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Business without burdens

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Ing. Martin Kocourek (1966) graduated after studying economics and management at the Czech Technical University in Prague. He was elected (the ODS nominee) as a member of the Federal Assembly in 1992. He was an adviser of Prime Minister Václav Klaus from 1992–1997. During the economic transformation and privatization he was engaged in the statutory bodies of several state and semi-state corporations (Česká Spořitelna, UNIPETROL, etc.). He was a member of the Presidium of the Land Fund of the Czech Republic from 1997–2005. Martin Kocourek became an MP (ODS) and held the office of the Deputy Chairman of the Budget Committee, in the years 1998–2006. He has been the president of the supervisory board of the ČEZ since 2006, and also has business in the field of economic consulting. For a long time, he has been involved in several non-profit organizations, including the Václav Klaus Endowment Fund. Martin Kocourek was appointed the Minister of Industry and Trade in 2010.

The key priority of your department is to strengthen the energy security of the Czech Republic. In this context, what do you think of the emerging common energy policy of the EU, and the EU’s effort to increase renewable resources, and manage the overall consumption of energy within the EU?

Strengthening the energy security of the Czech Republic is one of my main priorities. Energy is a very complex field, and the state’s role in this issue is to ensure the delivery of energy to its citizens and firms, 24 hours a day, 365 days a year. In this context, we need to see that the energy coming from renewable resources is part of a wellbalanced energy mix. The Czech Republic particularly pledged to produce 13 percent of its energy from renewable resources by the year 2020. Yet, weneed to be balanced with renewable resources, especially with regard to stability and control.

One of the energy security priorities of the Czech Republic is to successfully complete the nuclear power station Temelín. What risks do you face in this respect?

The nuclear power station Temelín has to be completed to satisfy the energy needs of the Czech Republic in the mid-term and the long-term. Energy investment needs to be planned about 40 years ahead. The tender for finishing Temelín,however, was announced by the ČEZ. Thus, the role of the state here is indirect, and is conducted by means of the supervisory board. In regards to nuclear power stations, we are looking for an optimal solution for the protection of their operation. Regarding the exclusion of some players from thetender in advance, I don’t think it would be beneficial. The tender will only bring the best offer if it is available to all of the competition.

What do you think the Czech business environment needs most?

I continually speak with businesses and professional associations, with the chief goal of establishing better conditions for entrepreneurship in the Czech Republic. Our businesses in the Czech Republic, and the Czech Republic in general, should be globally competitive. Obviously, any professional association has its own issues, but almost all agree on one thing: they want the state to ensure simple, transparent conditions of entrepreneurship, without redundant bureaucracy. Thus, elimination of the useless bureaucratic burden is one of my main priorities.

Finding new markets could, without a doubt, be one way of solving the problems of Czech business. However, entrepreneurs are calling for a better state policy to promote export. So, what is the state’s role concerning exports?

The Czech economy is very open, and more than two-thirds of our GDP is exports. Under these conditions, the business sphere obviously needs a strong voice to show strength in foreign markets. The Ministry of Industry and Trade actively supports the entry of Czech exports into foreign markets, as well as finding new business and investment opportunities. Obviously, we have cooperated closely with other bodies of the state administration, such as the Ministry of Foreign Affairs. Furthermore, we cooperate with state bodies such as the Czech Trade, the Czech Export Bank, and with the Export Guarantee and Insurance Corporation. On top of that, the Ministry of Industry and Trade has several tools for creating a pro-export policy. For instance, the Czech Republic participates abroad in 25 official fair trade events. This activity has a strong multiplication effect. The fair trade costs make up about 70 million CZK annually, and we do really appreciate that the economic return, with regard to closed contracts of Czech companies, is around 8 billion CZK.

So where are the biggest shortages in the state’s pro-export policy?

I would like to change the pro-export policy so that our tools are in the greatest possible synergy with other tools. I am analyzing some options to make industry, and export promotion, as effective as possible. This might perhaps require some institutional changes as well. In doing so, I want to unify and optimize the trade-economic departments of the Czech foreign branches and offices of Czech Trade and the CzechInvest. Beyond this goal, I am intensively preparing the Export Strategy for 2011-2016, which I will submit to the Government by the end of this year.

The budget proposal for 2011 is counting on the fact that the public finance deficit can not exceed 4.6 percent of the GDP. How does this influence your department? Where are you going to make the biggest cuts?

The state budget does not have its definitive form so far, yet the Ministry of Industry and Trade is going to make the biggest cuts in the area of operational costs, wages and subsidies. This is apart from the science and research expenditures. I see the biggest problem as the lack of means aimed at co-financing the EU structural funds; the budget cuts, with regard to covering damages after mining activities; and the significant decrease of subsidies aimed at the operation of technologicalcentres and centres of strategic services.

In this respect, could those steps toward public finance reform significantly weaken economic growth?

The first phase of public finance stabilization, i.e. the creation of a stringent budget for the year 2011, could cause aweakening of domestic demand, which could constitute a slowdown of the GDP by 0.5 to 0.7 percent in 2011. Nonetheless,if we manage to get the following year’s deficits under control, thanks to the stringent budget for 2011, it would mean a long-term contribution, because trust in the Czech economy would increase as well. Additionally, financing in general would become cheaper, and investment assets would increase. This would subsequently cause an acceleration of economic growth. In other words, if we sacrifice short-term consumer goals for the benefit of long-term stability, we can reach a much higher economic growth rate in the future.

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