The state export promotion agencies need to work effectively

Export companies do not care about the institutional setup of the state export promotion agencies but they want these agencies to work effectively, said a poll that was conducted by CTK among business associations today.

In a battle for contracts, Czech exporters want to have the same conditions as their foreign competitors, the poll showed.

There are 10 state-run companies helping the exporters on foreign markets such as CzechTrade, Czech Export Bank (CEB), EGAP (Export Guarantee and Insurance Corporation), CMZRB (Bohemian-Moravian Guarantee and Development Bank), CzechInvest, Czech centres and Czech Development Agency. Their operating costs reach Kc2.2bn a year.

Prime Minister Andrej Babis criticised the current export promotion system this week, saying it has to work more effectively. These institutions should be managed by the Finance Ministry, Babis said at a meeting of Czech export leaders, adding only EGAP's performance will cost the state Kc4.7bn next year.

There has long been talk of changes concerning EGAP and CEB, and the government should make a decision if it does want to use these two institutions as a tool supporting exports to risky territories, Miroslav Diro of the Chamber of Commerce has said. "We urged the previous government and also call on the new government (to do so)," he said.

Eva Velickova, spokeswoman for the Confederation of Industry, said the government should speed up its efforts aimed at reforming CEB and EGAP as entrepreneurs need certainty and predictability to prepare their export projects. "A well functioning system of export finance and insurance will raise competitiveness of our businesses vis-a-vis their foreign colleagues," said Velickova.

A report that was discussed by the government in February showed that the share of CEB's non-performing loans fell to 43 percent at end-2016, while a year earlier non-standard, doubtful and loss-making loans totalled Kc42.2bn, making up 51.8 percent of the loan portfolio. Unpaid debts are dating back to the years 2007-2011, with some business deals from this period being investigated by police.

Source: CTK