2019 OECD ECONOMIC SURVEY OF THE SLOVAK REPUBLIC

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1 219 OECD ECONOMIC SURVEY OF THE SLOVAK REPUBLIC Towards an innovative and inclusive society Bratislava, 5 th

2 The economy is flourishing 2

3 Growth has been robust GDP index, volume SVK CZE HUN POL OECD Source: OECD (218), OECD Economic Outlook: Statistics and Projections (database). 3

4 Public debt is low and stable Gross public debt, % of GDP Slovak Republic, Maastricht definition OECD Source: OECD (218), OECD Economic Outlook: Statistics and Projections (database). 4

5 The labour market is strong The unemployment is at historic lows Unemployment rate (%) Source: OECD (218), OECD Economic Outlook: Statistics and Projections (database). 5

6 Capacity constraints are beginning to bite Labour shortages are already limiting production Share of manufacturing firms pointing to labour shortages as a factor limiting production, (%) Source: Eurostat, Industry Database. 6

7 Diversification and more innovation will help sustain Slovakia s economic success 7

8 The production is narrowly specialised and based on downstream activities The economy is specialized in the car production with very little value added % Domestic value added ratio to gross output SVK FRA HUN ESP CZE ITA POL SVN GBR AUT DEU % Share of car production in gross output FRA GBR ITA AUT ESP POL SVN DEU CZE HUN SVK Source: OECD STAN Database. 8

9 Slovakia s employment looks vulnerable to the likely increase in automation % More than 6% of jobs are at risk of automation Percent of jobs at risk by degree of risk High risk of automation (>7%) Risk of significant change (5-7%) NZL SWE USA GBR NLD CAN BEL IRL EST KOR ISR OECD AUT CZE FRA POL ITA ESP SVN DEU JPN TUR SVK Source:L. Nedelkoska and G. Quintini (218), Automation, skills use and training. 9

10 The Slovak workforce is not sufficiently prepared for the digital transition Proportion of adults having high-level skills year olds % GRC POL SVN IRL ISR KOR SVK EST USA CZE AUT OECD GBR³ DEU CAN BEL³ DNK AUS NOR NZL JPN NLD SWE FIN Source: OECD (217), Education at a Glance 217: OECD Indicators. 1

11 Improving education outcomes should be a priority PISA average of mean scores in science, reading and mathematics 51 5 OECD Slovak Republic Source: OECD (216), PISA 215 Results (Volume I): Excellence and Equity in Education. 11

12 Tertiary education needs to improve so fewer students choose to study abroad Percentage of total tertiary students studying abroad, 216 USA AUS CHL JPN MEX TUR DEN NLD POL ESP GBR OECD BEL CAN ISR KOR NZE CZE FIN FRA DEU HUN ITA PRT SVN SWE AUT GRC CHE IRL LVA NOR EST ISL SVK LUX 74 Source: OECD (218), Education at a glance 218: OECD Indicators. 12

13 Capacity to innovate and adopt new technologies should be strengthened 1 Innovative large firms High R&D spenders, % of all large businesses (25 employees or more) CHL SVK HUN EST POL JPN NZL TUR LVA GBR AUS DNK ESP CZE NOR NLD FIN KOR SWE LUX PRT FRA ITA IRL BEL GRC LTU SVN CHE AUT ISL DEU Source: OECD (217), OECD Science, Technology and Industry Scoreboard

14 Facilitate immigration of skilled workers Immigrants in population Net flows, per 1 inhabitants, OECD average EST CZE HUN SVK Source: OECD International Migration Database. 14

15 Strengthen the quality of public services Low trust in the judicial system and courts Share of "yes" answers to the question: Do you have confidence in judicial system and the courts? % CHL ITA SVN MEX SVK PRT LVA GRC ESP USA TUR HUN POL CZE BEL FRA OECD ISR EST AUS ISL CAN GBR NLD JPN AUT SWE NZL DEU IRL LUX FIN CHE DNK NOR Source: Gallup World Poll (database). 15

16 Recommendation on moving up the global value chain Increase the time spent on general and digital training in vocational education. Strengthen initial and continuing teacher training. Create larger, internationally visible research units and reorient tertiary education funding to foster research at high international standards. Include research collaboration with innovative companies in the assessment of universities and public research institutions. Continue to work with the ongoing Council of Europe project on judicial reform, and implement its suggestions. Accelerate the handling of insolvency procedures. Lower licensing restrictions for legal services, architects and engineers. Continue to simplify work visa and residence procedures for highly skilled workers. 16

17 Making growth inclusive 17

18 The Slovak Republic has one of the continent's largest Roma populations % 12 Estimated number of Roma in the EU FRA EU GRC ESP CZE HUN ROM SVK BLG Note: The shares represent the average of different estimates. Source: Council of Europe, 18

19 Roma face social exclusion in almost every aspect of everyday life Selected indicators of Roma exclusion General population Roma At-risk-of-poverty rate (%) Employment rate, 2-64, (%) NEET rate - neither in work nor in education, aged 16-24, (%) Drop-out rate from education, (%) 7 58 Share of households living without a toilet, bathroom and shower inside the dwelling.6 43 Share of households living in areas affected by crime, violence and vandalism Source: EU (216), Second European Union Minorities and Discrimination Survey, Roma Selected findings, European Union, Agency for Fundamental Rights; B. Gavurová et al. (214), Meranie zdravia a zdravotných rizík vo vybraných rómskych osadách na Slovensku fakty a reflexie, in Nerovnost a chudoba v Európskej únii a na Slovensku, October, Košice. 19

20 Social exclusion is exacerbated by mistrust between Roma and non-roma groups % More than half of the Roma felt discriminated when looking for job Discrimination based on Roma background in the past 5 years (%) Education (self or as parent) At work Housing Other public/ private services Looking for work Note: Out of all Roma respondents at risk of discrimination on grounds of Roma background in at least one of the domains of daily life asked about in the survey in the past 5 years. Source: EU (216), Second European Union Minorities and Discrimination Survey, Roma Selected findings, European Union, Agency for Fundamental Rights. 2

21 Roma can be trapped in a cycle of poverty for generations Probability of ending up in poverty according to parents' economic and ethnic status Probability, % General population General population - 5% of the poorest households Roma from concentrated areas Source: OECD calculation based on J. Rizman (218), "Jablko padá ďaleko od stromu", Institute of Financial Policy, Ministry of Finance of the Slovak Republic, Policy Brief, No

22 Demographic trends underline the importance of Roma integration A. Roma population by age, 215 Men Women B. Non-Roma population by age, 215 Men Women Source: Šprocha, B. (214), Reprodukcia rómskeho obyvateľstva na Slovensku a prognóza jeho populačného vývoja, INFOSTAT Výskumné demografické centrum. 22

23 Social inclusion of Roma will have positive effect on the economy Estimated effect of Roma integration by 26 as a % of GDP Increasing the Roma employment rate and their productivity to the level of the general population % pts of GDP Effect on GDP Effects on fiscal revenues Source: Geva, A., S. Hidas and G. Machlica (218), The benefits of social inclusion of Roma in the Slovak Republic, Technical background paper, forthcoming. 23

24 The education system should become more inclusive Pre-school attendance is low, especially for Roma Share of children age 4-6 (%) who participate in pre-school education Roma General population EU 22 target % Source: OECD Family database; EU (216), Second European Union Minorities and Discrimination Survey, Roma Selected findings, European Union, Agency for Fundamental Rights 24

25 Improving living conditions for Roma is key % 5 4 % of Roma vs Non-Roma living in substandard housing or slums Non-Roma Roma CZE HUN SVK Source: United Nations Development Programme (216), Database on vulnerability of Roma based on UNDP/WB/EC Regional Roma Survey 211 and Pilot survey 211 conducted by the EU Agency for Fundamental Rights (FRA); EU (216), Second European Union Minorities and Discrimination Survey, Roma Selected findings, European Union, Agency for Fundamental Rights. 25

26 Access to health care should be bolstered Deaths per 1 live births Infant mortality is high for Roma SVN FIN JPN ISL NOR CZE EST SWE KOR ESP LUX ITA PRT AUT ISR AUS DEU IRL NLD BEL EU DNK FRA CHE GBR OECD GRC POL HUN LTU SVK, non-roma CAN NZL SVK USA TUR SVK, Roma MEX Source: MoF (218), Spending Review on Groups at Risk of Poverty or Social Exclusion, Expenditure reviews, (forthcoming); OECD Family database. 26

27 Recommendation on enhancing the social integration of Roma Give the office of the Plenipotentiary a bigger role in coordinating national policies and ensuring integrated provision of public services to Roma where they live. Scale up successful EU-funded pilot programmes and ensure sustained financing through the national budget. Continue expanding the provision of high-quality early education. Provide more funding for disadvantaged schools and higher salaries for teachers teaching in disadvantaged schools. Increase the number of teaching assistants speaking Roma, and provide Slovak language support for Roma children. Expand health-care mediator programmes, with more mediators specialising in maternal health information and preventive check-ups for mothers. Provide support to formalisation of Roma property rights, including legal, financial and technical support to municipalities and Roma households. 27

28 For more information Disclaimers: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. 28

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