Economic system of the Czech Republic

After the Second World War, and as a result of the social changes related to the rise of the socialist regime, significant changes in the economy system were enforced. All industrial companies were nationalized and the economy started to be controlled centrally on the basis of a national economic plan. Within the Soviet bloc, the Czechoslovak economic system focused even more on the heavy-industry development, which was demanding in resources and energy. Traditional economical branches such as the glass industry, the food industry and the textile industry were markedly suppressed . The proportion of producing the means of production grew at the expense of consumer goods.The national collectivization was on many occasions enforced in the agricultural industry. Farmers independently managing their farms were forced to give up their land and production means for the benefit of the agricultural associations. Thereafter they became members of such associations. Chemical fertilizers and heavy technology were used to a great extent, hence the land resources were greatly degraded.

From the 1960s, animal production developed rapidly in the factory farming plants. The Czech economy's development during the socialist regime resulted in the loss of competitiveness and in a high ecological burden on the landscape.

After the fall of the Communist party in 1989, the Czech economy system was at the start again; previous competitors, who had not been affected by socialism, were far ahead. In the years right after the revolution, the Czech economic system had to absorb all changes that had occurred on world markets; the changes were often very dramatic. Within the restitution system, businesses and land were returned to their previous owners; during the coupon privatization, a large majority of state companies were privatized. Some important companies were sold to foreign investors (Škoda Auto, Plzeň Brewery); some were bought by interested Czech parties (ČKD, Škoda Plzeň).

Currently, the Czech Republic ranks among the fastest-developing countries in the region and compensates for the delay that resulted from the historical development.