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Czech Republic: Czechs Joke About Some Problems, But Are Serious About Apples

Prague, 26 March 1998 (RFE/RL) -- The speaker of the Czech Republic's Parliament, Milos Zeman, today told one of his favorite jokes to a conference of investors and bankers at RFE/RL headquarters in Prague.

With a straight face, he said that so far, the Czechs have enriched the international vocabulary with one unique word, namely the term "robot." But he said that a second enrichment is now arriving, namely the word "tunneling." He said that on overseas trips he is often asked about Czech tunneling, and he has to explain that it does not refer to infrastructure projects.

In fact the word has become popular as a graphic description of how, under privatization, many Czech enterprises have been quietly and quickly stripped of their assets by short-term profiteers.

Zeman, who heads the main opposition Social Democrats, noted that the Czech Republic -- once the star transition economy -- now has about the lowest growth rate in Central Europe. He said it's time for the Czechs to move from an economy based on tunneling to one based on fruitful investment. He drew a distinction however between what he called wasteful short-term investment which merely stimulates consumption, and investment focused on long-term improvement.

As to the country's faltering privatization program, Zeman highlighted the ineffectiveness of the process. He said most privatized enterprises are owned by funds, which are owned by banks, which in turn are owned by the state. He said these illogical links must be broken, through bank privatization and opening-up of the funds. He said however that his party supports continued state participation in ownership of utilities like railways, posts and electricity, a practice which he said is quite normal in most market-based economies.

Zeman is one of the leading candidates to become the country's next prime minister following elections in June. In addressing the bankers, he was dealing with an audience skeptical of his party's commitment to continuing the largely-stalled reform process.

Although the Czech Republic may be short on economic growth right now, it appears not to be short on courage, in that it has embarked on a David and Goliath fight with the European Union over the import of EU apples. Prague has placed a quota on apple imports, and in retaliation from April 1 the EU will suspend preferential import duties on Czech pork, poultry, and juices.

The sharp disagreement comes just ahead of next week's formal opening of negotiations in Brussels on Czech EU membership. But the head of the Czech negotiators in the apples dispute, deputy agriculture minister Antonin Kalina, told RFE/RL that his side plans no backdown any time soon. He said Czech apple growers are being driven from the market by surging imports. He noted EU apple imports in 1994 amounted to 14,000 tons, and that they have jumped by last year to about 46,000 tons. Kalina said there is no point in Prague removing its quota at this time.

Kalina also said Czech farmers need time to re-adjust, and become competitive within EU conditions. He said the EU Commission had taken a hard stance, in that it had refused to discuss the dispute under an article of the Association Agreement which allows either side to request negotiations when imports reach such a volume that its own home industry is threatened.

Kalina declined to describe the EU behavior as punitive. He said he believed Brussels is sending Prague a signal that the Czechs have been "favored" by being allowed into the first round of membership negotiations, and that as a result Brussels expects a certain pattern of behavior from the Czechs. Kalina said that eventually, he expects that the Czechs will fit in with this pattern.