'Slovaks can do something about it'

US AMBASSADOR to Slovakia Theodore Sedgwick keeps in his Bratislava office a large map of Slovakia with numerous pins marking all the places in the country he has visited. “I am not just the ambassador to Bratislava; I am an ambassador to the whole of Slovakia,” said Sedgwick, adding that he adores the beauty that Slovakia has to offer and he will remember all of his travels.

When talking to foreign investors about Slovakia, Sedgwick has a lot of positive things to say about the business climate here. However, he admits that he also has to tell them about the unpredictability of the rule of law in this country.

“I think the country leadership needs to look at the impact this could have on foreign direct investment in a time when unemployment is high,” Sedgwick said in an interview with The Slovak Spectator.

The Slovak Spectator spoke to Sedgwick about the Transatlantic Trade and Investment Partnership (TTIP), the rule of law and the business environment as well as his diplomatic mission here in Slovakia.

The Slovak Spectator (TSS): The United States and the EU are negotiating the TTIP. Once signed, what will the trade deal mean for the US-Slovak economic cooperation?
Theodore Sedgwick (TS): I am very hopeful about prospects for successful negotiation of the TTIP and I think the fact that the president decided to go forward in the negotiations really reflects the strength of transatlantic relationships and that United States sees Europe as its indispensible partner, not only in security but also in the economy. The results of the negotiations would be the reduction or elimination of unnecessary regulations and, more importantly, setting standards for all kinds of products. This has huge potential, because if the two sides of the Atlantic are able to get together, since the EU and US represent half of the GDP of the world, and agree on setting standards, we will be able to improve our market position around the world. The negotiations are going to be very challenging because there are special interest groups on both sides of the Atlantic who have investment interests and who might worry that their interests might be harmed. I am sure there will be some losers but I think there will be mostly winners.

The European trade commissioner has commissioned a study by the London Centre for Economic Policy Research (CEPR) asking about the impact the TTIP is going to have and the answer came back: for every additional billion euros in trade and services, it will provide another 8,000 jobs in the US and 15,000 jobs in the EU. Slovaks would be specifically interested in the impact the TTIP would have on the automobile market since Slovakia is the largest per capita auto manufacturer in the world. A study on the impact on the automobile industry suggested that the deal, if successful, could result in up to a 149 percent increase in exports of European cars to the US. The European Automobile Manufacturers’ Association has already endorsed this agreement and we think it will have a very positive impact here in Slovakia.

TSS: The first participants of the Slovak American Foundation’s professional internship programme have already returned to Slovakia. Could you give some examples of the employment opportunities the young Slovaks had in the US and how you expect this will benefit Slovakia?
TS: It is a great programme because the foundation provides a stipend, transportation and lodging for the intern to go to the US, and also locates companies that will employ the interns. The variety of work they do is very interesting, while it is tailored to the individual. They worked in New York, Silicon Valley and Washington and the sectors are everywhere from international finances to architecture, to software, mobile application development and government relations. I found in my experiences as a diplomat that the best way to promote relations between our countries is actually bringing Slovaks to the US.

TSS: Amnesty International and Slovakia’s ombudswoman Jana Dubovcová warned about serious human rights violations by state bodies in relation to Roma policies, including segregation. However, recently a group of US diplomats operating in Slovakia, the Czech Republic, Bulgaria and Serbia witnessed some positive examples in three elementary schools in eastern Slovakia and praised the schools for their approach to integrating Roma into the majority society. Could you give some more details about their positive experiences as well as the reasons behind the diplomats’ visit to the schools?
TS: Frankly, we had similar challenges in the US going back to our civil rights period not that long ago in 1950s, and we identified segregation at school as being a key obstacle to inclusion of minorities. As you know the US does an annual human rights report and the concern about minorities is embedded in our foreign policy values. We are very interested in following this issue and that is why diplomats from Prague, Belgrade and Sofia visited these schools and they were generally impressed with the sincerity and the progress that these schools are making in desegregation, but clearly this is just the beginning of the process and there is more work to be done. It is not something where you can just turn on the switch and change it from segregation to desegregation. You are dealing with a lot of students and parents and their personal attitudes; you try to encourage human nature in a positive direction and it takes time.

TSS: Foreign diplomats continue to attend selected court hearings, especially those which are seen as having an impact on the quality of Slovakia’s judiciary. Earlier this year you attended a hearing involving the case of Supreme Court President Štefan Harabin suing a psychiatrist over what he called slander. Is there a message behind your presence at such hearings? What, in your opinion, are the challenges that Slovakia’s judiciary needs to address?
TS: The state of the judiciary in Slovakia is an area of concern. I attend the hearings because we at the US Embassy are very interested in following what is going on in Slovakia within the judicial system and the rule of law. We have our annual human rights report which also addresses
what we believe about the rule of law in Slovakia.

There are third-party rankings that indicate that Slovakia is falling in many categories about the confidence in the rule of law, and this is not just foreign investors who are saying this but also Slovaks themselves. Less than 30 percent have confidence in the integrity of the judiciary system. It is a real impediment for foreign direct investment. I will be honest; when foreign investors ask me about Slovakia I do talk about good things; there are many good things about the business climate here. But I also have to say that the rule of law here is unpredictable. I was troubled to hear recently that just at the time when all these rankings are falling the judicial council chose to eliminate teaching ethics at the judicial academy. I ask what signal does that send about what the country is trying to do to improve the rule of law.

I talked to a foreign investor two days ago and he said that he recently had employees in two different court cases: one where employees were clearly found violating safety standards, and the company is very strict about safety standards. The fired employees went to court and the judge reinstated them to the job. The other case involved employees who were caught stealing from the company; it was all videotaped and the evidence was clear. They were terminated but the judge’s verdict said that they should be reinstated because ‘yes they were stealing, but it was not very much’, and this is unbelievable. The big problem is that there is no predictability in the verdicts, and foreign investors have no confidence that they can have a reliable justice system that has integrity. I think the country leadership needs to look at the impact this could have on foreign direct investment in a time when unemployment is high.

TSS: Slovakia has slipped six positions in the Doing Business ranking for 2014 to 49th place, while it has also failed to improve its standing on the Global Competitiveness chart. What in your opinion are the areas Slovakia needs to address in order to improve its standing?
TS: I am looking at the current 2013-2014 Global Competitiveness Index and Slovakia ranked 78th out of 148 countries, the second worst among the EU’s 28 and Slovakia’s worst ever ranking in the index. Particular areas where Slovakia rated poorly, 133rd or worse among 148 countries, were related to corruption, the rule of law, diversion of public funds, public trust in politicians, judicial accountability; favouritism in decisions of government officials, wastefulness of government spending and the efficiency of the legal framework. There are many advantages to being in Slovakia, but if the country has the ambition to attract more foreign investments, they need to look at these rankings and improve those areas.

TSS: You mentioned that there are still many advantages in Slovakia. Could you name the areas that remain attractive? What areas of Slovakia’s economy have potential for US-Slovak cooperation?
TS: Perhaps 10 years ago the attraction was low wages, but now the emphasis has shifted more to skilled labour. For example, in the IT area it’s not just the fact that the workers are available at such a low wage, it’s also that they are well-trained at technical universities. There is not a single American IT company that is not here; even since I have been here we’ve got Google and Amazon coming in. You have IBM, AT&T, Dell, Cisco, Hewlett-Packard, and these are not just companies selling their goods and services in Slovakia; these are companies that support international, global customers, and doing very significant work with hundreds, and in many cases thousands of employees. I think that the IT sector is certainly an area where there is large potential for Slovakia.

I think it is important, both in Slovakia and in the US, not to take for granted the manufacturing sector. Frankly, we did that to some extent in the US, and we lost so much basic manufacturing to outsourcing. Now, because of our lower energy costs, we are attracted to manufacturing. I think it is important, particularly in rural areas, that the country remains attractive for both IT and manufacturing. I am encouraged by some of the new companies that are coming in and I do not see any companies leaving Slovakia.

I’ve seen a really dramatic increase in the interest in small and medium-sized companies and this is something we at the embassy have been very focused on: programmes to encourage young people to take a chance and start companies. We also feel that Slovakia is sitting on incredible untapped potential with women across the country and through our Women’s Entrepreneurship Forum we’ve matched mentors with mentees all over the country.

TSS: Has the recent government shutdown in the US harmed the international reputation of your homeland in any way, as some US officials warned during the shutdown and the debt ceiling debate? How do you assess the international response to these developments?
TS: I don’t think that the government shutdown helped the US image for sure. Most Americans don’t think it was a good thing and it certainly does not send the right signal internationally. I think that we in the US were not as surprised as Europeans were because we have gone through this before; we have had government shutdowns and we have survived them. Polls indicated that most Americans after the government shutdown do not think that it was the right way to go and even some politicians who brought the ballot agree that it was not popular among their own constituents. I think that now cooler heads are prevailing. I also want to draw a distinction between the shutdown, which originally was about health care, and the debt-ceiling crisis. I have a lot of confidence that we will be able to work through this debt-ceiling crisis issue because it would be catastrophic if one day the US were not able to pay its bills and defaults. I don’t believe this is going ever to happen.

TSS: What are the most challenging current international issues you feel the US needs to focus on?
TS: The US is working very closely with the EU on several issues: Syria, Iran, the Middle East peace process and also North Korea. But in spite of the fact that there are crises going on all over the world, there is positive progress in all these areas. I am not arguing that these can be solved anytime soon, but for example in Syria I thought it was very positive that chemical weapons are being removed now. The wider conflict is a very difficult issue and one that probably won’t be resolved anytime soon.

TSS: The US Embassy in Bratislava flew a rainbow flag in support of gay pride earlier this year and was among the foreign embassies that supported the march for LGBTI rights. How do you assess the public debate in Slovakia on LGBTI rights here? MFA Miroslav Lajčák, for example, spoke about verbal attacks received by his ministry, which is responsible for drafting the new human rights strategy.
TS: It is one of the core principles of our country in foreign policies to uphold the rights of any minority, no matter whether it is race, sex or religion, and it has taken us a long time to get where we are now. I see an increasing level of tolerance in Slovakia, but I thought it was very unfortunate the kind of attacks that the Ministry of Foreign Affairs and Mr Lajčák received; these were not just philosophical, they were in many cases ugly, personal and very inappropriate. I understand the sentiment and that there are many Slovaks who, from their religious conviction, feel that there should be only heterosexual relationships. But we believe that any country that is a member of the EU and the UN should subscribe to those philosophies that are enshrined in our own constitution and in the principles of these organisations: tolerance for people with different orientation.

TSS: Even Slovaks who know very little about diplomacy may have noticed you performing in a band with several diplomats. How has this experience enriched your mission here?
TS: We’ve had a lot of fun with the band and this is something that shows that music is a medium to communicate very effectively with people. I went to a wonderful concert last night by an American mezzo-soprano and she communicated with people on a very emotional level, while showing the best of the US. I don’t know if my piano playing shows the best of the US, but we have a lot of fun and we’re basically saying that we’re not just stuffy diplomats, but also like anybody else, like Slovaks. It’s been very positive for public diplomacy.

TSS: What are some of the highlights of your diplomatic mission to Slovakia which you will remember long after you have left the country?
TS: I’ve had a wonderful time here, your country is a beautiful region, and Bratislava is so centrally located that within a very short time you can go to so many beautiful places, while it is such a culturally rich environment. In terms of my diplomatic accomplishments, I have most enjoyed programmes to cultivate entrepreneurship and connections between the US and Slovakia by bringing Slovaks to the US. The projects we are doing are not just about me or the embassy staff, but they work through local NGOs, which then adopt them. I am very proud of the programme Re-Start Slovakia, which challenges Slovaks to come up with the idea to use social media to fight corruption, suggesting that Slovaks can do something about it.