Rastislav Káčer: Czech-Slovak relations are defined by love and reason

"Relations between Czechs and Slovaks are not burdened by historical injustices and are based on a combination of emotion and pragmatism. We may have leaned a little more towards pragmatism during those thirty years of independence in a turbulent world, but I am convinced that we need each other and that this factor will play an increasingly important role in our relations", says Ambassador of Slovakia to the Czech Republic Rastislav Káčer.

When you took up the post of ambassador to the Czech Republic, you mentioned that you wanted to seek synergies in our interests, since not even the best relationships are sure to last forever. What’s your point of view of Czech-Slovak relations now?

It is becoming increasingly apparent that both countries have now been independent for almost thirty years. In some ways they are each a little different, in others they are close partners with common interests. Both are members of the EU and NATO, but there’s no other country with which Slovakia would have such strong emotional, cultural and trade relations as it does with the Czech Republic. Slovakia has a new government for almost a year, while Czechia is in pre-election period and focusing more intensively on its internal issues. At the same time, our intergovernmental relations have been severely curtailed by the pandemic. Nevertheless, I believe that as covid-19 fades away, social life will gradually get back to normal, and our relations will gain new momentum. I believe we simply need each other, just like close friends.

Trying not to get lost in the covid maze

What’s the current situation in Slovakia like in your view? Which sectors of the economy are most affected by the covid pandemic?

The pandemic had a negative impact on the Slovak economy in the first quarter of 2020, but in Q3 the economy was able to make up for it to some extent. According to the latest forecast of the Slovak Ministry of Finance, our economy fell by 5.8% in 2020. The pandemic has obviously also affected Slovak foreign trade. For the whole of 2020, exports of goods decreased by 6% and total imports fell by 8.2%. As in Czechia, besides automotive, the crisis has most hit the service and tourism sectors, culture and entertainment and also transportation.

Anti-pandemic measures are often announced on a day-to-day basis in Slovakia, and are often ambiguous, which causes big uncertainty. Companies have the biggest problems with liquidity, falling demand, delayed payments from customers and supply chain interruptions.

How is the Slovak government trying to help?

The government tried to respond as soon as possible during the first wave, using measures to support entrepreneurs and employees. During the second wave, it boosted the financial aid by some 50% compared to the first wave: now this support is around € 200 million per month. Entrepreneurs who had to close their premises receive aid in the amount of 80% of their turnover (up from 80% of gross wages), up to a maximum of € 1,100. For the self-employed whose sales dropped year on year, the contribution increased by 1.5 times (the lowest decrease in sales by 20 to 39.99% and the highest decrease in sales by 80% and more). The lowest monthly contribution is € 270 and the highest is € 810. Self-employed with no income or interrupted business activity have seen their contributions increased from € 210 to € 315 per month.

There has also been an increase in the amount set aside for kurzarbeit for employers to encourage them not to lay off their employees. The monthly limit per employee has increased to a maximum of € 1,100, which is derived from the total cost of labour. Citizens who ended up without any income during the pandemic are entitled to SOS subsidies of € 300, with a maximum annual limit of € 1,800.

As many as 75% of SMEs face problems

How is the current uncertainty reflected among Slovak SMEs?

It’s SMEs and craftsmen who are being most impacted by the pandemic. At the same time, as in Czechia, SMEs are a cornerstone of the Slovak economy. They provide employment for almost 75% of the working population and contribute more than 50% to total production and value added.

A survey by Slovak Business Agency showed that 72% of Slovak SMEs felt a significant negative impact on their business as a result of covid-19. Many companies have responded by reducing their working hours or by lay-offs, but unfortunately bankruptcies and liquidations of companies are also taking place.

Every great historical shift such as the covid pandemic surely brings new opportunities. Can this already be observed in Slovak companies?

We’ve already seen that the current crisis is accelerating digitization, e-commerce or pharmaceutical research. It’s also changing people's business and work habits. From a global perspective, it will affect competition between the great powers and test the viability and efficiency of the EU. The pandemic clearly shows that globalization is a reality that must be understood. In this respect, it’s vital to stay ahead of others and not to strive for relocation or try to seek nationalist solutions.

The EU and the Western liberal democracy system - of which we are both part - have proved to be a successful model in the past. However, this does not mean that it will always be this way, particularly in times of revolutionary changes characteristic of today's world. The pandemic and the effects of globalization will test our ability to compete globally.

The pandemic and the effects of globalization will test our ability to compete globally.

I’ve understood how difficult it is to do business

You are an experienced and well-respected diplomat, known in the Czech Republic mainly as an expert on Euro-Atlantic relations. You’ve also worked in private consulting. Which activity suited you best?

That’s hard to say. I'm not your typical career diplomat. I leave and come back after a while. Diplomats, as they move around the world, have a nomadic life in a way. And I am a nomad also in terms of shifting between many different work activities.

Over the past thirty years, I have gone through three different professional stages. In 2008, I left civil service for five years to join an independent international consultancy for public policy and regulatory processes. I also collaborated with a team of young experts led by Róbert Vass on the Globsec NGO project, which focuses on international politics and global change. I see Globsec as probably the most successful project of its kind in Central Europe since 1989. After returning to civil service in 2013, I served as Ambassador to Hungary for five years and then went back to private consulting and Globsec activities for two years. Last summer I was appointed Slovak Ambassador to the Czech Republic.

What did you focus on in your consulting activities?

I am a diplomat both by education and experience. I therefore used my knowledge and experience in the fields of negotiation, regulatory processes, relationship building, information analysis, protocol and intercultural diplomacy. I like to call this “private diplomacy” for clients who do business internationally or globally. Years ago, our typical client was from outside Slovakia, while there are more and more Slovak entrepreneurs, whose companies have grown significantly, and their owners have investment and business ambitions to succeed in demanding Western markets.

Let's promote entrepreneurship and independence

What did you learn from doing business?

I've learned first-hand what it means if no one can guarantee that your paycheck will come next month. I can imagine the stress of a business owner who has doubts about his business model outlook. I know how difficult it is to win and retain a client. I also know how much bureaucracy, complex regulations and mandatory levies entrepreneurs have to struggle with. I understand the mentality of business owners and CEOs, as well as relations between shareholders. As a result, I have utmost respect for small and innovative entrepreneurs.

We should give more support to traditional rural businesses, crafts and small family businesses. Unfortunately, the countryside is often a business dead zone. The state tends to attract strong investors and large companies, but that only makes people more dependent and creates new “assembly shops”. Instead, I would love to promote entrepreneurship and independence, and encourage work that brings joy and fulfilment rather than frustrating daily routine, as people wait for the next salary and vacation.

With your experience both in public and private sectors, do you think public administration can indeed be compared to managing a successful company?

The state is a complex system which has completely different functions than the private sector. The company has an owner, who aims for the highest possible profit, and exercises ownership rights in an autocratic manner. Meanwhile, the state is a community of people who elect their representatives to administer it as a successful, prosperous and fair entity.

Throughout my work in the state administration, international organizations, NGOs and businesses, I’ve learned that the state cannot be managed as a company. Each of these areas is different in its meaning, mission, internal organisation and goal. My business experience has made me a supporter of lean government, efficient administration and simple rules. From my experience in NGOs, I am a big fan of civil society and citizen involvement. I see the state with its regulatory powers as irreplaceable in the areas of security, justice, international relations and worldview.

Mr. Káčer was interviewed by Jana Jenšíková and Věra Vortelová

Translated by D. Libertin