Jiří Rusnok on Investments in the MoravianSilesian Region, Exports & the Euro Jiří Rusnok – CNB Governor was born on Oct. 16, 1960 in Ostrava. Having finished grammar school in Český Těšín, he continued his studies at the Department of Economics at the University of Economics in Prague, graduating in 1984. He started his professional career in the Department of Long-Term Outlooks at the State Planning Commission. Later he worked at the Federal Ministry for Strategic Planning and briefly at the Federal Ministry of Labour and Social Affairs. You come from the Moravian-Silesian Region, which has gone through a demanding period of transformation until the recent aim to make it a so–called Smart Region. How do you feel about the economic transformation and opportunities in the framework of sustainable economic increase? Human society keeps developing and changing all the time. Economy is an indivisible part of society, probably the fastest developing part, considerably influenced by progress in technologies. We very often hear that in the 21st century we live in the “post-industrial” age. In the past 50 years the nature of economies in advanced countries has gradually transformed; some industries have disappeared (or have nearly disappeared), e.g. some fields of heavy industry; and new fields appeared: mobile telecommunication, software production, etc. This logically reflects in cardinal changes and regional measures. A great part of the Moravian-Silesian Region is a perfect illustration of such a structural conversion. In other words, the development is natural and basically inevitable. It is a very positive trend that the region is heading for a cutting– edge profile while building upon its technological traditions.
It is a very positive trend that the region is heading for a cutting–edge profile while building upon its technological traditions. Based on the focus of businesses of the region, we are a pure exports economy. Are there any risks and/or limitations that the region might face in the near future? Risks and limitations have always appeared and naturally accompanied any human enterprise. As for the near future in particular: in let’s say 2-3 years the economy in the Czech Republic (including its status in the Moravian-Silesian Region) is expected to be doing well. The present Czech economy does not suffer from any significant macroeconomic imbalance. If the situation keeps its positive trend in the Eurozone, then our prospective is good too. In the short-term I see the greatest risk, or better, insecurity, in an unexpected turbulence in the global economy (such as growing tendency of the US protectionism). In the longer term, Czech businesses will deal with the lack of a qualified labour force. Generally, the greatest issues remain in the spheres of so called “triple I”: Institution – Innovation – Infrastructure. 14
Support of the economic potential of the region demands a qualified labour force to stay as commuting is a risky bet. A qualified labour force hand in hand with wage increase means a stabilizing element. What is your estimate of the wage increase in 2018? Wages will keep on growing by an average of about 8%, next year by another 5% at least. The increase will probably be faster in blue collar jobs where the tension on the job markets with many professions is very intense. Numerous foreign investors operate in the region, not only in automotive industry, which facilitates growing exports of the local producers. How does the central bank influence the environment for sustainable economic development in the region? The central bank generally supports these conditions on the national level, consequently in regions. The monetary policy cannot be targeted on a particular region because of its very nature. The aim of each central bank is to provide for price stability via relevant tools of monetary policy, to work against excessive fluctuation of the economic cycle, and to contribute to the general balance of the national economy. That is the elementary prerequisite of successful economic progress as a whole because that is the environment which allows both large businesses and individual citizens to make efficient decisions on their investments and expenditures as a sound basis of present as well as future prosperity. The central bank also supervises financial stability. To make the long story short, we look after the reliable operation of the financial sector (banks first and foremost) in good times as well as when confronted with either external or internal shocks. Mr Rusnok, you come from the Moravian-Silesian Region where you spent a considerable part of your life. Do you occasionally come to enjoy the countryside, see the sights and places of interest? Which would you recommend as the best places to see or local cuisine specialties to try? Yes, right. I was born in Ostrava-Vítkovice in the shadows of blast furnaces, then still in operation. For a few years we also lived in a housing estate in Ostrava-Poruba. Having lived in Martin (Slovakia) and Hranice na Moravě we moved back to this region to Český Těšín where I finished my elementary school and attended grammar school. My best memories bring me back to childhood in Nýdek where both my parents come from. We had