Historical Development of the Czechoslovak and Slovak Economies in the Transition Period

Abstract

After 1989, the Czechoslovak economy faced very many challenges related to the transition process from centrally planned system to the market economy. The main goal of the transformation was the liberalization of prices and foreign trade. After the price and trade liberalization has been introduced a critical part of transformation, including the small and large scale of privatization. The price and foreign trade liberalization, including the small and large privatization, had very negative impact on the economic activities. After relatively successful transformation, the authorities from both the Czech and the Slovak Republic decided on a peaceful division on separate of two republics, the Czech and Slovak republics since January 1st, 1993. Historically, the main institutions during the Czechoslovak republic were located in the Czech Republic, in particular, central banks and other federal institutions. In addition, the structure of the Slovak economy was relatively less developed in comparison with the Czech economy. The Slovak authorities were able to build the institutional and legal frameworks for the Slovak economy. During 1993, the Slovak economy was under many pressures due to the relatively low level of the foreign exchange assets, deep external imbalances, and high level in inflation. Furthermore, it was needed the restructuring of the enterprises, dealing with bad debt in the banking sector etc. Despite all obstacles related to the overall transformation process, including the creation of new institutions for a new country, the Slovak economy started to adjust to new market economic conditions relatively well.

Citation

Sipko, J. (2024), "Historical Development of the Czechoslovak and Slovak Economies in the Transition Period", Augustín, M., Jančovič, P. and Sergi, B.S. (Ed.) Modeling Economic Growth in Contemporary Slovakia (Entrepreneurship and Global Economic Growth), Emerald Publishing Limited, Leeds, pp. 7-24. https://doi.org/10.1108/978-1-83549-454-720241002