‘Jak jsme se stali kolonií’ was first published in 2015. It successfully undermined the myth of the ‘transformation success’ and showed that the position of the Czech Republic in the world economy is unsustainable and disadvantageous for its citizens. This eBook is an adapted and updated version for non-Czech readers.
Please find the eBook on the right/below (mobile version) in 'Documents' (English, PDF).
‘Jak jsme se stali kolonií (‘How we became a colony’) was published in 2015 and became a bestseller because it grasped a topic that was taboo. It successfully undermined the myth of the ‘transformation success’, and showed that the position of the Czech Republic in the world economy is unsustainable and disadvantageous for its citizens. Furthermore, it highlights the interests of certain actors behind the transformation policy and the tendency to retain cheap labour policies, which benefited certain groups. I have travelled throughout the whole of the Czech Republic with this book because of the seemingly endless enthusiasm for debates among its readers. The widespread interest in the book reflects the deep dissatisfaction hidden within Czech society. The word ‘colony’ has since been included in the vocabulary of some politicians, and topics such as the outflow of dividends, the wage gap, and the role of transnational companies are now included in ‘mainstream’ discussions and are no longer viewed solely as ‘communist critique’.
This eBook is not just a translation of the original version into English. It respects the viewpoint of a foreign reader, for whom the context may be very new, and it includes current developments up until April and May 2022.
In this eBook, a span of more than thirty years is covered. After a brief introduction of the centrally planned economy, its specifics, and the position of Czechoslovakia in the Eastern Bloc, the focus shifts towards the transformation process. The transformation process was strongly influenced by neoliberal ideology and the Washington Consensus. The failures of the transformation process rapidly became obvious, but leaving the ‘path of dependency’ has proven to be very difficult.
In the following chapters, the development of the Czech economy is described regarding its position and category within the international division of labour, structural changes in the economy, cheap labour, and all the features of a dependent economy. The Czech Republic is suggested to be – politically and economically – a colony, giving this book its name. Within the book, the interconnectedness of individual features is emphasised. These features include the outflow of dividends, the wage ceiling, high engagement of foreign direct investment, transnational corporations, and the influence of foreign interests. Together they paint a clear picture, and represent a socio-economic model which is long overdue.
Furthermore, the political context of the Czech Republic has been taken into consideration, especially the fall of left-wing parties, which had been losing ground, and dropped out of Parliament after 2021 Parliamentary election. The political situation is presented using the main trends and tendencies so as not to bore the reader with many, to them, unknown politicians.
The eBook also contains numerous tables and figures which illustrate the development of certain economic indicators over time, for example the development of the minimum wage. They also offer a comparison with other countries, for example in the category of the outflow of dividends.
The socio-economic development of the Czech Republic is set in the framework of the development of the world economy and the main ideologies of the time. Thus, the globalisation era and its background are analysed. Further, the impacts of the Great Recession and the COVID-19 pandemic on the international division of labour are discussed. The Czech Republic has been strongly influenced by external factors and suffers from a long-term inability to present and implement economic strategies acting in its own interest. Such strategies would aim towards gaining a more dignified position in the world economy, wage convergence, and more strategic goals such as self-sufficiency in food production. All such steps would, of course, require not only a grasp of current changes in the world economy, but also the implementation of modern industrial policy.
How the Czech Republic Became a Colony
by Ilona Švihlíková
edited by Dagmar Švendová
commissioned by transform! europe
eBook | ISBN: 978-3-903343-20-7
82 pages | July 2022
Table of Contents
A brief introduction to the centrally planned economy
Changes in the world economy since the 1970s; the crucial role of the Washington Consensus
The Washington Consensus and its implications
The transformation process – common features
The transformation process in the Czech Republic
The Czech Republic in the international division of labour
Consequences of a dependent economy
Labour market and productivity
FDI, outflow of profits, and transfer pricing
The tax system and its distortions
The transformation of the political landscape
Impact of the COVID-19 pandemic: the Czech economy and policy
Global COVID-19 pandemic impacts
The current socio-economic situation in the Czech Republic
Ilona Švihlíková is vice-rector at the University College of Business in Prague. She holds a PhD in Political Science and specialises in the global economy. Her work focuses on the political and economic aspects of globalisation. She has authored or co-authored a number of monographs, including How the Czech Republic Became a Colony, The Greek Tragedy, and Capitalism, Socialism and the Future. In 2010, she founded the civic organisation Alternativa Zdola, focusing on local economy and citizen participation. In 2017, she founded the analytical website !Argument. She works as a macroeconomic analyst for the Bohemian-Moravian Confederation of Trade Unions and was a member of the National Economic Council of the Czech Government (NERV), a governmental advisory body.
Dagmar Švendová is a lawyer, holds a BA in Law and Business Management and an LLM in Czech Business Law in the European Union. She has worked as a political advisor and assistant to a Member of the European Parliament. Since 2017, she has been the transform! europe facilitator responsible for the Central and Eastern European Strategy and Member of the Editorial Board of the transform! yearbook. As part of her work, she is co-author of the CZ section in ‘Studies on challenges in post-coal regions: in southwest Poland, North Czech Republic, and East Germany’ and co-editor of eBook 100 Shades of the EU — Mapping Political Economy of the EU Peripheries.