Financial Services Volunteer Corps mission to the Czech and Slovak Federal Republic, March 11 -16, 1991 : observations, findings and recommendations

Paradoxically, this may allow the new democratic government to more easily privatize the economy, since it does not have to contend with hybrid, "socially owned" or operated factories and businesses. However, the country still faces daunting challenges in this process. Industry is geared towards exporting to COMECON markets, which have significantly diminished. Inflation and unemployment are rising, and increasing demands are being placed on an inadequate commercial banking system. This report identifies areas for future cooperation between A.I.D. and the Czechoslovakian government with respect to privatization, banking reform, the creation of a capital markets system, adoption of international accounting standards, and insurance industry reform. The report states that positive transformations have already been achieved in banking and finance and that the entrepreneurial spirit of the Czechoslovak people is encouraging. It concludes that the country has the potential to surmount the remnants of the past that impede its path to economic vitality and growth. Specific recommendations for cooperative development programs are presented.