Czech Republic

Population: 10.3 million
GDP: €7,370 per head
Key Industries: Cars (Skoda accounts for 16% of exports)

Overview: Tourism in the Czech Republic really dates from the 1989 Velvet Revolution and has largely focused on Prague, with its great museums, galleries, concerts and other attractions. Many day trips are possible from Prague, including the great western spa towns. However, the rest of the country has much to offer the independent traveller. Although prices have risen over the past decade, the country still represents very good value for money.
The Šumava Mountains of south Bohemia offer excellent rambles and a range of sports, and well-preserved medieval towns. Northeastern Bohemia’s mountains, offer superb hiking amidst unusual scenery. In the eastern half of the country, life is even less hectic; Brno provides an excellent base for exploring important historic towns like Olomouc and Kroměříž.
The country possesses an immense number of fascinating castles, churches and other architectural gems. It has always been known for its musicians, and there are an enormous number of all types of concerts and festivals to choose from. Best of all, the Czechs are an extremely hospitable people, eager to make any visit as enjoyable as possible.

Economy: Under Soviet control, the former Czechoslovak economy was subject to a particularly high level of state control, lacking even the small-scale private enterprise that existed to some extent in all other Eastern European economies. In the aftermath of the ‘Prague Spring’, especially, economic development was concentrated for political reasons on heavy industry at the expense of traditional strengths in light and craft-based industries. In the immediate post-Soviet era at the beginning of the 1990s, these inefficient and, in some cases, redundant industrial monoliths appeared to be a considerable impediment to the growth of the economy. The other problem was a dearth of natural resources – the country relied heavily on the former Soviet Union for most of its raw materials, particularly oil.
After a period of political and economic crisis, which ended with the separation of the Czech and Slovak Republics and a dispute with the Soviets over oil supplies, the Czech government pushed ahead with a rapid programme of market reforms, including a programme of mass privatisation and a major overhaul of the country’s financial system. The Government identified priority industries for development. These included: aircraft and vehicles, electronics, nuclear energy, gasification of coal, transport and communications, as well as traditionally strong light industries such as textiles, leather, ceramics and glass, and a variety of agricultural and service industries.
Although more than three-quarters of economic output is now in private hands, the State retains a major influence through minority shareholdings and state-owned banks (which in turn own parts of major corporations) in the economy. The results have been fairly good, with the exception of a mild recession during 1997-98. The Czech Republic has recorded steady growth within, on the whole, a sound fiscal and monetary environment. However, the high value of the koruna (which has impeded export growth) and damage caused by serious flooding during 2002 has slowed annual growth to under 2 per cent as of early 2003. The country has negotiated associate membership with the European Union and in 1998 began the lengthy process of negotiation to join the EU; this was accomplished, along with nine other countries, in May 2004. Trade links with Austria and Germany in particular, and with the EU generally, have grown substantially. The Czech Republic has already acquired membership of the IMF, World Bank and the European Bank for Reconstruction and Development.

Business: Businessmen wear suits. A knowledge of German is useful as English is not widely spoken among the older generation. Long business lunches are usual. Avoid visits during July and August as many businesses close for holidays.

Commercial Information: The following organisation can offer advice: Hospodárská Komora Ceské Republiky (Economic Chamber of the Czech Republic), Freyova 27, 190 00 Prague 9 Tel: (2) 2409 6111, Fax: (2) 2409 6222, E-mail: info@komora.cz, Website: www.hkcr.cz