Speech before the Los Angeles World Affairs Council on April 12, 2000:
His Excellency Jan Kavan
Minister of Foreign Affairs
Czech Republic
Thank you very much. That was a very nice introduction. I have to say that, among the list of countries you mention where I published articles I'm surprised you left out one where I also published articles, and that's the United States of America. I think it may be, as the English say, taking coals to Newcastle, to many of you, to say a few words about the Czech Republic, because during my short stay here I discovered to my surprise that you know much more about that small, but strategically located country, in the center of Europe or as we like to call it, in the heart of Europe. You know more about it than I expected, so I apologize in advance if I'll be saying things, which are common knowledge to you.
As you know, and that's not a surprise for a central European country with a history of my country, we've been very often the site of clashes between different empires, monarchs, states and regimes. Historically, more recently, after 1949 the Iron Curtain separated us from the democratic and economic developments of post-war Western Europe, a region with which we had enjoyed very rich cultural and economic ties for virtually centuries. In 1989 the so-called Velvet Revolution led to the beginning of our new integration into West Europe and, of course, into trans-Atlantic structures. Today, thanks also to the support of the United States, we are part of the West both in the economic and particularly in political and security aspects.
We are aware, however, that for the average Californian, maybe there are not too many of them present in this room, since Eastern Europe is very distant geographically and its arrangements may seem rather complex. It is up to us to deepen our mutual relations and to support better understanding in the exchange of experience, because I'm convinced that the world today is really becoming increasingly smaller which is due, among others, partly to the engineers and experts of Silicon Valley. I have to admit that I'm very honored to speak at the Los Angeles World Affairs Council. I know that before my visit here this honored assembly was addressed among others by Vaclav Havel, the President of the Czech Republic, and also by Vaclav Klaus, the current Chairman of our Parliament. Relations between our two countries are all the more closer since we became allies in NATO last year. I'm glad that at least one of you was there in March last year when together with my Hungarian and Polish friends, we handed over our ratification papers to Secretary of State Madeleine Albright. Mrs. Albright, she recently stressed that we are now true allies and that we are returning where we have always belonged. And I would like to point out that specialists from the West Coast played a major role in the process of accepting new members into the North Atlantic Alliance and they did so right from the beginning. The study run by the important strategic RAND institution in Santa Monica defended NATO enlargement and contributed, I believe, greatly to the assertion of this policy in American administration and, of course, on Capitol Hill as well.
We are fully aware that this alliance entails great responsibility and that it places both technological and moral demands on member states. We have worked, as you know, with the United States back in the Gulf War and later in Bosnia, and I would say that the fact that NATO membership is not just an empty phrase for us can be illustrated clearly in our close cooperation with other NATO allies in Kosovo. This cooperation reinforces the trans-Atlantic link the USA has been trying to build up and to strengthen.
In fact, Czech-American relations were actually formed right at the onset of the first independent Czechoslovak state. The first president of Czechoslovakia, Tomas Masaryk, prepared the Czechoslovak independence in Washington, D.C., in October 1918. At that time, the United States helped to build an independent Czechoslovak state from the ruins of the Hapsburg Empire. After all, the first Czechoslovak president not only knew and advocated Anglo-American thinking and Anglo-American concepts of democracy, but he was also a close personal friend of President Woodrow Wilson. Moreover, in 1878, Tomas Masaryk married a U.S. citizen, for us personified ties with the United States and today, I may say, perhaps even the trans-Atlantic link.
It is no coincidence that in Masaryk's time the Czechoslovak Republic was the only fully democratic state in Central Europe. Its existence, as you know, however, was terminated by the Munich agreement in September 1938. The friendly relations were once again revived at the end of the Second World War when the United States army helped to liberate Czechoslovakia. But a few years later what followed were four long decades of Communist oppression during which the Communist regime sought to cool off our relations as much as possible, if you'll allow me to use the Cold War language.
On the other hand, it was precisely during the ensuing period that many Czechs immigrated to the United States, basically in two major waves. First, after the Communist coup in February 1948, and secondly after the suppression of the Prague Spring and the Soviet-led invasion in 1968. The United States has thus become home of the world's largest Czech expatriate community. Some 1,300,000 persons living in the United States today are of Czech origin. To mention only some of them, the well-known Mayor of Chicago was Czech, and many other prominent Americans have Czech roots, among them, as you know, the present Secretary of State Madeleine Albright. As we talked a few minutes ago about tennis, you know that the two top tennis players of their time, Ivan Lendl and Martina Navratilova and the outstanding film director Milos Forman, are also Czechs....
The Velvet Revolution in November 1989 and the democratic development that followed revitalized contacts between our citizens....A prime example of mutual understanding between our nations is the respect enjoyed in the United States by Czech President Vaclav Havel. The President's speeches to leading U.S. fora received much attention, and his address to the United States Congress in 1990 drew an exceptional response. Besides politicians and businessmen, more and more Czech students and scientists come over to the United States under the various exchange or fellowship programs. On the other hand, thousands of Americans most of them part of the younger generation, are now pouring into the Czech Republic, lured by the reputation of the magic of Prague, generally considered as one of the most beautiful and, I would say also, romantic cities in the world and definitely in Europe. I'll say this is not a short-lived boom. For the American community in Prague of around 30,000, Prague is frequently compared to the Paris of the 1920s. These people are not only students, artists and businessmen, but also young professionals working for various international corporations represented in Prague. They have their own English language newspaper, The Prague Post, which is available on the Internet.
As I mentioned, after the Velvet Revolution, in the context of the democratic process, a playwright, a former dissident, Vaclav Havel, was elected our president. The whole change in the system took place without violence and very quickly. In fact, just over a few weeks, and there can be no doubt that we will not be going back down the path we came from. The moral revival of the nation, the completion of the economic transformation, and the full enforcement of democratic principles in everyday life is a much more complex process. On the other hand, the activity of the Czech Republic in our transformation area was fully recognized by the fact that the Czech Republic became a member of the OECD in 1995.
Alongside the submission to NATO, which constituted the Czech Republic's most significant foreign policy event of 1999 and of the country's short history to date, the preparation of the Czech Republic for membership in the European Union is yet another priority. Our country was included in the first wave of enlargement. The accession negotiations with those countries were launched in 1998. I would say that the ongoing negotiations are relatively successful.
The European Union candidacy is the greatest challenge, which confronts the Czech Republic since its independence in 1993. Our government has set 2003 as our target date for the country's submission to the European Union, and its coordination efforts are geared to that date. I am still cautiously optimistic that we shall meet that target. Our current government was elected on a program, which regarded the accession to the European Union as foreign policy priority number one. On an overall political level, we believe that European integration will lead to a unified democratic socially just, and, above all, peaceful Europe, to a Europe of cooperating regions. I stress, we do not fear the end of national states or the loss of national sovereignty as a result of this integration, nor do we, of course, fear any Brussels dictate. We are sure that nation-states will continue to play the decisive role in international politics and international law. We are fully prepared to share our sovereignty with other member states of the European Union in order to tackle much more successfully some of the tasks, which are increasingly beyond the powers of individual European states. They range from ecological concerns to the struggles against organized crime and so on. Also, I believe for example the joint efforts to combat things like unemployment may also be successful. On the contrary, I'm convinced that nation-states will have a role to play in the years to come in preserving the diversity, which constitutes Europe's wealth.
I would like to point out the original aims of European integration. To substitute old rivalries and conflicts by peaceful integration, by cooperation, by solidarity and a permanent dialogue. The recent elections in Switzerland and, later, in Austria have reminded us that these aims are still very topical. The fact that nationalistically oriented parties have achieved such a considerable success in prosperous countries actually runs counter to the conventional notion of nationalism. Politics is a never-ending process and you may never be entirely sure that certain phenomena will not recur. In this newly emerging situation at the threshold of the 21st century we should reconsider the old ideas and breath a new life into them.
I admit that the issue of how the enlarged European Union in the forthcoming century will develop is very topical and I would say that it's a highly interesting question. I admit that it is very difficult to predict how the European Union will look and how it will function when it will have between 25 and 28 member states. But even now we can say what will happen if the enlargement is shelved or postponed for a very long time. Not just the European Union but the whole of Europe would find itself on the world's sidelines and the European Union will be living on the doorstep of a zone of instability and potential conflict. I therefore believe that enlargement will benefit all Europeans. I also believe that it will benefit also the United States of America, because only a strong, prosperous Europe can be a dependable ally and a partner to the United States. An opportunity for deeper cooperation for the further integration of European and American companies, internationalized capital, and use of all the advantages offered by globalization. In a nutshell, a strong Europe means also a stronger United States of America.
EU enlargement is also a European response to the challenges of globalization. As I said, the world is becoming increasingly smaller. We are directly affected by the events that take place on the other side of the world, and here I do not just mean economic financial markets and business, but also security and political relations, human rights, or changes in the environment. We may have different views on globalization and its individual manifestations, but that does nothing to change the fact that this is a process that we cannot stop, a process that on the contrary is picking up speed. This process has an impact on every one of us and on the countries we live in. The undeniable outcome of this is that the role of the state weakens and a number of problems emerge that cannot be handled within the framework of a single country. These problems require far-reaching international cooperation. Europe and, in fact, that whole world is interwoven, whether we like it or not. Therefore, I believe we have to come up with mechanisms that will enable citizens of Europe to exploit these ties that bind them together to create a better, richer life.
I'm convinced that the Czech Republic cannot cope with the impacts of globalization without becoming integrated in the European Union. Membership in the European Union will give us the opportunity to become part of a larger whole that can successfully met the challenges of globalization at the beginning of the 21st century. Europe's responsibility for further development in the world is a key element, and this remark is, of course, not intended in any way to diminish the crucial role of the United States.
The negotiations on EU membership and the subsequent accession into the European Union raise several important expectations in my country. We expect the accession process to put an additional pressure on the completion of our transformation. We are promising ourselves a stronger economy. At the same time, we are only too well aware of the scope on the commitment the country will assume by the end of the negotiations, and of the extent to which the Czech economy will have to adapt. We are aware that the content, length and complexity of these negotiations have no comparison with any other international negotiations in the modern history of the Czech Republic or the former Czechoslovakia. The outcome of these negotiations will not only have an impact on the Czech Republic's international status for many years to come it will also change almost all the aspects of the country's domestic situation and they will affect the quality of life of individual citizens. A unified Europe will also bring advantages for foreign tourists, students and businessmen and women, mainly because we will see an expansion of the European Union's zone of free movement of persons, a stop to border checks between the Czech Republic and the European Union, simplification of transport and the transportation of goods, and, of course, savings in time and money.
Czech diplomacy will continue to strive for this country's more profound and more effective involvement in NATO's activities. The Czech Republic has been fully participating in NATO's integrated military structure and all of its political and military bodies, institutions and agencies.
With respect to NATO's further enlargement, the Czech Republic is prepared to share its experience in the integration process with candidate countries of Central and Eastern Europe. It is determined to assume its share of responsibility for Europe's common defense and security policy. However, as we are not yet a member of the European Union we assume that a close relationship and dialogue should be maintained between European Union member states and the other NATO member states in Europe while emphasizing the need for the preservation of a strong trans-Atlantic link.
It could be said that 1999 was something of a turning point in the area of security, not just for the three new NATO members, but also for the alliance itself and for the whole community of democratic states. The peace dividend, as it was called, created in the trans-Atlantic area following the disintegration of the Warsaw Pact and the Soviet Union has clearly been spent. New threats and risks have emerged and democracies throughout the world have to face up to challenges carrying a major security aspect. The immediate political priority is now to streamline security systems, to strength the cooperation between international organizations, and to secure adequate funding for security systems.
In this globalized and increasingly interconnected world, democratic countries are unquestionably expected to shoulder more responsibility for peace, security, human rights and freedom. In this world of global media and Internet, no crisis is distant enough to leave us unconcerned. Kosovo and East Timor have given us a glimpse of future crises and they also pointed a way to possible solutions. A system ensuring effective coordination of foreign, humanitarian and security and military policy in case of engagement abroad has become an imperative for each democratic state. The relatively high cost of such arrangements have made sure that small countries such as the Czech Republic to fundamentally review our defense and security capabilities.
As a new member of the alliance, the Czech Republic welcomes all impulses to strengthen the common foreign security policy and defense identity. We consider the actual building of military capabilities as equally important as discussions on the relevant new institutions and structures. In our opinion, the building of European defense capabilities should in no way disrupt the trans-Atlantic link and the alliance between Europe and the United States of America. The Czech Republic supports the idea that European forces should be engaged only when NATO as a whole is not engaged. On the other hand, it should be clear that Europe should take greater responsibility for managing crises on its own continent. I stress, our membership in NATO benefits the Czech Republic, and it benefits the Alliance and the entire European security system. We, in the Czech Republic, are therefore convinced that the enlargement of NATO should continue, and we support the idea that new candidates should be invited already in 2002. We, of course, are specifically interested in the early admission of Slovakia and we intensely cooperate both with Slovakia but also with a number of other candidate countries.
The United States is one of the key countries for our foreign policy in terms of its political, economic and military potential and, of course, also due to its role as a promoter of democracy throughout the world. As I mentioned earlier, the bi-lateral relations between the United States and the Czech Republic at the political level during most recent years have been outstanding. It has been the demonstrated politically by the approval of NATO enlargement in the U.S. Senate to visit to your country by our President Havel in September 1998, NATO's anniversary summit meeting attended by President Havel, the visit here also of our Prime Minister in October of last year, or the recent visit of Secretary of State Madeleine Albright to the Czech Republic last month.
International organizations have an even greater role to play in setting the course of world development. It is thus in the interests of small and medium-size countries to make efficient use of these organizations. A permanent component of Czech foreign policy is its activities within the United Nations. Our country has recently scored considerable success with its initiation and adoption of a resolution on the state of human rights in Cuba, in the U.N. Human Rights Commission last year. In this context, the work of Czech diplomacy was highly praised.
The Czech Republic was also elected to this Commission for another term, between 2000 and 2002. Its reelection to the UN Economic and Social Council provides [greater] scope for the promotion of more Czech proposals. As a member state of the WTO, the Czech republic has played a significant role in removing barriers to world trade by putting into place treaties and legal framework for the international trade system. Our country is promoting the continuation of the reform process in agriculture and the revitalization of trade and services, especially in non-agricultural goods, with respect to the reduction of custom tariffs. The Czech Republic promotes the principle of a single undertaking to be applied by all member states of the World Trade Organization. Our country also promotes a transparency principle according to which all negotiations must be open to all member states.
Our economy has recently started to recover from a period of recession. Over the past year, the net inflow of foreign direct investment registered a record value in the history of the Czech Republic, U.S. dollars $4.7 billion, which is almost double the 1998 figure. As regards trade balance, the current account has registered its lowest deficit over the past four years. Czech companies also increased their direct investments abroad from U.S. dollars $80 million in 1998 to almost $200 million last year. There should be another wave of foreign direct investments this year with the privatization of Czech telecom, Czech radio communications, commercial banks and the Czech Savings Bank. Investment will also find its way into production companies, the construction of a factory manufacturing engines and gearboxes for Skoda Auto, owned by Volkswagen, is in the pipeline for example. Overall, at least two-thirds of the assets administered thus far by the national property fund will be privatized, i.e., about $4 billion U.S. dollars in current market valuation. The government will continue its program of deregulating rent and adjust the energy prices with the aim of completing deregulation by 2002. By the end of this year we will present our plan on how to reform the pension system based on a combination of monthly contributions and capital funding. Since the beginning of this year, the foreign trade deficit has reached 14 billion Czech crowns, which is largely due to high oil prices and, of course, to a strong U.S. dollar.
Under the influence of the Soviet Empire, the then Czechoslovak economy reinforced its traditional sector of low-tech heavy industry, but on the other hand the high educational levels and qualifications of our work force meant it retained its gross potential in areas of latest high- tech technology and innovation. By plugging into the EU market the Czech Republic is acquiring new growth opportunities, especially in the high-tech sectors, and I believe the outlook for EU membership is one of the major reasons why it is now the right time, for example, for American investors to focus on the expanding European market via the Czech Republic.
If I could summarize the main reasons for investing in the Czech Republic they are as follows: Completed economic transformation. I've already mentioned that we've joined as the first post-communist country OECD in 1995, and then in 1998 entered into formal negotiations with the European Union. Our government's policy fully supports foreign investments with considerable incentives, rapid integration into global trading. The Czech economy is a very open economy. Almost two-thirds of Czech trade is now with the European Union countries. Firms with foreign capital now manufacture over half of all Czech exports. The conditions for business activities are being unified in the context of preparation for EU membership. For example, we have already taken over 90 per cent of European technical standards. A strong influx of foreign direct investment, which I mentioned. A highly skilled labor force, which fully meets European standards. Great potential growth in productivity. Foreign companies now have much higher labor productivity, which more than compensates for the higher salaries they pay. An up-and- running infrastructure and supply base. A key regional position and function of strategic hub exceptionally operative and easy access to almost 500 million customers in the emerging markets of Central and Eastern Europe and European Union.
I will conclude by stressing that the Czech Republic is now entering the new millennium once again as a fully democratic state, an advocate of peace, democracy and human rights worldwide, fully in line with the legacy of our first president, Tomas Masaryk. The tasks and problems facing us, as well as the whole international community, are not simple, but they can be solved. Our membership in NATO, together with future membership in the European Union, only confirms our firm establishment in the democratic community and in the main economic and security Euro-Atlantic structures. And I am pleased that it was on the United States soil that the idea of Czech statehood was first formulated and completely worked out. I think I can say that we stand by the legacy of the architects of the Czech state.
I thank you for your attention.