Eastern_Europe   Czecho-Slovakia   Czech Republic



by Michael Dean:



Vaclav Klaus, the Czech prime minister, is the only political survivor amongst a trio of central European finance ministers who emerged from obscurity after the fall of communism in 1989. Although Vaclav Havel is the president and certainly one of the most popular political figures in Czech history, it is Klaus who wields the true power. Havel, the jailed playwright who became president, brought in research economist who eventually became prime minister. His rise in Czech politics began in October 1990 when Klaus became chairman of the Democratic Forum (anti-Communist movement which emerged from the November 1989 " velvet revolution"). Four months later the Forum split into two ideological components. Klaus emerged as leader of thenewly formed Civic Democratic Party (ODS). The clear goal of his new party was to make market reform irreversible and provide a political home for the aspirant middle class. For months he roamed the country appearing regularly on television and writing a weekly column which explained the basic principles of market economics. After the June 1992 elections, the ODS emerged as the biggest party in the Czech Republic.


Economically, Klaus's party are firm proponents of radical reform and the transition to full capitalism. Under fierce criticism, he argued that price liberalization and privatization of firms in general should be undertaken as quickly as possible. To this end, he instituted a plan of "small" and "large" privatization. The "small" scheme revolved around the public auctions of small establishments like restaurants and retail shops. While the "large" aimed to privatize large scale firms through distribution of vouchers to all adult citizens. This was a revolutionary idea of dividing the country's national wealth amongst its people who would use vouchers to buy shares of privatized firms. This ingenious scheme brought about acclaim from supporters such as Milton Friedman.


So far Klaus's policies have paid off. With the second lowest unemployment rate in Europe, booming exports and the most foreign investment per capita in Eastern Europe, the Czech Republic appears to be well on its way to prosperity. Klaus is the only leader in Eastern Europe who unabashedly embraced market reforms and seen his popularity rise. Many attribute his success to his "permanent campaign", where he keeps in touch with the concerns of the common people. This is done through his masterly use of the media and his visits around the country. At each stop he trumpets the same message, arguing that the pain of transition to capitalism will eventually translate into gains. He proclaims his policy successes which he says have made the Czech Republic number one in the region. On his march to introduce the Czech Republic back into the European market, Klaus has left a tough act to follow. As one Moscow correspondent noted, what Yeltsin needs, is to find a Russian Vaclav Klaus.



1. The Velvet Revolution by Bernard Wheaton; and Zdenek Kavan,1992, Pages: 103, 154-181

2. Nexis system:

a) Politician behind the poet The Vancouver Sun, March 20, 1993,

b) Survey of the Czech Republic, Financial Times, March 24, 1993,

c) Czech Reform, Washington Post, October 30, 1993,

d) Czech Republic, N.Y. Times, February 25, 1994,

e) Czech leader to open talks, L.A. Times, June 8, 1992





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