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MSV
7.-11.10. 2019

International Engineering Fair

The Czech Republic and Slovakia are partners in export to third countries

 

Not only the cooperation in export promotion but also the economic development of the two countries over the 25 years since the split, were the subject of a conference titled "Made in Czechoslovakia" that was held during the MSV and organized by the MAFRA media group.


In exports especially to non-European markets, Czech and Slovak companies often follow the tradition from the times of the common state and benefit from the good reputation of the "Made in Czechoslovakia" brand. According to the Czech Deputy Foreign Minister Martin Tlapa, Czechoslovakia still has a great sound in the countries of Latin America and should continue to build on it. But what is more important than a common brand, according to the speakers of the conference, is the current cooperation of both countries in promoting export, which works very well. As the General Manager of EGAP Jan Procházka informed the plenum, we realized dozens of successful large joint projects in third markets in cooperation with Slovakia. As an example, he mentioned the delivery of rails to Azerbaijan, specifically for the modernization and reconstruction of 900 km of railway lines from Baku through Tbilisi to the Turkish Kars. The project, worth a total of € 750 million, was implemented in two phases since 2011 and is now fully completed and paid. The general contractor, the Czech company Moravia Steel, participated together with Slovak companies, and thus a part of the project valued at approximately EUR 80 million was secured by the Slovak Eximbanka. "We logically looked to our neighbours and searched for subcontracts with Slovak partners, reducing the risk that we would otherwise carry alone. In addition to reducing the risk, we have also gained a wider choice of subcontractors," explains Jan Procházka the benefits of such a process.

The CEO of Eximbanka Monika Kohútová also spoke about the advantages of cooperating with Czech partners. Large-scale projects are usually concluded in the Czech Republic, due to the size of the Czech market and its more industrial character. Slovak companies are involved in these contracts as subcontractors and such successful projects have taken place, among others, in Russia, Georgia, Cuba or Turkey. State-guaranteed financial support of exports in Slovakia is, unlike in the Czech Republic, concentrated in a single institution, and so Eximbanka SR operates as CEB and EGAP in one and provides financing as well as export insurance. In more than twenty years, it has supported projects in 95 countries worth a total of € 42 billion.

The macroeconomic comparison of the Czech and Slovak Republics was carried out by Michal Skořep, economist of Česká spořitelna (Czech Savings Bank). The Czech Republic came out somewhat better, since it is significantly more industrial, but at the same time less vulnerable to robotization and automation. The Organization for Economic Co-operation and Development (OECD) surveys the proportion of jobs that are in danger of being likely replaced by such machines in the near future. While the share of these positions in the Czech Republic is close to the OECD average, more than 60% of jobs in Slovakia have a minimum of 50% probability of extinction. Moreover, the Slovak economy has a very uneven regional structure, there is a far greater difference between the best and the worst region than in the Czech Republic. From the GDP development point of view, however, Slovakia is catching up quite fast. Last year it was already on 87% of Czech GDP, while in 1997 it was only 64%.

The introduction of the Euro was a hot topic, since it is a fundamental difference between the two economies. The Czech government is not planning to introduce the Euro anytime soon, while some entrepreneurs would welcome it with enthusiasm. "I am very bothered by the fact that the Czech Republic doesn’t have the Euro. Our company is spending a lot of energy to solve this matter, while we could invest it into something else," said Libor Kuchař, Chairman of Kovosvit MAS Board of Directors, at the conference. Analyst Michal Skořepa said that the Slovak economy is more vulnerable since the introduction of the Euro than the Czech economy and in the time of the economic crisis it has paid for the impossibility of weakening the exchange rate. He also warned of a hard hit that would the exchange rate conversion to the euro according to the Slovak model bring. As stated by the Prime Minister Andrej Babiš during the opening of MSV at the Congress of the Czech Confederation of Industry and Trade, in the case of the Czech currency it would correspond to twenty crowns for the Euro.

Datum: 4 Oct 2018 14:00:00

Concurrently with

Transport and Logistics
7.-11.10. 2019


ENVITECH
7.-11.10. 2019

 

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