Economy
The Czechoslovakian economy was a centrally planned command economy with links controlled by the communist party, similar to the Soviet Union. It had a large metallurgical industry, but was dependent on imports for iron and nonferrous ores. Like the rest of the Eastern Bloc, producer goods were favored over consumer goods, causing consumer goods to be lacking in quantity and quality. This resulted in shortage economies. Economic growth rates lagged well behind Czechoslovakia's western European counterparts. Investments made in industry did not yield the results expected, and consumption of energy and raw materials was excessive. Czechoslovak leaders themselves decried the economy's failure to modernize with sufficient speed.
- Industry: Extractive and manufacturing industries dominated sector. Major branches included machinery, chemicals, food processing, metallurgy, and textiles. Industry was wasteful of energy, materials, and labor and slow to upgrade technology, but was a source of high-quality machinery and arms for other communist countries.
- Agriculture: Minor sector but supplied bulk of food needs. Dependent on large imports of grains (mainly for livestock feed) in years of adverse weather. Meat production constrained by shortage of feed, but high per capita consumption of meat.
- Foreign Trade: Exports estimated at US$17.8 billion in 1985, of which 55% was machinery, 14% fuels and materials, and 16% manufactured consumer goods. Imports at estimated US$17.9 billion in 1985, of which 41% was fuels and materials, 33% machinery, and 12% agricultural and forestry products. In 1986, about 80% of foreign trade was with communist countries.
- Exchange Rate: Official, or commercial, rate Kcs 5.4 per US$1 in 1987; tourist, or noncommercial, rate Kcs 10.5 per US$1. Neither rate reflected purchasing power. The exchange rate on the black market was around Kcs 30 per US$1, and this rate became the official one once the currency became convertible in the early 1990s.
- Fiscal Year: Calendar year.
- Fiscal Policy: State almost exclusive owner of means of production. Revenues from state enterprises primary source of revenues followed by turnover tax. Large budget expenditures on social programs, subsidies, and investments. Budget usually balanced or small surplus.
Read more about this topic: Czechoslovak Socialist Republic
Famous quotes containing the word economy:
“The aim of the laborer should be, not to get his living, to get “a good job,” but to perform well a certain work; and, even in a pecuniary sense, it would be economy for a town to pay its laborers so well that they would not feel that they were working for low ends, as for a livelihood merely, but for scientific, or even moral ends. Do not hire a man who does your work for money, but him who does it for love of it.”
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