The richer Prague is, the greater decay it faces

Petr Holub
17. 3. 2008 8:00
Economy is growing but environment deteriorates
Never mind it´s block of flats but it is in Prague!
Never mind it´s block of flats but it is in Prague! | Foto: Ondřej Besperát

Prague - Prague is one of the three European capitals differentiating most from their surroundings.

Experts warn that cities with unrivalled economic and living standards are most threatened by poor public services, too expensive housing and poor quality transport.

London sets an example

According to Eurostat, Prague differs  from its surroundings like London and Bratislava as far its economic output is concerned.

Czech capital occupies the 12th position among 270 European regions, other Czech regions are still in the third hundred.

It is not difficult to explain London's dominant position in the U.K. This a world financial centre and the global economic operation only brings it extraordinary profit. Moreover, London provides financial, legal and marketing services for the rest of the country.

"London is the best comparison for Prague," politics expert Dan Marek of Olomouc University confirms.

Prague profits from being a contact point for foreign investors. Leading world banks, legal firms and all the media have their HQ in Prague. "For instance, Škoda Mladá Boleslav has its main address in Prague where it also pays taxes," Marek says.

Forging ahead

The gap between Prague and its surroundings keeps growing though. A Prague citizen's economic output is twice as great as the Czech average in the long run. Other regions range from 75 to 90 percent.

The difference between the output of regional economies grows each year. In 2001, a Prague citizen posted a production of CZK 475,000, i.e. by 259,000 more that the second most productive city, Plzeň.

In 2006, the difference was already 368,000.

The trend is not likely to stop as the investment gap is growing even faster. There are 2.5 times more investments coming to Prague than to the rest of the country. Against Jihlava and Pardubice, four times more investments flow through Prague per citizen.

As for those moving, more than a half of them head for Prague or its closest surroundings, one third of all new houses are built in Prague region.

London is a good compare to Prague
London is a good compare to Prague | Foto: Ondřej Besperát

According to politics expert Marek, this trend may not necessarily be bad. "Building megacities that lead other regions is counted upon in many European countries," he reminds us saying that also the Poles and Hungarians embarked on this journey within the past years. As for Germany, especially Hamburg and Munich are successful centres.

The country dependent on London

However, the example of London proves that relying on one metropolis only is rather risky.

"If London gets into trouble this year, the whole country will be afflicted," the Economist warns in a recent article.

London has still not got rid of the fear of a banking and real estate crisis. If local financiers stop making money, the whole London economy will freeze up.

Megacities have substantial disadvantages against the rest of the country. Usually, they have problems dealing with traffic issues.

In general, they provide worse public services: the government pays its employees identically all over the country and in the metropolis with higher wage level nobody is interested in working as a teacher, officer or policeman. Also the prices of apartments are higher there.

London inhabitants and talented people come to terms with all of this provided their income grows fast enough. When the growth stops, they lose interest in London and move away.

There are no alternative centres for economic growth in England.

As long as wages grow

For the time being, Prague is on the rise and its inhabitants overlook the disadvantages that are growing too.

The difference between housing prices in Prague and the rest of the country is greater than between London and the rest of the U.K.

For example, no other Czech city reaches to two thirds of the average price of a Prague apartment. And the prices of apartments in no part of Brno, the second most expensive Czech city, exceed the prices in Uhříněves, the cheapest Prague locality.

Housing prices in many towns of south England exceed the prices in the cheapest parts of London.

The Statistical Office draws attention to the fact that Prague is the only Czech region where private sector employees have higher salaries than in public services. In poorer Karlovy Vary and Olomouc regions, government salaries exceed those in private sector by 25 percent.

Prague is also the only city where transport worsens environment. There is ten times more dust and nitrates per square kilometre in Prague than in other regions. Whereas the situation keeps improving in other regions, in Prague it gets worse each year.

Therefore, sociologists warn that the problems can also afflict Prague. In recent elections, worsening living conditions made Prague inhabitants (similarly to Londoners) vote against the current government they consider guilty.

"In the years to come, Prague will be in an inconvenient position against other regions. All the regions will get money from EU structural funds to improve their transport, schools and environment. Rich Prague will not get anything," Dan Marek says.

How to replace Prague

Most Western European countries rely on alternative centres. Holland, Austria or Spain are a good example.

For instance, Utrecht is richer than Amsterdam in the long run. However, within the past years, Groningen on the Dutch-German border with 200,000  inhabitants got ahead of both of them. It is now one of the ten richest European regions.

Groningen is now one of the ten richest European regions
Groningen is now one of the ten richest European regions | Foto:

Besides the university, which has 2,500 graduates in medicine and biotechnologies apart from others every year, among the main reasons of the success is the development plan up to 2030, which is strictly followed.

The city wants to concentrate the development of industry and housing in a T-shaped corridor with the city of Groningen being on the legs' crossing.

Industry is looking for new specialisations especially in IT and biology fields and the 50,000 apartments that should be constructed by 2020 should use the space available in a better way. As much of landscape as possible should be kept undeveloped in order to maintain quality of life.

The corridor's end points join roads and railways into which investment still flows. A substantial part of the money needed is drawn from a mutual fund of the city of Groningen and other settlements.


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