Divergent Neighbors: The Czech Republic and Slovakai since Independence

By Meszaros, Andor I. | Harvard International Review, Spring 1999 | Go to article overview

Divergent Neighbors: The Czech Republic and Slovakai since Independence


Meszaros, Andor I., Harvard International Review


ANDOR I. MESZAROS, Senior Editor, Harvard International Review

On January 1, 1993, the state of Czechoslovakia ceased to exist and the Czech Republic and Slovakia were born in its place. The "Velvet Divorce," as the breakup was known, brought an end to more than 70 years of sometimes uneasy coexistence born out of the ashes of World War I. Communist rule from 1948 until 1989 kept any internal tensions securely under wraps, but the democratic government that succeeded it found itself facing the issue of separatism almost immediately. Elections in June 1992 saw economic reformer Vaclav Klaus capture the Czech premiership while Slovak nationalist Vladimir Meciar came to power in Slovakia. Klaus and Meciar were elected by a deeply divided electorate, and agreement could not be reached on a candidate to serve as federal president. Without the powerful symbol of federal unity that the institution of the presidency represented, it became clear that the nation would divide. In November 1992 the National Assembly voted to dissolve the federation, despite the lack of any real public enthusiasm for the split.

Since then, the two new nations have taken very different paths. The Czech Republic enthusiastically embraced Western capitalism, becoming the darling of foreign investors and boasting one of the strongest economies in Eastern Europe before finally hitting a setback in 1997. With former dissident and playwright Vaclav Havel as president, the Czech Republic showed a commitment to democracy and stable government that won it an invitation to join NATO and put it on the fast track for European Union (EU) membership. Slovakia, by contrast, found itself isolated and struggling to attract sorely needed investors, largely because of the policies of Vladimir Meciar, who, as premier, ruled Slovakia with an iron fist from 1993 until his party was defeated in parliamentary elections last September. Notorious for its disregard of personal freedoms and minority rights, the Meciar government relegated Slovakia to near-pariah status abroad.

The Czech Miracle

The Czech Republic's approach to reform can only be characterized as bold. Vaclav Klaus, Prime Minister from the time of the breakup until late 1997, was a Thatcherite conservative who believed strongly in free market principles. Foremost among his economic policies was the voucher privatization program, which facilitated the transfer of 80 percent of state holdings to private hands by the end of 1994. For a nominal fee--approximately a week's pay--any Czech citizen could purchase a book of vouchers and place bids on the stock of companies being privatized. Citizens could also entrust their vouchers to an investment fund to act on their behalf, an alternative many took. While it is difficult to conceive how state enterprises could have been privatized so quickly and efficiently in any other way without encountering rampant corruption, some problems did arise. The voucher system left many companies controlled by a large number of small shareholders with insignificant influence and a few large, powerful investment funds. Unfortunately, most of these investment funds were owned by the same banks that were the principal creditors of the companies they controlled. With the banks more interested in collecting on their loans than embarking on risky but badly needed restructuring of their holdings, many companies faced stagnation.

Foreign investment has also played an important role in the Czech Republic's post-communist economic success. Since 1990, the Czech Republic has attracted over US$8 billion in foreign direct investment. Germany has been by far the largest source of capital, followed by the Netherlands and the United States. Success stories, such as Volkswagen's 1991 acquisition of auto maker Skoda for US$6.4 billion, only helped fuel interest in the Czech economy. Skoda, once a poster child for communist industrial malaise and the laughingstock of Eastern Europe, was transformed into an efficient, modern enterprise with the help of German expertise. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Divergent Neighbors: The Czech Republic and Slovakai since Independence
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.