Corruption: Czech economy's hidden and growing problem

22. 11. 2011 17:13
Foreign newspapers, insiders and analysts agree: Czech corruption scares away foreign investors

Prague - Corruption in the Czech Republic works as a repellent for investors, said Czech entrepreneur Zdeněk Bakala to Financial Times.

Earlier, corruption in the top levels of Czech politics was also discussed in a story published by another influential British newspaper with global circulation - The Economist.

And in June this year, a survey among German managers showed that the Czech Republic's corruption problem is increasingly seen as spoiling the country's business environment and investment climate.

Read more: German investors fed up with Czech business "jungle"

"You are constantly in contact with various people that want your money, from obtaining a construction permit to meeting with a regulator," Bakala was quoted by the British daily.

Another Czech businessman and one of the richest Czechs Andrej Babiš said in an interview with Czech Television, a public-service broadcaster, that an adviser of Czech President Václav Klaus demanded a bribe in exchange for influencing the president's stance to the bio-fuels bill.

Some latest corruption scandals involve the Czech Republic's industrial giants.

Read more: Skoda Plzen silently moves its seat to Marshall Islands
Read more: Ex-spy chief: CEZ secretly financed political parties

The corruption and its negative effect on foreign investment may be especially harmful for the Czech economy, whose growth is expected to slow down to 0.7 percent in 2012, said Financial Times.

"We try to limit our investments in the Czech Republic, and one of the reasons we are doing it is that it is becoming near impossible to do business in the Czech Republic," Bakala was quoted as saying.

Financial Times trace the roots of the problem to the beginning of the 1990s, "when a controversial voucher privatisation scheme which was supposed to give every citizen a share of state-owned companies ended up being hijacked by certain fund managers, building many of the country's business fortunes."

Read more: Millions found in Czech official's Swiss account

Read more: "If Osama were a shareholder, nobody would know"

"The public is totally fed up by all these scandals, hardly a week comes by without a new corruption case being investigated," Cevro Institute analyst Jan Jireš was quoted as saying by Financial Times.

This disillusion translates into falling popularity of the Czech center-right government and its austerity belt-tightening measures.

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autor: | 22. 11. 2011 17:13


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