Business News

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End of hopes for Globopolis.com

The end of last week saw the first big crash on the Czech internet market, when the server globopolis.com went out of business. This was an international site, offering tourists information about major cities in Central and Eastern Europe. Observers say Globopolis, backed by American investors, had a good chance to prosper, but it emerged too early - it operated on a market where 70 percent of the population have never used the internet. On the other hand, it lacked the resources for a massive marketing campaign to attract clients from the rest of the world.

Komercni bank cuts down staff numbers

The only remaining state-controlled bank, Komercni Banka, laid off more than 20 percent of its employees in 2000 in a run-up to the planned privatisation of the bank this year. The bank's general manager, Radovan Vavra, does not see a reason for further redundancies. Komercni Banka now has nearly 11 thousand employees.

Vavra expects that the state could sell its 60-percent stake in the loss-making bank for more than one billion USD. However, economic analysts are rather sceptical, estimating the price at around 700 million USD.

Czech Republic to join elite club

The Czech Republic is expected to officially confirm its candidacy for membership in the group of the world's most developed countries in April. This means that the country will start participating intensely in development programmes and at the same time stop using World Bank funds. According to Czech Finance Minister Pavel Mertlik, the Czech Republic is to sign an agreement on entering the graduation process at the World Bank and IMF meeting in Washington in the spring.

Flight tickets selling best on the internet

Flight tickets were the best-selling commodity in Czech on-line shops in the year 2000, with sales exceeding 1 million USD, which was about a fifth of the total turnover in Czech electronic trade. According to a survey conducted by the auditing agency Deloitte and Touche, home appliances came second, followed closely by music recordings.

Srejber sent to prison for embezzlement

A court in Prague has sentenced former tennis player and entrepreneur Milan Srejber to five and a half years in prison for embezzlement. Mr. Srejber was found to have embezzled 13 million crowns in favour of his firm, Srejber Tennis Investing. He had siphoned the money out of investment funds, which he founded and administered. Srejber is also known as a generous sponsor for the former ruling Civic Democratic Party of Vaclav Klaus, whose government approved the privatisation of a giant steelworks conglomerate into Srejber's hands. The ruling judge said this was the lowest possible sentence, because Srejber had never been prosecuted before. Mr. Srejber filed an appeal immediately after receiving the verdict.

Employees get higher wages than officially declared

Some Czech papers have disclosed a wide-spread practice among small Czech firms, which officially pay their employees salaries near to the minimum wage, but in addition pay them the same amount or more in cash. This way, the employers economise on taxes, but damage the workers' interests. The illegal procedure affects mainly young people, in regions with high unemployment. However, by accepting this practice, employees are party to a crime and as well as criminal prosecution, they could face a number of other disadvantages, because social benefits and pensions are calculated according to officially declared wages.

Foreign trade gap widens

The Czech foreign trade deficit almost doubled in the year 2000, to 3.5 billion USD, compared to less than 1.8 billion in 1999. The Czech Statistical Office attributes the widening gap to a passive balance in categories such as raw materials, semi-finished products and chemicals, as well as machinery and transportation.

Experts worried about falling birth rate

The Czech birth rate has fallen by 30 percent since 1970. According to the latest data provided by the Czech Statistical Office, there are now 9 children born per 1000 inhabitants a year, while 30 years ago, the figure was 15 children per 1000 inhabitants. Experts say the demographic development is worrying, because the ageing of the population, which is common throughout Western Europe, is likely to create serious problems for the labour market.

Earlier, Radio Prague's Olga Szantova talked to labour market expert, Daniel Munich from the Economic Research center of the Charles University in Prague.

Authors: Vladimír Tax , Olga Szantová
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