Story of De-Communization

A Czech CaseAlexandr VondraCEVRO Institute

1989 Point of Departure

• Communism Collapsed• -> economic inefficiency• -> central planning

failure• -> senility at power

(missing revolutionaries of 1st generation)

• -> lost support in Kremlin

Favorable Geopolitical Environment

• -> weakness of U.S.S.R• -> Gorbachev reforms

(glasnost, perestroika)• -> Western offensive

(Reagan, Thatcher)• -> Euphoria• -> U.S. Leadership

1989 Domino Effect

• Solidarnosc in Poland (1980/81 -> 89)

• Baltic states (Sajudis, etc.)

• Round-table in Hungary• Fall of the Berlin Wall• Velvet Revolution• T.G.Ash (10 years, …. 10

days)

1989 Czech Opposition

• Weak and fragmented (100s -> 30 000)

• Without political program, no intention to take a power

• „Philosophical“ nature• Dialog• Civic Forum as umbrella

to dismantle communist regime

Civic Forum „Round-Table“• No violence• „Our President, Your PM“• Dubček factor + Czech - Slovak• Early Presidential Elections

(December 89)• Co-opted Parliament• Late Parliamentary Elections (June

90)• Withdrawal of Soviet troops• Legal „Continuity“• KSC was not banned

Czech(oslovak) Transformation• 1) What = Vision• 2) How = Program• 3) When = Public support• Charismatic Leader• Havel – Klaus (1990-97)• Core supporters (33%)• Political Parties (ideology)• Simple Rules• Speed

Dealing with the Past - Regime• Dissolution of StB (KGB)• 5 Constitutional Acts (1989/90 –

source of power, KSC role, ownerships, free political competition, regional self-government)

• 1991 Lustration Act• 1993 Act on Unlawfulness of the

Communist Regime (declared as criminal, illegitimate and deplorable, not a legal act, just 15 people sentenced)

Dealing with the Past: Victims

• 1990 Act on Criminal and Judicial Rehabilitation (satisfaction to unjustly persecuted)

• 1991 Acts on Property Restitutions (buildings, land, some Jewish and Church property)

• -> on the basis of continuity with the old law, it was not a real restitutio in integrum which would mean an automatic restoration of original property rights

• -> individuals that were deprived of their ownership and other property rights have had apply for these rights before ordinary courts

Building of the Rule of Law

• 1991 – the Charter of Fundamental Rights and Freedoms („Bill of Rights“)

• 1991 - the Constitutional Court of ČSFR• 1992 – dissolution of Czechoslovakia• 1993 - New Czech Constitution • 2003 - reform of Administrative Judiciary

finished by creating the Supreme Administrative Court

Transformation of Judiciary: A Problem

• Communist past and great resistance from bellow• Weak pressure from the top (new regime) for changes in

judiciary• Insufficient personal (1460 judges in 1990 vs. 484 in

1993, educated at communist universities)• Courts overloaded by cases, participants faced delays in

procedures („mistrust“ among citizens)• Corruption affairs („it is cheaper to pay your own judge

than to overpay an attorney“…) • Courts vs. Parliament („Justice“ vs. „Democracy“)

Economic Transformation: Key Principles

• The objective of transformation does not rest in increasing efficiency of individual institutions but of the institutional frame as a whole („It´s capitalism, stupid.“)

• The efficient institutional frame and rule of law is the outcome, not a prerequisite of a transformation.

• If there is a fatal threat to transformation, it is from the call for ex ante regulation („switch-off“ criticism)

Economic Transformation: 4 main pillars

• 1) Restrictive macroeconomic policy and stability (budget surplus)

• 2) Price and foreign trade liberalization (including devaluation of Czech koruna – black market exchange rate -> prices + 26% in a month up)

• 3) Privatization• 4) Social safety net

Economic Transformation: Chronology

• January 90 – Budget re-design• October 90 – Strategy approved by

Parliaments• September 90 – Small Privatization (+

Restitutions)• February 91 – Simple institutional

frame for 3 reform pillars (liberalization, privatization, social safety net)

• February 92 – Large Privatization starts • January 93 – Czech/Slovak currency

Czech Privatization 1991-98(bil. CZK)

1) Small-scale privatization (20)2) British-style privatization (400) – e.g. Skoda3) Free transfers (900): „lack of capital“

• vouchers (300)• „kolkhozes“ (200)• restitution (100)• to municipalities (300)

Privatization: Two Phases1) Primary “top-down”

privatization of the existing state-owned means of production -> need not install optimum owners

2) Secondary “bottom-up” privatization; restructuring of the ownership rights … asset stripping -> It is the secondary market that should fulfill the task

The search for universal know-how

• Re-distribution of power and wealth; winners and losers.

• Enforced liberalism - the inherent weakness of new governments.

• „Creative destruction“ (Joseph Schumpeter) and speed.

• Courage of the architects of change.• Foreign Assistance (IMF/WB x „soft advice for

hard currency“)

International „Anchor“

• 1991 – exit from Warsaw Pact and COMECOM• 1991 – Visegrad Cooperation• 1991 – EC Association Agreement (market

opening)• 1992 – peaceful divorce• 1997 – Czech-German Declaration• 1997/99 – NATO membership• 2002/04 – EU membership

Societal Transformation, Education:25 years after

• 3 Generations 2:1 (Czechs and Moses – 40 years of wondering?)

• Czech Scepticism, Missing paradigma• Schools (Germany in 1960s – „children and parents“)• NGOs – Post Bellum („Memory of Nation“), People in

Need („One World to Schools“, „Stories from the Past“)• 2007 – The Institute for the Study of Totalitarian Regimes• 2011 – Act on the participants in anti-communist

opposition and resistance • 2012 – final law on Church restitutions

Conclusion

• Czech Transformation – key achievements in the first decade (btw 1989 and 1999)

• „Orange“ Ukraine 2004 vs. „Maidan“ Ukraine 2013/14

• New geopolitical Environment after 2008 (U.S. looking inward, assertive Russia and EU crisis)

• Strength begins at home