ambassador speeches

Speech to the American Chamber of Commerce (AMCHAM)

September 7, 2005

Good Morning – It’s certainly a pleasure to be with you today and share with you some thoughts and concerns about the business environment in the Czech Republic – I want to stress the need this morning for a stronger relationship to be built and nurtured between AmCham and the Cabinet and the Parliament of the Czech Republic.

Governments working closely with business groups build good business climates in their countries –

AmCham continues to gain credibility with Czech Parliamentarians and Cabinet Officials.  The Czech Republic competes daily with other Central and Eastern European countries for business investment and the jobs it brings, and its imperative to continue to improve its business climate if it wants to continue its economic growth –

I am making these remarks 1) as the Honorary AmCham Chairman, 2) as a person who is vitally interested in the Czech Republic having the best possible business environment in order to continue to attract foreign investment and 3) as someone who has built a business and who has also served in Government.

I make these observations and suggestions after serving a year and a half as the U.S. Ambassador to the Czech Republic and as someone who views this country with a great deal of respect and admiration.

There are some good economic trends in the Czech Republic today:  GDP growth in the 4% range, strong exports, interest rates still low, foreign investments are still good, the number of mortgages is climbing, the Prague Bourse is at record levels and the financial credit rating of the Czech Republic is improving.

I’ve tried to be an optimist all my life, but, even with the above good news, I’m concerned about the complacency on the part of some in Government and also some in this audience as it pertains to the need for continued improvement in the business environment in the Czech Republic.

Some parts of this country still have unemployment above 20%, more than 10 times as high as it is here in Prague.  This region of Central Bohemia has attracted most of the big investments over the past decade. Since 1994, over ¼ of new investment projects were located in the region which includes Prague  The Karlovy Vary region, on the other hand, attracted just 1% of the investments.  The ASTA convention meeting in Prague next March (ASTA stands for American Society of Travel Agents) – several thousand coming, is a great opportunity to show off the Czech Republic and encourage the expansion of tourism and I believe business outside of Prague and in the regions.  In fact,   85% of the people in the Czech Republic live outside Prague,  For the Czech Republic to really grow and prosper long term and provide a better quality of life for all of it’s people, a major priority of the central government should be to help the regions develop economically.

Some more good news is that most global investment surveys give very good marks to the investment opportunities in countries in Central and Eastern Europe.  Continuing with the good news, even with the changes and upheavals in the Czech Government (I’m on my third Prime Minister) some important business reforms  have either been passed by the government, such as commercial registry, or are being seriously debated by the Government such as comprehensive bankruptcy reform.  I know that a year ago, some of you in this room were very pessimistic about the very divided Parliament being able to pass any constructive reform measures.  Persistence, good research, effective lobbying for legislation which will be very beneficial to the economic growth of the Czech Republic and optimism, all of these on the part of the AmCham staff and many of you members of AmCham, were responsible for helping make this happen.  Special kudos and thanks to Ivetta Havlova for leading much of this effort.  Ivetta, would you please stand so we can recognize you?

I want to spend a few minutes talking about the best social program any government can implement for it’s citizens.  I’m talking about employment opportunities, jobs, giving it’s citizens the opportunity to earn a decent living for themselves and their families.

I have served with politicians in my state of Alabama who personally take credit for every job that is created in Alabama.

I have said before and I will continue saying, politicians and governments do not create jobs, however, if they are not careful they can chase jobs away to other states or countries.

Entrepreneurs, small business owners, successful companies create jobs.  Politicians and government’s role should be and can be to create the best possible environment for free and open competition in business.

A few things politicians and governments can do:
1.      Deregulate, deregulate, deregulate
2.      Let the marketplace decide winners and losers
3.      Turn the entrepreneur loose – commercial registry reform is a huge step in simplifying the process of starting a business in the Czech Republic.  However, there remains some more work to be done to make the reform as effective as it should be.
4.      Reward the risk-takers by implementing tax policies which allow people to keep more of the money they earn and which encourages investment in plant and equipment which in turn provides more jobs.
5.      Monitor all proposed legislation – is it business friendly or will it have a negative effect on business growth –
6.      Adopt strong ethics laws for public officials and promote a justice system that acts promptly and punishes those who use their public office for their own private gain.  Laws in themselves do not guarantee honesty and integrity, but they will act as a deterrent to those who would use the influence of their office dishonestly.  If we allow this to go unchecked, we lose the confidence and support of our citizens and lose investments and the job opportunities which follow these investments.

To go back to my number one point – Deregulate the economy – Several disturbing things have been done by the Czech Government recently:  Intrusion in the operation of a competitive and successful banking industry, and passing legislation to prohibit the regions from privatizing hospitals – These are not good signals for outside investors.

Let me now speak for a moment about visas for business travel – Encouraging and facilitating business activity between the Czech Republic and the U.S. continues to be a priority of the mine and U.S. Embassy and our Consular section in particular.  Our American Citizen Services, for example, provides notary services for business and personal use in the U.S.  Additionally, the non-immigrant visa section offers several types of visas for differing types of business travel.  Most applicants come in for visas for short term business trips.  There are also special visas available for intra-company transfers, language training, and practical training.  We recognize that visas for business travel are integral to your operations and have put in place measures to ease the process.  For one thing, if you will be sending a group of associates to a meeting or to training, feel free to fax a list of participants and the purpose of their trip in advance of their interviews.  This will speed up the process. Our Consul General would be happy to meet with you at any time to further discuss these visa issues.

I cannot discuss business visas without stating that the U.S. Embassy continues to encourage tourist and school travel to the U.S and continues to do all we can to improve the visa application process for all Czechs.  A working group composed of persons from the Czech Foreign Ministry and our U.S. Consul office meet regularly to discuss ways to improve its transparency to all Czechs applying for visas to the U.S.  An encouraging note is that 90+% of all Czech citizens applying for visas get their visas.

On another matter of interest to many of you, later this month, U.S. and Czech officials will begin formal talks that will lead to an agreement on Social Security Totalization.  This agreement will allow Americans working in the Czech Republic to pay into only one social insurance program and not see their future benefits eroded because of overseas employment.

In addition, our U.S. Embassy is soon going to set up an Overseas Security Advisory Council, OSAC.  This Council is our Government’s way of sharing information on security issues with American businesses, schools, and other organizations with a presence here.  If your company is planning a conference for example, you will be able to consult with our Embassy’s Security officer ahead of time. This officer will soon be informing his counterparts in the business community to a meeting to discuss this -

The political campaigns for the 2006 National Elections have begun and I believe there will be strong competition between the different political parties.  I think this is good for the country.  Competition in politics is as beneficial as it is in business.  It gives the voter choices between party agendas and candidate positions on the issues.  It can become a campaign of the best ideas for the future of the Czech Republic.  If competition of agendas and ideas takes place, I’m very optimistic that the Czech voter will become engaged and voter turnout will be high.  And don’t believe the old wive’s tale that no good legislation will be enacted during a campaign season with all the rhetoric being thrown around. I’ve seen just the opposite happen. Competition can bring out the best.

So keep up the strong efforts to support good business reform legislation with the Parliament.  In between campaign appearances, politicians might surprise us.