The message that Estanislao de Grandes Pascual, Spain's Ambassador to Slovakia, sends to Spanish businessmen is clear and direct: take advantage of the good investment conditions and the opportunity that exists at this time in the Slovak Republic.
While it's true that many of Slovakia's crown jewels have already been privatized, or are about to be (such as telecommunications and transportation), many other sectors, like the electricity sector, are still waiting for their opportunity—"a field in which Spain could and should be present," the ambassador states. Unión Fenosa's presence in Slovakia through its consulting subsidiary, Soluciona, has yielded positive results but doesn't generate sufficient business volume. It's worth noting that Unión Fenosa's interest in the country was primarily strategic and, in any case, focused on the electricity sector. "They were interested in both the gas and electricity sectors. They've left the gas sector for now and intend to invest in electricity distribution companies, and they haven't ruled out generation either. Nothing concrete is planned today," says Estanislao de Grandes.
The sector is expected to be opened up by the end of December, and both the Spanish Embassy and Commercial Office, as well as the Ministry of Foreign Affairs, will be available to interested Spanish companies.
Furthermore, the Spanish embassy takes an active part by regularly informing, through direct contacts with Spanish companies, about business opportunities in the Central European country.
But there are many more sectors that offer great opportunities to foreign investors. The insurance sector, for example, or gas. Regarding the latter, de Grandes states that there are no Spanish companies in Slovakia, "not even Repsol has apparently shown interest, unlike Unión Fenosa, which did, but withdrew shortly afterward because, after the purchase of Egyptian gas, they considered their presence non-strategic in increasing their market share in the gas sector."
Another sector essential to any economy is telephony. De Grandes contacted the former President of Telefónica, José Luis Villalonga, to inform him about the privatization. However, just a week earlier, the Spanish telecommunications company had acquired Austria's second-largest telephone operator, and despite the recommendations of the Spanish ambassador in Slovakia regarding the excellent investment opportunity, especially as a springboard to expand into the rest of Central Europe under seemingly secure and unbeatable business conditions, the deal went ahead.
On the other hand, regarding the transport sector, there is a Talgo project to connect the former Soviet Union and Slovakia via Lithuania. CAF had also made some contacts regarding rail units, but these have not yet materialized. The embassy has also been involved in the efforts to renovate the Bratislava metro, maintaining contact with the Madrid City Council. "The mayor of Bratislava visited Madrid and was impressed by the Madrid metro expansion works, but what's lacking is not so much official support as Spanish business initiative. Companies need to overcome their fear of the unknown and come to Central and Eastern Europe."
Information about Slovakia is missing.
The problem is that there remains a complete lack of understanding about what Central Europe is. "Slovakia is a country in transition from a purely state-controlled regime (real socialism) to a modern, open country with a future," added de Grandes, "and investments are much safer in a country that is a candidate for the European Union, which has a very good chance of becoming a member in 2.004 or 2.005 at the latest, than in many other countries that are more attractive in theory but carry a much greater risk due to political instability." The Ambassador then turned to Latin America, saying that "it is logical that Spain should naturally focus on Latin America, but it is somewhat unsettling that our companies are not interested in this part of the world, while other countries like Italy are gradually gaining ground." Indeed, Spain is the largest investor in Latin America, even ahead of the United States.
There is no doubt that both Slovakia and Spain are making a great effort to increase mutual understanding. "In recent years, investment seminars have been organized in each country. When the Prime Minister visited on his penultimate trip, he was accompanied by a large delegation of businesspeople, and another investment seminar is planned for the coming months." The problem lies in the difficulty of attracting businesspeople from both countries to invest.
And, with the honorable exception of Poland, where some Spanish companies have set up shop thanks to the airport renovation, the Spanish presence in both the Czech Republic and Hungary is practically negligible.
And yet, Spain "is selling more to Slovakia than to Syria or Egypt. We're selling almost $400 million worth of goods, but there's no investment, and they're also selling us $200 million," says the ambassador. However, although the figures are meager, the growth is spectacular: in 1998, sales alone reached $100 million, "which is very important," affirms Grandes, "but as long as investment doesn't come to Slovakia, our presence here will be crippled."
The Spanish presidency of the European Union.
The Spanish Ambassador is convinced that Slovakia expects to make significant progress during the Spanish presidency, but that "in general they are realistic enough not to expect to close all chapters during our presidency, but rather during the Danish one," says de Grandes.
The embassy is one of the key organizations that Spanish businesspeople looking to do business in Slovakia must contact, especially because of the information it provides. "We still have a modest staff, although I'm very satisfied. The work of Raúl García and Francisco Javier Medina has been fundamental. Furthermore, the rapport with ministers and politicians is excellent, and contacts are fluid and increasing over time. As I mentioned before, we need a significant investment to act as a driving force, like Telefónica's presence in Peru, which attracted all the Spanish banks and other large companies such as Dragados and Repsol."
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