Deep Economic Disparities Fuel Calls for Sovereignty in Slovakia

THE nationalist fires may never have started burning in Slovakia had it not been for mounting frustration over the dismal economy here.

All during the recent Czechoslovak election campaign, nationalist parties in the Slovak Republic spent more time fuming about the economic differences dividing the Czechs and Slovaks than the ethnic ones.

The politicians obviously struck the right chord, for Slovaks swung in behind them, giving the most votes to nationalist Vladimir Meciar in the June 5 and 6 general elections.

Admittedly, say the nationalists, Slovakia inherited a broken economy from the Communists. But they blame the Czechs in Prague for the nose dive the economy has taken since reform began under the country's finance minister, Vaclav Klaus. A conservative economist and staunch defender of the free market, Mr. Klaus emerged as the clear winner last week among voters in the Czech half of the federation.

"At first we thought that the scenarios for economic reform drawn up in Prague would be equally beneficial to Slovakia," says Michal Kovac, economic adviser to Mr. Meciar in the Movement for Democratic Slovakia. But as time passed, says Mr. Kovac, "we found that the negative impact of [economic] transformation was hitting Slovakia much harder than the Czech lands."

In 1991, gross domestic product in the Slovak Republic dropped by about 30 percent over the previous year. In the Czech Republic, it dropped by about 20 percent.

Slovakia's 12 percent unemployment rate is three times higher than in the Czech lands. As large-scale privatization gets under way, some economists forecast that restructuring will push the Slovak unemployment rate past 20 percent by the end of the year, in comparison to estimates of 8 percent to 10 percent for the Czech lands. Dual economies

The problem with Prague, say the Slovaks, is that it will not recognize that the Slovak economy is radically different from the Czech economy.

"Klaus has not been able to admit the necessary approach to two different economies. He's been stubbornly insisting on implementing one reform," says Ignac Prno, vice minister at the Slovak Ministry of Economy.

Prague, he says, is blind to the fact that Slovakia has been much more severely affected by the breakup of the former Soviet trading bloc than the Czech Republic has, and that because of a different climate, agriculture production is 10 percent more expensive in Slovakia than in the rest of the country.

Unlike the Czech economy, which still has many prewar small and medium-sized businesses which may appeal to foreign investors, Slovakia is stuck with giant industrial complexes. These energy gobbling, highly polluting behemoths were plunked into Slovakia's predominantly agricultural economy by the Communists.

Under central planning, the Slovak factories were created to import raw materials from the Soviet Union and turn them into semi-finished products such as metals, chemicals, and textiles. These products were then sent on to the Czech lands, which turned them into finished products such as refrigerators for export.

Several important nationwide policy decisions made in Prague over the last two years have failed to take these economic differences into account, asserts Meciar adviser Kovac.

For instance, when Finance Minister Klaus was working out a devaluation of the Czechoslovak crown with the International Monetary Fund in October 1990, "he did so without taking my attitude into account," says Kovac, who was Slovakia's finance minister at the time. Reforms favor Czechs

According to Kovac, Klaus and the IMF settled on a 100 percent devaluation to 28 crowns per dollar instead of 24 crowns, the rate Kovac favored.

The greater devaluation worked in the Czech Republic's favor, Kovac argues. Because the Czech lands are more export-oriented, their products became cheaper to foreign buyers. But Slovakia, which has to import raw materials, saw the prices these commodities rise.

Another example of Prague ignoring the Slovak economy, agree Slovaks of all political persuasions here, is President Vaclav Havel's intention to convert quickly Czechoslovakia's heavy weapons industry, which is based in Slovakia.

"Every expert and economist knows that it takes at least five to eight years for conversion...so it is quite unrealistic, providing you want to avoid a severe social impact on people, to deal with this in less than two years, as Havel ... suggested," says Mr. Prno, at the Slovak Ministry of Economy.

Slovakia's heavy weapons industry is a shadow of its former self, having laid off about 100,000 workers from a total of 130,000, according to Prno. Meciar, meanwhile, at his press conference June 7, said he was going to restart the industry.

"It's necessary to make systematic changes. We want to orient ourselves toward the market economy, but we don't want to come back to the 19th century, where Mr. Klaus is pulling us," says Jozef Prokes, chairman of the Slovak National Party, an open advocate of independence and a possible coalition partner of Meciar.

What the Slovaks want, says Prokes, is the freedom to make their decisions about their economy.