zahranicni investice v CR

[Vladimir Vrabec]

Vazeni,
dost casto se diskutuje na tema, proc se k nam zahranicni kapital nehrne.
Prikladam zajimavy nazor pana S. Jelinka z Ithaca College, New York.
                                                     Vladimir Vrabec

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Date: Tue, 3 May 1994 14:21:09 EDT
Sender: Eastern Europe Business Network <E-EUROPE%PUCC.BITNET at earn.cvut.cz>
From: SONNY JELINEK <SJELINE1%ithaca.edu at earn.cvut.cz>
Subject: Foreign investment in the Czech Republic

----------------------------Original message----------------------------
Hi everyone,

I noticed that there has been some discussion about foreign
investment into the CE & EE countries.  I want to throw the
following out to you and would like to get some comments on it as
a possibility.

Regarding the Czech Republic:

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Is it possible that the government of the Czech Republic is
discouraging, or at least, not encouraging foreign investment?
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-  The Czech government has no incentives for foreign investors
(tax breaks, low cost utilities, discounted business areas) that
I know of (without having to directly petition them for a break).

-  They have a number of barriers that limit foreigners from
investing in the Prague Stock Exchange (PSE).  Such as requiring
local representation by a Czech citizen (could be a banker),
purchase in koruna only, and a price quoting system that gives
four different prices depending on how shares are traded.

- Demands seem to be driving away foreign investment.  Volkswagen
announced cut backs in its original investment plans and Air
France is upset with pressures from the CSA (the Czech national
airline).


Other figures:

> Hungary and CR have almost the same population (10.5 million),
> Czech Republic is rated the least risky Eastern European
  Country to invest in (by far) by the EIU Country Risk Service.

YET,

  The Czech Republic only has ONE foreign investment over $200
million while Hungary has NINE.


Possible reasons for the Czech government to discourage foreign
investment:

- Economic: afraid of the short term effects of foreign
investment, which can include the depletion of traditional Czech
industries and the loss of jobs within these industries.

- Cultural: the "anti-western" idea where some feel belittled by
other nations "taking over" the Czech culture.  Some of the "old
school politicians" may still be playing a part in the operations
of the government.

Just a different perspective to think about.

Best Regards,

Sonny Jelinek            SJELINE1 at ITHACA.EDU
Ithaca College           (607) 275-8144
Ithaca, New York
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