Why PAS? Eugen Jurzyca, Bratislava, February 2010

Why PAS? situation Corruption High level and increasing Clientelism Etatism Low trust

Why PAS? Clean versus dirty villages Critical mass needed Small group of dedicated managers Snow ball

Why PAS? Universities Ministry of Economy, Finance BEI and Profits

Why PAS? What politicians said The State Secretary of the Ministry of Labor, Social Affairs and Family of the Slovak Republic: “BAS considerably contributed to the Labor Code Revision by means of putting pressure on public opinion as well as through particular suggestions.” The Minister of Labor, Social Affairs and Family of the Slovak Republic: “I appreciate every impulse and idea leading to the reduction of contributions. I believe that it will facilitate the common goal, i.e. a better business environment with a low tax and contribution burden.”

Why PAS? World Bank Out of the original 24 principal comments of BAS 16 have been taken into consideration in the present Labor Code that came into force as of 1 July The Labor Code Revision implemented in 2004 was assessed by the World Bank as “the best reform of labor law legislation”.

Why PAS? Pas in media, on average one quotation daily BEI, WEF, WB, IMD, special surveys

Why PAS?

Economic reforms

Why PAS? Why successful reforms were implemented in 2004, 2005, survey

Why PAS? I. Government reform Measures Weight of reforms by panel Benefit for one year Reforms with costs estimated Author’s costs estimation Reforms of first wave: Border opening, price liberalisation, privatisation10 %500 Privatisation and restructuring banks7 %350 0,15 Increasing transparency (e.g. Freedom of Information Act, public procurement)3 %150 0,03 Allowing foreign investors to participate in Slovak privatisation10 %500 Tax reform (flat tax, unification of VAT rates)21 %1050 0,03 Labour market reform (Labour Code)10 %500 0,01 Pension reform4 %200 0,06 Health care reform2 %100 Others: Increasing reliability abroad, public finance reform, investment incentives, etc.5 %250 Management of the entry to EUROZONE3 %150 Abolishing the marginal payments in health care system, changes in tax system...-1 %-50 EU entry12 %600 World economic boom4 %200 Globalisation impact4 %200 Majority of people in Slovakia is willing to work for low salaries2 %100 Others: Geographic location, decrease of oil prices, weakening of USD, etc..4 %200 Total:100,0%€ 5000 mil.€ 2250 mil. € 0,28 mil.8000%

Why PAS? Investment into business environment is extremely efficient, but difficult to organize