BMI's Executive Summary

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Slovakia's underlying defence and security position in 2007 remained strong, as reflected in our ratings. The coalition government under Prime Minister Robert Fico had a comfortable majority, was doing well in the opinion polls and was presiding over a period of strong economic growth. EU and NATO membership underpin Slovakian security; there are no known domestic terrorist organisations. There are of course, some issues of concern. Relations with the ethnic Hungarian community – about 10% of Slovakia's population – remain somewhat tense, and this has led to frostiness in bilateral relations with Hungary. Nationalist sentiment on both sides can shade into chauvinism and even racism – a danger also present in relations with the Roma minorities. Despite the booming economy youth unemployment remains high, a potentially contributing factor to social tensions. BMI takes the view that these dangers will be kept under control not least because of the country's membership of the EU, which imposes a number of obligations in terms of the observation of human rights.

Since entry into NATO, Slovakia has been undertaking a significant force modernisation and reduction programme, which is taking up much of the defence budget. Although progressing, the process is costly, and future alliance commitments may strain the armed forces and their budget. One example is the pressing need to upgrade the military air transport fleet. Slovakia's professionalisation programme is proving successful. The Slovakian army became fully professional in January 2006, after mandatory national service ended in December 2005. The Slovak defence industry has undergone a protracted transition. A downsized industry is in the position to seek out new markets, while further privatisation and co-operation agreements between larger Slovakian firms and multinationals are likely.

Although Slovakia is considerably cushioned and supported in many aspects by NATO and the EU, Prime Minister Fico will have to act carefully to maintain the country's present progress. So far Slovakia has mastered a transition from a centrally planned economy to a modern market economy. Militarily, Slovakia has to modernise to adopt NATO and EU standards of equipment and training, which requires funds that are not always easy to find in the current economic climate.

Chapter 1 - Executive Summary

SWOT Analysis

Slovakia Political SWOT

Slovakia Security SWOT

Slovakia Defence Industry SWOT

Slovakia Economic SWOT

Slovakia Business Environment SWOT

Chapter 2 - Political Overview

Domestic Political Outlook

Smer Seeks To Reassure

Markets May Need More Persuasion

External Political Outlook

Hungarian Ties in the Spotlight

Risks Remain

Convergence: Quantifying Resistance to Reform

Significant Political Implications Still To Come

Chapter 3 - Security Risk Analysis

BMI’s Security Ratings

Risk Ratings

Table: Regional Risk Ratings

Table: State Terrorism Vulnerability Index

Regional Security: Europe

Overview

Internal Terrorism

International Terrorism

Criminal Activities

Slovakia Security Risk Rating

Slovakia Conflict Risk

Slovakia Terrorism Risk

Slovakia Physical Safety Risk

Chapter 4 - Security Overview

Internal Security Situation

Hungarian Slovaks

External Security Situation

Transnational Crime

The Balkans

Hungary

Chapter 5 - Market Structure & Defence Industry

Armed Forces

Regional Armed Forces (including conscripted) 2006

Defence Reform

International Deployments

Table: Foreign Deployment

Co-ordination And Joint Operations

Market Overview

Arms Trade Overview

Imports

Exports

Industry Trends & Developments

Table: Slovakia Defence Key Players

Procurement Trends & Developments

Table: Selected Recent Procurement Contracts

Chapter 6 - Industry Forecast Scenario

Army Enlargements

Table – Army Enlargements

Government Expenditure on Defence Industry

Table – Government Expenditure On Defence Industry

Chapter 7 - Macroeconomic Forecast

Table: Growth & Output

Chapter 8 - Company Profiles

Konstrukta Defence

ZVS Holding

ZTS Špeciál

Foreign Manufacturers

BAE Systems

Diehl

Chapter 9 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Defence Industry

Sources

Chapter 10 - Appendix A: Risk Ratings Methodology

Conflict Risk Methodology

Terrorism Risk Methodology

Physical Safety Risk Methodology

Overall Risk Rating

State Vulnerability Index

Competitive Landscape for European Defence & Security: Sample of  
Companies Ranked

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Rankings and Competitive Landscapes by production and sales; market share and change on previous year; number of employees, ownership structure and year established. Also includes analysis of company expansion, export and investment strategies.

Network of Defence & Security Sources

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BMI's European Defence & Security Reports are based on an extensive network of multilateral organisations, government departments, automotive industry associations, chambers of commerce and company reports. Information sources include: