Planning, Market & Unemployment

Yoshie Furuhashi furuhashi.1 at osu.edu
Sat Aug 28 04:21:02 PDT 1999


Jim Heartfield
>I think that in truth the low unemployment was symptomatic of an
>essential weakness in the soviet economy rather than a strength.

Was the employment glass half full or half empty under a socialist economy admittedly full of problems, major and minor? It's all relative.... It's up to people in ex-socialist countries to decide, I think, and it would be no surprise if they began to say half full. Lackluster as KSCM may probably be now, it would be better, for instance, if the dispirited Czech youths turned toward them instead of ODS or CSSD if there were no viable alternative to the left of KSCM. The failure to solve, or at least alleviate, the unemployment & job insecurity problem would lead to an increase in xenophobic nativism. Yoshie

***** Czech Republic GLOBAL INTELLIGENCE UPDATE

Communist Party Gains in Czech Republic August 27, 1999

SUMMARY

Communists have attained their greatest popularity in the Czech Republic since the end of the Cold War and are poised to gain seats in upcoming Senate elections. The rise of the party in one of NATO's newest members signals dissatisfaction with economic change and the sudden and very real burdens of membership in the alliance. While the communists will not drastically alter the Czech government, they are a bellwether of how poorly change is being received in some of NATO's newest members.

ANALYSIS The Czech Communist Worker's Party (KSCM) has 4 seats in the senate. A key seat in the 81-seat senate is up for grabs in the August 27 vote. The front-runner is the dominant Czech Social Democratic Party (CSSD), now holding 23 seats. The second largest party, the right-wing Civic Democratic Party (ODS), holds 26. Communists, however, are rising in the opinion polls. At this point KSCM's popularity stands at about 17 percent, with the ruling party CSSD at 15 percent and the ODS at 23 percent. While there is lingering resentment at the loss of Slovakia, much of the surge in support for the KSCM and right-wing opposition groups is pure frustration at a badly mishandled economy. The Czech Republic, like Slovakia, is in a deep recession. Worried about unemployment, the Czechs are increasingly interested in trying to keep Slovak workers out of the republic.

Topping it off, the republic's decision to join the European Union, which is struggling even to build a common currency, is widely seen as stretching the limits of a mismanaged economy. Czech dependence on the EU is growing, too. Czech central bankers are testing the international bond markets, with reported plans for a US$300 million bond issue.

Though desired, the reality of the transition to the West has been a jolting surprise to many Czechs. Acceptance to NATO earlier this year has come with a considerable price tag. Early in the year, western militaries began turning up the pressure for aspiring nations to modernize their militaries. And as soon as the summit in Washington granted the Czechs membership, they were asked to extend overflight rights to alliance aircraft enroute to bomb Yugoslavia. As the war dragged on, and talk of invasion mounted, the republic faced the unpleasant prospect of having to help invade a fellow Slavic nation.

The communists opposed entry into NATO, when the senate voted in April, 1998, to seek membership by a margin of 64 to 2. Ever since then, the KSCM has been taking advantage of anti-Western sentiment, including feelings against radical economic reform. NATO's bombing of Yugoslav bridges on the Danube River triggered Vojtech Filip, the leader of the KSCM deputies group, to accuse U.S. President Bill Clinton, U.S. Secretary of State Madeleine Albright, and Gen. Wesley Clark, the NATO commander, of war crimes. Though extreme, these accusations are consistent with the KSCM perspective. KSCM is hostile to the growing U.S. and German influence in the region and the West's effort to co-opt post-Soviet states for Western strategic advances. Features of KSCM that make the party attractive to voters are its active campaign for socialism, its anti-corruption platform and cooperation with unions and interest organizations.

Support for the party is genuine; but communism in the Czech Republic is not fashionable, and is not favored by dispirited youth. The party appears set for a promising minority role in the parliament. Senate seats are held for six-year terms, allowing KSCM to profit heavily.

The rise of communists in what is arguably a crown jewel for NATO suggests a broader problem. Democracy has clearly won in what was once called Eastern Europe. Capitalism is still an uncomfortable companion. Poland's coalition government has begun to tackle difficult economic reforms - particularly in heavy industry - that were once seen as too tough. Reform is the price of joining the EU. Poland will have to grapple with tension between its trade unions and pro-market forces.

Hungary has created growth by selling off state-run enterprises to foreign investors; today foreign-owned firms account for one-third of the economy and two-thirds of exports. But Hungary, too, has a long way to go in becoming part of the West it has ostensibly joined.

In the Czech Republic, an increase in KSCM senate seats will give the communists more leverage, particularly as their politics are not entirely incompatible with other parties. With a larger senate presence, the KSCM will be involved in more of the give-and-take of democratic politics. This will enable it to influence the outcome of much legislation, including legislation dealing with relations with the West. The Czech Republic's cooperation with NATO, then, stands a greater chance to be challenged in the long term. This will be especially true if other parties start contending with KSCM's popularity by borrowing from the anti-NATO, anti-EU sentiments in their campaigns. *****



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