Czechs want to be competitive on global markets!

Experts of the Czech National Economic Government Council (NERV) together with experts and representatives of public sector have prepared a report on the competitiveness of the Czech Republic. The NERV report focuses on weaknesses and strengths of the Czech economy and brings proposals that might improve the position of the Czech economy in global competition.

Step by step within 6 weeks, NERV is presenting to the public the individual chapters of its more than 300-page report. The chapters are dealing with institutions, education, marketing of goods, services and labour, financial markets, technological preparedness, business and innovations. According to the sixteen NERV members, the most important barriers of the Czech competitiveness are its public institutions, educational system, infrastructure and ineffective labour market.

In the field of institutions, NERV is proposing a central portal for purchase and sale of public properties, common back-office for the public services, setting up of National Budget Council that would be a guarantee against an excessive and burdensome regulation; e-registers and better regulatory impact assessments on businesses.

The Czech Republic must deal with time consuming law enforcement and corruption. One of the solutions is to accelerate judgments and juridical procedures, prevent juridical disputes via arbitrations and improve qualifications of judges and clerks. Regarding the Czech banking sector, there is a problem with limited access to financial services and insufficient financial literacy. Therefore, NERV recommends the introduction of an obligatory school subject focusing on financial literacy, more intensive mathematics schooling and an obligatory State leaving exam in mathematics. One of its radical recommendations for school education is also at least one foreign language – English and more ICT and reading at schools.

NERV is also calling for the abolition of dividends tax and privatization of minority shares of public firms via the stock-exchange. In the field of the labour market, NERV calls for the reduction of high adjoining labour expenses or unification of VAT (so call flat rate). On 10th March, Czech coalition agreed on a 20%VAT and 14% reduced VAT from 1st January 2012 and on unique 17.5% VAT without exceptions since 1st January 2013. This additional VAT revenue should be used to cover the expenses of Czech pension reform.