14th January 2009 (Právo) CHAIRMAN OF THE BOARD OF THE CHAMBER OF COMMERCE FOR ECONOMIC RELATIONS WITH THE CIS, VÁCLAV PETŘÍČEK:

While previously more than three-quarters of the goods from the Czech Republic went to the East, today these comprise less than four percent of total exports. On the other hand, we export nearly 85 percents of our production to the EU countries. Should enterprises, in this period of burgeoning crisis and of reduction of production, be attempting to revive their trading relationship with the eastern markets?

In the current difficult economic situation it is essential to seek out additional outlets for the long-term allocation of Czech goods, services and capital. And these are, undoubtedly, the eastern markets - Russia, Ukraine, Kazakhstan, China, India, etc. The entire Russian share in the totality of Czech exports currently amounts to less than three percent. And this is not enough. Certainly there is room for increasing exports. The tough competitive environment and progressive market saturation, however, require a more bold and, in particular, a longer-term approach by the Czech companies. Expansion must be based not only on the export of goods, but even more on investment, production cooperation and innovation.

In this respect, the state aid for export sometimes plays an irreplaceable role. How satisfied are you with it?

I am very pleased that the Czech Export Bank, the Export Insurance Company EGAP and the Czech-Moravian Guarantee and Development Bank, in cooperation with the commercial banks, have prepared a series of new products, which are designed to significantly support exports to these specific territories. These mainly concern increased support for small and medium-sized businesses, insurance for intangible exports (e.g. innovation), insurance, development projects and the easier obtaining of guarantees for loans. And here I have mentioned only some of these new products. As a member of the intergovernmental commission for economic cooperation between the Czech Republic and Russia, I have the opportunity to participate in high-level meetings. As a deputy of minister Říman I am also leading working groups for cooperation with some of the Russian regions, such as the city of Moscow and the Moscow and Sverdlovsk regions.

How much room is there for Czech investments east of our borders?

The demand for Czech investments and investors is high, although in the immediate future we can expect a slowdown. Apart from the financial benefits, it should not be overlooked, that the activities of Czech investors, directly or indirectly, have an effect the business environment in a country, even more so in a specific region. It is important that our investors should present an exemplary model.

Are all Czech entrepreneurs prepared?

I could mention a number of successful Czech projects, in reference to - ČEZ, the CKD Group, Alta, Sklostroj, Inekon, Skoda Auto, JS Skoda ... However, the tough competitive environment in these countries obliges us to maintain long-term export capacity not only in the traditionally strong areas of Czech industry, but also to create an environment for the implementation of activities the areas currently in demand. Highly desirable is development of joint technology centres, where our experts will cooperate with their foreign partners. We are still not successful in this aspect. Likewise, I can see a considerable lag in cooperation between the universities. I would consider the pooling of business groups into so-called export alliances as being very useful. This is a normal practice abroad, where it facilitates more effective and better penetration of foreign markets.

Could not be companies be discouraged from investing towards the East by the current dispute between Russia and the Ukraine for the supply of gas?

I certainly do not think that they will be. The current situation is, however, a lesson, which should be taken seriously by the European Union, as well as by Czech entrepreneurs.

Jan Holý