ECONOMIC BALANCE AND PROBLEMS OF THE ENTREPRENEURIAL SPHERE

The paper states at first that the starting period of transformation i s also the period of initial macroeconomic stabilization of the econom y, during which the manifestations of market unbalance existing in a c entrally planned economy are eliminated. The initial macroeconomic sta bilization of the economy (installing the supply - demand balance) was accompanied by a transformation recession (the rise of a distinct unb alance among production capacities, work potential and their utilizati on). The creation of market balance during transformation led towards the origin of other manifestations of overall unbalance. From this poi nt of view the starting stabilization had a partial character. Initial partial stabilization of transforming economies at the same time has no permanent effects. Mainly in external economic relations the unbala nce renews itself, grows and exceeds tolerances which characterize sta ndard operation of market economies. If the initial stabilization (the approach of the economy towards the state of balance) was only a part ial one, and moreover only temporary, it is obvious that initial refor m measures did not create market mechanisms in a form which could prov ide further maintenance of balance on its own. The solution of this pr oblem in the necessary volume was not either ensured by the revival of economic growth. The paper aims to ascertain how was the initial macr oeconomic stabilization in the Slovak Republic (i.e. that reached at t he beginning of transformation process) gradually weakened as a result of chronic unbalances existing in the entrepreneuring sphere. This is analyzed separately in profit making and losing enterprises, using th e data of the table. The fairly high share (consistently over 40%) of losing enterprises in the total number of employees in non-financial e nterprises with 20 and more people signals the great extent of social and economic problems connected with the fact that part of the microsp here could not adapt itself to the situation in a market economy. The relatively high profit rate in profit making enterprises and high shar e (approximately 80%) of this group of enterprises suggests that in th e economy of the Slovak Republic costs adapted themselves to market pr ices so as to use the revenues to provide resources necessary to recov er and to develop new technologies. On the other hand the high rate of negative profit rate in losing enterprises, ''stabilization'' of this indicator on approximately the same level and since the year 1996 the growth of the share of this part of non-financial enterprises (mainly after their share in the total revenues of the business sphere) signa ls that these enterprises are unable to make the profit necessary for development and probably not even for the simple regaining of their pr oduction capacities, and are thus usually unable on their own to overc ome this position. In the branch projection of the results of profit m aking and losing enterprises one discovers than in all branches a cons iderable part of enterprises operate on a profit rate level ensuring n ecessary investments and maintaining competitiveness at home as well a s on the foreign market. This conclusion does not hide the vast, and i n the period of weakening macroeconomic balance even growing, problem of losing enterprises in all branches of the economy. The paper presen ts the information that the problems discovered in the Slovak business sphere appear also in other transitional economies. A separate part o f the paper notes the link between (un)balance in entrepreneuring sphe re and at the macrolevel and finds that losing enterprises negatively influence the total balance by their substandard labour productivity a nd, linked with this, the growing negative production differential (e. g. the growth of the difference between labour productivity in the ex port segment of the Slovak economy and abroad. These losing enterprise s have also a considerable influence on the maintenance of positive in flation differential values, mainly through: 1. Neglecting the obligat ions to pay income tax and to pay fees to insurance funds, thus causin g one of the unbalances in national budget management, or in the budge t of the whole public sector. 2. Wage increases, which in fact copy ti n the years 1995 and 1997 even exceeded) wage increases in the profit making part of the microsphere. 3. Former accepted need to provide for the operation of losing enterprises also by means of granting risk cr edits. This produces pressure to increase bank credit margin and thus to increase the overall interest rate. The unbalance in losing or low profit enterprises leads through its impacts to a relapse of the macro economic sphere and acts towards further weakening of the balance in t he whole microsphere, consequently also in profit making enterprises. Unbalances at macrolevel and microlevel are phenomena to a certain ext ent mutually independent which are nevertheless internally linked one to another. The solution of the problem of badly managed enterprises b ecomes a focal task of the next phase of the transformation process.