Representatives from Compaq Computer Corp’s East European headquarters in Munich are trying to arrange a meeting with the Slovakian government in an attempt to persuade it to ease the currency regulations adopted by the National Bank in February. Under the new rules, local firms importing goods valued at under $30,000 can receive only 15% of the hard currency needed to pay for them in advance, with the remainder allocated only after goods have cleared customs and value-added tax has been paid. In the case of import orders over $30,000, no hard currency can be released until after goods have cleared customs and been in the country for three months. The restrictions were initially adopted as a temporary measure designed to slow down the flight of foreign currency reserves from the country. However, with the economic situation in the country deteriorating seriously, the prospects for the normalisation of trading conditions in the near future do not look promising. The currency convertability restrictions threaten to wipe out the country’s domestic base of small resellers unless suppliers opt to extend credit facilities further, but to date there has been no inidication that suppliers are prepared to take such steps. Compaq area sales manager Bernard Schaffer commented We have some flexibility, but we can’t change the world, adding the government is definitely under pressure, but the rules will hurt everybody in the market and finally they will hurt Slovakia. Western firms which have chosen to supply Slovakia from subsidiaries in Prague are facing the additional burden of near chaos at the Czech-Slovak border, with guards and officials struggling to understand and implement new import regulations in the context of highly ‘dynamic’ bilateral relations. To make matters worse, the Czech-Slovak clearing system has also all but ground to a halt and simple financial transactions between companies in the two the states are currently taking one to two months to complete, according to local businessmen.
