The changing face of the country
If you were lucky enough to discover Prague in the early 1990s, just after the Velvet Revolution, and haven't been back since, you'd be hard pressed to recognize the city. The buildings blackened by years of factories and coal-fired heating have given way to a model capital, clean, green and breathable, even if some work remains to be done in certain districts. Bohemia has regained its wilderness, and in Moravia, the most polluting large factories, mines and blast furnaces have also ceased to operate, paving the way for a more balanced development of the economic sectors, leaving a new place for services and trade at the expense of industrialization alone. The shift to a liberal economy that began with the fall of the Wall came at a time when the Czech Republic was throwing itself wholeheartedly into the arms of Europe, multiplying its efforts to turn its back on an oppressive regime. A somewhat brutal transition, which is far from having had only happy consequences.
Pervasive corruption
This early and sudden wind of liberalism has indeed triggered a speculative frenzy with all its disastrous consequences: too rapid enrichment, sudden ruin, deepening inequalities. The capital was not the only city concerned. In the countryside, too, financial profitability replaced communist productivity very quickly, leading to huge production differences from one region to another and from one year to another. The need to renovate all aspects of the country's economic life, for its part, led to major investments by the state, which did not always end up in the pockets they were supposed to bail out... From this came the many financial scandals, such as the one related to photovoltaics in 2013, and their corollary: the fall of governments.
Achieving political stability
President Miloš Zeman, a major opposition political figure at the turn of the millennium and President of the Republic since 2013 after re-election in 2018, has so far been unable to stem the tide of government, which is considerably slowing down the necessary reforms. Financial scandals have led in recent years to a lack of interest in politics among Czechs, a desertion of polling stations that is almost as massive as that of churches, and the appearance of a multitude of small parties whose names reflect the mood of the Czechs: "Party of Discontented Citizens," "Pirate Party"... Even the former Communist Party has managed to regain its strength. As a result, traditional parties such as the Social Democratic Party and the Civic Democratic Party are only able to govern at the cost of incessant, sometimes contradictory and often unstable alliances. Former Prime Minister Andrej Babiš had to govern with a coalition of a dozen different parties, which considerably limited his ability to act. He was implicated in a tax evasion scandal, and in 2021 he was succeeded by Petr Fiala, a figure from the Civic Democratic Party, who formed an alliance with right-wing parties to win the elections and has since governed with five parties, trying to reconcile the right with the Pirate Party and the Mayors and Independents Party, against a backdrop of repeated hospitalizations of President Miloš Zeman. His first goal is to stay in office long enough to initiate some reforms, but the long-term vision is unfortunately very difficult.
Finding a European second wind
Europe was one of the first choices of orientation for the Czech Republic after the Velvet Revolution. But despite some progress, joining Europe in 2004 and the Schengen area in 2005, many other steps have still not been taken. Entry into the euro zone, in particular, has been postponed year after year for a decade, to the point where the political class, after extolling its merits, seeks to expose its drawbacks to justify the lack of progress in this area. As a result, the Czechs hold the European record for abstention in European elections and, for many of them, joining Europe is no longer as synonymous with progress as it once was. For the current government, it will be a matter of choosing a path quickly and succeeding in motivating a majority in its direction to give a second wind to membership.
Reducing inequalities
The standard of living of almost half of the population has improved since 1989 and the fall of communist rule. This includes those who have successfully set up a business, those who have recovered the assets they were deprived of in 1945-1948 or, as many Czechs claim, the old apparatchiks who made their fortune during the socialist period. However, behind this rather positive picture lie inequalities that have become much worse since the economic crisis of the late 2000s. The emergence of a wealthier segment of the population and the wind of liberalism have led to a phenomenal rise in rents, making housing very difficult for the middle classes living in Prague or Brno, for example. It is not uncommon to see Czechs, especially women in low-level jobs, working two jobs in one day: a teacher or secretary by day may be working at the cash register of a supermarket by night. It is not easy to make ends meet in a country where the average salary is €1,850 and the minimum wage is €575. The situation affects especially pensioners and young people. In recent years, with the crisis, the gaps between the very rich and the very poor have become more and more obvious.
The place of tourism
Tourism has a role to play in improving all this: reorienting the Czech Republic towards Europe and reducing inequalities. But for this to happen, it must not be limited to Prague and must be expanded to the entire country. Tourist spending within the Czech Republic accounts for more than 5% of GDP, almost all of it in Prague. Germans are the leading foreign tourists in the Czech Republic, followed by the British, Spanish, Russians, Austrians, Poles, French and Belgians. Tourism directly generates 3% of jobs in the Czech Republic and up to 13% indirectly. 67% of all foreign tourists visit Prague, which means almost 4.5 million tourists every year, more than three times the population of the city. Capturing this population and attracting it to the rest of the country is a major challenge for the Czech economy and for employment in the provinces, which the government must address.
