The first 16 years of the post-1989 period in Slovakia can be described as an era of privatization. A majority of the state-owned economy was transformed into a market-oriented model, where state-owned enterprises (SOEs) remain the only key player in several sectors.
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History of SOEs in Slovakia
Unlike Hungary and Poland, where certain forms of private ownership (especially in agriculture, the service sector, and crafts) were revived during the 1970s and 1980s1, the state and collective organizations held almost 100% control of all legal economic activities in Czechoslovakia before 1989.
After 1989, the Czechoslovak government decided for a “shock” transformation instead of a gradual one, which included rapid privatization across most of its sectors. The majority of SOEs had been privatized in the 1991–1995 period, either by auctions, direct sales, or a voucher system.
Auctions and direct sales of smaller enterprises (hairdressers, pubs) often involved employees, while the big companies were usually sold to persons with strong ties to the government.
The voucher system offered all adult citizens a chance to buy (for a rather symbolic price) one “voucher book” and allocate the vouchers to desired companies (the transactions were cleared in several rounds of auctions), then becoming a shareholder. In almost all cases, 100% of the ownership was transferred. What remained was a handful of big utility companies, rail and bus companies, the mail, and several dozen smaller companies, usually with some specific function (airports, hospitals, testing centers). The majority of new owners were Slovak nationals, with few exceptions.
The second wave of privatization came with two reform governments at the beginning of the millennium. In the 2002–2004 period, part of the stakes in the utilities was sold to foreign investors. The state usually kept 51% of shares, but surrendered managerial control to investors. Privatization of 17 regional bus companies started in the mid-1990s, and was finished a decade later.
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1See: Martin, R. (2013) Constructing Capitalisms: Transforming Business Systems in Central and Eastern Europe, New York: Oxford University Press, p. 75.