ZDENKO TREBULA Regional President

Regional government seeks to address imbalances between east and west, relying on a long history of excellence in education and technical know-how

The region of Kosice, in eastern Slovakia, is finally getting the attention it deserves. For years, its engineering and metallurgical legacy was downplayed as obsolete. Scarcely 60 kilometers from the Hungarian border, foreign investors preferred Bratislava for the proximity of its sub-regional connections. Kosice lost many of its gifted engineers to the Slovak capital, five hours away.

Now, the investment flows could reverse. Led by Zdenko Trebula, the regional president, Kosice is focusing its efforts on attracting FDI. Under a regional program, up to 36% of state funds will go to the regions of Kosice and Presov. A highway headed east is already making the playing field more level. On a color-coded map, Trebula points at areas where household income has been growing. As he slides his finger east of Bratislava, the colors fade.

“The motorways and highways are really necessary. If you can’t do it through Slovakia, then connect our highway to the Hungarian network,” says Trebula. For policymakers in the capital, Kosice needs to invest in high-tech clusters. Pavol Paska has vowed to use EU structural funds for 2007-2013 to empower IT industries in Kosice. But the Speaker of the Slovak National Council first wants to refocus FDI on value-added production.

“IT system development, education and training – these are the areas where we intend to tap into the EU funds,” says Paska, who was elected in Kosice. He thinks devolution of decision-making to the regions is the most efficient way to channel funds.

Trebula now holds the key to economic development. So far, he has appointed a team of experts to match investors with local companies. The formula seems to work. Since 2002, the jobless rate in Kosice has dropped from 25% to 12%.

“Kosice has always been rich because of its people. The workforce here is creative and technically skilled. Today we’re working on an overhaul of higher education, together with companies and investors,” he says, pointing out that the region’s technical know-how goes back to the early days of industrialization, when Kosice was an economic hub.

But beyond the flat tax rate and the assembly lines, Trebula thinks Kosice needs to anchor itself in the knowledge-based economy. The region needs more investors like IT-Systems, a subsidiary of Deutsche Telekom. Together with other players in Kosice’s IT-Valley, the German company has created 750 new jobs. Innovation in steel, meanwhile, is courtesy of US Steel, another company with a value-added product line.

“We have a broad-based customer group: construction, packaging and tin plates,” says David Lohr, the president of US Steel Kosice. Privatized in the 1990s, the company is considered a model investor in eastern Slovakia. US Steel grew out of the giant steelworks built in Communist countries after WWII. Today, its product line is entirely focused on western Europe and Turkey. Will the automotive sector become a major buyer? “We have a specialization and carmakers will clearly be a claim for us,” says Lohr.