US DEPARMENT OF STATE
BACKGROUND NOTE: CZECH REPUBLIC
Official Name: Czech Republic
Area: 78,864 sq. kilometers; about the size of Virginia.
Cities: Capital--Prague (pop. 1.2 million). Other cities--Brno
(385,000), Ostrava (327,000), Plzen (175,000). Terrain: Low mountains
to the north and south, hills in the west.
Nationality: Noun and adjective--Czech(s).
Population (1993 est.): 10.5 million. Annual growth rate: 0.1%.
Ethnic groups: Czech (95%), Germans, Gypsies, Poles, Silesians,
Religions: Roman Catholic, Protestant. Language: Czech.
Health: Life expectancy--males 68 years, females 75 years.
Work force: 5.2 million; industry, construction and commerce--47%,
government and other services--41%, agriculture--11%.
Type: Parliamentary republic.
Independence: The Czech Republic was established January 1, 1993
(former Czechoslovak state established 1918). Constitution: Signed
December 16, 1992.
Branches: Executive--president (chief of state), prime minister (head
of government), cabinet. Legislative--Chamber of Deputies (formerly the
Czech National Council), Senate (to be elected in 1994). Judicial--
Supreme Court, Constitutional Court.
Political parties: Civic Democratic Party-Christian Democratic Party
(ODS-KDS), 76 seats; Left Bloc (Communist Party of Bohemia and Moravia
[KSCM]-Democratic Left [DL]), 35 seats; Czechoslovak Social Democratic
Party (CSSD), 16 seats; Liberal Social Union (LSU), 16 seats; Christian
Democratic Union-Czech Peoples Party (KDU-CSL), 15 seats; Association
for the Republic-Republican Party of the Czech Republic (SPR-RSC), 14
seats; Civic Democratic Alliance (ODA), 14 seats; Movement for
Autonomous Democracy in Moravia and Silesia (HSDMS), 14 seats.
Suffrage: Universal at 18.
Administrative subdivisions: Two regions--Bohemia and Moravia; seven
administrative districts and Prague.
Flag: Blue triangle on staff side; upper white band, lower red band.
GDP (1993 est.): $30 billion.
Per capita income (1993 est.): $3,000.
Natural resources: Coal, coke, timber, lignite, uranium, magnesite.
Agriculture: Products--wheat, rye, oats, corn, barley, hops, potatoes,
sugar beets, hogs, cattle, horses.
Industry: Types--iron, steel, machinery and equipment, cement, sheet
glass, motor vehicles, armaments, chemicals, ceramics, wood, paper
products, and footwear.
Trade (1993): Exports--$9 billion: machinery, iron, steel, chemicals,
raw materials, consumer goods. Trading partners--Austria, Belgium,
Commonwealth of Independent States, France, Germany, Hungary, Poland,
Switzerland, United States.
Exchange rate (July 1994): 30 Czech crowns=$1.
The majority of the 10.5 million inhabitants of the Czech Republic are
ethnically and linguistically Czech (95%). Other ethnic groups include:
Germans, Gypsies, Poles, and Silesians. After the division, some
Slovaks remained in the Czech Republic and comprise roughly 3% of the
current population. The border between the Czech Republic and Slovakia
is open for former citizens of Czechoslovakia. Laws establishing
religious freedom were passed shortly after the revolution of 1989
lifting oppressive regulations enacted by the former communist regime.
Major denominations and their estimated percentage populations are:
Roman Catholic (39%), Protestant (4%). A large percentage of the Czech
population claim to be atheists (49%), and 16% describe themselves as
uncertain. About 10,000 Jews continue to live there of a pre-war
population of more than 360,000.
The Czech Republic was the western part of the Czech and Slovak Federal
Republic. Formed into a common state after World War I (October 18,
1918), the Czechs, Moravians, and Slovaks remained united for more than
75 years. On January 1, 1993, the two republics split to form two
The Czechs lost their national independence to the Austro-Hungarian
Empire in 1620 at the Battle of White Mountain and, for the next 300
years, were ruled by the Austrian Monarchy. With the collapse of the
monarchy at the end of World War I, the independent country of
Czechoslovakia was formed, encouraged by, among others, U.S. President
Despite cultural differences, the Slovaks shared with the Czechs similar
aspirations for independence from the Hapsburg state and voluntarily
united with the Czechs. The Slovaks were not at the same level of
economic and technological development as the Czechs, but the freedom
and opportunity found in Czechoslovakia enabled them to make strides
toward overcoming these inequalities. However, the gap never was fully
bridged, and the discrepancy played a continuing role throughout the 75
years of the union.
Although Czechoslovakia was the only East European country to remain a
parliamentary democracy from 1918 to 1938, it was plagued with minority
problems, the most important concerning the country's large German
population. Constituting more than 22% of the interwar state's
population and largely concentrated in the Bohemian and Moravian border
regions (the Sudetenland), members of this minority supported in large
part by Nazi Germany undermined the new Czechoslovak state. Internal
and external pressures culminated in September 1938, when, at Munich,
France, and the United Kingdom yielded to Nazi pressures and agreed to
force Czechoslovakia to cede the Sudetenland to Germany.
Fulfilling Hitler's aggressive designs on all of Czechoslovakia, Germany
invaded what remained of Bohemia and Moravia in March 1939, establishing
a German "protectorate." By this time, Slovakia had already declared
independence and had become a puppet state of the Germans.
At the close of World War II, Soviet troops overran all of Slovakia,
Moravia, and much of Bohemia, including Prague. In May 1945, U.S.
forces liberated the city of Plzen and most of western Bohemia. A
civilian uprising against the German garrison took place in Prague in
May 1945. Following Germany's surrender, some 2.9 million ethnic
Germans were expelled from Czechoslovakia with Allied approval.
Reunited after the war, the Czechs and Slovaks set federal and national
elections for the spring of 1946. The democratic elements, led by
President Eduard Benes, hoped the Soviet Union would allow
Czechoslovakia the freedom to choose its own form of government and
aspired to a Czechoslovakia that would act as a bridge between East and
West. The Czechoslovak communist party, which won 38% of the vote, held
most of the key positions in the government and gradually managed to
neutralize or silence the anti-communist forces. Although the
communist-led government initially intended to participate in the
Marshall Plan, it was forced by Moscow to back out. Under the cover of
superficial legality, the communist party seized power in February 1948.
After extensive purges modeled on the Stalinist pattern in other East
European states, the communist party tried 14 of its former leaders in
November 1952 and sentenced 11 to death. For more than a decade
thereafter, the Czechoslovak communist political structure was
characterized by the orthodoxy of the leadership of party chief Antonin
The 1968 Soviet Invasion
The communist leadership allowed token reforms in the early 1960s, but
discontent arose within the ranks of the communist party central
committee, stemming from dissatisfaction with the slow pace of the
economic reforms, resistance to cultural liberalization, and the desire
of the Slovaks within the leadership for greater autonomy for their
republic. This discontent expressed itself with the removal of Novotny
from party leadership in January 1968 and from the presidency in March.
He was replaced as party leader by a Slovak, Alexander Dubcek.
After January 1968, the Dubcek leadership took practical steps toward
political, social, and economic reforms. In addition, it called for
politico-military changes in the Soviet-dominated Warsaw Pact and
Council for Mutual Economic Assistance. The leadership affirmed its
loyalty to socialism and the Warsaw Pact but also expressed the desire
to improve relations with all countries of the world regardless of their
A program adopted in April 1968 set guidelines for a modern, humanistic
socialist democracy that would guarantee, among other things, freedom of
religion, press, assembly, speech, and travel; a program that, in
Dubcek's words, would give socialism "a human face." After 20 years of
little public participation, the population gradually started to take
interest in the government, and Dubcek became a truly popular national
The internal reforms and foreign policy statements of the Dubcek
leadership created great concern among some other Warsaw Pact
governments. On the night of August 20, 1968, Soviet, Hungarian,
Bulgarian, East German, and Polish troops invaded and occupied
Czechoslovakia. The Czechoslovak Government immediately declared that
the troops had not been invited into the country and that their invasion
was a violation of socialist principles, international law, and the UN
The principal Czechoslovak reformers were forcibly and secretly taken to
the Soviet Union. Under obvious Soviet duress, they were compelled to
sign a treaty that provided for the "temporary stationing" of an
unspecified number of Soviet troops in Czechoslovakia.
Dubcek was removed as party First Secretary on April 17, 1969, and
replaced by another Slovak, Gustav Husak. Later, Dubcek and many of his
allies within the party were stripped of their party positions in a
purge that lasted until 1971 and reduced party membership by almost one-
The 1970s and 1980s became known as the period of "normalization," in
which the apologists for the 1968 Soviet invasion prevented, as best
they could, any opposition to their conservative regime. Political,
social, and economic life stagnated. The population, cowed by the
"normalization," was quiet.
At the time of the communist takeover, Czechoslovakia had a balanced
economy and one of the higher levels of industrialization on the
continent. In 1948, however, the government began to stress heavy
industry over agricultural and consumer goods and services. Many basic
industries and foreign trade, as well as domestic wholesale trade, had
been nationalized before the Communists took power. Nationalization of
most of the retail trade was completed in 1950-51.
Heavy industry received major economic support during the 1950s, but
waste and inefficient use of industrial resources resulted from central
planning. Although the labor force was traditionally skilled and
efficient, inadequate incentives for labor and management contributed to
high labor turnover, low productivity, and poor product quality.
Economic failures reached a critical stage in the 1960s, after which
various reform measures were sought, with no satisfactory results.
Hope for wide-ranging economic reform came with Alexander Dubcek's rise
in January 1968. Despite renewed efforts, however, Czechoslovakia could
not come to grips with inflationary forces, much less begin the immense
task of correcting the economy's basic problems.
The economy saw growth during the 1970s but then stagnated between 1978-
82. Attempts at revitalizing it in the 1980s with management and worker
incentive programs were largely unsuccessful. The economy grew after
1982, achieving an annual average output growth of more than 3% between
1983-85. Imports from the West were curtailed, exports boosted, and
hard currency debt reduced substantially. New investment was made in
the electronic, chemical, and pharmaceutical sectors, which were
industry leaders in Eastern Europe in the mid 1980s.
The Velvet Revolution
The roots of the 1989 civic Forum movement that came to power during the
"Velvet Revolution" lie in human rights activism. On January 1, 1977,
more than 250 human rights activists signed a manifesto called the
Charter 77, which criticized the government for failing to implement
human rights provisions of documents it had signed, including the
state's own constitution; international covenants on political, civil,
economic, social, and cultural rights; and the Final Act of the
Conference for Security and Cooperation in Europe. Although not
organized in any real sense, the signatories of Charter 77 constituted a
citizens' initiative aimed at inducing the Czechoslovak Government to
observe formal obligations to respect the human rights of their
In the days after November 17, 1989, Charter 77 and other groups united
to become the Civic Forum, an umbrella group championing bureaucratic
reform and civil liberties. Its leader was the dissident playwright
Vaclav Havel. Intentionally eschewing the label "party," a word given a
negative connotation during the previous regime, Civic Forum quickly
gained the support of millions of Czechs, as did its Slovak counterpart,
Public Against Violence.
Faced with an overwhelming popular repudiation, the Communist Party all
but collapsed. Its leaders, Husak and party chief Milos Jakes, resigned
in December 1989, and Havel was elected President of Czechoslovakia on
The astonishing quickness of these events was in part due to the
unpopularity of the communist regime and changes in the policies of its
Soviet guarantor as well as to the rapid, effective organization of
these public initiatives into a viable opposition.
A coalition government, in which the communist party had a minority of
ministerial positions, was formed in December 1989. The first free
elections in Czechoslovakia since 1948 took place in June 1990 without
incident and with more than 95% of the population voting. As
anticipated, Civic Forum and Public Against Violence won landslide
victories in their respective republics and gained a comfortable
majority in the federal parliament. The parliament undertook
substantial steps toward securing the democratic evolution of
Czechoslovakia. It successfully moved toward fair local elections in
November 1990, ensuring fundamental change on the county and town level.
Civic Forum found, however, that although it had successfully completed
its primary objective--the overthrow of the communist regime--it was
ineffectual as a governing party. The demise of Civic Forum was viewed
by most as necessary and inevitable.
By the end of 1990, unofficial parliamentary "clubs" had evolved with
distinct political agendas. These solidified into the parties that make
up the Czech political landscape. Most influential is the Civic
Democratic Party, headed by Prime Minister and former Federal Minister
of Finance Vaclav Klaus. Other notable parties that came into being
after the split were the Civic Movement and Civic Democratic Alliance.
By 1992, Slovak calls for greater autonomy effectively blocked the daily
functioning of the federal government. In the election of June 1992,
Klaus's Civic Democratic Party won handily in the Czech lands on a
platform of economic reform. Vladimir Meciar's Movement for a
Democratic Slovakia emerged as the leading party in Slovakia, basing its
appeal on fairness to Slovak demands for autonomy. Federalists, like
Havel, were unable to contain the trend toward the split. In July 1992,
President Havel resigned. In the latter half of 1992, Klaus and Meciar
hammered out an agreement that the two republics would go their separate
ways by the end of the year.
Members of the federal parliament, divided along national lines, barely
cooperated enough to pass the law officially separating the two nations.
The law was passed on December 27, 1992. On January 1, 1993, the Czech
Republic and the Republic of Slovakia were simultaneously and peacefully
Relationships between the two states, despite occasional disputes about
the division of federal property and governing of the border have been
as peaceful as Prime Ministers Klaus and Meciar promised. Both states
attained immediate recognition from the U.S. and their European
POLITICAL CONDITIONS AND GOVERNMENT
The Czech political scene supports a broad spectrum of parties ranging
from the semi-reformed communist party on the far left to the
nationalistic Republican Party on the extreme right. Currently, the
ruling coalition comprises the Civic Democratic Party (ODS), the Civic
Democratic Alliance (ODA), the Christian Democratic Party (KDU-CSL), and
the splinter Christian Democratic Party (KDS). It is generally
considered right of center. The ruling coalition includes several
prominent economists and derives support mainly from the free market
reforms they advocate. As Prime Minister, Klaus represents the
coalition and wields considerable power. These powers include the right
to set the agenda for most foreign and domestic policy, mobilize the
parliamentary majority, override a presidential veto, and choose
Vaclav Havel, now President of the Czech Republic, is not affiliated
with any party but remains one of the country's most popular
politicians. As formal head of state, he is granted specific powers
such as the right to nominate Constitutional Court judges, dissolve
parliament under certain conditions, and enact a veto on legislation.
With the split of the former Czechoslovakia, the powers and
responsibilities of the now defunct federal parliament were transferred
to the Czech National Council, which renamed itself the Chamber of
Deputies. It has become the highest legislative body.
Constitutionally, it is bicameral, with the Chamber of Deputies and the
The Senate has not yet been elected; elections are slated for later in
1994. Chamber delegates are elected from seven districts and the
capital, Prague, for four-year terms, on the basis of proportional
The country's highest court of appeals is the Supreme Court, elected by
and responsible to the Chamber of Deputies. The Constitutional Court,
which rules on constitutional issues, is appointed by the president, and
its members serve 10-year terms.
National Security Issues
A major overhaul of the Czechoslovak defense forces began in 1990 and
continues in the Czech Republic. The military has assumed a more
national-defense orientation. The armed forces that numbered up to
200,000 in 1989 will be cut down to 65,000 by 1995. Other reforms
-- Cutting the Czechoslovak Army from 48,000 to 23,000 members. It is
now organized into corps with subordinate brigades.
-- Cutting the Czechoslovak Air Force from 55,000 to 27,000. It is now
organized into air defense and tactical air corps, each with two air
-- Dropping the compulsory military training requirement for those more
than 18 from two years to one.
Principal Government Officials
President--Vaclav Havel (Independent)
Prime Minister--Vaclav Klaus (ODS)
Foreign Minister--Josef Zieleniec (ODS)
Ambassador to the U.S.--Michael Zantovsky
The Czech Republic maintains an embassy at 3900 Spring of Freedom
Street, NW, Washington, D.C. 20008, (tel. 202-363-6315).
Of the emerging democracies in Central and Eastern Europe the Czech
Republic has one of the most developed industrialized economies. Its
strong industrial tradition dates to the 19th century, when Bohemia and
Moravia were the economic heartland of the Austro-Hungarian Empire.
Today, this heritage is both an asset and a liability. The Czech
Republic has a well educated population and a well developed
infrastructure, but its industrial plants and much of its industrial
equipment tend to be obsolete.
According to the Stalinist development policy of planned
interdependence, all the economies of the socialist countries were
linked tightly with that of the Soviet Union. With the disintegration
of the communist economic alliance in 1991, Czech manufacturers lost
their traditional markets among former communist countries to the East,
some of whom still owe the former Czechoslovakia sizable debts.
The Czech Republic lacks sufficient energy resources as well as many
other raw materials. Its major source of energy is highly polluting
low-grade brown coal, which is not considered a viable long-term option.
Nuclear energy is currently considered the country's most plausible
alternative. The Czechs are almost entirely dependent on a Russian
pipeline for petroleum and natural gas. For this reason, they have
recently signed an agreement to construct an oil pipeline from Germany
The principal industries are heavy and general machine-building, iron
and steel production, metalworking, chemicals, electronics,
transportation equipment, textiles, glass, brewing, china, ceramics and
pharmaceuticals. Its main agricultural products are sugar beets, fodder
roots, potatoes, wheat, and hops.
The "Velvet Revolution" in 1989 offered a chance for profound and
sustained economic reform. Signs of economic resurgence have begun to
appear in the wake of the shock therapy that the International Monetary
Fund (IMF) labeled the "big bang" of January 1991. Since then, astute
economic management has led to the liberalization of 95% of all price
controls, annual inflation in the 10%-15% range, modest budgetary
deficits of 2%-4% of GDP, low unemployment, a positive balance-of-
payments position, a stable exchange rate, foreign reserves at a post-
World War II high (about $5 billion), a shift of exports from former
communist economic bloc markets to Western Europe, and a manageable
Particularly impressive have been the Republic's strict fiscal policies.
Following a series of currency devaluations ending in January 1991, the
crown has remained stable in relation to the U.S. dollar. The black
market exchange rate, which in the past deprived the government of
valuable western currency, has effectively been eliminated. The Czech
crown, now partially convertible, should become fully convertible in
1995 or 1996.
In addition, the government has revamped the legal and administrative
structure governing investment in order to stimulate the economy and
attract foreign partners. Shifting emphasis from the East to the West
has necessitated restructuring existing facilities in banking and
telecommunications as well as adjusting commercial laws and practices to
fit Western standards. The republic has made progress toward creating a
stable investment climate.
This success enabled the Czech Republic to become the first post-
communist country to receive an investment grade credit rating by
international credit institutions. For this reason, the country
attracted $3 billion in foreign investment during the period of 1991 to
1993, with the U.S. holding 30% of the foreign investment, in second
place just after Germany. The Czech Government welcomes U.S.
investment, in particular, as a counter-balance to the strong economic
influence of Western Europe, specifically that of their powerful
neighbor Germany. Since the Velvet Revolution, the number of U.S.
companies represented in Prague (where nearly all the foreign investors
are located) has increased from a handful to more than 500.
The government has an ambitious plan to privatize state industries in
all sectors of the economy. It hopes to create a private sector rapidly
using the following means: restitution of property confiscated under
the former communist regime, sale of large and small state-owned
enterprises through a voucher system, direct sales and rights to
ownership for foreign investors, and encouraging entrepreneurship.
The republic boasts a flourishing consumer production sector and is
making marked progress toward privatizing state-owned heavy industries
through the voucher privatization system. Under the system, every
citizen was given the opportunity to buy, for a moderate price, a book
of vouchers that represents potential shares in any state-owned company.
The voucher holders could, then, invest their vouchers, infusing the
chosen company with valuable capital. State ownership of businesses,
estimated to be about 97% under communism, will be reduced to about 30%
by the end of 1994. When the voucher privatization process is complete,
Czechs will own shares of each of the Czech companies, making them one
of the highest per capita share owners in the world. Privatization
through restitution of real estate to the former owners was largely
completed in 1992. In the words of Prime Minister Klaus, the republic
has "crossed the Rubicon" in terms of privatization.
The republic's economic transformation is far from complete--the
government still faces serious challenges in transforming the housing
sector, privatizing the health care system, solving serious
environmental problems, and helping newly privatized state-owned
companies adjust to the rigors of free-market competition.
Full membership in the European Union (EU), which the government hopes
to achieve by the year 2000, is probably the country's highest foreign
policy goal. It became an associate member of the EU in 1993, but it
may take a decade or more for the economy to reach Western European
standards. As of 1993, wage levels, averaging $200 a month, were 10%-
20% of those in the neighboring Germany and Austria. Productivity also
is substantially lower due to chronic underinvestment.
The division of Czechoslovakia has not had an appreciable effect on the
Czech economy. An agreement was concluded to divide all federal
property of the former Czechoslovak state according to a 2:1 ratio in
favor of the Czech Republic. Firm monetary and fiscal policies are
likely to be maintained, meeting the objective of a balanced budget.
Real GDP is likely to remain stable, with unemployment increasing to
about 5% and inflation to the 20% range.
The foreign policy of Czechoslovakia had, until 1989, followed that of
the Soviet Union. Since independence, the Czechs have made integration
into Western institutions their chief foreign policy objective.
Fundamental to this objective is Czech membership in the European Union.
The government has met most EU demands. Although there have been
disagreements over some economic issues, such as agricultural tariffs,
the EU has signed various association agreements with the Czech
Government designed to facilitate membership.
The Czech Republic is a member of the United Nations and participates in
its specialized agencies. It is a member of the General Agreement on
Trade and Tariffs (GATT). It maintains diplomatic relations with more
than 85 countries, of which 63 have permanent representation in Prague.
Millions of Americans have their roots in Bohemia and Moravia, and a
large community in the United States has strong cultural and familial
ties with the Czech Republic. President Woodrow Wilson and the United
States played a major role in the establishment of the original
Czechoslovak state on October 28, 1918. President Wilson's 14 Points,
including the right of ethnic groups to form their own states, were the
basis for the union of the Czechs and Slovaks. Tomas Masaryk, the
father of the state and its first President, visited the United States
during World War I and worked with U.S. officials in developing the
basis of the new country. He used the U.S. Constitution as a model for
the first Czechoslovak Constitution.
After World War II, and the return of the Czechoslovak government in
exile, normal relations were continued until 1948, when the communists
seized power. Relations cooled rapidly. The Soviet invasion of
Czechoslovakia in August 1968 further complicated U.S.-Czechoslovak
relations. The United States referred the matter to the UN Security
Council as a violation of the UN Charter, but no action was taken
against the Soviets.
With the "Velvet Revolution" of 1989, bilateral relations have improved
immensely. Dissidents once sustained by U.S. encouragement and human
rights policies reached high levels in the government. President Havel,
in his first official visit as head of the Czechoslovakia, addressed the
U.S. Congress and was interrupted 21 times by standing ovations. In
1990, on the first anniversary of the revolution, President Bush, in
front of an enthusiastic crowd on Prague's Wenceslas Square, pledged
U.S. support in building a democratic Czechoslovakia. Toward this end,
the U.S. Government has actively encouraged the political and economic
transformation. U.S. funding has been in the range of $30-$35 million
annually, largely regional programs administered by the U.S. Agency for
Although the U.S. Government was originally opposed to the idea of
Czechoslovakia forming two separate states, concerned that the split
might aggravate existing regional political tensions, it recognized both
the Czech Republic and Slovakia on January 1, 1993. Since then, U.S.-
Czech relations have remained strong economically, politically, and
Customs: A passport is needed but a visa is not required for stays of
up to 30 days. For further information concerning entry requirements
for the Czech Republic, travelers can contact the Embassy of the Czech
Republic at 3900 Spring of Freedom Street, NW, Washington, DC 20008,
telephone (202) 363-6315.
Health: Medical facilities are available. Some facilities,
particularly in remote areas, may be limited. Doctors and hospitals
often expect cash payment for health services. U.S. medical insurance
is not always valid outside the United States. Travellers have found
that in some cases, supplemental medical insurance with specific
overseas coverage has proved to be useful. Further information on
health matters can be obtained from the Centers for Disease Control's
international travellers hotline at (404) 332-4559.
Published by the United States Department of State -- Bureau of Public
Affairs -- Office of Public Communication -- Washington, DC July 1994 -
- Managing Editor: Peter Knecht -- Editor: Peter Freeman
Department of State Publication 10190 Background Notes Series -- This
material is in the public domain and may be reprinted without
permission; citation of this source is appreciated.
For sale by the Superintendent of Documents, U.S. Government Printing
Office,Washington, DC 20402.
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