The transformation process, which aims to transform centrally planned or command economies into economies based on market mechanisms, has both general and specific features. In the case of Slovakia, a specific feature is the intersection of transformation with the construction of a new state, which makes the whole process more complex. The transformation process, which started in Slovakia in 1990 (before the break-up of Czecho-Slovakia), was based upon ‘shock therapy’ — rapid privatization, a much-hoped-for rapid inflow of foreign capital, the liberalization of prices and foreign trade, and restrictive monetary, budgetary and wage policies with the aim of blocking inflationary pressures and the closure of inefficient enterprises. ‘Shock therapy’ has been continued in both of the successor states after the breakup of Czecho-Slovakia. After nearly five years of transformation we are in a position to begin to assess its impacts. I have divided this period into two sub-periods: 1990–92 and 1993 onwards, after Slovak independence.