West versus East, East versus West, Bratislava versus Slovakia, Slovakia versus Bratislava. I am not talking about sports rivalry, but unfortunately about the whole society rivalry. Rivalry between the capital city – Bratislava lying in the most western part of Slovakia and the rest of the country. We hear this question from everywhere in Slovakia – argues about who lives from whom money.
Bratislava is capital city of Slovak republic and there are some huge differences between it and other regions of country, differences regarding quality of life, GDP, unemployment rates, wages and many more.
For administrative division, Slovakia is subdivided into 8 regions (kraje) since 1996:
Despite the efforts of governments, Slovakia is still unable to remove the significant regional differences. Development is concentrated mainly in and around its capital Bratislava, respectively around major cities and their hinterlands. More about economic and labour indicators after jump.
Bratislava region is the region in which the active employment accounts for only 14 percent, but its regional GDP as well as GDP per capita is about 3 times higher than in other regions. As you can see in chart below the average Slovak GDP per capita is 12 000 EUR, while in Bratislava it is as high as 30 000 EUR and remaining region vary around 10 000 EUR. The situation is worst in region of Prešov where it is as low as 6 900 EUR.
The only sector in which Bratislava is not dominant is agriculture. In other sectors the capital city leads. The sale and maintenance of motor vehicles, according to the Statistical Office of the Slovak Republic contributes to 68 percent. In industry, wholesale and retail trade it contributes to 39 percent and its share of construction is 25 percent.
Position of other regions in the long term changes only very slowly, while the tendency is even greater strengthening of Bratislava.
In the chart below you can see evolution of unemployment rate across Slovakia’s regions. Capital city dominates here again with only 5,4% of unemployment at the end of 2011, while the worst region Banská Bystrica is as high as 20%. Slovakia average at the end of 2011 was 13,6%.
Why is that? Why are differences that huge? One reason might be the global urbanisation phenomenon – the trend is that people all around the Europe move from countryside into big cities and metropolises.
The other reason might be the density of businesses in regions, which is very uneven in Slovakia. As shown in the chart below, the region of Bratislava is home to whole one third (36%, 58 400) of all registered Slovak businesses (164 700). The remaining 64% of businesses is spread across remaining 7 Slovak regions quite evenly – around 9% per region. One can see the huge inequality very easily. It is only natural that unemployment rate of Bratislava is so low when majority of Slovak businesses are focused there. Also many people commute to work in Bratislava from other regions.
Another big reason is the wages inequity. There are huge differences in average net nominal wage between capital Bratislava and other Slovak regions. The chart below shows the average net nominal monthly wage by region at the end of 2011 in euros. The difference is clear – the value in Bratislava is 878 EUR, while for remaining regions it varies between 545 and 639 EUR. So we can say that in Bratislava wages are in average 50% higher than in other Slovak region. That is quite huge difference.
There always will be differences between regions
Regional differences are natural. Economic growth in western Slovakia can be positive for eastern regions, albeit with some time delay.
Decline of available labor and wage growth in the west – mainly in capital city Bratislava means that investors are considering eastern Slovakia for their operations.
Completion of the highway could also help in the future (but it takes so long), it could boost investor interest. Investment in fact are and will always be attracted to cities with highly developed infrastructure. These conditions are perfectly met by Bratislava, which also has a favorable geographical location. We think this is the main reason why Bratislava dominates in both economic and labour indicators.
Although the quantity of foreign investments in Bratislava may slightly decrease in the future because of saturation, the proportion of sophisticated investment may increase. Production of products with higher added value and investment in science and research move Bratislava region further forward. This growth is similar to the growth of most developed countries of the European Union. Regional differences will always exist, we think the goal is that the least developed regions of Slovakia will catch up with the EU average.
All charts and tables created based on data from
SUSR – Statistic office of Slovak Republic – http://portal.statistics.sk and
RegDat of SUSR – Regional Data of Statistic office of Slovak Republic – http://px-web.statistics.sk/PXWebSlovak/
Group: Matej Vician, Veronika Müllerová, Helena Wenzelová, Zsolt Farkas