Ironically, these bad tidings are mostly the inevitable outcomes of
much delayed reforms, notably privatization. Four fifths of the
country's economy is alleged to be in private hands - a rate similar to
the free markets of Estonia, Slovakia and Hungary. In reality, though,
the state still maintains intrusive involvement in many industrial
assets. It is the reluctant unwinding of these holdings that leads to
mass layoffs.
Yet, the long term outlook is indisputably bright.
The ministry of finance forecasts a rise in the country's GDP from 59
percent to 70 percent of the European Union's output in 2005 -
comparable to Slovenia and far above Poland with a mere 40 percent. The
Czech Republic is preparing itself to join the eurozone shortly after
it becomes a member of the EU in May 2004.
Foreign investors are gung ho. The country is now the prime investment
destination among the countries in transition. In a typical daily
occurrence, bucking a global trend, Matsushita intends to expand its
television factory in Plzen. Its investment of $8 million will enhance
the plant's payroll by one tenth to 1900 workers. Siemens - a German
multinational - is ploughing $50 million into its Czech unit. Siemens
Elektromotory's 3000 employees export $130 million worth of electrical
engines annually.
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