Italy became Slovakia's third to fourth trading partner in the past years. Slovak interests in Italy, which is an important territory for our country, are represented by two commercial diplomats - in Rome and in Padua. Concerning Slovak-Italian economic relations as well as other issues, we addressed Jaroslav BOBRÍK, Counsellor of the Slovak Embassy to Italy based in Rome.

The importance of Italy as Slovak trading partner is on increase, which is also confirmed by recent statistics. Italy is on the second place from EU member states. How do you assess the current state of mutual economic co-operation?

Italy was one of important trading partners of our country as early as in the times of former Czechoslovakia. During the communist regime, two commercial offices - in Rome and in Milane, and representations of former foreign trade companies at the Czechoslovak Embassy represented our trade. After the political changes in Czechoslovakia, they gradually decayed. Part of their employees became independent, others passed to affiliations of major firms, which started to organize foreign trade in an independent way. At present, only Slovak Eastern Ironworks (VSZ) Holding Košice, Martimex Alfa and Ironworks from Podbrezová have their own representations in Italy. After the split of the federation, the existing affiliations in Italy were taken over by the Czech Republic. Slovakia had to build its commercial and economic representation basically from the very beginning.

The commercial exchange between Slovakia and Italy has sharply increased in the recent years. In 1998, the mutual commercial exchange is expected to be four times higher than that of the period since 1993, when independent Slovakia was established. In general, we can state that the commodity structure of Slovak production complies with the demands of Italian traders. However, it will not be possible to substantially change the structure of our exports in favour of machine and electrotechnical industries without a more aggressive policy of Slovak exporters, directly on Italian market. Italian companies demand mainly products of machine, chemical, wood and furniture industries. Cars, clothes, shoes, aluminium and products made of aluminium currently prevail in Slovak exports, while iron and steel suffered a slight decrease.

Which Slovak commodities can succeed on the Italian market?

We can speak about two groups of goods. The first group consists of commodities, which are already exported to Italy and whose volume could be increased, such as paper, textiles and clothes, shoes, glass and components for automobile industry, steel, bearings, plastic, wood, furniture, beer, living stock, venison and other commodities. These are all products of adequate technical and qualitative level. Exceeding of their exports is prevented by existing production and distribution capacities of the Slovak producers.

The second group is composed of commodities, which have not been exported from Slovakia so far, such as pumps, hydraulic motors, various products made of metal, manual tools, locomotives and health care equipment. With these commodities, Slovak producers could compete with producers from transforming countries and from Asia. The export of these products has to compete with low prices offered by other producers and insufficient market research.

Italy is an important investor to Slovakia. What could further support these activities?

There are numerous joint companies, especially at the level of small and medium firms. Italian entrepreneurs are mainly interested in textile, shoe and machine industries. One of the crucial roles, by their decision making is played by the transparency of conditions created for foreign investors. General positive signals issued by the Slovak Government should be followed by exact measures with a clear intention - to attract foreign investors. The Government should aim at creating comparable space for foreign investors, to make the differences between Slovakia and its neighbours obvious for foreign investors, to make them see where the potential advantages are and which fields and sectors are the most advantageous to invest to.

Big Italian companies, such as ENI SNAM, FIAT and TELECOM focus by their strategic decisions on acquiring a significant share on the market. The numbers indicate that as of December 31, 1997, 495 joint Slovak-Italian companies were established in Slovakia. However, here in Rome, we do not know how many of them became successful and effective.

Slovakia currently discusses forms of pro-export policy. The Fund for Supporting Foreign Trade is among the most frequently mentioned forms.

This institution could help to revive the commercial relations, especially to provide the Commercial and Economic Departments of Slovak Embassies abroad (OBEO) with technical equipment. I think that many entrepreneurs also appreciated financial help they were provided in order to be able to participate in fairs and exhibitions. It is important that the activities of the Fund's delegates be not parallel to those of the commercial diplomacy. Instead, they should be of great help by improving the acquaintance of our entrepreneurs with economic situation in the country of their interest. It is also necessary to clarify the statute of these entrepreneurs in the countries they are working in, in order to prevent misunderstanding and conflicts with local authorities from taking place. EXIMBANK also needs sources for advantageous pro-export credits in order to be effective.

With what kind of problems do the entrepreneurs usually turn to you?

Every entrepreneur is interested in placing their goods on the given market. Our commercial department advises them what kind of goods and under which conditions can be exported to Italy or imported to Slovakia. Most entrepreneurs ask initial information on the import regime and respective regulations, specifics of the Italian market and recommendations as to how to negotiate with Italian trading partners.

Italy, similarly as Slovakia, are to a great extent dependent on import of raw materials. Slovakia is attractive for Italy as a transition country for natural gas from the Russian Federation and as a space for entrepreneurial activities in cloth- and shoemaking industry.

What about business contacts?

In May 1998, Slovak-Italian Chamber of Commerce based in Bratislava was established in Slovakia. Entrepreneurial missions in co-operation with regional chambers of the Slovak Chamber of Commerce and Industry (SOPK) and the OBEO based in Rome and in Padua regularly take place in individual Italian regions. Unlike the SOPK, the Italian economic chamber UNIONCAMERE requires obligatory membership. With its 5 million members it represents a force, which is not negligible even outside the economic field.

What does Slovak business lack in order to be successful abroad, especially in Italy?

Tradition in business contacts. There are not enough qualified business managers in Slovakia. Another handicap by entering into economic relations is the fact that Slovak entrepreneurs do not have sufficient command of foreign languages. However, even more important than speaking some foreign language are the expert skills. Italian counterparts do immediately recognise if their business partners are experts in the given issue and deal with them accordingly. The Italians are not willing to waste their time with "laymen", moreover if they do not have a clear idea of their goals. If the aforementioned shortcomings were eliminated, the Italian market would open to Slovak entrepreneurs to even a larger extent.

Slovak Trade FORUM