Prague, Nov 14 (CTK) – Foreign companies have been sending abroad much more money than they have invested in the Czech Republic, and the country’s capital outflow is the third highest in the European Union, Julie Hrstkova writes in daily Hospodarske noviny (HN) on Monday.
A recent Czech government report wonders at the capital outflow, however, this outflow is no surprise, she says.
Moreover, unlike Ireland and Luxembourg that occupy the first two positions in capital outflow, the Czech Republic is an industrial country, Hrstkova writes.
She says the Czech Republic is a “colony,” but it is its own fault.
The hope that the Czech government will be able to convince companies to reinvest a large part of their profits in the country is false. The government is not even able to convince firms to treat their employees in the same way as they are treated in the home countries of these firms, Hrstkova writes.
This concerns not only wages but also job protection – something like the Future Pact that aims to guarantee the production programme and future for the employees of the Volkswagen group. But this pact only applies to the car maker’s employees working in Germany, not to those employed by Skoda Auto in the neighbouring Czech Republic, Hrstkova writes.
One may complain of evil supranational imperialists who exploit the country, but Czech capital was no better. In the 1990s, Czech industrial captains and bank giants did not send tens of billions of crowns in dividends abroad, but they ran into high debts of a similar volume, which the Czech state had to pay, she says.
The former state Czech Consolidation Agency (CKA) actually developed a solid basis for the Czech state debt, Hrstkova adds.
Since the 1990s, Czech capital has learnt to make money. However, most big Czech companies have their seats outside the country, which means that they send their profits abroad, same as foreign companies, she writes.
Hrstkova says it is a question of whether the returns negative balance can be changed as privatisation of big state-run firms has ended.
When the Czech Republic joined the EU in 2004, one of the main issues discussed was “convergence” or a comparison of the economic performance of the member countries. However, the only country that seems to have succeeded in convergence is Ireland, Hrstkova writes.
Ireland made a low taxation and education its priorities and it found enough money and strength to persuade the high-earning Irish people who worked and studied abroad to return home, invest and pass their experience to others, Hrstkova says.
The Czechs do not want people from abroad and they do not learn foreign languages, although almost nobody abroad speaks Czech. The Czechs are a nation that is excellent in cheap production and in sending the profits abroad. Such countries were called colonies in the past, Hrstkova writes.
