The Czech Republic Since 1993: Identity, Economy, and the Czech Miracle

INTRODUCTION

The relatively peaceful Velvet Revolution fostered Czechoslovakia's return to a liberal democracy, but the Czech Republic did not become an independent nation until January 1, 1993. Since that date, the state of the Czech Republic has been called miraculous and unprecedented, with the nation gaining World Bank recognition as a developed nation in 2006. Miracles aside, the cultural identity, political environment, and economic landscape of the Czech Republic are undoubtedly unique, with echoes of communist rule still reverberating within certain domains and nationalist sentiment remaining strong nearly two decades following the country's independence. The following inquiry delves into the evolution of the Czech Republic since 1993, exploring the nature of and the relationship between the nation's identity, political structure, and economic state.

The tensions which ultimately led to the dissolution of Czechoslovakia had century-old roots. Moreover, granting sovereignty to a given group inevitably leaves significant numbers of sub-minorities within a new state, and the ethnically diverse nature of Eastern Europe made the national question of the Czech Republic a complex one following its independence. The Czechoslovak state was birthed in 1918 from parts of the squelched Habsburg Empire, essentially a conjoining of Bohemia, Moravia, and Slovakia. Even with minimal, Austrian control, the Czech lands were relatively economically prosperous and culturally developed, while Slovakia was troubled by ethnic conflict and a fractured, floundering economy.

The unification of Czechoslovakia rendered the new nation the least homogenous country in Eastern Europe in terms of cultures and ethnicities. The population of fourteen million people embodied three million Germans, 700,000 Hungarians, 500,000 Ruthenians, 200,000 Jews, and 100,000 Poles. Primarily out of political convenience, the diverse Czech population was framed by the new nation's government as a common, national majority labeled Czechoslovaks; they were counted as a lone, ethnic category. Despite having an array of languages, traditions, and religions, Czechoslovakians were deemed a single people at the nation's birth and during the interwar years.



As early as the 1920s, the lingual, social, and religious differences between the Czechs and the Slovaks, with the former being anti-clerical Hussite predominantly and the latter being Roman Catholic, became an increasing political problem. Slovak leaders in general resented the more populous and socioeconomically fortunate Czechs for their political domination, with Slovak nationalists collaborating with the Nazis in order to garner greater political freedom during World War II. Following the war and the brutalities of the Holocaust, Czechoslovakia was no longer as ethnically diverse and was briefly reunified in 1945 as an independent state. The communists seized power in 1948, however, leading to a general stagnation in the Czech economy.

By the time of the Velvet Revolution, the economic gap between Slovakia and Czech had narrowed, but the same ethnic, cultural, and social tensions that had existed since the early 1900s remained. The Czech lands had been politically repressed while Slovakia gained more Soviet investments in the realm of heavy industry. The Soviets were removed from power permanently in 1989 when popular support from both Czechs and Slovaks coalesced in two, key social movements; the Czech Civic Reform movement and the Public Against Violence in Slovakia movement both fortified support for the anti-communist movement and successfully removed the communists from power.

The years between the Velvet Revolution and the dissolution of Czechoslovakia were marked by increased attention to calls for separation between the Czech and Slovak lands; these calls stemmed, however, primarily from political parties and not from the voting populous. The Czech and Slovak Prime Ministers fundamentally opposed each other in terms of key, economic policies, and the Federal Finance Minister insisted that the only way to restructure and recover was for Czechoslovakia to split. Opinion polls of the Czechoslovakian people reflected that the large majority of citizens emphatically opposed the dissolution of the state, but the Prime Ministers announced the split of Czechoslovakia nonetheless. The Czech Republic and Slovakia became two, separate states officially on January 1, 1993.

THE CZECH IDENTITY SINCE 1993

When the first president of the newly formed Czech Republic was sworn in to office, he declared the following: "The horizon of what we call homeland has thus been significantly narrowed. No one is easily coming to terms with this change, but we have not lost our homeland because of this. On the contrary, its new state image represents for us an appeal for new thinking about its very essence and identity, its possibilities and prospects, its hopes." The new nation was suddenly burdened with cultural, political, and economic pressures significantly altered from those it experienced when still unified with Slovakia.

TOWARD LEGITIMACY AND SEPARATENESS: THE CZECH CONSTITUTION

During the communist period, constitutions were generally perceived as sham documents within East European nations, Czechoslovakia included. Between 1993 and 1995, both Slovakia and the Czech Republic sought to promote the legitimacy of their constitutions as a symbolic, meaningful manifestation of national identity. In addition to structuring the basic interworkings of government and citizens' rights, the Czech Republic's constitution became one of the first channels for acknowledging a new, Czech identity.

The post-communist states of Eastern Europe were charged with asserting both their sovereignty and independence during the early 1990s, following nearly forty years of Soviet domination. The break-up of Czechoslovakia, however, placed an additional burden on the Czech Republic, as the nation not only had to extricate itself from a communist identity but was also forced to concurrently construct a national identity for itself separate from that of Slovakia. The Czech Republic and Slovakia had a seventy-four year history as a common state, and the constitutions of the new nations needed to set forth diverging strategies for promoting nation-hood, lest the separateness of the two countries be perceived as superficial.

There are primarily two types of constitutions that were embraced by East European nations. While the civic principle type of constitution bases national cohesion on the citizenship of the people, the national principle type of constitution bases the nation's identity on geography and ethnicity, a blood-and-soil identity. The national principle type of constitution is frequently criticised as a vehicle for ethnic and cultural tensions, as it automatically creates a distinction between the majority and minority populations.

The Czech Republic wisely adopted a constitution based on a civic principle, and this laid the foundation for the nation's success. While Slovakia adopted a national principle constitution, focusing on exclusivity, the Czech Republic constructed a conversely inclusive attitude toward minorities within its foremost political document. The relative stability and growth of the Czech Republic, by extension, is likely at least partially attributable to its national identity as accepting of all of its citizens, regardless of their backgrounds. The preamble to the Czech Republic's constitution reads as follows:

We, citizens of the Czech Republic in Bohemia, Moravia, and Silesia, at the time of the restoration of an independent Czech state, faithful to all the good traditions of the ancient statehood of the Lands of the Czech Crown and of the Czechoslovak statehood, determined to build, protect, and develop the Czech Republic in the spirit of the inviolable values of human dignity and freedom, as a homeland to equal, free citizens conscious of their obligations toward the whole, as a free and democratic state based on respect for human rights and on the principles of civil society, as an integral part of the family of European and world democracies, resolved to jointly guard and develop the inherited natural, cultural, material, and intellectual wealth, determined to abide by all the tested principles of a law-governed state, adopt through our freely elected representatives the following Constitution of the Czech Republic.

The instrument constructs the Czech identity as at once ethnically diverse and charged with the promotion of common goals. While the nation's constitution has undoubtedly taken strides to protect the diversity of the Czech population, inevitable tensions exist from years of strategic, cultural oppression.

ETHNIC DIVERSITY AND THE CZECH IDENTITY

The Czech Republic is widely depicted as ethnically homogenous, with census results consistently reflecting that ninety-four percent of the eleven million Czechs are ethnically Czech. Other research suggests, however, that there are significant populations of Slovaks, Gypsys, Romanies, and Germans in the nation that have been grossly underestimated. Romanies alone are believed to number in the hundreds of thousands, and are widely blamed for soaring crime rates. By extension, they are the frequent victims of nationalist, skin-head violence, and the Czech government has been accused of ignoring their plight by overlooking the significance of the Romany population and the widespread hate crimes committed against them.

Ethnic tensions in the Eastern areas of the nation have been a problem as well, with Moravians and Silesians insisting that they constitute a distinct, ethnic group that was a separate province under the Habsburg Empire. Political movements to restore a regional autonomy for Moravia and Silesia have not been strong enough, thus far, to birth significant change. The Czech Republic oscillated between declaring the regions separate lands within the Republic and making other, less drastic concessions. Politicians feared, however, that any option would fragment the new nation, particularly as compared to Slovakia.

The Czech identity, nearly two decades after the nation's independence, remains an enigmatic one, with the new nation's economic pressures taking precedent, initially, over internal, ethnic strife. The Czech language has recovered, and, during recent years, the nation has embraced Western commercialism as a vehicle toward world membership and global market participation. Particularly since the dawn of the millennium, the Czech Republic has begun to solidify an identity that liberally acknowledges a diverse ethnic population whilst embracing common political and economic goals. In his text entitled The Czech Republic: A Nation of Velvet, Fawn writes that "the Czech Republic has many traditions on which to draw its contemporary creed. Whether these traditions, as ever in the study of nationalism, may be partially or wholly false is irrelevant. Instead, the Czechs take the glory of their history as an indicator of their future." The nation is in many ways returning to the success and stability it enjoyed at the beginning of the twentieth century, with a high standard of living and egalitarian ideals.

Czech politics are generally inclusive, as the nation's constitution reflects, but the single crack in the nation's political inclusiveness is its dismissive attitudes toward minorities. In short, while the Czech Republic's government has acknowledged the minorities in its population within certain political instruments, it has not sufficiently catered to its minorities through social policies. For example, the Romanies in the nation do not receive the same levels of tuition funds and healthcare generally received by the dominant Czech population. There is a significant lack of sympathy toward minorities like the Romanies that is glaringly reflective of racial intolerance; this is the same intolerance, ironically, that is dismissed within the nation's constitution.

THE CZECH IDENTITY AND THE WEST

The Czech foreign policy has largely been geared toward shedding its affiliations with Eastern Europe and conversely embracing those with the West. The economic and political policies of the Czech Republic have reflected, however, a persisting feeling of isolation from both the East and West, with the Czech identity existing somewhere in between Eastern and Western culture. In desiring membership to the European Union and Western trade organisations whilst creating films and other cultural manifestations that are distinctly Czech, the nation is undoubtedly attempting to belong to the Western community without having to define itself as expressly Western. Anthropologists both inside and outside of Czech society describe the Czech people as confident, educated, and intelligent, with no esteem issues forcing them to succumb to Western values.

Results on the international exams demonstrated as early as 2000 that the Czech education system was a solid one. Czech students excel particularly in maths and sciences, with Czech newspapers declaring that the "Czech Lion" is akin to the "Asian Tiger." Strategic efforts on the part of the Czech government are accredited with the fortitude of the nation's academic system, but underlying all policies during the late 1990s was a distinct plan to unite the Czech identity with a new, non-communist, economic identity.

THE CZECH ECONOMY SINCE 1993

The bonding element within the Czech identity, one that has relatively united the population, is not embedded within Czech culture; it exists as common, economic goals. The economy is extremely market-driven, though some industries and the aspects of the financial sector are in state-hands. During the post-communist reconstruction years, there was a strategic effort to address the economic nature of the Czech people. The drive to extricate communism from the Czech identity was a strong and successful one, uniquely embedding economic goals within an otherwise purely cultural identity.

Restitution of family dwellings to their pre-communist state was a significant goal during the post-communist years, as was the return of agriculture to private ownership. The overall articulation of egalitarian capitalism as the prime channel for economic recovery and success was frequent and eloquent, with voucher privatisation taking effective root in promoting capitalist ideology among the Czech people.

Overall, the success of the Czech economy since 1993 has been called an economic miracle. The Czech Republic has a balanced budget and the lowest unemployment and inflation rates within post-communist Europe. With an international credit rating higher than Greece and much higher than its post-communist counterparts, the World Bank identified the nation as one of the most promising countries for foreign investment. Many economic organisations, such as the European Bank for Reconstruction and Development, have acknowledged that the Czech Republic meets economic criteria for membership better than do their current members.

SMALL BUSINESS SUPPORTS AND PRIVATISATION

The success of Czech small businesses is believed to largely be fueling the nation's flourishing economy, with both macroeconomic and microeconomic government policies supporting a small business promoting strategy. Initially, Czech economic goals in the earl 1990s aimed to reduce state subsidies to state-owned enterprises and enact a strict monetary policy that would restrain inflation. Upon the success of these agendas, a currency policy was established to stabilise the Czech crown in conjunction with fervent efforts focused on privatisation.

The reduction of government subsidies to state-owned enterprises was complemented by privatisation of small businesses first. Larger enterprises were not privatized until the mid-1990s following the imposition of wage controls. The Federal Assembly in Czech afforded citizens the right to create businesses freely, independent of restrictions on the number of employees or the amount of property that could be had by a single entity. Independent contracting among collaborating firms was encouraged as a means to reduce the labor burden on new enterprises. Large, vertically integrated state enterprises were replaced, consequently, by smaller entrepreneurial enterprises.

In contrast to Poland and other post-communist nations in Eastern Europe, Czech's economic success was birthed from a comprehensive policy that framed small businesses as integral to the new, Czech identity. In short, by charging the Czech people with their own success, the government was able to promote capitalism whilst garnering public support. Most saliently, while other post-communist nations in Eastern Europe suffered from inconsistent economic policies, the Czech government has been very consistent in its support of small business development.

THE AGRICULTURAL SECTOR AND THE STIGMA OF SOCIALISATION

Socialist farms in the Czech Republic were either collectivist or state-owned, with rigid controls imposed over wages, labor, and other operations. The de-collectivisation and restitution process was a long and arduous one, with ownership titles being redistributed and the reallocation of land to private hands from the state. Most restitution claims were largely resolved by the dawn of the millennium, resulting in a large-scale transfer of nearly one-third of Czech agricultural land. The collectives presented a different type of problem, however, with members in a collective being asked to either remain members, with newly added changes imposed, or extricate themselves from their collective.

By the beginning of the twenty-first century, it was clear that the Czech farming industry was plagued by a unique stigma not had by other industries. Because agriculture in the former Czechoslovakia was the most conspicuously socialised industry, the drive to engrain capitalist ideology within the Czech people promoted little public support for farming. Liberal politicians and their constituents did not acknowledge the value of farming adequately, and the industry suffered significantly by a negative image.

While the agricultural industry in the Czech Republic was not particularly critical to the Czech economy, contributing less than five percent to the nation's GDP, the nation still needed to address the loss of agriculture as an environmental and political issue. The nation's desire for membership in the EU was a significant consideration as well, as the threat of Czech farms to those of other nations was a widely recognised one. During recent years, however, the Czech agricultural industry has followed the privatisation trends of other industries and made strides toward family-farming.

ORGANISATIONAL CULTURES AND MANAGEMENT IN CZECH BUSINESSES

The success of both small and large-scale, private enterprises in the Czech Republic is undoubtedly attributable to the embrace of capitalism by the Czech people. "Profit," as an economic term, was not a widely understood notion in post-communist nations, but the Czech government was able to efficiently frame "profit" as critical to the growth of the nation. The structuring of enterprises in the Czech Republic reflects a purposeful mirroring of Western organisations, with businesses of all sizes embracing corporate cultures and empathic management styles as vehicles for success.

Competition and profit were emphasised as integral to effective management, though technological competence was deemed critical as well. The conversion from a centrally planned economic system to a capitalist, market-based economy demanded massive changes in personnel, including educated, technical experts being placed in positions of management.

There was increased emphasis, in general, on specific competencies that were largely irrelevant under communism. The new competencies included those in communications, creativity, and leadership. The mentality of workers under socialism was not geared toward promoting profits and motivation was markedly low. By extension, new leaders were needed to promote internal change and organisational cultures of commitment and drive.

The notion that organisational culture was critical to the success of an organisation was one that was virtually non-existent under communism, and Czech organisations used strategic leadership to empower workers and foster a cohesive culture. The literature suggests that the extent to which organisational culture promotes autonomy and commitment among workers in the Czech Republic varies from industry to industry. However, the overall success of Czech's market economy suggests that organisational cultures, likely built upon a common vision for Czech privatisation and small business success, were allowed to evolve organically since 1993.

EMPLOYMENT, ENVIRONMENT, AND THE CZECH MIRACLE

In all other post-communist nations attempting to transition to a market economy, the change was marked by significantly high unemployment rates. Before the Czech miracle, this was viewed as inevitable as the state sector lays off its excess workers and there is a gradual absorption of those workers into the private sector. The goal, by extension, is to speed up the growth of the private sector so that unemployment rates are not high for long; this goal, however, is generally not met and, indeed, was not met by any nation other than the Czech Republic. The voucher system employed by the Czech government during the transition, through which all citizens were afforded the opportunity to bid on shares of state-owned enterprises, is accredited with the rapid transition to a market economy, along with policies toward small businesses and a general reconstruction of the Czech identity to acknowledge economic goals.

The Czech miracle, however, forced a number of less educated and unskilled workers into a state of unemployment, as physical labor was in less demand, the agricultural sector was growing smaller, and educated, competent managers were in high demand. While the levels of unemployment were low in the Czech Republic compared to other post-communist nations, there was and is a growing disparity between social classes and employment. However, the nation has solid social institutions in place and unemployment is not widely perceived as a significant issue in the nation. The class disparity birthed from the market transition and general lack of government acknowledgement of it, however, may be indicative of a problem in the Czech Republic similar to that of ethnic discrimination. In short, though the strides made by the nation are undoubtedly significant and admirable, the success of those strides overshadows very real, social problems.

The stress pervading the Czech population following the nation's 1993 independence has been empirically investigated as a significant health issue. The stress is attributable to the rapid transition from a communist economy to a market economy conjoined with the dissolution of Czechoslovakia. The economic uncertainty that plagued the nation during the 1990s increased stress-related health problems and was linked to the increasing rate of marital problems. Though the Czech miracle is not widely connoted with high levels of stress and a widespread lack of support by the Czech people during the late 1990s, evidence suggests that the stress of the transition birthed a range of social problems only now being recognised.

Similarly, the rapid transition to a market economy exacerbated an existing environmental problem in the Czech Republic, with air pollution and other environmental offenses committed by the communist regime remaining a substantial problem. The Czech Republic is the most adversely affected nation by air pollution in Europe. The emphasis on heavy industry had by the communist regime in the nation combined with high energy usage and poor conditions for dispersing emissions renders the Black Triangle, or the intersection of Czech, Polish, and German borders, one of the worst environmental areas on Earth.

The Czech government has not sufficiently addressed its environmental ills. Though heavy industry declined since 1993 in the nation, the Czech Republic is still heavily reliant on coal. Environmental reforms have been slow and only moderately effective, with emissions caps being set and liabilities enforced for businesses committing environmental offenses.

Overall, however, the fervent surge toward a market economy was not conducive to rigid constraints on businesses. The Czech government wanted to remove controls on small businesses in order to encourage entrepreneurship and foster a capitalist hunger in the Czech identity, and the environment in the nation was allowed to suffer in the absence of enforced measures. Trade and business would have been hindered by enforced environmental protocols and the nation's ecological system remains substantially impaired at the end of the twenty-first century's dawning decade, despite recent efforts to heal the Black Triangle.

ASSESSING THE MIRACLE: CZECH SOCIETY SINCE 1993

The Czech miracle is not confined to the realm of economic policy; it refers to the overall success of the nation in terms of politics, economy, and social institutions. During elections in the late 1990s, the Czech people voiced their concern regarding the direction being taken by Czech society. In post-communist countries, social class disparity is believed to be too in flux to be considered a valid and pressing issue. However, the rigid social lines birthed from the rapid transition to the market economy, dividing the educated from the non-educated and also the younger from the older generations, were a salient concern among the Czech people as early as 1996.

Because the Czech Republic is so frequently compared to other post-communist nations who undoubtedly fared far worse than the Czech people, the downfalls of the Czech transition are widely and grossly overlooked. The social stratification taking place was significant enough during the 1990s to birth admirable welfare policies during the first decade in the twenty-first century, but the ethnic prejudices and environmental offenses engrained within the nation have yet to be sufficiently addressed. The Romany population, most urgently, are frequent victims of hate crimes and are largely ostracised from Czech welfare policies. The Black Triangle continues to be a blemish on the global ecosystem and the burden lies on the Czech government to amend the offenses committed by the communist regime and its emphasis on big industry.

Overall, the Czech Republic needs to be at least partially extricated from the post-communist dialogue. The nation has undoubtedly proved itself to be resilient and successful in constructing a Czech identity that unites economic ideals with ethnic and cultural elements. The miracle has, in short, been sufficiently acknowledged. The time has come to examine the Czech Republic for both its strengths and weaknesses, as it undoubtedly has both.
The social issues holding the Czech Republic back are minimal compared to those of other East European nations; and yet, they still exist. While the educational system in the nation is a strong one, the sociopolitical attitudes toward the nation's minorities are a salient obstacle to the health and wellness of a nation claiming to be egalitarian capitalist. Though the Czech Republic has the right to maintain its political cohesion, it does not have the right to turn the proverbial blind eye to its ethnic minorities. Similarly, though the Czech Republic has the right to foster its economic growth, it does not have the right to shrug off its significant environmental issues. The Czech miracle occurred over a decade ago, and the discourse surrounding the nation, fortunately, has begun to highlight the weaknesses that inevitably plague a nation recovering from significant social and political conflict.

CONCLUSIONS

The Czech identity did not organically evolve in the wake of post-communist reconstruction. The identity was calculated by Czech politicians and economists as a union of egalitarianism and capitalism, a vehicle for fortifying the Czech Republic as a new nation poised to shed its communist trappings and embrace the economic success it enjoyed during the interwar period. The Czech identity is one that acknowledges citizenship over ethnicity, as demonstrated in the nation's constitution, and yet is still challenged by prejudices. Similarly, the Czech identity is aimed at embracing Western capitalism and structuring its businesses accordingly; and yet, the class disparity and environmental issues born from the rapid transition call the Czech miracle into question. While the calculated moves of the Czech government during the late 1990s and first decade of the twenty-first century were in many ways admirable, they were not universally flawless. The future of the Czech Republic now rests on building upon the nation's undeniable economic and political strengths and amending the social weaknesses.

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