Editing Economy of the Czech Republic (section)

===1989–1995===
The "[[Velvet Revolution]]" in 1989, offered a chance for profound and sustained political and economic reform. With the disintegration of the communist economic alliance in 1991, Czech manufacturers lost their traditional markets among former communist countries in the east. Signs of economic resurgence began to appear in the wake of the [[shock therapy (economics)|shock therapy]] that the [[International Monetary Fund]] (IMF) labelled the "''big bang''" of January 1991. Since then, consistent liberalization and astute economic management has led to the removal of 95% of all price controls, low unemployment, a positive [[balance of payments]] position, a stable [[exchange rate]], a shift of exports from former [[Eastern bloc|communist economic bloc]] markets to Western Europe, and relatively low [[foreign debt]]. Inflation has been higher than in some other countries – mostly in the 10% range<ref>{{Cite web |last=International Monetary Fund |date=October 2023 |title=International Monetary Fund: Czech Republic, 15 INDICATORS, 1980 - 2028 |url=https://www.imf.org/external/datamapper/profile/CZE |url-status=live |archive-url=https://web.archive.org/web/20231216200252/https://www.imf.org/external/datamapper/profile/CZE |archive-date=December 16, 2023 |access-date=2023-12-16 |website=International Monetary Fund}}</ref> – and the government has run consistent modest [[budget deficit]]s.{{Citation needed|date=December 2008}}

Two government priorities have been strict [[fiscal policy|fiscal policies]] and creating a good climate for incoming investment in the republic. Following a series of currency [[devaluation]]s, the [[Czech koruna|crown]] has remained stable in relation to the [[US dollar]].{{Citation needed|date=December 2008}} The Czech crown became fully [[convertibility|convertible]] for most business purposes in late 1995.

In order to stimulate the economy and attract foreign partners, the government has revamped the legal and administrative structure governing investment. With the breakup of the Soviet Union, the country, till that point highly dependent on exports to the USSR, had to make a radical shift in economic outlook: away from the East, and towards the West. This necessitated the restructuring of existing banking and telecommunications facilities, as well as adjusting commercial laws and practices to fit Western standards. Further minimizing reliance on a single major partner, successive Czech governments have welcomed U.S. investment (amongst others) as a counterbalance to the strong economic influence of Western European partners, especially of their powerful neighbour, Germany. <!-- Which was not always successful, see the flop with Boeing vs Aero Vodochody. --> Although [[foreign direct investment]] (FDI) runs in uneven cycles, with a 12.9% share of total FDI between 1990 and March 1998, the U.S. was the third-largest foreign investor in the Czech economy, behind Germany and the Netherlands.

The country boasts a flourishing consumer production sector and has [[privatization|privatized]] most 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, increasing the capital base of the chosen company, and creating a nation of citizen share-holders. This is in contrast to Russian privatization, which consisted of sales of communal assets to private companies rather than share-transfer to citizens. The effect of this policy has been dramatic. Under communism, state ownership of businesses was estimated to be 97%.{{Citation needed|date=December 2008}} Privatization through restitution of real estate to the former owners was largely completed in 1992. By 1998, more than 80% of enterprises were in private hands. Now completed,{{Citation needed|date=December 2008}} the program has made Czechs, who own shares of each of the Czech companies, one of the highest per-capita share owners in the world.{{Citation needed|date=January 2009}} On the other hand, by the public is the voucher privatisation seen mostly as unfair and source of [[corruption]].<ref>{{Cite web |date=2005-06-01 |title=Why do most Czechs regard early 90s voucher privatisation as unfair? |url=https://english.radio.cz/why-do-most-czechs-regard-early-90s-voucher-privatisation-unfair-8099520 |access-date=2025-04-08 |website=Radio Prague International |language=en}}</ref>