Economic Analysis of SlovakiaCountry: Slovak RepublicFormation of the Slovak RepublicThe Slovak Republic, or Slovakia, is located in Eastern Europe with a population of 5.4 million and borders the countries of Poland, Austria, Ukraine, and the Czech Republic (World Bank). Initially part of the former Czechoslovak nation, the Slovak Republic has only recently begun to write its own history (Abizadeh, p. 171). In 1989, numerous revolts took place against Eastern European governments under communism, including Czechoslovakia (Slovakia.Org, “20th Century”). Slovaks and Czechs staged massive protests against communism in Czechoslovakia and ended communist rule in November 1989 (Slovakia.Org, “20th Century”). Under the new non-communist system of government, the two republics of Czechoslovakia were established: the Slovak Republic and the Czech Republic (Embassy of the Slovak Republic). In June 1990, with the establishment of federal and republican governments, free elections were held for the first time in the country since 1946 (Slovakia.Org, “20th Century”). The main concern of the new government was the transformation of Czechoslovakia from a state-controlled economy to a market economy (Embassy of the Slovak Republic). Disputes arose between the two republics over the reform process focused on privatization, encouragement of foreign investment, macroeconomic stabilization policy, price liberalization and foreign trade liberalization (Slovakia.Org, “ 20th Century"). The Czech Republic was more economically developed than Slovakia's industrial economy (Slovakia.Org, “20th Century”). The transition to a market economy has left the Slovak Republic facing more serious economic difficulties than the Czech Republic (Sovakia.Org, “20th Century”). For example, the federal government chose to significantly reduce the country's defense industry, leading to a sharp decline in industrial production and a sharp increase in unemployment in Slovakia (Slovakia.Org, “Slovak Economy”). This is because the Slovak economy emerging from the communist era was based on industrial production, particularly weapons and military equipment (Slovakia.Org, “Slovak Economy”). There was a big difference of opinion between Slovaks and Czechs. on the nature and pace of economic reform in Czechoslovakia (Slovakia.Org, “20th Century”). The disagreements delayed the reform process as well as the acceptance of a new constitution (Slovakia.Org, “20th Century”). It became clear that the current form of government could meet the requirements of both republics. As a result, Slovakia declared sovereignty in July 1992, meaning that its laws were given higher priority than those of the federal government (Slovakia.