Czech republic : [special features: banking, financial markets, labour market]. 1997-1998.

161 Pages·1998·0.621 MB·English

by  OECD

OECD
D
ECONOMIC
SURVEYS
C
1998
E
SPECIAL FEATURES
Banking, financial markets
Labour market
O
CZECH REPUBLIC
(cid:211) OECD, 1998.
(cid:211) Software: 1987-1996, Acrobat is a trademark of ADOBE.
All rights reserved. OECD grants you the right to use one copy of this Program for your personal use only. Unauthorised
reproduction, lending, hiring, transmission or distribution of any data or software is prohibited. You must treat the
Program and associated materials and any elements thereof like any other copyrighted material.
All requests should be made to:
Head of Publications Service,
OECD Publications Service,
2, rue André-Pascal, 75775 Paris
Cedex 16, France.
OECD
ECONOMIC
SURVEYS
1997-1998
CZECH REPUBLIC
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
ORGANISATION FOR ECONOMIC CO-OPERATION
AND DEVELOPMENT
Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960,
and which came into force on 30th September 1961, the Organisation for Economic
Co-operation and Development (OECD) shall promote policies designed:
– to achieve the highest sustainable economic growth and employment and a rising
standard of living in Member countries, while maintaining financial stability, and
thus to contribute to the development of the world economy;
– to contribute to sound economic expansion in Member as well as non-member
countries in the process of economic development; and
– to contribute to the expansion of world trade on a multilateral, non-discriminatory
basis in accordance with international obligations.
The original Member countries of the OECD are Austria, Belgium, Canada,
Denmark, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the
Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the
United Kingdom and the United States. The following countries became Members subse-
quently through accession at the dates indicated hereafter: Japan (28th April 1964),
Finland (28th January 1969), Australia (7th June 1971), New Zealand (29th May 1973),
Mexico (18th May 1994), the Czech Republic (21st December 1995), Hungary
(7th May 1996), Poland (22nd November 1996) and Korea
(12th December 1996). The Commission of the European Communities takes part in the
work of the OECD (Article 13 of the OECD Convention).
Publie´ e´galement en franc¸ais.
(cid:211) OECD 1998
Permission to reproduce a portion of this work for non-commercial purposes or classroom use
should be obtained through the Centre franc¸ais d’exploitation du droit de copie (CFC),
20, rue des Grands-Augustins, 75006 Paris, France, Tel. (33-1) 44 07 47 70,
Fax [phone], for every country except the United States. In the United States permission
should be obtained through the Copyright Clearance Center, Customer Service, [phone],
222 Rosewood Drive, Danvers, MA 01923 USA, or CCC Online:
http://www.copyright.com/. All other applications for permission to reproduce or translate all or
part of this book should be made to OECD Publications, 2, rue Andre´-Pascal,
75775 Paris Cedex 16, France.
Table of contents
Assessment and recommendations 1
I. Recent trends and prospects 13
The spring 1997 exchange rate crisis 13
Economic developments since the crisis 19
The short-term outlook 26
II. Macroeconomic policies 29
Monetary management 29
The fiscal stance 38
III. Pursuing the transition effort 49
Privatisation and the resulting ownership structure 49
Enterprise restructuring and the role of the financial sector 54
Encouraging more rapid changes 67
Summing up 72
IV. Implementing the OECD Jobs Strategy 75
Labour market and employment performance 77
Policy requirements 86
Recent policy actions 123
Assessment and scope for further action 124
Notes 129
Glossary 133
Bibliography 134
iii
Annex
Chronology of main economic events 136
Statistical annex and structural indicators 139
Boxes
Text
1. The April 1997 stabilisation package 15
2. The May 1997 stabilisation package 17
3. The Czech and Asian crises: a comparison 19
4. Net inflation 30
5. The impact of the floods 40
6. Privatisation in the Czech Republic 50
7. Stock markets in the Czech Republic 62
8. Market practices and minority-shareholder rights 64
9. Skoda-Volkswagen joint venture: a success story 66
10. Complicating factors in the full privatisation of Czech banks 69
11. The OECD Jobs Strategy: synopsis of recommendations for
the Czech Republic 87
12. Wage bargaining institutions in the Czech Republic 89
13. Employment protection legislation 91
14. Principal social security programmes 98
15. The Minimum Living Standard 101
16. Other Income Support schemes 104
17. The Pro-active Labour Market Intervention Fund (PALMIF) 108
18. Programmes for Small and Medium Enterprises (SME) 118
19. The Competition Office 120
Tables
Text
1. Demand and output 14
2. Balance of payments 22
iv
3. Short-term projections 27
4. Money and credit 36
5. State budget 38
6. Government accounts 39
7. State budget, actual vs planned 42
8. Government liabilities 46
9. Revenue from privatisation 51
10. Equity participation of the National Property Fund in strategic
companies 52
11. Average composition of IPF portfolios 53
12. Competitiveness and export performance 55
13. Productive investment 56
14. Balance sheet of non-financial enterprises 57
15. Bankruptcies 59
16. Credit allocation and enterprise performance 59
17. Banks: main indicators 60
18. Average return on equity by ownership structure 65
19. Sectoral employment 82
20. Earnings dispersion in the OECD 84
21. Minimum wages and wage tariffs 90
22. Social security payroll taxes 95
23. Social security expenditure in the Czech Republic 96
24. Average gross replacement rates 100
25. Implicit equivalencies for additional household members 100
26. Labour market programmes 106
27. Employment office networks, staff members, and work-load
indicators 107
28. New entrants to secondary education 113
29. Controlled, non-market prices 119
Statistical annex and structural indicators
A. Selected background statistics 140
B. Supply and use of resources 141
C. Labour market indicators 142
D. Costs and prices 143
E. Monetary indicators 144
v
F. Balance of payments 145
G. General government revenue and expenditure 146
H. Financial markets 147
Figures
Text
1. Real and nominal exchange rates 14
2. Trade performance 16
3. Trade and current account balances 16
4. Official intervention and the exchange rate 18
5. Private-sector sentiments and industrial production 20
6. Foreign trade 23
7. Registered unemployment rate 24
8. Inflation developments 25
9. Net and CPI inflation 32
10. Monetary conditions 34
11. Interest rate and exchange rate developments 35
12. Special state-owned institutions and their relationship with
the government 45
13. Key developments in the labour market 76
14. Labour market indicators by age and sex 78
15. Labour market indicators by educational attainment 79
16. Unemployment by region 81
17. Distribution of earnings 83
18. Wage-push inflation and the unemployment rate 85
19. Government spending and social transfers 95
20. Average and marginal tax wedges 97
21. Net earnings and social security 102
22. Estimated effective marginal tax rates 102
23. Enrolment rates by age 115
vi
BASIC STATISTICS OF THE CZECH REPUBLIC
THE LAND
Area (sq. km) 78 864 Population of major cities (thousands)
Arable land (sq. km) 42 798 Prague 1 209.9
Brno 388.9
Ostrava 324.8
Plzen 171.2
THE PEOPLE
Population (thousands, 1997) 10 299 Employment by sector (per cent of total, 1997)
Number of inhabitants per sq. km 130.6 Agriculture 5.8
Annual population growth, 1991-1996 (per cent) –0.02 Industry 41.6
Employment (thousands, 1997) 4 889 Services 52.6
THE PARLIAMENT
Parliament, as of April 1998 (number of seats)
Czech Social Democratic Party 58 Christian Democratic Union 19
Civil Democratic Party 38 Republican Party 18
Freedom Union 30 Civic Democratic Alliance 12
Communist Party 22 Independent 3
Total 200
THE PUBLIC SECTOR
As a percentage of GDP, 1996
Current receipts 41.5 Total expenditure 42.7
Direct taxes 9.5 Government consumption 10.1
Indirect taxes 13.7 Subsidies 7.0
Social security contributions 14.9 Social security benefits 17.7
THE PRODUCTION
GDP (million US$, 1997) 47 621 Structure of production (% of GDP, 1995)
GDP per capita (US$, 1997) 4 624 Agriculture 5.2
Gross fixed investment (% of GDP, 1997) 30.7 Industry 41.0
of which: manufacturing 26.7
Services 53.8
THE FOREIGN TRADE
Exports of goods and services (1997) Imports of goods and services (1997)
(billion US$) 27.4 (billion US$) 30.0
(per cent of GDP) 57.6 (per cent of GDP) 63.0
Main merchandise exports (% of total, 1997) Main merchandise imports (% of total, 1997)
Machinery and transport equipment 37.9 Machinery and transport equipment 38.1
Manufactures 27.0 Manufactures 19.5
Chemicals 8.8 Chemicals 12.3
Other 26.3 Petroleum products 5.0
Other 25.1
THE CURRENCY
Monetary unit: Czech koruna Currency units per US$
Year 1997 34.6
March 1998 33.7
Note: An international comparison of certain basic statistics is given in an annex table.
This Survey is based on the Secretariat’s study
prepared for the annual review of the Czech Republic by
the Economic and Development Review Committee
on 16 April 1998.
•
After revisions in the light of discussions during the
review, final approval of the Survey for publication was
given by the Committee on 6 May 1998.
•
The previous Survey of Czech Republic was issued
in July 1996.