Ron Weiser, U.S. Ambassador|
to the Slovak Republic
Ambassador Ron Weiser: Central Europe's Business Future Bright
Central European countries are among the world¿s most effective exporters of democracy and free market capitalism, says Ronald N. Weiser, U.S. Ambassador to the Slovak Republic and a University of Michigan Business School alumnus.
Slovakia, Poland, Hungary and the Czech Republic¿the Visegrad 4 (V-4) ¿can help reel the former Soviet empire and other emerging democracies into the western sphere, asserted Weiser in the 37th Annual William K. McInally Memorial Lecture at the Business School on Oct. 21. Weiser, who earned a BBA in 1966 and founded the national real estate investment company McKinley Associates, has served as ambassador since November 2001.
Weiser¿s lecture ¿Central European Transition: Opportunity for American Diplomacy and Business¿ highlighted the progress the V-4 countries have made politically, economically and socially since the 1989 fall of the Berlin Wall.
¿Developing a market economy with a culture of entrepreneurship and risk taking was a monumental task¿ for early political leaders in the former Warsaw Pact countries, said Weiser. ¿Two generations of centrally planned economies that directed workers to build a predetermined number of widgets, regardless of what the market demanded, largely stripped people of the ingenuity necessary to find better ways of doing business.¿
Corruption is one of the greatest threats to Central Europe¿s future, Weiser said. Corruption ¿cannibalizes the hopes, the dreams and the ambitions of the greater society for the selfish enrichment and benefit of a dishonest few.¿ The good news, he added, is that the situation is improving with the introduction of new laws and reforms, prosecutions and a cultural change that is taking root, especially with young people.
One area where V-4 countries have been extremely successful, according to the ambassador, is in providing a healthy environment for nongovernmental organizations. The Czech Republic boasts approximately 36,000 active NGOs. Poland has 28,000, and Slovakia has 20,000. Weiser credits assistance from the U.S. government and foundation sources for providing the infrastructure and training that has allowed the NGOs to flourish. ¿The U.S. effort showed how a small amount of money in development assistance, when properly administered, can have an enormous impact,¿ Weiser said.
Who better to give Iraq, Afghanistan and countries that were part of the Soviet Union a roadmap for their transition to democracy? It is important that the V-4 and the United States promote democracy because there has never been a war between two democracies, said Weiser, who also noted the V-4 have been loyal allies in the war against terrorism and strong supporters of the Organization for Security and Cooperation in Europe.
The transition of Central Europe from centrally controlled economies into free market capitalist systems will create business opportunities for the United States and the world, said Weiser. ¿These people represent incredible future purchasing power as they become upwardly mobile.¿
The V-4 countries have highly motivated, well-educated workforces, he said. Already more than 125 American companies¿such household names as IBM, Hewlett-Packard, Delphi, Johnson Controls, Pfizer and Whirlpool¿have facilities in Slovakia and almost all are expanding their operations. In Slovakia alone, the cumulative level of foreign investment has increased 500 percent since the beginning of 2000, and returns have been high, Weiser said.
Low wage rates found throughout the V-4 will provide foreign investors with substantial cost advantage and higher profit margins over western European competitors, Weiser predicted. In addition to lower direct costs, income taxes generally are lower, and often there are incentives for new investors. ¿Slovakia, for example, will be introducing a 19 percent flat tax for both corporations and individuals next year,¿ Weiser said.
New investments in Central Europe will create American jobs in administration, professional services and expatriate positions, added Weiser, who also envisions more exports of U.S.-made materials, supplies and equipment and growth in consumer markets. ¿It is a lot easier to sell products to people in Kiev from your office in Krakow, Bratislava or Budapest than it is from Kansas,¿ he noted.
The McInally Lecture began in 1966 in memory of William K. McInally, who served on the University of Michigan Board of Regents from 1960 until 1964. Past speakers include Madeleine Albright, Andrew Young, Martha Seger, William Rukeyser, F. Lee Bailey and B. Joseph White.
For more information, contact:
Mary Jo Frank