What Ukraine needs most now? Evidence from Slovakia Reforms
Ivan Mikloš (former Minister of Finance and deputy Prime Minister of the Slovak Republic)
I visited Ukraine for the first time in March, only a few weeks after the tragic and heroic events around Maydan. Since that time I have begun to intensively think about how to help Ukraine with necessary reforms. I spent almost all of my professional life preparing and implementing economic reforms in my country, Slovakia. The main aim was to change my country from backwardness and stagnation into a modern, competitive European state. We enjoyed mixed success, but in general we can say today that Slovakia has produced a successful transition. We are not only in the EU but also in the Eurozone (unlike neighbouring Visegrad countries, Poland, Czech Republic and Hungary). We have recorded the highest cumulative economic growth among all EU countries from the breakdown of the communism until now and we have been one of the world’s most successful economies in that period. At the time of independence in 1993, Slovakia had only 62% of the Czech Republic’s GDP per capita. Just this year, we caught up with our westerly neighbour on this metric. Twenty-five years ago Slovakia produced antiquated Soviet tanks and another heavy military equipment but not one car. Today we are the number one producer of cars in the whole world, per capita. The most important reason for that success is reforms. Let me illustrate this by comparing convergence success of the Visegrad countries from 2004 until 2008. Over those four years, GDP per capita in PPP in comparison with the EU average improved in Hungary by 1%, Czech Republic by 3%, Poland by 5% and Slovakia by 16%. These were the first four years of EU membership for all of these countries, therefore the big difference among their convergence progress has to have had different reasons. This reason is reforms.