Ivana Hlavsova, Ambassador of the Czech Republic to Serbia – Several Czech companies are considering moving their production to Serbia

The Czech Republic is currently facing a major lack of workforce, Ivana Hlavsova, Ambassador of the Czech Republic to Serbia, says in her interview for eKapija and adds that there`s a lot of room for production cooperation between the two countries` companies.

Hlavsova says that Czech business people are very interested in Serbia and that several Czech companies are seriously considering moving a part of their production to Serbia.

We also talked to the ambassador of the Czech Republic about the support the country provides to Serbia on its path to the EU and about how a century of diplomatic relations between the two countries will be marked.

eKapija: The Czech Republic is one of Serbia’s important trade partners. According to you, how developed are our economic relations and is the merchandise trade satisfactory?

– Our economic relations are very good, and our mutual merchandise trade has been systemically growing in the past few years. Last year, exports from the Czech Republic grew by a fifth, whereas the export from Serbia to our country rose by 10%.

It`s also a very good sign that, in addition to the traditional trade, investments are growing as well, especially those from the Czech Republic to Serbia.

Despite that, there is a considerable unutilized potential, so we try to further improve our economic relations and remove potential obstacles with our Serbian partners.

Last December, the mixed intergovernmental committee for mutual economic relations, which deals with these issues, had its tenth session.

eKapija: You have mentioned that the merchandise trade is growing continuously. What are the main exporting assets when it comes to the trade between the two countries?

– Traditionally, the main item, when it comes to exports from the Czech Republic to Serbia, are passenger cars, followed by electrical energy, coal, cables and electronics.

On the other hand, exports from Serbia are dominated by seats for the Czech car industry, electrical energy, plastic pipes and hoses, electric engines and electric switches.

Considering the new Czech investments in Serbia, it will be interesting to follow the development of the structure of export and import in the upcoming years. Although we don`t expect any big changes, it can be assumed that new products will appear on the list.

eKapija: How interested are Czech business people in Serbia and how often do they turn to the embassy for advice as to how to reach the Serbian market?

– Czech business people are very interested in Serbia, as shown by the number of inquiries we get, and it is certainly not surprising that we present Serbia to them as a very promising market, which holds a number of benefits for Czech business people.

This is the biggest Balkan market outside the European Union, which is close to us both geographically and culturally, which has been growing steadily in the past years, offering qualified and inexpensive workforce and, above all, providing free entrance to the important market of Russia and other countries.

However, there are flaws as well. Czech business people most often complain on the weak rule of law, complicated and often contradictory regulations and the excessive length of certain administrative procedures. This, then, is the area in which things can improve the most.

eKapija: In which fields is there the most room for companies from the two countries to establish cooperation?

– I believe that there is room for production cooperation, as the Czech Republic is currently facing a major lack of production workforce and has one of the lowest unemployment rates in Europe. Serbia, on the other hand, has quality workforce.

Several Czech companies are therefore considering moving a part of their production to Serbia, whereas smaller companies are still reluctant to make that step. Cooperation in production could then be an interesting alternative.

eKapija: More and more citizens of Serbia have been leaving for the Czech Republic looking for better jobs lately. In which field does your country lack workforce?

– It is estimated that the Czech labor market lacks 200 thousand workers, especially in the fields requiring lower qualifications.

We lack construction workers and drivers above all, but companies are also looking for workers of other profiles abroad, and Serbia is, logically, one of the destinations where workers are recruited for the Czech labor market.

Geographical proximity, a similar language and culture, as well as positive historical relations, are understandably a strong motivating factor not just for Czech companies, but for Serbian workers looking for a job in our country as well.

eKapija: In 2017, Czechoslovak Group officially acquired the Krusevac-based company 14. oktobar and RC Reinvest Serbia opened the first shopping center in Kraljevo and is planning to make further investments in Serbia. How many Czech companies do currently operate in Serbia?

– Although the embassy does not have precise statistical data, we know of several dozen business entities that operate in Serbia.

However, short-term statistics are not that important anyway. More important is the medium-term trend.

I am very glad that this trend is rather positive and that it has been constantly accelerating in the past years. Positive experiences of certain companies have attracted other interested companies, so there are more and more Czech firms in Serbia.

At the same time, the total number of active Serbian companies in the Czech Republic is considerably lower. However, there’s no doubt that there is a considerable potential, which is nevertheless limited by the more complex legislature and regulations within the single European market.

eKapija: In the past period, there have been frequent Czech-Serbian business forums. How important are those meetings and what are their concrete results?

– Business forums are one of several instruments of economic diplomacy. In today’s digital and online world, we can’t overestimate them, but, on the other hand, I believe that few arrangements can be made without business people talking to each other eye to eye.

These meetings are also an opportunity to give the initial impulse for establishing the cooperation, but it is only through subsequent hard work of both partners that results are produced.

I believe that these meetings do have a place in building economic relations and that they will have it in the future as well.

eKapija: This year, the 100th anniversary of the establishment of diplomatic relations between the Czech Republic and Serbia will be marked. How do you see the current state of our countries’ political relations?

– The mutual relations of our countries are on a very high level. There are no open political issues and the Czech Republic unequivocally supports Serbia’s joining the EU.

From our own experiences, we know how hard the accession process is.

Considering the regional context, the challenges lying ahead of Serbia are even greater. Results made in certain fields are promising, whereas in some others, the tasks are very demanding. They will require intensive efforts and a strong political will, especially regarding chapters 23 and 24.

eKapija: The Czech Republic has been recognized as a country which has made the most use of its accession to the European Union. How important is the Czech experience you’ve mentioned to Serbia and what could we learn from it?

– The Czech Republic truly managed to maximize the benefits, not just regarding the European funds, but also regarding the fact that the single market was available to it, especially in the years immediately following the accession.

We are trying to actively help Serbia, especially through bilateral developmental cooperation, but also though European instruments, such as twinning projects and other means of aid.

eKapija: Serbia and the Czech Republic also have strong cultural and historical bonds. What is the cooperation like in other fields and in what way does your embassy promote the Czech Republic in our country?

– Another proof of the quality of our mutual relations are strong regional connections, where the cooperation covers practically every aspect of the social life. For this reason, perhaps there is no need for special promotion of the Czech Republic in Serbia.

“Czech beer” and “Prague ham” are recognized by almost everyone in Serbia, and the same is true for trademarks such as Skoda or Zetor.

Still, we do try to promote the Czech Republic through cultural events such as concerts or exhibits, and not just in Belgrade either, but in other regions of Serbia as well.

As we have already mentioned, this is a year of more than one anniversary. Not only are we celebrating 100 years from the establishment of diplomatic relations, we are also marking the 100th anniversary of the forming of Czechoslovakia together with the Slovak Republic.

On this occasion, several events will be held, such as the exhibit of Czech glass and crystal and Slovak glass jewelry, to be held in late March at the Museum of Science and Technology in Belgrade, which will be complemented by a practical demonstration of glass production, to be put in charge of glassmaking masters of the Dechem studio.

We are also preparing a specialized exhibit dedicated to this anniversary, as well as concerts of Czech artists.

Milos Vlahovic