Thirty years of Slovak independence: A roller-coaster country

A view of Bratislava. Photo: Rasto SK / Shutterstock

With Slovak independence nearing its 30th anniversary and amidst unprecedented security challenges in Europe, it is time to take stock. Slovakia is perhaps the most turbulent country in terms of its economic performance as it witnessed three extremely contrasting periods over the past thirty years. Some see Slovakia, once referred to as a “Tatra Tiger”, as a success story. Others, however, see the EU’s 3rd poorest economy as having deep structural issues and an uncertain future.

A vicious circle where a weak national identity, a lack of national interest, a shortage of adequate policies and a lack of tangible outputs have all contributed to foreign policies without palpable results, especially in the field of economic diplomacy, which is perhaps the most important outward-looking agenda that the Slovak foreign policy establishment should prioritise. The country’s most significant foreign policy success has been entering the EU and NATO, both of which now heavily influence Slovak foreign policy. Recently, the most internally consensual foreign policy decision was to help Ukraine, which illustrates the solidarity this nation can offer its neighbours during crises.

The war in Ukraine has shown that despite being one of the poorest countries in the EU, Slovakia is a reliable ally, and provides significant support to its eastern neighbour. Yet Slovakia, according to conventional wisdom, belongs to the most pro-Russian countries in the region, and the Slovak public appears to be one of the most vulnerable to disinformation campaigns that in turn perpetuate that pro-Russian appearance. GLOBSEC’s vulnerability index (which measures the potential for countries to fall prey to “malign” foreign influence) provides some evidence of this. Slovakia scored the worst amongst the three V4 countries studied in the index’s public attitudes dimension. However, in other attributes, Slovakia performs above the average. Its ranking as the third least vulnerable of the eight countries measured shows that the perception of Slovakia as the most pro-Russian country in the region is not entirely accurate.

The support Slovakia has given since Russia’s invasion shows that it is in fact one of Ukraine’s most resolute champions. Alongside Poland, Slovakia is near the top of the leaderboard in terms of aid to Ukraine as a proportion of the donor’s GDP. Poland is in first place, with 45 refugees to every 1000 citizens, while Slovakia is third with 38 refugees to every 1000 citizens (second place belongs to Moldova with 41 refugees to every 1000 citizens).

Foreign and security policy in the wake of the Russo-Ukrainian War

The war in Ukraine is not only showing Slovakia as a good neighbour but it is also exposing a number of divisions on the domestic political scene. These ruptures are particularly apparent where the war has brought Slovakia’s foreign and security policies into conflict. The reactions of Slovak leaders to the war in Ukraine have at times stood in contrast to domestic priorities. Prime Minister Eduard Heger and Economy Minister Richard Sulik have come under public scrutiny for agreeing to the EU embargo on Russian oil, which could have a catastrophic effect on one of the champions of Slovak industry – the oil refiner Slovnaft, whose technology is only suited to processing Russian oil.

The war in Ukraine has sharpened the rift between the current ruling parties and an opposition which is calling for a more restrained approach – similar to that of Hungary. So far, the prime minister’s approach to Russia has been bold and in line with the EU’s stance, however the economic damage of the Russia-EU economic war is being met with increasing resistance in Slovakia.

The ‘emboldened’ right wing is correct in assuming that if Russia wins the war, the security environment will deteriorate, thus dismissing the arguments of the restraint branch that the Russo-Ukraine war is not also ‘our war’. The restraint proponents point to the theory of small states in an anarchic environment where actors’ survival depends on sustaining a good relationship with all relevant players and the ability to balance a wide variety of interests.

However, being part of NATO and EU constrains the hedging, as these organisations are hierarchically organised, despite the democratic nature of the transatlantic institutions. This is particularly the case with military alliances such as NATO, while hedging could be exercised when the coalition was not facing the threat of great power conflict.

These rifts demonstrate the long tradition of ambivalence in Slovak foreign policy largely caused by the definition of national interest being absent both domestically and externally. However, doubts about Slovak identity regarding geopolitics are, for now, largely supressed by the war in Ukraine.

Economy

The economic arena is much clearer: Slovakia is entirely dependent on international trade. While it has the 12th most open economy in the world, Slovakia struggles with a monotonous export structure, with 87 per cent of its exports bound for the EU and the automotive sector accounting for 34 per cent of total exports. Foreign owned companies comprise the top five largest businesses in Slovakia and three out of those are car manufacturers, namely Volkswagen, Kia Slovakia and Peugeot-Citroen Automobiles. There are no wholly-owned Slovak companies with revenues exceeding 1 billion euros, and the majority of critical infrastructure companies, such as Slovnaft and the electricity provider Slovenské Elektrárne (powerplants), are in international ownership structures.

Economic integration with the EU initially proved very beneficial to the Slovak economy, however the country has failed to capitalise on this. The 2000s saw the country profit from an economic boom thanks largely to foreign direct investment and sales of strategic infrastructure. However, the country has not utilised the vast capital inflow to kickstart innovations or to support its own businesses and their innovative exports. SMEs have largely been neglected and are crying out for critical assistance which would bolster in-country development and reduce dependence on foreign investment. Indicative of this is the inaccuracy of the Slovak national branding campaign which revolves around the trite slogan “Good Idea Slovakia”. This would suggest the country is a hub for innovations or good ideas in general. The former is clearly not the case, as Slovakia spends only 0,8 per cent of its GDP on innovation, making the country one of the lowest R&I spenders in the EU; the latter offers very few empirical cases to prove the point.

Despite Slovakia’s former successes which hark back to a time where it was monikered the “Tatra Tiger”, the country has more recently plummeted to being the third poorest in the EU, shadowed by Romania, Croatia and Latvia. In 2012, by contrast, Slovakia generated more GDP per capita than Estonia, Poland, Hungary, or Lithuania and served as a role model for countries with which it now finds itself in unenviable company.

The case for 21st century foreign policy

Thirty years of Slovak Independence have shown us that the “Black hole of Europe” (as Madeline Albright termed Slovakia in 1997) was able to become a Central European Tiger and then fall down to the lowest ranks of the EU again. But all is not lost for Slovakia – on the contrary, young intellectuals still have not fled, the remnants of an excellent education system and a good industrial base still provide the foundations for some sort of hope for the future.

If R&I is well funded and the education system adapted to industry needs, we might witness a Slovak economic renaissance of sorts. However, this road may well prove to be a longer and more arduous one.

Internationally it will take strong economic diplomacy to sell Slovak products in non-traditional markets, but we are already seeing the fruits of these labours with several companies making their imprint; examples include Chirana, Heneken Group, ESET, Sygic, Pixel Federation and Simplicity. Companies such as these generate added value for the economy and bolster the nation’s branding simultaneously.

Slovakia’s plunging export-dependent economy highlights the importance of economic diplomacy and defining the country’s economic interests. These should focus on what the country already has and with the prospects of innovation in medical technologies, IT, heavy industry and hydrogen technologies, all is not lost.

One should dispel the notion of the small state with a constant need to maintain good relations with all relevant powers; Slovakia is a part of an alliance that directly or indirectly competes for power with Russia and China, but there are a whole other two continents to explore, not to mention the other BRICS nations which have been largely neglected up until now.

Slovak power, comparable in many ways to that of Estonia or Finland, can be fostered through innovation and exemplified through economic diplomacy and soft power, as there are no expectations of Slovakia being a formidable hard power force. To the world, Slovakia can present itself as a neighbourly role model, as well as a participant in a text-book non-violent separation from its former partner country – Czechia. This example is particularly relevant to situations such as that facing Russia and Ukraine, as well as the post-Soviet space more generally.

Slovakia has produced a number of fine diplomats over the years, including Miroslav Lajčák, Ján Kubiš and Eduard Kukan, and there is certainly a rich diplomatic tradition to build upon. Yet, without a clear vision of national interests, the country cannot really determine its own foreign policy and it will remain dependent upon following the Brussels or Berlin playbooks. This is not necessarily catastrophic, but it would be infinitely better if Slovakia was the master of its own destiny, by carving and creating its own prosperous future through industry, innovation and productive interlocution with a dwindling state structure.

At 30 years old now, Slovakia can be classified as a grown-up country, although what use is that if the country does not have a clear direction and is struggling with its identity? These issues are of vast importance in this turbulent era of global changes, and will most likely determine the country’s course over the next thirty years.

Jozef Hrabina is Chief Analyst at the Council of Slovak Exporters, where he is responsible for in-house analytical studies and commentaries and provides strategic insights to the economic, political and geopolitical developments in the World. With almost a decade worth of academia focused in international relations, Jozef develops the think-tank section within the CSE.

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independence, Post-communist transition, Slovakia, Visegrad