Minister of Industry and Trade counts half year achievements

Jan Mládek, photo: Filip Jandourek

Czech Prime Minister Bohuslav Sobotka continued his ministry tour on Wednesday with a stop off at the Ministry of Industry and Trade, under the tutelage of fellow Social Democrat Jan Mládek.

Jan Mládek, photo: Filip Jandourek
There is little doubt that the ministry was very much a second choice for Mládek, who was preparing himself to be finance minister before the shortfall in Social Democrat votes and curtailed expectations following the October 2013 parliamentary elections.

But Mládek has made an energetic debut in his second choice job and, as the press release following the prime ministerial visit points out, dealt with some of the skeletons in the closet that he seems to have inherited.

It’s pretty clear that a lot of the state trade and export promotion bodies that come under industry and trade ministry control were not functioning properly previously. Heads have rolled at many of these but it will take time to show whether the replacements are really putting the Czech Republic back on the map as the top destination that it was for European incoming investment.

One thing is clear under the new administration, jobs are jobs and there are not the sort of quibbles and questions that were asked of foreign investors in the recent past when they raised the issue of locating to the Czech Republic for the first time or expanding their existing activities.

As a result, minister Mládek could boast on Wednesday that under his almost six month ‘watch’ incentives have been offered to 84 foreign companies with 10,000 jobs created and another 52 local companies also benefitting and 4,000 extra jobs as a result. In the case of South Korean tyre plant Nexen, the Czech Republic appears to have snatched a massive investment at the last minute that looked destined for Poland.

On the other hand, in the case of Amazon the Czech Republic has only so far got half of the incoming investment that might have been forthcoming thanks to the puzzling antics of Brno city councillors and their objections to a second distribution chapter. The second Amazon investment is still, apparently, not entirely a lost cause though it’s clear that the episode has left the US-based Internet commerce giant with a sour taste in its mouth.

For the following months, Mládek looks like he will not be underemployed. The long-term financial problems of hard coal mining company OKD will not go away irrespective of whether the current owners patches up a new capital restructuring and investment package. As time goes on, the pressure to thrash out an energy policy that allows construction of new nuclear plants without excessively burdening electricity consumers or taxpayers will grow.

The ministry, which has already tried to show itself as more consumer friendly than in the past, is also in the midst of a fight with the national energy regulator over charges that can be made by big power companies. In this battle, the regulator is seeking the moral high ground and mantle of consumers’ friend with the ministry cast as the evil doer. The consumer protection role is always a tricky one to wear when at the same time be the champion of industrial and business interests.

As well as the economic upturn, another factor in Mládek’s favour over the last months is that he has not been involved in too many of the turf wars that plagued the industry and trade ministry in the past. Relations with the foreign ministry are amicable, those with the environment ministry seem calm, and only the finance ministry and the unexpected interventions of its boss Andrej Babiš look like they have real explosive potential.