Czech-Sri Lanka bilateral trade to triple in coming years: Czech Ambassador

The newly-appointed Ambassador of the Czech Republic to Sri Lanka Milan Hovorka sat down with the Daily FT for an exclusive interview, where he spoke of, among other things, improved bilateral trade, relations between the two countries in light of the change in government, Sri Lanka’s reconciliation efforts, tourism, infrastructure development in energy and other sectors. Following are excerpts:

By Himal Kotelawala

Q: There has been a change in government in Sri Lanka and myriad changes in policy that came in its wake. What does this mean for relations between Sri Lanka and the Czech Republic?

A: I believe that it is a unique window of opportunity to take friendly relations between the two countries to a higher level. We have a long history of bilateral partnership which has evolved over time and we believe that the time has now come to benefit from these synergies and mutual sympathies between our two great nations to work on our general interests. Czech businesses have to develop their activities here on the territory of your country and benefit from the fact that so many Czechs visit Sri Lanka and spend a couple of days here, getting acquainted with your country.

We are committed to support Sri Lanka and will engage with it in its genuine efforts to put the country on the path of prosperity, stability and inclusivity. I’ve had a chance to call on your President and other dignitaries. I have constantly been giving words of appreciation for everything the authorities have done over the last couple of months to strengthen democracy, to re-engage with the international community and initiate a genuine process of national reconciliation.

Q: How has your dialogue been with Sri Lanka since taking oaths?

A: We are interested in giving more regularity to different kinds of context. Whether we talk about G2G level, or B2B discussions, and people-to-people.

Q: What are your targets for this year, with regard to bilateral trade?

A: We want to increase our economic presence here. That’s for sure. We want to do it in a way that is beneficial to both countries. We have a very solid basis. Our total trade is worth $ 65 million, out of which 55 million is exports from your country to the Czech Republic. Local businesses are doing extremely well – food and textiles, traditional handicraft, tea, footwear.

But the problem – if it is a problem – it isn’t direct export to the Czech Republic. The idea is to streamline and increase awareness here that the Czech Republic is one of the most open economies in Europe and that we’re and open minded people. That you can benefit a lot through direct business with us.

We would also like to increase our stakes here. We have a relatively precise idea of those sectors: Czech technologies, knowhow and skills of Czech-based companies would perfectly align with your authorities’ intentions or strategic plans of your private companies.

Q: These technologies being…?

A: Energy – be it classical or renewable energy – water. There are a couple of projects being seriously considered. Then there is environment, waste and water management, building new waste disposal sites in your country with Czech expertise. We have companies that have proved their capacity to do things globally.

Q: Is this limited to providing expertise and technical knowhow or can Sri Lanka expect financial assistance too?

A: Sooner or later, it’s about financing and finding the ways and means and enabling us to finance any jointly-shared projects. And we’re perfectly ready to mobilise Czech private banks; and, at the same time, we have two State institutions to promote international cooperation of Czech-based companies: One is the Czech Export Bank, and another Export Guarantee – and insurance companies – and these two institutions are set to provide export financing and insurance on most concessional terms.

Q: All State owned?

A: 100% owned by the State. Five years ago, there was knowledge sharing on hydropower. It’s still there. Being the new ambassador, my intention would be to build on that extremely useful work that has been done until now, and at the same time try and take it to a new level. To transform it into something more specific, in terms of new trade and investment opportunities. So that we, at a certain point in time, can see the results of our jointly shared agenda.

Q: The Czech Republic is well known for its keenness to invest in renewable energy. How is that sector doing currently, back home? 

A: We’re doing extremely well. We have cutting edge technology both in solar and wind power. We have companies that excel themselves in water. Nuclear energy as well. We’re one of those countries we have practical experience from almost all phases of the cycle. We have six nuclear blocks (reactors). Recently we adopted a new energy policy, according to which we’ll be expanding that capacity further. Because we believe in the potential of nuclear energy. In fact, one third of domestic energy comes from nuclear.

Q: Sri Lanka has a long history of hydro power. Do you hope to have a conversation with the Sri Lankan Minister of Power and Energy on this regard?

A: We’re in constant touch, I wanted to call on the Minister, but unfortunately he’s out of town. I’ll be here again, in February for the Independence Day celebrations. It will be an opportunity to call on the Power Minster. We have to get acquainted with your energy policy and see what your country’s energy needs are and how to meet those needs – what are the niches or areas in which we can work together.

Water is definitely one area we’re looking at. Today you can even use waste for energy. Biomass is another area. We have the technology. So let us sit down together, bringing companies here, engage with local partners and see how we can advance it further.

Q: Any plans for utilising solar energy here?

A: I think so. It’s not only about technology. It’s also about appropriate policy framework. This is an area in which we have gained some practical experience. Cooperation isn’t only about investment. It is also about best practices, it’s about experience sharing, about training, about the ways and means in which we as a member of the EU can help your exporters enter a 500 million strong single market.

Though we’re only a 10 million market, we’re the fastest growing economy in Europe. 4.6% in 2015. Quite robust result, isn’t it?

Q: Getting back to bilateral trade, what are your thoughts on Czech exports to Sri Lanka and vice versa?

A: Far from using its full potential. We’re an industrialised country. 30% of our GDP is from industry. We have one of the highest industry:GDP ratios in the world – engineering, manufacturing, passenger cars. We’re interested in knowing more about the local public transport systems. We talk about civil aviation. To reach out to remote areas, increase the mobility of people here through placing of smaller cities on the civil aviation map. This can be done. Today, if you want to establish regular air transport you don’t have to invest too much. 

Today you can build modular airports and mobile airports which don’t necessarily cost too much. Of course you have to take care of security. We can offer a complex package. We have companies that can help the country deal with the problem of lack of infrastructure. We can help them construct those small airports, helipads, etc. We can help upgrade the existing airports, through our control, lighting system that Czech-based companies have.

We’re one of those nations which have preserved the capacity to design and produce small aircraft. Some of those aircraft are already operating in the region. In Bangladesh, Pakistan, we want to have them in India as well. We’re also in touch with local authorities here. Hopefully we’ll be able to have these planes operational here as well. It would require a tremendous effort from both sides.

Q: What plans for improving tourism between the two countries?

A: Thousands of Czechs are coming here, and I’m confident that in the years to come, it’ll increase. The only regret is that we don’t have a direct flight to Sri Lanka. Tour operators offering your country are either too high, or we have to reach Sri Lanka via some other destination, making a stopover in Dubai using some other European airport. Here I see tremendous potential. As ambassador I’m keen to see more local people travelling to the Czech Republic.

Q: There was a student exchange programme between the two countries back in the ’90s. What happened to that?

A: There are young [Sri Lankan] people who would like to study there. We have to be able to work with them. To put in place a credible system that would help us realise their dream. Because you receive almost the same high quality program as in any other university in Europe, but for a substantially lower cost. We have a couple of scholarships we offer as well. We also provide development assistance. In 2016 we will have some programs. We want to be a development partner for Sri Lanka.

Q: The Czech Republic does not have a permanent embassy in Sri Lanka (currently operating out of New Delhi). Will this be addressed soon?

A: Now we’ll be having a new consul here. We’re very serious in our intentions, we want to be credible, we want to be a high-calibre, knowledgeable and respectable person who here who will promote our own interests but at the same time be extremely efficient in helping us to deepen our traditional friendship between our two great nations. We’re just about to complete all necessary procedures. We’re grateful to local authorities for giving concurrence with the name we suggested for their careful consideration.

This is another powerful instrument. The fact that we don’t have an embassy here for the time being has nothing to do with a lack of willingness or interest… definitely we’re interested. There are certain limits, financial constraints, etc. I don’t want to speculate, for the time being we’re opening the honorary consulate. We’d also like to improve our service in New Delhi. We’ll see how we can work together in the years to come.

Q: What are your targets for 2016?

A: Working hypothesis: I believe that we could at least triple our bilateral trade… It will take some time. I believe we’re entering a new stage of our relations. Even if we start working now – we’re not starting from scratch – what is required is to change gears and have something more result oriented. To yield results it’ll take some time. In about three years I believe we may see a substantially higher figure.

And we don’t just mean trade. We also talk about mutual investment. An ambassador’s task is to increase awareness of your investment opportunities here. To bring it closer to the attention of Czech investors. It is also about the possibility of creating joint ventures here. We have to find out those areas in which local companies – be they private or state owned – can work together, such as energy, engineering, manufacturing, environmental technologies, public transport, infrastructure development, defence and security.

Q: The Czech Republic has provided military aid to Sri Lanka in the past. Will there be continued assistance in defence and security?

A: We have provided military aid. It is gratifying to hear words of appreciation.  Now it’s about your role in the region. Sri Lanka is poised as an investment hub in the region. (Sri Lanka used to play that role in the past). When it comes to security, I believe we have the perfect technology that can serve this purpose. This is one of the areas I’ll be pursuing vigorously.

Q: How hopeful are you about the present administration’s foreign policy and Sri Lanka’s relations with the international community going forward?

A: I believe that the EU has applauded all the tremendous efforts [taken by Sri Lanka] over the last couple of days. We stand committed to engage with Sri Lanka. We’re ready to work shoulder to shoulder with local authorities. It’ll require tremendous effort. The EU has been providing assistance in a number of areas helping authorities facilitate this process. [Our willingness to work in different formats]. On the one hand, as the EU, 28 member states to work on a bilateral basis, but at the same time to work with Sri Lanka on those so called global subjects. Whether it’s on global warming, terrorism, multilateral trade rules. It’s a kind of multilayer approach and a willingness to move forward whether it’s bilateral, regional or on a multilateral level.

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