Wednesday, 18 July 2018

LN: Czechs still lagging far behind Germans in wealth

19 June 2017

Prague, June 17 (CTK) - Czechs' earnings still amount to roughly one-third of those of Germans after their efforts lasting for 25 years, Pavel Kohout writes in Lidove noviny (LN), adding that nothing but hard work and domestic capital can help close the gap.

If average net salaries are compared between the Czech Republic and Germany, the former's are still at the dismal 36 percent of the latter, Kohout writes.

This is quite a sad figure, given all the circumstances.

For a quarter of a century, the Czech Republic has been building the market economy, making reforms, integrating itself, harmonising its law, attracting foreign investors, subsidising, co-financing, but still it remains at one-third of Germany's earnings, Kohout laments.

However, the gap may be even bigger. If the volume of financial property of households is taken into account, the Czech Republic is only at 26 precent of the German level, he adds.

Is there any even more bleak figure? Yes, if the financial property of an average Czech is compared with that of an average German, this is a mere 13.9 percent, Kohout writes.

Although it aches, one has to reveal the truth. The Czech Republic is a nation of the poor, he adds.

It is to a large extent clear how the Czechs got into the current situation. In the early 1990s, their income made up roughly one-tenth of the German level.

The rise to the above-mentioned 36 percent is a considerable change for the better, this is beyond any doubts, Kohout writes.

This prompts the question of what to do to close the gap behind the rich West faster, he adds.

The question is all the more urgent that roughly since 2010, the process of closing the gap behind the rich has all but stopped and in some years, it was even reversed, Kohout writes.

There is the question of how the rich West actually got rich and whether this process can be emulated. Some claim that the West owes its wealth to the colonial plundering, he adds.

This is nonsense because South Korea never had any colonies, but still its economy managed to close the gap behind the rest tremendously, Kohout writes.

Switzerland and Sweden never had any colonies, while Ireland itself used to be a colony which had to struggle much, he adds.

How about the budget policy? The advocates of high taxes point out Sweden and other Nordic paradises. However, in 1960s, the Swedish tax burden was lower than that of the U.S. economy, Kohout writes.

After all the impossible explanations are ruled out, only the plausible ones remain, though they may not seem likely, he adds.

Believe it or not, work is the primary source of wealth. The economy which imposes such high taxes on work like on the consumption of tobacco or alcohol cannot be any sound economy, Kohout writes.

The lower the taxation of work, the easier path to wealth, he adds.

Capital, but the domestic one, is equally important. It demands well-functioning banks, a stock exchange and investment companies, Kohout writes.

Without investment companies, it is difficult to gather capital for business, he adds.

This is an easy way in which to reach a wealthy economy. There is no reason why this well-tested method should not be working now, too.

All one has to do is to find a political representation that would be able to implement it, Kohout writes.

The next general election to the Chamber of Deputies is scheduled for October 20-21.


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