Residual State Property in the Czech Republic

Privatization in the Czech Republic was carried out under three programs: restitution, small privatization and large privatization. By far the most important privatization program in the Czech Republic was large-scale privatization that began in the spring of 1991. Large privatization allowed combinations of several privatization techniques. The largest firms were transformed into joint stock companies, the shares of which were distributed within voucher privatization (almost one half of the total number of all shares of all joint stock companies was privatized), sold for cash or transferred for free to municipalities. Despite the massive scale of the voucher privatization, there still remains a substantial number of companies where the state has been involved. The total number of 1849 companies of a book value of 367.5 billions entered both waves of voucher privatization. In 1998 the state has kept its involvement in 369 companies with the overall book value of more than 440 billions crowns. The book value of the state share in these companies amounted to almost 177 billions crowns. A great number of these companies was "privatized" through voucher privatization but the state did not privatize them entirely. An analysis showed that 76% of the assets (book value of the above companies) is possible to be influenced by the state. One cannot but to conclude that, despite the voucher privatization, the state sustained its influence over the significant part of the Czech economy. In view of the facts it seems legitimate to question the official success of the voucher privatization. There exist a clear consensus that further privatization of the residual state property is both necessary and inevitable.