In this week's Economics Report, we'll be taking a look at the Awards for a Healthy and Safe Environment, which were handed out to environmentally friendly Czech companies earlier this week, but first, here's a rundown of the business stories making the headlines this week:
Rusnok reassures foreign investors: privatisation stays on track
The new Finance Minister Jiri Rusnok has assured foreign investors that the planned privatisation of the country's remaining state-owned enterprises will remain on track. Addressing a gathering of potential investors in London, Minister Rusnok said the unexpected resignation of his predecessor Pavel Mertlik would not affect the government's fiscal policy or slow down privatisation. In his address to the assembly Mr Jack Stack, General Director of leading Czech bank Ceska Sporitelna, described the Czech Republic as "a land of opportunity with a highly-qualified, cheap labour force".
Trade deficit reaches 13.9 billion crowns in March
The Czech Republic's trade deficit reached 13.9 billion Czech crowns in March, up from 8.6 billion in February and 6 billion in March last year. The year-on-year growth rate in imports was up in current prices in March, while the pace of exports dropped. Imports rose by 24.6 per cent year-on-year in current prices, and exports were up by 17.9 per cent.
Czechs make most of being BSE, foot-and-mouth free
While Europe struggles with BSE and foot-and-mouth to hit agriculture, the Czech Republic is making the most out of being a country where farm animals are free of the two diseases. Officials said this week that two of the country's largest slaughterhouses were actively promoting Czech-grown beef as disease-free, Italian investors were reportedly eyeing up Czech meat-processing companies, and exports of Czech beef to the Middle East are strong. Meanwhile, the government has criticised a recent warning by the European Commission, which said Czech cattle may be at risk from BSE. Czech beef is safe to eat, was the message from Agriculture Ministry spokesman Hugo Roldan.
Philips Matsushita and Parker top green-field investment list
The Dutch electronic giant Philips was awarded Investor of the Year 2000 this week, a new prize to show foreign investors that the Czech Republic doesn't take them for granted. Phillips came first in three categories: largest green-field investment, largest expansion and largest contribution to society. Philips is investing 7.4 billion Czech crowns in building a plant manufacturing TV tubes in Hranice, North Moravia. Martin Jahn, head of CzechInvest, said large-scale foreign investment meant new jobs, new technology, support for exports and increasing competitiveness and labour productivity in his country.
Government, CSOB auditors come up with different sums for IPB
Reports appeared in the media this week claiming that plans to sell the failed IPB bank may be jeopardised by a huge gap between what the Czech government and the potential buyer think the bank is worth. Czech newspapers and the CTK news agency reported that while the government's auditors claimed IPB had a positive net worth, auditors for the CSOB bank, which had promised to buy the bank by June this year, said the net value was negative. The difference between the two auditors' figures exceeds 100 billion Czech crowns, or just over two and half billion U.S. dollars.
Personal computer sales rise, but slowly
Personal computer sales in the Czech Republic rose by 6.8 per cent year-on-year to 296,443 units worth a total of $386.3 million in 2000, the Czech News Agency reported this week. But the growth was much slower than the EU average, and also slower than in 1999, when the year-on-year increase in computer sales equalled 14 per cent. Compaq remains the largest computer dealer in the Czech Republic, with market share of 13.9 per cent, ahead of Dell (9.3%) and ProCa (7.9%). Central and East European dealers sold 3.6 million computers worth a total of 3.83 billion dollars last year.
Business Leaders Forum awards for clean environment
This week the Business Leaders Forum, an organisation that represents many of top corporations in the Czech Republic, held its tenth annual ceremony for the Healthy and Safe Environment Awards. The awards are handed out to companies and municipalities whose projects contribute to exceptional improvements in the local environment and the health of employees and the general public.
Following 40 years of Communist rule, where little or no consideration was given to environmental concerns, extensive environmental damage and pollution were rife in the Czech Republic, especially in key industrial areas in North Bohemia and North Moravia. There is still a lot of cleaning up to be done and there are also some outstanding issues, such as the Temelin nuclear power plant in South Bohemia that have strained relations between the Czech Republic and Austria.
Czech Environment Minister, Milos Kuzvart, who attended the awards this week, believes that they play a significant role for public awareness, at a time when the Czech Republic is hoping to close the crucial environment chapter of European Union legislation on the way to EU accession: