Officials repairing trade with Russia
28. 3. 2016 | Source: BusinessInfo.cz
Exports to Russia fell 30 percent in 2015. A reawakened commission is working to reverse the trend.
The Czech-Russian Intergovernmental Commission for Economic, Industrial and Scientific Cooperation, a body that until last week had not met for three years, is once more coming to the assistance of Czech exporters looking to make sales in Russia. A Prague meeting of the commission, led by Czech industry minister Jan Mládek and his Russian counterpart Denis Manturov, and involving dozens of business representatives, dealt with concrete export opportunities.
“The intergovernmental commission has key significance for firms in the former Soviet Union market space. The Austrians, Slovaks and Hungarians have already met with the Russians at this level,” said František Masopust, executive director of the Chamber for Economic Relations with the Commonwealth of Independent States.
Russia is afflicted by a recession and economic sanctions imposed by the West. Demand for foreign goods has fallen because, on the one hand, the Russian government is pursuing the preferment of domestic products, while on the other the rouble has severely depreciated and loans availability for Russian firms has narrowed. Czech exports to Russia last year fell 30 percent year on year to CZK 78bn.
“For the Czech Republic, areas such as energy, mechanical engineering and environmental protection remain attractive in Russia. The Russians have an interest in forming joint enterprises into which Czech firms put their own production technology,” added Masopust. He saw the revival of the work of the commission as a restoration of normal relations.
Czech firms also perceive the commission’s role as important when their business in Russia hits difficulties which can be effectively addressed intergovernmentally. The body’s reactivation was also welcomed by state-owned export credit insurer EGAP.
“We need to discuss some problematic business cases with the Russian side and we hope the commission’s dealings will contribute to resolving them,” said EGAP spokesperson Hana Hikelová. Difficulties in meeting payments are prompting EGAP to restructure around 30 commercial deals.
EGAP last year insured Czech exports to Russia worth CZK 7bn. Insurance fees for firms have grown more expensive because Russia has been shifted into a riskier group of countries. The insurer and Czech enterprises now have to more thoroughly check out Russian purchasers.
Originally published in E15 weekly, economic and business newsmagazine. Author: Jan Stuchlík