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As is often the case following divorce, the two new states emerging from Czechoslovakia's dissolution are actively, even aggressively, searching for new partners. Both republics, freed three years ago from the constraints of a communist command economy and now liberated from their troubled union, are looking to foreign investors to provide the necessary capital to finance their programme of reform and renewal.
The Czech Republic optimistically hopes to attract US$10 billion in foreign investment over the next five years. For Slovakia, expectations are more modest. Of the nearly US$2 billion invested from abroad in Czech and Slovak enterprises since 1990, less than 10% has found its way to Slovakia (home to a third of the former federation's population) and only a handful of deals there have involved substantial amounts of capital. More has been invested in Prague than in the entire Slovak republic.
Contrary to some reports, Slovakia appears committed to redressing this imbalance. To do so, the eastern republic, which has long lived in the shadow of the more prosperous Czech Republic and Prague in particular, will clearly need to create a strong, positive image abroad.
Following the June 1992 federal elections, economic and political forecasts for Slovakia were grim. It was widely believed that following independence, the republic's leaders would slow down or bring to a halt many of the radical reforms implemented by their counterparts in Prague. Such a move would cushion Slovak workers and industries from the new and hostile forces of the market economy. Foreign investors' fears of a return to failed central planning were fuelled by reports that Prime Minister Vladimir Meciar's initial cabinet was stacked with former communists. Uncertainties over politics and the economies of both republics caused many interested foreign investors to sit on the sidelines and wait out the storm.
Eight months later, the peaceful separation has been successfully implemented. As the dust settles, it is clear that many initial fears about Slovakia's course were unfounded. Slovak leaders seem intent on proceeding slowly, but they are nevertheless committed to reform. The two republics have vastly different economies and Slovakia's is undeniably the weaker of the two in most areas. Different industries, Slovaks say, need to be revamped and privatized in different ways. Leaders in Slovakia...