruling of the SupremeCourt of the Slovak Republic from April28, 2011, which confirmed the ruling ofthe Bratislava Regional Court from Janu-ary 18, 2011, it is not possible to carry outthe audit, the Supreme Court wrote in apressrelease.

In April 2011 the Supreme Court foundin its own favour, ruling that the FinanceMinistry wasnot authorised toauditit.

Finance Ministry auditors made theirfirst attempt to review the courts ac-counts on July 29, 2010 but Harabin re-fused to allow them to do so. Though hestated at that time that the court hadnothing to hide, he has refused to permiteach subsequent attempt by auditors to

begintheir work.Finance Minister Ivan Miklo said last

year that Harabin may be abusing the in-dependence granted to courts and judgesby blocking the audit.

SeeCOURTpg3

BYMICHAELATERENZANI

Spectatorstaff

BYBEATABALOGOVSpectator staff

BYBEATABALOGOVSpectatorstaff

Supreme Courtagain blocks

governmentauditors,despite Constitutional

Court ruling

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Action on communist crimes required

DENYINGthe Holocaustor

othercrimesconnected withfascism or communismshould soonbecomea crimeinSlovakia, with jail termsofbetweensix months andthreeyears,according to anamendmentto theCriminalCodesubmittedby fourlegis-lators fromthe CivicConser-vative Party(OKS),part oftheMost-Hdcaucus,whichparliamentpassedon July13,theTASR newswirereported.

The pointis toensurethat noone gets away withdenying all sortsof atrocit-ies committedby thecom-munist andfascistregimes,OKS headPeterZajacsaid, asquotedby

TASR.Themoretimegoesby,the stronger thetend-

ency notonlyto forgetbut

alsoto trivialisethe terriblethings thathappenedunderfascism and communism.

The initiative hasgarnered support fromanumberof MPsfromthegoverning coalition, as wellas Justice MinisterLuciaitansk.

Wecannot onlypickoutgoodthingsfromthepast, Zajacsaid.We haveto process theevil things

within ourselves,as thisistheonlywayof makingsuretheydon't occur again.

A similaramendmentwas passedby MPsin 2002but then-presidentRudolfSchustervetoedit andpar-

liament failed to overridehisveto.

Police chief caught speeding

POLICE CORPS presidentJaroslav Spiiakwas caughtdriving at 33 kilometres perhourover thespeed limitbetweenthe municipalitiesofBajand Pribeta inKomrno districton July19.Hewas spottedspeedingby apolicepatrol.

Spiiak said hecon-sidered theoffenceto be hismostsignificant failuresincehe enteredofficeoneyearago.

Imsorry forthis,Spiiak tolda pressconfer-ence,as quotedby theSITAnewswire.I amtrying toob-serve therules. Imnotar-ranging anyfavoursformyself.

Spiiak also addedthathehadno good reasonforspeed-ing atthetimehe wasstopped by the policeofficers.

He said hewas gladthatthepublic hadbeenin-formedabouthis offence as

hewouldnow bepunishedpublicly.

Spiiak willundergo adisciplinaryprocedure andhaveto pay a fine, saidIn-teriorMinisterDanielLipic, asreportedby SITA.Lipic, as Spiiaksboss, willsetthe fine.

The minister an-nounced thatSpiiak wouldnotreceivebonuses forthelast sixmonthsas a resultofthe disciplinaryprocedure,

although he woulddeserveitfor hiswork, SITAquoted.

The officers who caughthimwere commendedfortheiractions.

They were ina placewhichwasassessedas onewherethey shouldbe,Spiiak said,praisingthepoliceofficers.They weremeasuring [vehicle]speed.Theyofficiallyreportedthecase.

Police resumesearch forMello

THESPECIALTask ForceDe-partment of theGeneral

Prosecutors Office wasgran-tedan international arrestwarrant forKarol Mello, analleged mafiaboss,by theNi-traDistrict Courton July 15,theSITA newswirereported.

Mello, whois accusedoforganisinga 2004ganglandhitwhich left a womanandchilddead,is currently ontherunfora secondtime.

He wasarrestedlate lastyearin Poland afterbeingsought by Slovak police forseveral yearsand extraditedandcharged.

However,a series of legalbunglesled to a Bratislavacourtordering hisreleasefromcustodyearlierthis

year. Mello waslater repor-tedto have fled again,as awranglecontinued overwhichcourt,if any, wasau-thorisedto issuea warrantforhis re-arrest.

Thepolicehad beenwaitingfor a warrantfor

Mello forweeks,but judgesin Topoany, Nitra andBratislavapassed theprosecutorsfilingfrom onecourt toanother.

Afterthe NitraDistrictCourt agreedto issuetheinternationalarrest war-rant, thepolice immedi-ately announced they weresearching forMello,andasked thepublicto help

withany informationabouta 180-cm-tallman

withshortbrown hair.Justice MinisterLucia

itanskhas meanwhilefiled a proposal fordisciplin-aryaction against theBratis-lavaI DistrictCourt judges

who,she says,were respons-iblefor Mellosearlierre-lease, SITAreported.

Compiledby Spectatorstaff

frompress reports

Slovakia's democracy marks improve

ALTHOUGH the overall stand-

ard of democracy in Slovakiamight be improving, the au-thors of a project that evalu-ates it who come from thenon-governmental Instituteof Public Affairs (IVO) saythere are several areas whichcan still be regarded as neur-algic. The Roma issue standsout as the most obvious ex-ampleof these,theysay.

The IVO Barometer surveygraded Slovak democracy at2.6 for the first half of 2011 ona scale where 1 is excellentand 5 is failing. The 2.6 graderepresented an improvementof 0.2 points in comparison

with the score at the end of2010. The overall rating has

returned to the same level asin early 2008 when IVO eval-

uated the state of Slovakdemocracy for the first time.The improved grade suggeststhata trendtowardsstabilisa-tion of democratic institu-tions in Slovakia is continu-ing, IVO president GrigorijMesenikov said.

The IVO Barometer evalu-

ates the quality of democracyin Slovakia on a quarterly

basis in four key areas: demo-cratic institutions and a law-fulstate(which in this surveyreceived a grade of 2.5); legis-lation (2.25); protection of andrespect forhuman andminor-ity rights (2.75); and mediafreedom and public-servicemedia(2.75).

We have improved therating in three areas, but it

remained unchanged in thearea of minorities and hu-man rights, Mesenikovpointed out.

Humanandminorityrightsquestioned

Mesenikov admitted thatthe authors of the barometerhad difficulty deciding on thegrade in the area of minoritiesand human rights, since sev-eral positive things hadhappened.

The atmosphere has im-proved, for instance Slovak-Hungarianrelations arenot asneuralgic as they were duringthe government of RobertFico, and to some extent alsoat the very beginning of thecurrent governments rule,

when some not-very-positivetrends from the previousperiod were still resonating,Mesenikov said.

SeeIVOpg9

BYMICHAELA

TERENZANI

Spectatorstaff

CLAIMS: Evidence not forthcomingContinuedfrompg1

Fico wants to have the Labour Codepassed, because if it does not pass then he

wouldnothavea topicto scornand wouldnot have any agenda, Matovi said, asquotedbySITA.

Both Smer and SNS denied havingmadeanyagreementwiththerulingcoali-tion.

Nevertheless, Darina Mallov, head ofthe Department of Political Sciences at

Comenius University, sees a compromisein the way Matovi acted during the vote,whichallowedthecodetopass.

Political compromises are part of thepoliticians process of maturing, MallovtoldThe Slovak Spectator.He understoodthat he would have been left holding the

baby if this very serious change had notgonethrough.

ThebillneedstobesignedbyPresidentIvan Gaparovi to become effective asplanned on September 1, 2011.Membersofthe governing coalition have already ex-pressed doubts whether Gaparovi willsignthebillintolaw.

Mallov would not speculate on howMatovi might act if the president sendsthe code back to parliament, suggestingthat he is a very unpredictable politicianandhenceveryhardtoread.

He has small proposals on which hehasbuilthisagenda,Mallovsaid,addingthathecaneasilychangehisposition.

Thevoucherspat

Matovi accused the coalition partiesof selling out,claimingthey hadpromisedto support his proposals but then let himdown.He threatened that iftwo rulingco-alitionparties,namelytheSDKandKDH,did not change theirapproach, his factionmight not guarantee to support proposalsproducedbythesepartiesinfuture.

Matovi said, as quoted by the Smedaily, that some people will become veryrich but did not explain what he meant,orprovideanyevidencetosubstantiatehissuggestionof impropriety.

In response to Matovis claim, Bla

Bugr, the leader of ruling coalition partyMost-Hd,saidhe didnotthinkthatdepu-tieshadbeenbought.

I can imagine that there was somelobbying, but this is a harsh thing to say[that they were bought] and I dont think

this was the case, Bugr said, as quotedbyTASR.

In the final version of the law, a pro-posal by SDK deputy udovt Kank wasapproved to limit the revenues of meal-

voucher providers, which could meantheirincomeswillfall.

Corruptionclaims

Arguments over the Labour Code hadnot completely died down before Matovi

pulled out another topic: partisan nomin-ationstostatepositions.I am accusing of corruption all the

politicalpartieswhich gained morethan 3percent in the elections, Matovi said onJuly 18. He went on to claim that theparties are abusing their power to nomin-ate appointees to public positionsin orderto reward their sponsors and people whohave been distributing flyers for them; hestated that professional qualifications

werenotconsideredintheappointments.Matovialsoallegedthatafteritprom-

isedto publish a listof politicalnominees,hisfactionhasbeenthreatenedbyonerul-ing coalition party. The party, he said,promisedtosupportmasslawsuitsagainstOrdinaryPeoplebynamednominees.

Matovi said hewantsto publish a listof partisannominationsto statepositions

before the next regular session of parlia-ment. The Ordinary People faction leadersaid that partisan nominations are in factcorruptbehaviour,addingthatthoughthecurrent coalition has been trying to com-

bat what he called the brutal corruptionthat existed under the rule of Fico, theparties arestill involvedin thekindof cor-ruption represented by political nomina-tions, while trying to present it as normalpractice,SITAreported.

The co-ruling SDK has said thatMatovi is in fact just promoting a newpartythatheisabouttoestablish.

Mr Matovi is a liar, said the deputychairman of the KDH, Pavol Abrhan,pointing to Matovis claim made tojournalistsshortlyaftertheparliamentaryelection that he had been offered millionsof eurosto destabilise the ruling coalition.

When pressed for more information, hewithdrew the claim, saying it was just ajokebyafriend.

Mallov said that statements byMatovi are quite serious because he is nolongerjustamanoffthestreet.

Though at the beginning he presen-ted himself as a man from the street who

was interested in politics and public af-fairs, he is now a member of parliamentand thus his words carry weight and hehas received wide publicity that he oth-erwisewouldnothavehad,Mallovsaid.

Theother reasonwhy hisstatementscountisthatasadeputyhehasmuchbet-teraccess to information thanthe major-ityof citizens,Mallovadded.

But she conceded: Whether he is

trustworthyis aquestiononehas toask,adding that so far Matovi has providednoprooftosupporthisstatements.

Mallov said that despite Matovisstatement that political parties have

been installing political nominees instate jobs, this has been happening formany years and it remains questionable

whetheritisreallyaformofcorruption.Mallov said that he had to explain

how parties were benefiting from theirnominations. He posed some very seri-ousquestions; questionedallthe politicalparties, but so far he has given verylittleevidence.

As forMatovisimpact,Mallovsaidthat he has damaged the already lowcredibilityofpoliticiansasawhole.

One of the messages from his state-ments is that all politicians in Slovakia

are corrupt and he himself is anexception, said Mallov, who believesthis is how Matovi wants to generatepopularity. How wide his popularity

willbedependsonhowheisabletoprovehiscredibility, whichso faris quiteweaksince he is providing little evidence tosupporthisclaims.

The political parties have been de-fending partisan nominations. SaS toldSme that the party, when selectingnominees, carries political responsibil-ityforthem.

As long as other criteria are met,such as expertise, we do nominate partymembers, SaS leader Richard Sulk said,asquotedbySme.

Sme reported on July 20 that sincelast years parliamentary elections theruling coalitionhas replacedthe headsof

50 district offices and almost the samenumber ofheadsof districtlabouroffices.Noneofthejobsweresubjecttoacompet-itive selection process; instead, the cab-inet appointed people who had beennominatedby ministers,Sme reported.

Romaissueswerehighlightedin thereport. Photo:T. Somogyi

2 NEWSJuly 25 August 7, 2011


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Evaluation systemproposed for judges

CHANGES in how Slovakias ju-diciary operates will continueto be pursued by Justice Minis-ter Lucia itansk. After she

was successful in gettingamendments to the laws gov-erning judges and prosecutorsoffices passed by parliament,she announced in early Julythat she will seek to amendSlovakias constitution to as-sure that one person cannotsimultaneously fill the posi-tion of Supreme Court presid-

e nt and the c hair of thecountrys Judicial Council.Both posts are currently held

by tefan Harabin. In additionshe proposed that judgesshould receive regular evalu-ationsof theirwork, conducted

by threedifferent evaluators.The main opposition party

in parliament has already an-nounced that its MPs will notsupport the first proposal,while Harabin has accused thejustice minister of seekingpersonal revenge against him.But the idea of regular evalu-ations for judges may get asmoother ridein parliament.

When Slovakias JudicialCouncil elected tefan Hara-

bin, who at the time wasjustice minister, to the post ofSupreme Court president onJune 22, 2009, it also automat-icallymadehim theheadof thecouncil, which oversees theoperation of all courts in Slov-akia. At the time several non-governmental organisationsheld protests in front of theJustice Ministry, where theJudicial Council was meeting,and the-then opposition

parties now mostly in gov-ernment joined the criticismof Harabins selection.

A year later the new gov-ernment took power and theMovement for a DemocraticSlovakia (HZDS), which hadnominated Harabin to thejustice ministry post, failed tomake it into parliament. Theincoming governments pro-gramme statement featuredseveral bold changes that it

would seek to make toSlovakiasjudicialsystem.

The government pledgedto amend the rules so that aperson would no longer beable to switch immediately

between posts in the judicialand executive branches. Thefour parties in the governingcoalition also promised to ex-clude the heads and deputyheads of courts from holdingposts in the judiciarys self-governing bodies and pro-posed to stop the same person

acting simultaneouslyas headofthe JudicialCounciland theSupreme Court by pursuing aconstitutional proposal forthe Supreme Court presidentnot to be the chair of the Judi-cial Council.

This change has now beenpropos ed by Ministe ritansk, along with twofurther requirements: that

votestakenby membersof theJudicial Council be publiclyrecorded, and that the councilpublish informationabout the

itemsit discusses.If the Judicial Council isto have any sense, these posi-tions need to be separated,theministersaid, asquoted bytheSITA newswire.

The separation of the twoposts currently held by Hara-

bin will require an amend-ment to Slovakias constitu-tion and it does not seemlikely thatthe justice minister

willbe able tofindthe 90votes

neededin parliamentto pass aconstitutional amendment.

MP Robert Madej, whoserves as shadow justice min-ister for the opposition Smerparty at least some of whoseMPs voteswould be neededtosecure 90 votes in parliament said that his party will notsupport the amendment and

believes it is a further politi-cisation of thejudiciary.

Its a fight against oneperson in the judiciary, whichagain betrays the coalitions

frustration over Mr Harabin,Madej said, as quoted by SITA.Healso statedthatthe currentsystem, wherebythe SupremeCourt president also heads theJudicial Council, was intro-duced and promoted by thefirst government of MikulDzurinda from the SlovakDemocratic and ChristianUnion(SDK)in 2001.

SeeJUDGESpg5

BYMICHAELATERENZANI

Spectatorstaff

Morechangesmaycometo Slovakia'scourts. Photo:Sme - T. Benedikovi

More white-collarfraud detected

ENIORexecutives arecom-mitting morefraud, a surveybyglobal consultingcom-pany KPMG hasfound.Acomparisonof theresultsofsurveys from 2007 and2011indicatesan increase in fraudandfraudulentbehaviour bysenior managers.The global

surveyby KPMG showsthatCEOs were involvedin 26percent ofcases, upfromjust11percentin theprevioussurvey. Thesurvey wasbasedonthe findingsof fraudin-vestigations conductedbyKPMGmember firms. Onefinding, identifiedas alarm-ingby KPMG,is that compan-iesare continuingto ignorewarning signsof fraud.This,andthefactthatmorethanonehalf of theinvestigatedfraudshadrun formorethanthreeyears before theyweredetected, suggeststhat morewhite-collar fraudmayemergein thefuture.

The KPMGstudy follows

a 2007analysisof fraudulentbehaviouracross Europe,theMiddle Eastand Africa.Sincethat reportprovedso popu-lar, KPMG extendedthe 2011surveyworldwide. KPMGsoughtto identify patternsamongindividualswho havecommittedactsof fraud andcompared thevalue anddur-ation,as well asmanyothercharacteristics.

The2011survey isbasedon 348cases investigatedbyKPMGacross 69 countries,includingSlovakia,between2008and 2010,coveringthestartand themainpartofthe recentfinancialand eco-nomiccrisis.

Thetypicalfraudster

The2011 researchfoundthat thetypicalfraudsteris amanagedbetween36 and45who worksin a finance orfinance-relatedrole, hasbeenwiththe company inques-tion formorethan10 years,andholds a senior manage-mentposition.Oftensuchindividualswill be betterplacedto override controlsandmayhaveaccumulatedagooddeal of personal trust.They aremostlikelyto en-gagein embezzlement orprocurement fraud.

Viliam Kaeriak, a man-

agerat KPMGsforensicser-vicesdepartment in Slovakiathatcoversthe centralandeasternEurope(CEE) region,noted that inSlovakiathetypicalfraudstermost com-

monly works inthe procure-mentor salesdepartments.Thefinance department oftenplays theroleof policing

theseareas.Wemost oftenregisterfraudsleadingto misappro-priation of assets,embezzle-ment andothercorruptactivities,said Kaeriak,adding that in otherregionsmisstatementof financialresultsis morecommon.

Inthis respect theCEEregionbucks the globaltrend.Fewerfrauds occurwithinthefinance function, whilemost are committed withinsalesand procurement.

In central andeasternEuropemany multinationalcompanies havetended totransfer trustedexpatriateemployees fromthe parent

companyinto key financialpositions at theirsubsidiariesinthe region,to provide notonlythe necessary experi-ence,but alsoto policethesubsidiaryfrom withinthefinance function,JimmyHelm,KPMGsheadofforensicsin CEE,said, asquotedin theKPMGanalysis.Theyact as whistleblowers,theinitiatorsof investiga-tions.Often theyare furthertransferredfrom regionto re-gionas thecompanysets upnewoperationsto ensuretheongoingintegrityof the fin-ancefunction.

According to theKPMGfindings,in eastern Europe

some89 percent ofpeoplein-vestigatedhad beenem-ployedat thecompanyinquestion formorethanthree

years, ofwhommore thanhalf hadbeenemployed forlongerthan sixyears. Fifty-twopercentof thefrauds had

beenrunningfor morethanthreeyears beforethey weredetected,said Kaeriak.

Theresultsof thesurveyalso showedthata typicalfraudsterdoes not workalone:in61 percent ofcases, thefraudstercolludedwith eitheran internalor externalthirdparty.The CEEcases followedthistrend,with 63 percentinvolvingcollusion. This

characteristicis further sup-portedbya reviewofreportedcasesin Slovakia resultinginconvictions, which indicatesthatthere wascollusioninmore than 50percentof cases.

ubicaMartauzov, amanagerat KPMGsforensicservicesdepartment inSlovakia,said that, interest-ingly, menhave a fargreatertendencyto actin coopera-tionwithsomebody elsethan women.

Fraudstersmotivations

Martauzovexplainedthat basedon thetheory offraud,three basicprecondi-

tionsmustbe fulfilledin or-derfor a fraud tobe commit-ted:pressure,opportunityand rationalisation.

SeeCONpg9

3NEWS July 25 August 7, 2011

BYJANALIPTKOVSpectatorstaff

COURT: Tussle continues with auditorsContinuedfrom pg1

If any other public official or minis-ter acted like this, I would have submit-ted a proposal for his or her dismissallong ago, Miklo said after the first at-tempt, as quoted by the SITA newswire.tefan Harabin is using the fact thatjudges cannot be dismissed in this way.

Harabin has repeatedly asserted thatonly the Supreme Audit Office (NK)wields the right to supervise the SupremeCourt, alleging that an audit by the Fin-anceMinistry wouldbe politicised.

Since then both the Justice Ministryand the Finance Ministry have been tuss-ling with Harabin and the Supreme Courtoverthe barred audits.

The Finance Ministry imposed a33,000 fine on the court, along with a1,000 personal fine against Harabin,

for hindering the auditors work. Hara-bin and Finance Minister Ivan Mikloalso filed lawsuits against each othersinstitutions.

Justice Minister Lucia itansk thentook action against Harabin by filing a

proposal with the Constitutional Court in

November 2010 to launch a disciplinaryproceeding against Harabin. She pro-posed the highest possible penaltyagainst Harabin: a one-year, 70-percentreduction in salary.

In response,the Supreme Courtfiled acriminal complaint against itansk forwhat it called suspicion of committingthe crimes of abuse of power, interveningin the independence of the courts, libeland unauthorised use of personal data.

In late June this year the Constitu-tional Court ruled on the JusticeMinistrys disciplinary complaint andordered a 70-percent reduction inHarabins salary for one year.

The Constitutional Courts opinionstated that Harabin had violated his du-ties associated with management of thecourt, its financial control and internal

audit by repeatedly making it impossiblefor the Finance Ministry to conduct anaudit. The Constitutional Courts rulingcannot be appealed. Harabin responded tothe Constitutional Courts ruling by stat-ing that he perceived it to be politically-

motivated, arguing that it was punish-

ment for his legal opinions.Other state institutions have voiced various opinions on the ongoing conflict.The General Prosecutors Office has statedthat Harabin did not commit a crime by re-fusing to permit the Finance Ministersauditors to examine the courts accounts,

while also dismissing a criminal motionfiled by theSupremeCourt against Miklo.

Slovakias ombudsman, Pavel Kandr,has stated that Finance Ministry audits ofexpenditures at the Supreme Court had

been a normal procedure in the past, con-ducted without any objection by the court.

At the time The Slovak Spectator went toprint it was not known what further stepsthe Finance Ministry might take in ordertobeginits auditof theSupremeCourt.

At this moment the Finance Min-istry together with the Justice Ministry

are considering what further steps totake, Patrcia Malecov epitkov fromthe Finance Ministrys communicationsdepartment told The Slovak Spectator,adding that the Finance Ministry still in-tendstoaudittheSupremeCourt.

The typicalfraudster is a

man holding a

seniormanage-ment position


4/12

State changes investment aid rules

THERULES thatSlovakia

willuse whenproviding in-vestmentassistance to firmswillchangebased onanamendmentto theActonInvestment Assistancesigned by PresidentIvanGaparovion July18.

The conditionsand lim-its for receiving investmentassistancefrom the statewillvaryamong Slovakiaseightregionsso that thestateas-sistance supports morejobcreation inregions withhighunemploymentand focusesmore on investmentswithhigheradded value, the TASRnewswirereported.

Economy Minister JurajMikov,who proposed the

changes, saidthat assistancewillbe aimedparticularlyateasternSlovakiaandto theilinaand theBansk

Bystrica Regions, stating

that,an investor willhavenochance ofgetting invest-mentassistanceinBratislava,as quotedbyTASR.

The amendmentalso re-ducesby half theminimumlevelof investmentrequiredtoseek state financialsup-port.The ministry believesthis will broadentherangeoffirmsthat are eligible.

The statesinvestmentsupportwill typicallybeprovidedonlyin theformoftax relief.

Wedontwantto giveinvestors money,Mikovsaid.Afterall,we donthavemuch ofit inthe budget.

The maximum periodforreceiving assistancewas alsoincreasedfromfive years toten years.

EU banks' stress-test results released

MOSTEuropean bankinggroups thathave affiliateoperations in Slovakiaaresufficiently capitalised towithstand macroeconomicturmoil,according to theresults ofEU stressteststhatwerereleased onJuly15 bythe EuropeanBanking Au-thority (EBA), theSITAnewswire reported.

sterreichische Volks-

bankenAG of Austria, activein Slovakia via VolksbankSlovensko,was the onlybankwithoperationsin Slovakiathat wasamongthesevenbanking groupswhose coreTier1 capital ratiofellbelowthe 5-percent minimum re-quiredby theEBA.

Regarding theresults ofthestress tests,the appro-priateAustrianbodies havetakennecessarysteps, theFinance Ministry stated, asquotedby SITA.AlthoughVolksbankSlovensko,the

Slovakarm ofthe[sterreichische Volks-

banken] banking groupwasincludedin thetestsonlyin-directly andalthoughtheresults do not require inter-

ventionon thepartof theSlovak authorities,the Na-tionalBank of Slovakia (NBS)

willcloselywatch the situ-ationat thebank.

FourteenSlovakbanks,

includingeight thatwereindirectparticipantsin theEU-wide stress tests,under-

went a nationalstress testbased onindividualscenari-os andmethodologiesearlierthisyear.

The outcome oftestscarriedoutby theNBShasprovedthe resilience of theSlovak banking sectoragainstadversemacroeco-nomicscenariosas well asthe sectors stability,theFinance Ministry wrote inastatement,SITA reported.

Unemployment rate rises to 13 pct

THE UNEMPLOYMENTrateinSlovakiagrewfrom 12.84percentin Mayto 12.98per-cent inJuneand was0.46percentage pointshigherthan last year,the CentralOfficeof Labour, SocialAf-fairsand Family (PSVaR)reportedon July20, accord-ingto theTASRnewswire.

A slightyear-on-yeardrop inthe numberof long-term unemployedwas recor-ded from48.6percentto48.2 percentof allunem-ployed. PSVaR saidthis wasmainlydue to6,696jobsopeningin seasonal workandin anti-floodprojects.

PSVaRaddedthat the

unemploymentrate wasaf-fectedby universitygradu-atesand school-leavers en-teringthe labour force.Around7 percentof re-gisteredjob applicants(or

27,000) werenew entrantsfromthisgroup andtheirnumbersaccountedfor a 0.5percentage pointmonthlyincrease in the unemploy-mentrate according toPSVaR. Slovakjob centresreported9,078vacanciesinJune,an increase of34 per-cent from thenumberavail-able a year ago.

Thisindicatesa gradualrevivalin thelabourmarketin Slovakia,PSVaRstated,asquoted byTASR.

The numberof recipientsof unemploymentbenefitstagnated in June.The socialsecurity provider SocilnaPoisovapaidout thebene-

fit to 43,300 individuals inJune this year, thesamefig-ureas inthe previous month.

Compiled bySpectatorstaff

frompress reports

CODE: Unions mourn for old rules

Continuedfrompg1

The revision also removesa restriction on longer over-time hours; eases drawing ofcompensatoryleave;sets lowerpremium payments for over-time work and allows morenightshifts; mandatesa longerprobationary period for man-agers; establishes five weeks ofannual holiday for employeesaged 33 and older; eliminatesspecial advantages held bystate managers; and gives thego-ahead for employers toshare one work positionamong two or more employ-ees. Six different minimumsalary or wage levels are con-tinued in the Labour Code,

based on the nature of the joband its qualifications. Theamended code requires that atleast 30 percent of employeesin a particular firm must bemembers of a union for it tohave the right to negotiate ontheir behalf.

Employersreactions

Robert Kiina, the head ofthe Business Alliance of Slov-akia, agreed with the govern-ment that the modifications

willhelp create newjobs.It is enough to take a look

at countries with [more] flex-ible labour codes, for exampleSwitzerland, Denmark,Sweden, Great Britain, Aus-tralia, and New Zealand and tosee that long-term unem-ployment has been kept at arather lower level, somewhere

around 6 percent, Kiina toldTheSlovak Spectator.Markus Halt of the Ger-

man-Slovak Chamber ofCommerce said that Germaninvestors will appreciate thenew code and view it as a stepin the rightdirection.

The new regulation in-creases flexibilityin the labourmarket that is crucial for at-tracting foreign investment,Halt told The Slovak Spectator.Some of our major requestshave been realised, such asmaking working times moreflexible, by providing a long-term legal basis for [working]time accounts, the so-calledflexi-accounts that help com-

panies in dealing with fluctu-ations in theirorders.Halt praised the abolition

of parallel entitlements foradvance layoff notificationand severance pay, saying ithad served as a barrier to em-ployment, as well as the in-troduction of a statutory basisfor non-competition clausesfor managers and specialists, aconcept that is common inGermany and Austria, as wellas in the Czech Republic sincelastyear.

Kiina also listed elimina-tionof theparallelnoticeperiodand severance pay as a positivechange, along with reducingseverancepay afterlayoffsfrom

6 months salaryto a maximumof 3 months, as well as makinglayoffs easier when a firm findsitself in financial trouble.

I alsopositively assess theweakening of the managerial

authority of labourunions,theintroduction of the flexi-ac-count, longer probationaryperiods formanagersand moreflexible working time, KiinatoldThe SlovakSpectator.

Jn Oravec, president ofthe Entrepreneurs Associationof Slovakia (ZPS), told TheSlovak Spectator that he eval-uates the revision to the La-

bour Code as a mixture ofmeasures that will moderatelyincrease labour market flexib-ility in certain areas but also

will be accommodating to theneedsof employeesas well.

However, the revision tothe Labour Code, with its cau-tious nature, is a disappoint-ment for everyone who hadexpected that it would con-tribute to the acceleration ofg rowt h in Slovakia seconomy,Oravec said.

The Federation of Employ-ers' Associations (AZZZ) said itagreed in principle withMihls assessment of job cre-

ation, while adding that can-celling the parallel entitle-ment for layoff notice and sev-erance pay is one of the most

beneficial changes, along withshared job positions, moreflexibility in fixed-term em-ployment contracts, and ex-tending the use of the flexi-ac-count. But AZZZ believes thatpreserving a minimum wagein Slovakia might have a neg-ative impact on the businessenvironment.

In principle, the adoptedchanges to the Labour Codecan be evaluated positivelyfrom our point of view;however, the code does notcontain all the necessary

measures we proposed, Miri-am pnikov, spokeswomanfor AZZZ, told The SlovakSpectator, adding that itcouldhavebeen moredecisivein order to help increaseemployment.

Unionsreactions

In response to Mihls as-sertion of more jobs flowingfrom adoption of the revisedLabour Code, Otto Ewiak, thespokesman for Slovakias Con-federation of Trade Unions(KOZ), said employment doesnot hinge exclusively on theprovisions of theLabour Code.

Substantive reasons for

the high unemployment rateare the weak enforceability ofthelawand corruption,as wellas the course of public pro-curement and financial flowsin which a negative role is

played by firms' secondaryinsolvency, Ewiak told TheSlovak Spectator. A shortened[layoff] notice period or mul-tiple fixed-term contracts orother tricks reducing the pro-tection of employees and re-stricting the rights of tradeunions will not solve it[unemployment].

Ewiak said that permittingan employer to sign repeatedfixed-term contracts with anemployee does not mean thatthe employer will boost em-ployment and said it will onlycut the employers expensesand increase its profit whilekeeping employeestense.

The revisionto theLabourCode does not create a bal-anced relationship between anemployer and an employee that is what we arecriticising, Ewiak said,adding that the unions did not

wantany changes inthe law.Ewiak said the previous

code was balanced and the

unions sought to protect itfrom being c ompl etel ystripped by the governmentand employers, who he saidare now suggesting that themodified law still does notcompletelysuit them.

Though minimum wageshave been preserved, Ewiaklisted many changes that theunionsdo notagreewith, suchas reducing employee rights inthe event of mass layoffs andthe multiple signing of fixed-term contracts. The end ofparallel entitlement to layoffnotice and severance pay and

what KOZ calls more limitedprotection of employees dur-ing l ayoffs are on the

confederationsblack list.The increased number ofweekly work hours and the re-quired overtime work is atodds with balancing work andfamily life and also has a neg-ative impact on employment,Ewiakstated.

Ewiak said the changes inthe Labour Code will increaseemployers flexibility but do soat the expense of employeessecurity.

The measures that limitthe rights of unions areunacceptable,Ewiak added.

He believes the new re-quirement that a union mustprove that at least 30 percent ofemployees inany workplaceare

members is at odds withSlovakiasconstitutionand KOZviews it as an unjustified limit-ationon unions activities.

Ewiak told The SlovakSpectator that the unions

have a sked P resi dentGaparovi not to sign the billinto law and have also reques-tedMPs tochallenge thelegis-lation before the Constitu-tional Court. KOZ has also

written to the InternationalLabour Organization and tothe European Trade Confeder-ation, requesting assistancefromthem.

More changesneeded?

Halt of the German-SlovakChamber of Commerce seesroom for some additionalchangesin thelabourlaw.

The government couldhave gone a step further, assome unfriendly rigidity re-mains in the labour market,Haltstated.

Halt noted thatSlovakias Labour Code doesnot permit termination ofemployees when they reachpensionable age, adding thatin Germany and Austria anemployment contract auto-matically ends at that time,arguing that not mandatingthis in Slovakia hinders theemployment opportunitiesof younger employees.

Wage compensationthat courts can order is toohigh under the new rules,too, Halt said. Due to thelong [legal] proceedings inSlovakia this may lead to un-justifiably high severancepayments in practice.

While Halt noted that thedeclared aim of the changes

was to make the labour mar-

ket more flexible and to re-duce costs for employers so asto stimulate employment, hesees some contradictions intheamendment.

It seems questionable,however, as at the same timethese cost reductions are par-tially offset by increasing theholiday entitlement for

younger employees and tight-ening the minimum wagerequirements, Haltstated.

Kiina identified the mul-tiple minimum wage levels asa hurdle to business, viewingit as a needless complicationin hiringqualifiedemployees.

In developed EU coun-tries there is only a basic min-

imum wage and everythingelse is defined by the demandand supply in the labour mar-ket, which is better suited todetermine wages than alegislator, Kiina told TheSlovak Spectator.

Oravecas well is critical ofthe six different minimum

wage levels and noted thatending this was one of the 16demands by employers that

were accepted by the govern-ment but that parliament re-fusedto approvethis change.

We do not expect furtherchange to the Labour Code inthis election term, thus theroom for its further improve-ment is minimal, Oravec told

The Slovak Spectator, addingthat other changes are stillpossible through modifica-tions of other labour-relatedlegislation such as workplacesafety andhealth regulations.

Parliamentamendedthe LabourCode onJuly 13. Photo:SITA

4 BUSINESSJuly 25 August 7, 2011


5/12

Zmena

WHY DO police officers al-ways come in pairs? So thatthere is one who can read andone who can write. The oldSlovak joke now needs revi-sion there should also be athirdone, whocan checkyouridentity. The recent zmena(switch) which the justicesystemfell victimto is uniqueeven by local standards. Sure,the country remembers at-tempts by criminals to paysomeone to go and serve theirsentence. But a criminal pre-

tending to be his own brotherand going to jail under thefalse name? That seems al-most as surprising as the factthat in theageof fingerprints,DNA testing, and, not to for-

get, photography, a former

convict can spend eightmonths in prison before any-one notices that he is not whohesaysheis.

Slovak police have in re-cent years had their share of

comic moments. Putting ex-plosives on a flight to Dublin,letting a suspected thief es-cape through a hospital toilet

window, or allowing an un-suspecting truck driver to un-knowingly drive a substancecrucial for the production ofheroin across half of Europeand spend Christmas in aTurkish prison as a result:these are all admirable feats.But yes, the force does seemdetermined to push the limitsever higher.

On the positive side, theNews of the World scandal inBritain makes one realise thatthings are not necessarilymuch better abroad. The West

is often used as a role modelfor Slovakia. And, on the whole, rightly so. But thereare rare moments when itseems that one wouldnt gainmuchby switching.

JUDGES: 'Excellent, good orfail' grades to be awarded

Continuedfrompg3

Harabin reacted that heregarded itansks proposalas personal revenge againsthim.

Its no reform, just per-sonal political purges whichresult in prolonging judicialprocedures, Harabin stated,as quoted by the TASR news-wire.

Gradesfor judges

The proposed evaluationsystem for judges is a changethat might have a chance ofpassing in parliament sincemany persons inside and out-side government and the ju-diciary consider the currentsystemto be non-functional.

If judges want an indi-vidual approach to their workand if we want to do away

with the simplification thatan errorof anindividual judgeis an error of all judges thenweneedto give theevaluationsystem real content and makethe results accessible to thepublic, itansk stated asshe setout herproposal.

The Justice Ministry pro-posal would require evalu-ation of a judge every fiveyears, with the judge receiv-ing one of three grades: excel-lent, good, or fail. Receivingthe fail grade would be re-garded as a disciplinary of-fence. If a judge gets failinggrades three times, consecut-ively or otherwise, he or shewould be dismissed.

Judges would receivepoints from three differentevaluators: an evaluationcommittee created by theJudicial Council to evaluatethe judges fluency and dig-

nity in leading court pro-ceedings; by the president ofthe college of judges, who

would evaluate statementsof appellate courts and thejudges compliance with ju-dicial ethics; and the judgescourt president, who wouldprimarily evaluate whetherthere had been unnecessarydelays or procrastination. If ajudge disagreed with the lat-ter persons evaluation, he orshe could turn to the JudicialCouncil to review the accur-acyof theevaluation.

Slovak judges appear to be split over the proposedevaluation system. Whilejudges who are part of theFor Open Justice initiativehave said they agree with the

proposal, the Association ofJudges of Slovakia has statedits opposition.

There are judges amongus who for a long time have

been professionally provingthat they should beexcluded, Judge KatarnaJavorkov from the ForOpen Justice initiative toldtheSme daily.

But Judge Dana Bystri-anska from the Associationof Judges of Slovakia fearsthat the evaluation systemcould be abused by judges'

superiors, adding that judgesarefacing a workoverload.They have more duties

than their human powersare fit to bear, BystrianskatoldSme.

All mouth and no trousers?IF POLITICS were nothing but a source of entertain-ment, and if the only harmits gallery of weirdos couldpotentially do to their audi-ence was to serve up indi-gestible mental junk food,

then some current parlia-mentary deputies might beconsidered perfectly suitedto their role in the politicalreality show.

But parliaments have anincomparably weightierimpact on the audiencethan just deforming theirsense of aesthetics or cul-tural values. This does notstop some people, the polit-ical Narcissuses, from treat-ing the chamber as an outletfor their surges of self-im-portance, all the while ob-serving their own image re-flected in the eyes of their

voters, in different poses,statementsand calls.

The people who votedIgor Matovi and his Ordin-ary People faction into par-liament on the slate of Free-dom and Solidarity (SaS)party may have hoped they

were opening the gates to anew generation of politi-cians who would stand forprincipled, reasonable andfair politics, intended to be-nefit the public and not ex-clusively those who some-how managed to get insidethe politicalmachinery.

Yet anyone followingMatovis brief career as anMP will by now be sufferingserious doubts about him

being the bringer of light to

a system so vulnerable tocronyism and corruption. Itis not that Matovi has not

been talking the anti-cronyism talk. But he hasdone so in a way that hasgradually exhausted hiscredibility.

Without political cred-ibility, seriousness andmost importantly thedemonstration of evidence,some assertion will remainmerely bombastic state-ments seasoned by suspi-cions of populism and self-promotion.

I am accusing of cor-ruption all the politicalparties which gained more

t han 3 per cent in th eelections, Matovi said re-cently, adding that theparties are abusing politicalpositions so that they canreward their cronies, spon-sors and people who have

been distributing flyers forthem, and stating that pro-fessional qualifications arenot important.

To make his story morecredible, Matovi referred to

what he called the districtroads administration office.But this is an institution

which, as theSme dailypoin-tedout,does notin fact exist.He was presumably referringto the roads administration

authority of one of Slovakiaseightregions.S trang ely e nough,

Matovis outburst came afterthe ruling coalition failed to

back his demand, made dur-

ing the debate on the revisionto the Labour Code, to replacethe meal vouchers that em-ployers currently provide toregular employees with cash.In response to the coalitionsrejection, Matovi responded

by suggesting that there had

been massive lobbying bythe firms that currently dis-tribute meal vouchers. Yethe did not turn to the police,thus repeating the patternset during his many previ-ous assertion.

When Matovis name ismentioned, one immedi-ately recalls how his parlia-mentary career began: witha claim made to journaliststhat hehad been offered mil-

lions of euros to destabilisethe fragile ruling coalition.When pressed for more in-formation, he withdrew theclaim, saying it was just ajoke bya friend.

Another incident whichinstantly recalls Matovi isthe educational slap onthe face he received fromformer Slovak NationalParty deputy chairwoman

Anna Belousovov after hereferred to her, in one ofhis newspaper pieces, bythe disrespectful diminut-ive,Ana.

Matovi has adopted theapproach of trying to buyhis place in the media spot-light at any price, usually inthe form of bombasticstatements rather than

weighty legislative propos-

als. Some say that given thefragile nature of the rulingcoalition, Matovi, for

whom it sometimes seemspolitics is a huge gamingroom where he can try outdifferent bids and risks

while hoping for the largestpossible gain with no fear ofthe consequences, in factpossesses more influencethan he is able to handle or deserves.

The price he has to pay,however, is that after a cer-tain time not even his past

voters will take him seri-ously.

It could be that some in-formation he throws into

the public arena has somerealistic basis, but given thestyle he has adopted, few

will bother to check outwhether what he is sayingactually contains any seri-ous revelations.

While partisan nomina-tions at all levels of stateadministration deserve acloser look, and thoughparties have promised to re-duce nominations based onparty affiliation, there arestill armies of nomineesadministering various areasof public life.

But the fact that Matovihas raised the issue meansthat little progress, if any, is

likelyto bemade.Most recently, Matovisaid that his group has facedthreats from one of the rul-ing coalition parties follow-ing his promise to publish alist of political nomineesand that the party in ques-tion says it would supportmass lawsuits by nomineesagainst Ordinary People.Matovi claims that politic-al nominations representcorrupt behaviour. But whatif most peoples response isonly to say: Who said this?Matovi? Oh well

5July25 August7, 2011OPINION / NEWS

QUOTEOFTHEWEEK:Nobody doubtswhatOrdinaryPeopledid withordinary

people.They wipedtheirbehindswith them.

SmerleaderRobert Ficocommentson theOrdinaryPeople factionsconduct in theLabourCodevote.

SLOVAKWORDOFTHEWEEK

EDITORIAL

BYBEATABALOGOVSpectatorstaff

BYLUKFILASpecial to the Spectator

JusticeMinisterLuciaitansk Photo:Sme - T.Benedikovi

The Slovak Spectator i s an independent newspaper publi shed every Monday by The Rock, s .r .o.Subscrptions: Inquiries should be made to The Slovak Spectatorsbusiness office at (+421-2) 59 233 300.Printing: Petit Press a.s. Dstributon: Interpress Slovakia s.r.o., Mediaprint-kapa s.r.o., Slovensk pota a.s.Mail Distribution: ABOPRESS. EV 544/08. 2010 The Rock, s.r.o. All rights reserved. Any reproductionin whole or in part without permission is prohibited by law. The authors of articles published in this issue,represented by the publisher, reserve the right to give their approval for reproducing and public transmission

of articles marked The Slovak Spectator, as well as for the public circulation of reproductions of these articles,in compliance with the 33rd article and 1st paragraph of the Copyright Law. Media monitoring is providedby Newton, IT, SMA and Slovakia Online with the approval of the publisher. Advertising material contained herein

is the responsibility of the advertiser and is not a written or implied sponsorship, endorsement or investigation of suchcommercial enterprises or ventures by The Slovak Spectatoror The Rock s.r.o. ISSN1335-9843.Address: The Rock, s.r.o., Lazaretsk 12, 811 08 Bratislava. IO: 313 86 237.

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6/12

Scholarships to study in India

Indianuniversitiesand educational institutionsarerecognisedthe world overas seatsof learning.Forinformationaboutopportunities forSlovakstudentstogeta scholarshipin India,contactthe embassy orgo to:

- UniversityGrantCommission,www.ugc.ac.in- Associationof Indian Universities,www.aiuweb.org- ICCR,www.iccrindia.net

Source:Embassyof India

India in Slovakia

IndiaClub (India klub), Mlynroviova24, BratislavaSlovak IndiaFriendship Society (SpolonosIndickoslovenskho priatestva), Povask 49,Trenn

www.slovindia.greenheart.sk

Indian restaurantsAshoka, ivnostensk 2, BratislavaBakchus Vinre (traditionalSlovakcuisinecomplementedwith Indian meals), Hlbok cesta5,Bratislava, www.bakchus-vinaren.skDeliciousIndia,Aupark, Bratislava PetralkaShopping Palace, BratislavaZlatPieskyGaneshUtsav,Vysok 2A, Bratislava, www.ganesh.skGvinda, Obchodn30, Bratislava, Pukinova8, KoiceHlavn 70,Preov,www.govinda.sk

Krishna, BotelMarina, Nbreiearm. gen.L. Svobodu,Bratislava, www.indickarestauracia.sk

Sale ofIndian foodNamaste India, Domtechniky,kulttyho1, Bratislava

www.popy.sk

AyurGaneshMedicalCentre AyurvedicMedicalCentreAyur Ganeshin Bratislava isthe firstcentre ofitskindin Slovakia,www.ayurganesh.sk

CompiledbySpectatorstaff

Indian institution in Slovakia

Embassy of IndiaAmbassador: RajivaMisrawww.indianembassy.sk

India: General facts

Political system: parliamentary democracyCapital: NewDelhiTotalarea: 3,287,263 square kilometresPopulation: 1.189 billionPrincipal languages: Hindi, EnglishCurrency: Indian rupee

Source:www.cia.gov/library

Making growth inclusive

THE CHALLENGE for any fast-growing economy is to makeits growth more inclusive sothat the disparities and gapsbetween regions, and betweenthe rural and urban parts ofcountries, which growth oftenbrings with it, can be bridged.So believes Rajiva Misra,

Indias ambassador toSlovakia.Misra, who previously servedin Croatiaas therepresentativeof his country of over a billionpeople and hundreds of lan-guages and dialects, says thatSlovakia has a distinct charac-ter, like that of an individual,and for him the descriptionlittle bigcountryis veryapt.

The Slovak Spectator spokewith Misra about Indias eco-nomic growth and the chal-lenges it brings, about regionaldisparities, the potential forcooperation in the energy sec-tor, and about the phenomen-on of outsourcing, which con-tinues to fascinatepeople.

The Slovak Spectator (TSS):Economic growth in Indiahas been averaging between7 and 9 percent over the lastfive years, a pace of devel-opment which puts Indiaamong those countries withthe fastest growth. What hasbeen fuelling this growth

and what challenges does itposefor yourcountry?

Rajiva Misra (RM): I thinknow we seem to be heading to-wards somewhere around 8.2

percent average growth for theyears 2007-11, while we tar-

geted 9 percent in our five-yearplan. This marks a little slip-

page, but one could have notforeseen the global economiccrisis, from which we did notcome out completely un-scathed. But yes, our economyhas been doing pretty well. Weattribute this growth to a num-

ber of things: in the early 1990swe carried out a series of fun-damental economic reforms

which have made the economymuchfreerand haveintegratedus into the global economy. We

wereable tofree theentrepren-eurial drive of Indian busi-nesses, which had been held

back by the previous model of

development, the so-calledmixed economy. It was clearlya fundamental move from

which everything elseflowed. As for Indias advantages,

we have a large pool of college-educated, English-speakingpeople as well as a large num-

ber of students graduatingfrom science-oriented fac-ulties, which works to our be-nefit. We also have a consider-ablenumber of people graduat-ing from managerial discip-lines, accounting and informa-tion technologies.

The focus on informationtechnologies, which certainly

is one of our major strengths,has helped us to link with theglobal economy. Nevertheless,the economic momentum has

become broader than just theITsector andit hasnow spreadtoothersectorsaswell.

TSS: Tuning the educationsystem to meet the demandsof business is a challengethat Slovakia hasbeen facingaswell.

RM: In India, the availab-ility of human resources to fittheneedsof business wasveryhelpful and it also pushed the

education system to expandfurther. But now, due to ourhigh growth rate, we are be-ginning to run into a scarcityof human resources with theright skills and the right edu-cation. We need to expandhigher education and second-ary education even further.

So one of the challenges isto expand the base from

which qualified human re-sources come.

But the high growth ratehas also brought deeper dis-parities, disparities betweendifferent sectors, betweenrural and urban India, differ-

ent regions, which creates achallenge that needs to be ad-dressed. A major challenge forus now is to make growthmore inclusive.

TSS: Regional disparities areamong Slovakias problemsand this small centralEuropean country has beenasking the same question:how to make growth moreinclusive?

RM: I think the approachis twofold: one is when the

weakest regions or groups getdirect help from the govern-ment. In the past few years, a

very successful employmentgeneration programme in therural areas, the MahatmaGandhi Rural EmploymentGuarantee Scheme providingfor minimum guaranteedemployment to one memberof each family below thepoverty line, has been ap-plied. People are paid for

working on rural infrastruc-ture: they create water facilit-ies, digging wells, or they

work on rural roads. Thus thestate in some ways addressesrural employment and ruralpoverty while creating rural

infrastructure.The second approach iswhen the government directsstate funding into higher-pri-ority sectors such as educa-tion or health. Overthe longerterm, growth will become

broader only if the benefits ofeducation and health spreadto everyone. This is what wehave been trying to do overthe past few years, while amuch higher percentage ofgovernmental resources have

been devoted to education,health andsocial issues.

SeeRMpg 11

BYBEATABALOGOVSpectator staff

IndianAmbassadorRajivaMisra Photo:Jana Liptkov

Enjoying India with all ones senses

QUITE different but still with some es-sential similarities: the cultures andtraditions of India and Slovakia revealsome common points and several in-teresting facets that are attractive topeople of both countries. Traditionalgenres that attract Slovak audiencesare Indian classical and folk dances,classical-folk and pop music andmovies, especially the renowned Bol-lywood-style production. But other

aspects are popular as well: traditionalyoga and Ayurveda and, of course, In-dian cuisine, well-appreciated bymanySlovaks.

Several Indian dance events havebeen offeredin Slovakia in recent years

such as a performance by the Mohini-attam Dance Troupe led by DeeptiOmchery Bhalla in Bratislava and

Bansk Bystrica, a visit by the KathakDance Troupe led by Vaswati Misra inBratislava and ilina, the KuchipudiDance Troupe led by Yamini Reddy inBratislava, and most recently a con-temporary dance troupe led by Priy-adarshini Shome performing in Bratis-lavain February.

Folk dances from the Indian statesof Punjab, Rajasthan and Orissa werealso recently organised, the IndianEmbassy in Slovakia told The SlovakSpectator, and an Indian classical Ku-chipudi dance performance is plannedfor autumn 2011. In Koice, the Gaur-anga Festival 2011 was held on June 16at the citys Lower Gate, offering clas-

sical Bharata Natyam Indian dancedemonstrations, Kirtan and Bhajantraditional songs and mantras, Indianliteratureand traditionalcuisine.

SeeMULTIpg10

Yamini Reddy Photo:J. Liptkov

BYZUZANAVILIKOVSKSpectatorstaff

6

BENELUX

Next issue:BUSINESS FOCUS

INDIA

July 25 August 7, 2011

Slovakiaseeks to boostits exportsto India

Indian and Slovak educationalinstitutions partner up

TheTajMahal inAgra,India. Photo:Beata Balogov


7/12

Aptech Europepartnerswith AV

APTECHEurope,the com-puter educationcentrethat

Aptech Limited of India

launchedin Bratislava,clincheda partnership withAkadmiaVzdelvania(AV),thelargestand theoldestlifelong learningorganisa-tionin Slovakia in March,

Aptech Europewrote on itswebsite.By doingsoAkadmiaVzdelvaniahasextendedits training pro-grammes byadding a two-

yearACCP(AptechCertifiedComputerProfessional)course. ACCPs graduatescancontinuetheir studies at CityUniversityof Seattlescam-pusin Bratislavaand obtaina bachelor'sdegree.

Partneringwith AV isanother stepby Aptech

Europe to increasethenumber of qualifiedITworkers in Slovakia.

OwenFernandes,dir-ectorof Aptech Europe, wel-comedthe partnership as a

wayto offertop educationandincreasethe competit-iveness ofpeople inthe la-

bourmarket,both in Bratis-lava andin otherpartsofthecountry,as Akadmia

Vzdelvania operates36educationalcentres acrossSlovakia.

Ourcompany hasjusttheright programmeto

bridgethe gapbetweenthepracticalneedsof theITsegment andwhat academiaoffers,said TomBok,commercialdirector of

AptechEurope.StudyatAptech isan entrystepforfurtheruniversity educa-tion,either inthe form ofdailyor distanceeducationaround theworld.

Inadditionto itscentre

in Bratislava,AptechEuropealsoopeneda second ICTcentre in Koicethis April.


frompress reports

More Slovak exports to India sought

SLOVAKIAregistereda neg-ativetradebalanceof 89million withIndia lastyear.

While imports fromIndia toSlovakiaamountedto160.83 million,Slovakiasexports to Indiatotalled71.76 million.

Slovakiahas a highlynegativebalancein foreigntradewith Indiawhichwe

wantto change,the SlovakMinistryof Economy statedinmid April,as quotedby theTASRnewswire. This is whyitis importantto focusespe-cially on energy,mechanicalengineeringand thecar in-dustry, where Slovakia hasarealchanceto reducethenegative balance.

Improvement ofthenegative trade balanceaswellas enhancement of

tradeand investmentbetween Slovakiaand Indiawereaims ofnegotiationsSlovak Economy MinisterJuraj Mikov heldduringhismeetingswith representat-ivesof the Indian govern-mentand businesses.

Mikov reportedthat In-diasees roomfor cooperationin buildingsmall hydroelec-

tricpowerstationssince In-diahas struggledwithashortageof electricity gener-ating capacity.

Indiais Slovakiasfourthmostimportanttradingpartner in Asia.Annual eco-nomicgrowthin Indiahas

been runningat between7and9 percent over thelastfiveyears,making thecoun-tryoneof thefastestgrowingeconomiesin theworld.

Hopes for Indian car plants dashed

PLANSforthe arrival ofa new

Indiancarmanufacturingplantin Slovakiahaveappar-ently fallen through,theHospodrskeNovinydailywrote in lateMay.DanielaPirelov,spokespersonfortheMinistry of Economy,toldthedaily thattheministryhasreceivedno officialapplica-tion forsupportof thein-vestment, nordo theyhaveanyinformationabout anyfurtherplans.According to reports,

plans fortheIndiancarmakerweresolidlast spring.The in-vestmenthadbeencon-firmednotonly bythe min-istry,but alsoby theparentcompanyof thecarmaker,

Vectra Group,the dailywrote.Witha plannedin-vestmentof about 60mil-lion, theplantwas projectedtoemployabout1,000Slovaks

inthemanufactureof 20,000

to30,000electric carsannu-allynearBnovcenad Bebra-vou,whereVectraGroup hasa productionunit.Thedaily alsoreported

thatplansbyChinesecar-makerJAC toproducecarsinSlovakiahavefailedas well.According toRbert

Kiina,the executivedirectorof theBusinessAlliance ofSlovakia (PAS): "Producing inSlovakiawasapparently notadvantageousenough giventhehigherproductioncosts."Headded thatsincetheplannedarrivalof thecar-makerwasannouncedjustpriorto theparliamentaryelection,itmight havebeen

partof a pre-electioncam-paignaimedat increasing thepopularityof certainpoliti-cianswhohadclaimedcreditforthe projects.

Prospects for cooperation

INDIA has approximately 200times more inhabitants and isabout 60 times larger thanSlovakia. But in spite of thisGoliath-David ratio, Slovakiacould be an interesting part-nerforIndia. Whileit isone of

the most populous countriesin the world and is the fourthmost important trading part-ner of Slovakia in Asia, bothsides see a lot of as-yet un-tapped opportunities for fur-ther development of econom-ic cooperation.

Although we are a smallcountry, with our strategiclocation inthe heartof Europewe have lot to offer. We couldbecome a gateway to Europefor you, Andrea Gulov, thedeputy chief executive of theSlovak Investment and TradeDevelopment Agency(SARIO), told potential in-vestors in mid April during avisit to India. SARIO repres-

entatives were part of an offi-cial delegation accompanyingSlovak Economy MinisterJuraj Mikov and DefenceMinister ubomr Galko ontheir trip to India. SARIO co-organised investment sem-inarsduring thetripto informpotential Indian investorsabout the business and in-

vestment environment inSlovakia. The scope of poten-tial fields of cooperation is ex-tensive, ranging from the de-fence industry through theenergy sector including nuc-lear energy to car produc-tion,IT, andtourism.

India, like Slovakia, seesroom for the development of

Indo-Slovak economic rela-tions, saying their potentialhas notyet beenrealised.

Slovakia was preoccu-pied in its neighbourhood till2006, but we welcome theSlovak initiative to expand re-lations with India, R.K. Puri,counsellor at the Embassy ofIndia in Bratislava, told TheSlovak Spectator. We believethat there are many areas inwhich we could cooperate formutual benefit.

According to SARIO, someIndian entrepreneurs knowSlovakia well since they aresuccessfully doing businesswith local businesspeople. Itcites Tanax, ArcelorMittal

Slovakia, the daughter com-pany of the steel giant, and K1Engineering India Private asexamples. There are also sev-eral Slovak firms successfullyoperating in India, for ex-

ample Slovak India Trading, which produces shoes andemploysabout 400people.

Even though Slovakia re-

gards India as an interesting business partner, SARIO per-ceives current interest fromthe side of Indian investors inSlovakiaas beingverysmall.

In the past we worked onsome prospective Indian in-

vestments, of which the mostinteresting was the ApolloTy res pr ojec t, S ARI Ospokesman Richard Drer toldThe Slovak Spectator, addingthat the investor opted forHungary, but later abandonedthe whole project. Plans forIndian carmaker Reva to setup shop here have not materi-alised either.

TradewithAsiakeepsrising

Eva Sadovsk, an analystwith Potov Banka, told TheSlovak Spectator that Asiasexports to Slovakia make upalmost one fifth of total im-ports, leaving Slovakias ex-ports to Asian developingmarkets inthe shade:the lat-ter account for only onetwentieth of Slovakias total.However, both figures keepgrowing and the outlook ispromising.

While goods importedfrom Asia to Slovakia make up19 percent of Slovakias im-ports, exports from Slovakiato Asia account for only 5percent, said Sadovsk.

Thus exports from Slovakiaremain in the shadow of im-ports. For example,duringthefirst four months of 2011 im-ports from Asia exceeded ex-ports by almost 2.4 billion.Imports from Asia to Slovakiarose 30 percent year-on-yearduring the first third of the

yearwhileexportsroseby lessthan13 percent.

Sadovsk regards Asia as apromising destination forSlovak products.

We can imagine thatdeveloping Asian countriesmight be very interestingconsumers for Slovakia inthe future and that theshare of Slovakias exports

to these economiesmightbeeven higher, Sadovskcommented.

Slovakia currently has anegative trade balance withIndia and the mutual trade

between both countries is notreaching its full potential,Sadovsk said. During thefirst four months of 2011,

Slovakia exported goods toIndia accounting for 0.1 per-cent ofits totalexports , whileimports from India to Slov-akiamade up 0.4percent.

According to Puri, Indo-Slovak bilateral trade grew byabout 28 percent in 2010 com-pared to 2009, and stood at232million.

There has been a dramat-icgrowth ofalmost60 percentin Indian exports to Slovakia,

which stood at 50 million forthe first three months of 2011as compared to 31.3 millionduring the same period last

year, Puri said. As regardsSlovakias exports, India, be-ing a large and open market,

would welcome items such asmachinery, chemicals, plasticmaterials, transport equip-ment, iron and steel, andpharmaceuticalproducts.

Puri also believes that theSlovak spa and wellness in-dustry could offer businessopportunities and tie-ups

with the Indian Ayurvedahealth sector. There are op-portunities for mutually be-neficialbusinessexchanges insectors such as auto ancillar-ies and pharmaceuticals, es-pecially the supply of Indiangeneric drugs which can helplower the costs of procure-ment of medicines bySlovakias public health sys-

tem. In addition, tradegrowth in traditional sectorssuch as textiles, garments,leather goods, and others isalsofeasible.

However, [as] Slovakia[is] a relatively small market,trade flows alone cannot addsubstance to our economicrelationship, said Puri. Itcan attain higher levels if In-dian companies can be per-suaded to avail themselves ofopportunities for using Slov-akia as a regional hub to sup-ply the larger EU markets andcountries of the Eastern Part-nership.Slovakiacouldalso bea base for Indian informationtechnology (IT) companies to

provide IT services, usingIndo-Slovak know-how andresources.

According to Puri, somepartnerships in the IT sectorare already functioning in

Koice Region. Similar oppor-tunities could alsobe exploredin thepharmaceuticals sector.

When discussing how In-dian investors regard the

Slovak business environment,Puri said that they need to bemade aware of the advantagesresulting from the unique loc-ationof Slovakiain Europe.

Its pro-business and pro-investment environment,political and economic stabil-ity, uniform flat-tax rate, rel-atively low labour costs in theEU, skilled manpower, grow-ing infrastructure, strongmacroeconomic fundament-als, EU intellectual propertyprotection and large scale in-

vestments between 2000 and2005 contribute to make Slov-akia an attractive investmentand business choice, Purisaid. The large amount of

foreign investment attractedby Slovakia between 2002 and2008 has also opened up fur-ther opportunities.

Tourism

Slovakia is an interestingdestination and India wouldlike more and more Indiantourists to travel to Slovakia.But according to Puri, there isa needfor greaterpromotionalefforts and for facilitation of

visas, which require elaboratedocumentation.

The beautiful landscapeof Slovakia, the breathtakingHigh Tatras, the free-flowingDanube with its exotic tourist

spots, historic monuments,spa resorts, and so on, shouldattract all types of tourists,said Puri. Spa tourism andfusion with Indian Ayurvedacould also be an area of in-terest fortourists.

The Embassy of India hasnoticed small groups of Indi-an touristsvisiting Bratislavacity centre, but these gener-ally come as day trippersfromthe neighbouringcity of

Vienna.There i s a need to

broaden the horizon of Indiantourists by projecting famousSlovak tourist attractions, likeits medieval castles and theHigh Tatras, to bridge the

awareness gap, said Puri.Forthis, Slovak tourcompan-ies and operators could be en-couraged to launch a publicitycampaign to educate touristsand develop tour itinerariesaimedat theIndian market.

The embassy has been re-gistering a steady increase intourist traffic from Slovakia toIndia. It issued 1,231 tourist

visas in 2008, increasing to1,356in 2009 and1,572 in2010.

During the first half of2011, we have so far issued 798tourist visas, saidPuri.

The Embassy of India,which would like to see moreSlovaks travelling to India,also provides and distributes

informational material relat-ing to tourism in India. It alsoparticipates in cultural eventsand charity bazaars, which isanother channel to promoteIndiaas a tourist destination.

BY JANALIPTKOVSpectator staff

India's popularityas a travel destinationis rising. Photo:AP/SITA

7BUSINESSFOCUS

Many Indian

investors arestill unaware

of Slovakiasadvantageouslocation in

central Europe

July 25 August 7, 2011

FOCUSshorts


8/12

Tradewith China is growing fast

SLOVAKIAregardsChinaas apromisingdestination forSlovak exports.

During thefirst fourmonths of 2011Slovakia ex-ported goods worthalmost390millionto China, ac-countingfor 2.2percentofSlovakiastotal exports.

Eventhoughthisshare isgrowingeach year,Slovakiasexportsto Chinalag behindimports,Eva Sadovsk,an

analystwith PotovBanka,toldThe Slovak Spectator.BetweenJanuaryand April

Slovakiaimported goods fromChinaworth1.06billion,makingup6 percentofSlovakiastotal imports.

Accordingto Sadovsk,expansionof Slovakia'sex-portsto Chinawill continuein thefuture.


Taiwanese companies in Slovakia

-AUOptronics(Slovakia), Trenn,www.auo.com- DeltaElectronics (Slovakia), Dubnica nadVhom,

www.deltaelectronics.sk- FoxconnSlovakia, Nitra,www.foxconn.comFoxconn purchasedits Nitrafactoryfrom theJapanesefirm Sony in2010


Taiwanese offices and

organisations in Slovakia

Taipei RepresentativeOfficeTheSlovakia-basedrepresentationof theGovernment oftheRepublicof China(Taiwan)Representative: DavidNan-yangLee

www.roc-taiwan.org/sk

Slovak-Taiwanese ChamberofCommerce (establishedin July2011)

Chinese institution in Slovakia

Embassyof thePeoplesRepublicof ChinaAmbassador:Gu Zipingwww.cinskaambasada.sk

China: General facts

Officialname: PeoplesRepublicof China(PRC)Political system: one-partystateCapital:BeijingTotalarea:9,596,961square kilometresPopulation: 1.336billionPrincipal language:ChineseCurrency: renminbi (yuan)

Source:www.cia.gov/library

Taiwan: General facts

Officialname: Republicof China(ROC)Political system: multi-party democracyCapital:TaipeiTotalarea:36,191squarekilometresPopulation: 23 millionLanguages:Mandarin (Chinese)Currency: newTaiwandollar

Source:www.roc-taiwan.org

Attracting Asian funds

THERE IS now a global eco-nomy and neither large nor

small countries can avoid thisreality. Transportation sys-tems of the 21st century haveshortened distances, openingmore and more global b usinessopportunities and offering op-portunities for intensive busi-ness contacts between evendistant countries like China orTaiwan in Asiawith SlovakiainEurope. These growing globalinterrelationships are attestedto by the arrival of several ma-jor Taiwanese companies inSlovakia, by the establishmentof a new Slovak-TaiwaneseChamber of Commerce as wellas by plans to build a Chinesebusiness centre in western

Slovakiafor thecountryto gain

betteraccessto Europe.Slovakia is the gateway toEurope for businesspersonsfrom Taiwan and Taiwanserves Slovaks as the gatewayto Asia, saidMP Ivantefanec,the head of the Slovakia-Taiwan Friendship Group inthe Slovak Parliament, as heled a parliamentary delegationto Taiwan in March, as cited bytheSITA newswire.

The intensified businessties between Taiwan and Slov-akia were also marked by thel aunc h of the S lovak-Taiwanese Chamber of Com-merce in Slovakia in mid July.Its founding members includeAU Optronics, Foxconn, Delta

Electronics, Eson, China Air-lines and Eva Air, all Taiwan-based companies, along withthe Taipei Representative Of-fice, the Slovakia-based rep-resentation of the Govern-ment of the Republic of China(Taiwan), the SITA newswire,andthe SlovakUnionfor Smalland Medium-Sized Busi-nesses,thechamber wrote inapressrelease.

Theidea tolauncha cham-ber of commerce emerged atthe beginning of 2011, bywhich time investments byTaiwanese companies in Slov-akia had reached a total of450 million and had createdthousandsof jobsin Slovakia.

The Taipei RepresentativeOffice, led by David Nan-YangLee, has been one of the pro-moters of this idea, whilecommunication with theSlovakia-Taiwan parliament-

ary group led by tefanechelped in the process of form-ingthe chamber.

The main goals of thechamber are to representTaiwanese businesses withinvestments in Slovakia, tohelp develop conditions forthe arrival of new investors,and to interconnect smalland medium-sized busi-nesses in both countries sothat Slovak companies can

better establish themselvesinthe Asian market.

There have been four large

Taiwanese investments inSlovakia todate.As David Nan-Yang Lee told the TA3 TV newschannel on July 13, three ofthese firmsare membersoftheTop30 companiesin Taiwanin2010: Foxconn in Nitra is the

biggest, followed by AUOptronicsin Trennand DeltaElectronics in Dubnica nad

Vhom. As large internationalcompanies with capital, tech-nologies and know-how, Nan-Yang Lee believes that if Slov-akia offers a good investmentenvironment thesecompanies

will extend their investmentsand drawother subcontractorstoSlovakia.

The Slovakia-Taiwan

Friendship Group has operated within Slovakias parliamentfor three election terms andtefanec is serving a fifth yearas chairman of the group. Heexplained to TA3 that he hasactually been substituting forthe executive branch in jointcontacts as Slovakia andTaiwan do nothave anyofficialdiplomatic contacts.

We are trying with ourlawsto create a favourableen-

vironment for new investorsin Slovakia as well as for ourcompanies so that they canmake i nvestments i nTaiwan,tefanectoldTA3.

tefanec stressed thatTaiwanese companies have

picked Slovakia, in manycases, as their first Europeandestinationfor investment.

AU Optronics Slovakia inTrenn is the most recentTaiwanese firm to invest in

Slovakia, with its productionfacility being ceremoniallyopened on June28.

AU Optronics, the third-biggest producer of liquid crys-tal display monitors in the

world, expects to create 1,300direct and2,000 indirectjobs inTrenn, with around 1,500employees to be recruited bytheendof 2011. Around2.4mil-lion LCD modules and LCD TVsets are to be produced at theassembly plant every year, in-cluding all the associated met-al andplasticparts.AU Optron-

icswill invest morethan 191.3million over three years, theTASRnewswirereported.

As AU Optronicss majorEuropean production base, AUOptronics Slovakia is respons-ible for the manufacturing oflarge-sized LCD modules andassembly of TV sets, Lenka

Wangov Klianov from thecompanys corporate commu-nications division told TheSlovak Spectator. Mass pro-duction started in May 2011,

when the first shipment wasdeliveredas well.

Delta Electronics (Slovakia)announced an expansion of itsproduction plant in Dubnicanad Vhom at the beginning of

thisyear.We see expansion oppor-tunities for the factory inSlovakia, Daniel E. Heri, man-aging director of Delta Elec-tronics (Slovakia), told TheSlovak Spectator in explainingthe reason for expanding theplant. But we can only realisethese new projects if we havemore space and new equip-ment available.

Delta Electronics plans tostart construction within thisquarter,with production in thenew building planned forsecond quarterof 2012.

Chinacomingto Senec

The Chinese economy isexpanding rapidly and Slov-akia may b ecome thiscountrysgatewayto therest ofEurope. Slovak media reportedin early July that plans to build

a European Chinese businesscentre near Senec in westernSlovakia are in the works, withthe aim to help Chinese busi-nesses to better penetrateEuropean markets. The plansforesee that by next year hun-dreds of Chinese companiesfrom banks to carmakers could

be clinching various tradedeals at the business centrenear Senec, the HospodrskeNoviny dailywrote.

The centre will be thebiggest in Europe and will cre-

ate space for companies so thatthey can extend their contactsinto the European market,said Vladislav Khabliev, thelegal representative of UMCSlovakia, a TV producer, whichisbehind theproject, asquoted

by thedaily.Khabliev said he had

signed an agreement with An-hui Publishing Group, aChinese financial company, inlate June which could begin todraw companies to Slovakia,noting that the Bank of China,

various manufacturers, ware-houses and Chinese carmakerscouldbe among them.

Hospodrske Noviny wrotethat the projects budget is

100 million and that theChinese chose Senec in Slov-akia because of its location,nearto thebordersof Hungary,

Austria andthe Czech Republicaswell asto Vienna Airport.

The centre is projected tocover 17 hectares and may con-sist of300,000square metresofoffice and exhibition space.The project will be developed

by Ipec Group and construc-tion may begin next year, thedailywrote.

Slovak Economy MinisterMikov said last Septemberthat it is a pity that there arecurrently only a few Chineseinvestors in Slovakia at thistime, with Lenovo being the

best known. The ministry, aswell as the Slovak Investmentand Trade Development

Agency (SARIO), noted thatthere is some interest fromChinese investors but Rbertimoni, SARIOs director,told the SITA newswire thatattracting Chinese invest-mentsis notaneasytask.

S ARIO spo kesper sonRichard Drer, told The SlovakSpectatorthat Chinese compan-ies are currently interested inpursuing large infrastructureprojects, for example highwayconstruction, wastewater puri-fication plants, energy projects,andthelike.

This is not an area in

which SARIO primarilyoperates, Drer said. TheChinese expect thatSARIO canoffer them a specific projectinto which they can investtheirmoney.

AU Optronics openedits plantin Trennin June. Photo:Reuters

8 July25 August7, 2011

Asian firms see

Slovakia as a

gateway toEurope

BY JANALIPTKOVSpectator staff

Delta Electronics (Slovakia), s.r.o.Priemyseln 4600/1

018 41 Dubnica nad Vhom

Tel:+421 (0)42 4661-111

Email: [email protected]

www.deltaelectronics.sk

To provide innovative, clean and energy-efficient solutions for a better tomorrowSP90595/1

BENELUX

Next issue:BUSINESS FOCUS

EASTASIAPlansannounced fora Chinesebusinesscentre nearSenec

Slovak-TaiwaneseChamberofCommerce established


9/12

CON: 'Red flags' fail to ring alarm bellsContinuedfrompg 3

The latter is the most cru-cialcomponentin mostfrauds,KPMGstated,sayingthatabout80 percent of the populationare in the so-called grey zone,

i.e. they would commit a fraudonly whenthe abovethreepre-conditions are fulfilled andthat atbothendsofthe popula-tion spectrum are small per-centages of people who wouldnever commit a fraud or wouldcommitafraudeverytimetheyhave the opportunity. Ration-alisation means that the per-son must be able to justify inhis or her own mind the fraud-ulent behaviour, for examplelabelling theft as borrowing,or by intending to pay stolenmoney back at some point, orusingjob dissatisfactionto jus-tify the belief that somethingmoreisowedtothem.

With regards to motive, it

isnotrestrictedtothedesireforpersonal financial gain, butcan also be prompted by an ef-forttoimprovetheimageofthecompanyintheeyesofaparentcompany or shareholders. Thisis often done to conceal lossesorpoorperformance.

Here Kaeriak pointed outone case of parallel bookkeep-ing that the KPMG team in-vestigated in the CEE region.An investigation revealed thatthe local management hadfalsified theirfinancial recordsfor more than five years. Theyhad parallel bookkeeping, i.e.one with real documents andanother one, completely fab-ricatedandreportedto thepar-

entcompany.

Warningsignored

Martauzov pointed outthatthe KPMG findingssuggestthat fraudis a growingproblemin society, but, paradoxically,defence mechanisms appear tobe gettingweaker.

One of the most significantfindings of the KPMG survey isthe very large increase in casesinvolving the exploitation of

weak internal controls byfraudsters up from 49 percentin2007to74 percentin 2011.Thedifficult economic climate maybe partiallyto blame, accordingto the KPMG survey. Tighter

budgets are forcing some com-panies to cut costs in their con-trol environments. Less robustcontrols,and fewerresourcestomonitor controls, allow forgreater exploitation by fraud-sters.

The survey also found that

red flag warnings, such as anemployee who rarely takes hol-idaysor whoselifestyle appearsexcessive for their income, arecommonly being ignored bycompanies.

Just6 percent offraud casesinthe2011surveyhadinitialredflags that were followed up,compared with 24 percent in2007 a substantial drop. Ineastern Europe the position is alittle more positive, with some11 percent of red flags being ac-ted upon. However, 43 percentofred flagswerenotacteduponin eastern Europe: lower thantheglobalaverageof 56 percent,and comparable with the 2007averageof45percent.

It is surprising that com-panies continue to ignorewarning signs, particularly inlight of the recession, saidMar

Slovak Spectator 1727

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