"SMEs’, our strength"
By Samir Mehalla
The vice-president of the Czech Republic Senate recently made a visit in Algeria. The aim was to create a parliamentary commission of friendship between the two countries. What did this visit bring to the relationship between the Czech Republic and Algeria and which are the objectives for the future?
Sir Martin VARVÁ : Thank you for this opportunity to talk about the economic relations between our two countries. I have to say that the economic and commercial field is where we have to work constantly, because it is unceasingly being developed. In fact, there are two areas, the political sector and the economic sector. As political representatives, we point out the need to open a partnership door with the entrepreneurs. This is our intention and the above mentioned visit of the Senate vice-president, came together with a delegation of members of the commission of economy, agriculture and transport. We talked with several Algerian senior officials and in Relizane, we visited an automobile assembly factory of Sovac, the representative of Volkswagen, and of which the Skoda is part. In my opinion, it was a very successful visit. Now, we must to do the follow-up and achieve all this with interested collaborators.
Some time ago, the Algerian Minister of Industry, M. Benmeradi, accompanied by an important delegation, made a visit in the Czech Republic. But there was no follow-up. We see that there is a movement but no actions accomplished behind. Are investors losing interest in Algeria? Is investment in Algeria not attractive? What ambition or environment are Czech investors looking for in Algeria?
In my sincere opinion, it is true that from time to time it is necessary to insert economic relations into political ones. Investors should be encouraged and supported through a ministerial visit. But on the other hand, you have companies that are present and doing business with Algeria, regardless of political visits. During the aforementioned visit, an agreement on economic and industrial cooperation was concluded by creating a legal framework for the joint sessions of the committees. A meeting is planned for this or next year. I want to make a difference between the management of economic relations through political visits and the individual activities of investors or traders.
The Czech Republic is a country that has a good diplomatic level. The Czech Republic points diplomacy as a tool in the service of the economy. What are the axes of this policy that the new Czech president wants to apply in Algeria?
We are an industrialized country. We can share experiences regarding industrial knowledge. Agriculture is an area where we can share a lot of experiences with Algerians too, as for the tourism sector. We are ready to contribute because Algeria is a beautiful country.
But which are the domains where the Czech Republic can be beneficial to Algeria? We know for example that in Algeria, it is the public investment that dominates, while in the Czech Republic it is the private one. So what are the main interests in Algeria for Czech companies?
Almost half of our exports to Algeria are represented by the Skoda cars. Our economic relations are developing mainly in the commerce domain. The investment of Czech companies in Algeria is a little difficult because our companies are not strong enough to make investments in all countries of the world. If you want to invest abroad, we will do it in Germany, Russia, and Poland but not in more distant countries. For the moment, we have an example of a mixed company that makes the assembly of Skoda cars. The parent company is an Algerian-German company and produces the Octavia model. We will add two more models in next years. For now, this is the largest Czech investment in Algeria.
While in the field of defense, there is a solid cooperation between the two countries, the civil one has none or very little. Why? In addition, I have the impression and please correct me, if I am wrong, that since the separation between the Czech Republic and Slovakia, in 1993, these close relations with Algeria are no longer as we knew them before. Why do you think the companies doing business with Algeria directed elsewhere?
Because companies have become private now. The state cannot order a company to settle in Algeria. It is no longer possible. The environment has changed completely. We lost many relationships with the collapse of the socialist regime. And in Algeria, the 90s were a difficult period. All these reasons caused the reorientation of our companies. But in the early 2000s, we began to resume our relations and cooperation in the military field survived all that. And it works very well, without any problem. Even if the Czech companies are private, and sometimes they are being sold to a foreign management, the Czech state can submit ideas, enable relations, propose partnerships, but it cannot dictate the direction and say that we must settle in Algeria or elsewhere. However, the debate today is not about the Europe of 27, especially with Brexit. It is said that Europe makes States lose their sovereignty. There are new horizons opening up, for example, Africa is a continent of the future. So why well-regarded countries like the Czech Republic would not encourage its investors to go out of Europe borders and explore other spaces that can profit a lot more. We clearly see that China is interested, as well as the United States. Unfortunately, small-sized countries but which are well-skilled, like the Czech Republic, are still clinging to Europe although it is decried. I have spent most of my career in the Middle East, and I can say that the Czech state is doing a lot to encourage Czech companies to move in this direction. But when you have foreign companies located in your country, it is difficult to interfere in their strategy.
Is the investment code in Algeria blameworthy, because of its unattractiveness?
No, it is not. You have to know the country first. To be able to play a role abroad, not only at home, you must know this environment. Either you are competent or not. It is true that we are not naturally francophone and this is also a small obstacle. But we do not have so many people who know the area. On the one hand, we need to have people who know Africa, the Middle East, solid countries. On the other hand, particular countries like Algeria must encourage foreign companies to come and invest. And then you have to have really strong companies. And if we are talking about 100% Czech companies, they are small and medium-sized enterprises (SMEs). And the largest companies are in international groups, like car producer Skoda, it's a German group (Volkswagen). This is valid for the entire industrial sector.
At first it was Czech...
It is still Czech. It is made in Czech Republic but method and strategy, if you like, are German.
At the time of Czechoslovakia, there were many Algerian students who lived there. All this community of former Algerian students in Czechoslovakia, cannot make the connection, the link? Today, most of them are engineers and executives in our country. Can they become the ambassadors of the Czech Republic, here in their country, Algeria? Where are they?
Certainly, they exist, but they are part of the past, almost 30 or 40 years ago. There are some executives who were trained in our country and who came back to apply for visas, indeed. But these people should be the connection between the two countries in investment field, and even in culture. The Czech Republic is a very cultural active country. And then there are investors from distant countries who want to invest in Algeria while the Czechs which are only 2 hours and 30 minutes away by plane from Algeria are desired, despite all the historical links and human exchanges between the two countries. Which is the position of Czech Republic? During the 2000s we had the Marshall Plan and companies of all around the world found here a profit and a market. I understand perfectly your idea, but once more the decision to come and invest here in Algeria is an individual company decision and this also depends on some general circumstances. Although I studied in Austria, in the 90s I find myself completely elsewhere. So it depends on the circumstances.
What is the amount of the trade balance between the Czech Republic and Algeria?
In 2017, we exported $ 133 million worth of products to Algeria. It's the same amount as with the Marco, Tunisia and Egypt. In 2014, the amount was $ 352 million, 45% are composed of Skoda cars. I understand that Algeria is trying to diversify its economy to no longer depend on hydrocarbons.
And what does Algeria export to the Czech Republic?
Oil and dates.
And what about the income in armaments?
When it comes to the field of armaments, I do not have the numbers.
No. In recent years, we have not exported weapons to Algeria but spare parts for engines, etc. Now we have cooperation, and it works very well.
Excellency, at the international level, I would like to talk about your presence in Mali. What can you tell us about this?
We have soldiers operating in Mali. They are 41 soldiers and contribute to the fight against terrorism and to stabilize the country and to prevent such a large country from falling into a situation with negative consequences. We try to contribute to it within the framework of the European Union. This is a group of 50 people with headquarters in Bamako. We have some instructors. And there are one or two people working for the UN mission for the stabilization of Mali situation (Minusma). This is a small contribution for the stability in Africa and the Sahelian strip.
I perfectly understand that we must contribute to the fight against international terrorism. However, the Czech Republic still maintains contact with the Syrian regime of Bashar Al Assad. There is not a contradiction between the almost pro-American foreign policy and the pro-Russian policy of Syria?
We have kept our embassy in Syria, and we represent the interests of the United States. Because we believe that diplomacy is not only necessary in times of peace but also in difficult ones. Bashar El Assad is the president of his country.
Why should we leave Syria, just because it is going through difficult times? I am in favor of maintaining our embassies in countries where the situation is difficult.
Yet, you have closed the borders to refugees.
We did not close the borders. It is not possible.
You did not close the borders, you refused to host emigrants.
We did not refuse to welcome them, because according to the Schengen rule you are obliged to keep your borders. And if you do not, you may have a lot of problems. So an emigration that is well managed is not like closing the borders. Immigration has always existed. But you have to have a well-organized immigration.
On the contrary, Germans opened the borders.
Any country that wants to open its borders, takes its own decisions and we will not comment on that. I speak on behalf of the government of my country and I say we are for a well organized immigration but the total closure of borders is not possible. There is no such thing.
Do you have, your Excellency, a message to conclude?
Just a message to entrepreneurs, telling them that we encourage them to do a lot of things. We try to organize and to propose, we open the doors. Maybe you should be a lot more active. You can take the first step but you must have the pursuing. And if there is a sequel, you have to continue. But you cannot take the first step and then do nothing, because after that you will not be taken seriously. If there are people behind you, it is with pleasure, not otherwise.