the great "Americare" emulators still scheming

Already in the early 1990s I remember talk in the Czech media about how the Czechs should emulate the U.S. in all things policy-related. I'm talking education, health care, whatever America was doing was admired.

I recall watching a roundtable of pundits swooning over the U.S. healthcare system, in particular, arguing that the Czechs should adapt a similar scheme. Back then already I found myself shouting at the television and shaking my fists high in the air: "What a terrible idea!"

Privatization of all state assets was on the agenda way before communism toppled. The concept of market liberalization Washington-Consensus style is largely what drove the movement for a "democratic" Czechoslovakia in the late 80s. Healthcare reform, or more accurately, the wholesale auctioning off of public healthcare assets, has been in the works for nearly two decades. The transfer of public assets into private hands began right after the fall of communism, but did not take shape as rapidly as in many other Eastern Bloc countries.

Interestingly, a study published this month has shown a correlation between rapid health care privatization and disastrous effects on countries' health and mortality rates:

The researchers examined death rates among men of working age in the post-communist countries of eastern Europe and the former Soviet Union between 1989 and 2002. They conclude that as many as one million working-age men died due to the economic shock of mass privatisation policies. Following the break up of the old Soviet regime in the early 1990s at least a quarter of large state-owned enterprises were transferred to the private sector in just two years. This programme of mass privatisation was associated with a 12.8% increase in deaths. The latest analysis links this surge in deaths to a 56% increase in unemployment over the same period.

The Czech Republic apparently did much better than Russia, for instance, whose rapid privatization was responsible for unemployment tripling and number of male deaths rising by 42% in three years. However, at the current rate of privatization, seeming to be approaching a feverish pitch, it wouldn't be too far-fetched to say that, compounded by the global financial crisis, the situation could get worse and result in a much more devastating scenario. Unemployment is rising rapidly, access to social services and healthcare is becoming more limited due to cost restrictions and cuts in funding for social programs. Experts are warning that as a consequence of the economic changes, mental health issues and domestic violence will likely become much more rampant.

What can go wrong with privatizing the health care sector? What has happened in the United States as a result of a health care for-profit industry orientation should have become enough of a warning. When profit comes before people's health and well-being, leading to health care becoming unaffordable and health insurance companies and facilities cutting corners and denying care to make profit as in the U.S., the consequences can be dire.

In the Slovakia, on which the Czech reform was modeled, the changes led to worse patient care and a mass exodus of physicians out of the profession and abroad. Slovak physicians warned the Czechs before the reform to not follow the lead of their privatization pioneers. The European Federation of Salaried Doctors also warned the Czech Minister of Health about the dangers of American-style managed care.

In the Czech Republic, as a result of the reforms, at the core of which is profit, the salaries of health care professionals have been stagnating, causing large numbers of professionals to flee the field. In 2008 alone, 20,000 healthcare workers, that is 8% of the workforce, left the healthcare sector and not nearly enough new professionals, especially nurses, are entering the field.

The health care reform has unfolded more slowly than in many other parts of Europe, yet already by the end of 1991, only two years after the Velvet Revolution, 28 percent of healthcare facilities had been privatized. By the year 2000, more than 95 percent of physicians, all of whom worked in state facilities prior to the revolution, were working in private practice.

As Jiří Schlanger, president of the Union of Health Service and Social Care of the Czech Republic, writes:

At the beginning of the nineties, when rightist political parties came into power, the first wave of privatization in the healthcare sector was started on their decision. The first to be privatized were the services of pharmacies, general practitioners and healthcare specialists, and also transportation of patients with the exception of emergency ambulance services. . . Privatization of services was accompanied by privatization of property. Only a few policlinics and surgeries became property of municipalities, most property became private ownership of physical persons or legal entities. . . At the same time, an attempt was made to privatize regional hospitals. A list of about a hundred general hospitals was drawn.

"Luckily," writes Schlanger, "the pace of privatization slowed down and in the end trade unions succeeded in persuading the Minister of Privatization and then the whole Government that privatization of hospitals should be stopped."

That was nine years ago. The pace has seemed to increase again. The reformers are busy. Fortunately, as can be seen above, the privatization process has not been met with silence. In 2007, for instance, the selling off of a group of regional hospitals sparked off a wave of protests, alas to no avail. In fact, more and more facilities are being sold and converted into for-profit ventures. Just over a year ago, demonstrations took place across the country to try to stave off the announced Ministry of Health reform, implementing copay payments at the doctor's office and in pharmacies. Despite the outcry of patient advocates, trade unions, and left-wing parties, payments went into effect in January 2008. The dominant argument in support was -- and still is -- that without these fees, the health care system will go bankrupt. Others counter that free health care to all citizens (excepting insurance payments) is a right guaranteed by the Czech constitution.

The people spoke up decisively in the 2008 parliamentary elections, responding to one of the key platforms of the left-leaning Czech Social Democratic party, ČSSD, promising the abolishment of the patient fees. In every single district, ČSSD won majority of seats. Now the newly formed parliament is expected to deliver on its promises. As of February, in some regions of the Czech Republic, it has already been decided that the copay and pharmacy fees will be scrapped.

The last phase of the premeditated health care reform is the privatization of state-run health insurance providers. In the spring of 2008, former Minister of Health Tomas Julinek came out with a proposal to convert public insurance agencies, all ten of them, into joint-stock companies. The proposal met with a wave of protests. The transformation of the insurance sector is still being debated. It is well-known that the insurance agencies' profits are currently at a record high. Clearly somebody's got an eye on that sweet deal.

Another example of a recent pet reform project is this: last year, the health minister's proposed reform unleashed a fierce debate when it surfaced that he was pushing for privatization of some of the last public health facilities - university hospitals, a once unconscionable, idea. The health workers' unions demonstrated and bought some time. But, based on the privatization pattern thus far, there's no indication this coveted sector will be spared. The world financial crisis makes for the perfect excuse to choke and slash the bulk of the remaining government funding in all the most "sacrosanct" spheres, including health, education, and social services, much like what President Barrack Obama has signaled will be happening in the U.S. under his directive.

Yes, in addition to health care, the public education department and the state-managed pension fund sector have been getting a lot of heat these days. They too are poised to soon be undergoing drastic reforms. Far and wide, America's influence in the realm of free market reform is felt. Foreign firms are clambering at the doors, recession or not, slobbering over the opportunities for profit and more than enough politicians seem ready and willing to facilitate the process. Maybe the Czechs could learn a thing or two from the French and organize on a more massive scale to curb the destructive plundering of public assets and social protections?

left, right, left: history in the post-communist era

Recently, an insightful discussion has been taking place in the Czech press over how modern history is (or isn't) taught in Czech schools. Some education experts allege that modern history instruction often extends only as far as World War II; that most teachers don't even bother with lessons devoted to the communist and post-communist era. Perhaps, some education experts believe, it is because that chapter of Czech history is too fresh, too personal, and instructors are not sure how to present it to their students. Yes, textbooks have sections devoted to selected events in the last sixty years of Czech history, but they are often just that - a list of dates and names, which leave a whole host of questions unanswered.

After the 1989 fall of the totalitarian regime, responsible for imprisoning and torturing people and ruining, if not ending, many lives, in an effort to right the wrongs of the past, the following steps were taken: Still during the days of the Velvet Revolution, communism was struck out of the constitution as the leading ideology. Communists in the government were forced to resign. The communist party was then dismantled (though later reformed under a different name). Communist dignitaries and former informants were forbidden from holding posts in politics. A "decommunizing" law called lustrace was put into place in 1991 and is still in effect today. The law states that in order to obtain a position in the judiciary, military, education, state-run media or state-owned enterprise, every Czech born before 1971 must obtain clearance, showing that between the years 1948 and 1989 s/he was never a high-ranking member of the communist party, a spy or secret service collaborator. In addition, the person in question could not have studied in a police academy or an institute for dignitaries in the former Soviet Union. Since the law has been in place, more than half-million clearances have been ordered from the Ministry of Interior.

As you can imagine, the process of trying to bring about justice for those persecuted by the communist regime is, however, fundamentally flawed. The law has been circumvented, many of those responsible never held accountable, but also innocent people smeared. What's more, the "purification" process has been accompanied (if not partly caused) by a powerful wave of anti-communism, which has swept across Czechoslovakia, limiting discourse and, in the process, unjustly shunning everyone even marginally implicated in the oppressive system.

As George Lawson writes in his book Negotiated Revolutions:

The policy of lustrace, literally meaning illumination or purification, was the principal attempt by the Czech government to hold people accountable for the crimes of the communist period. The lustrace law in October 1991 set up a commission of 14 MPs to remove and exclude former agents and collaborators of the StB (secret service), secretaries of the Communist Party from the level of district committee and above, and members of the People's Militia from high public office, government bureaucracy, the media, universities, the police and armed forces for a period of five years.

. . . The problems with lustrace were manifold. First, the commission relied on StB documentation that many argued was incomplete, could have been doctored to appease bosses or implicate enemies, and failed to differentiate between formal informers and those who unwittingly helped the security services. Kieran Williams estimates that between 1 October 1989 and 31 January 1990, 90 per cent of files held by the StB's Second Directorate (which dealt with domestic political intelligence) vanished. One-third of the files pertaining to the 50,000 or so continuing operations being run by the StB disappeared in a 10-day period. Second, lustrace presupposed guilt, requiring the accused to prove their innocence rather than accusers to establish culpability. This allowed lustrace to become both a powerful political tool and a moral condemnation of people who were, at least, initially, unable to defend themselves.

Don't take me wrong. I am no defender of criminals or apologist for a totalitarian regime, however modern Czech history is more complex and more nuanced than just the convenient division of people into the two camps of good and bad guys. Many people who belonged to the communist party, even those who held offices there, are still to this day conflicted about their role in the regime. Or, at least, their ties to the crimes of the regime aren't so clear-cut. These people, as much as the political dissidents, have stories that are important in shaping our understanding of recent history and our place in society today.

For instance, I am reading a book entitled Winners? Losers?. The book is a collection of oral histories told by dissidents and communist dignitaries about their lives and work during the period of Normalization between 1969 and 1989. I believe, even more so now that I am reading them, that the stories of people from both "camps" are worthy of studying to form a more holistic view of our past. Silencing all those who belonged to or associated themselves with the communist party is counterproductive, even discriminatory, I'd argue.

Take my grandmother. She was an enthusiastic fan of the communist philosophy in the 1940s when the movement was fresh and largely populist. Little did she know it would turn into a totalitarian regime.... She remained a party member, albeit with no political function, through the fifties and sixties. She told me she didn't leave the party until 1969 because she was too scared to as a single mother. She was afraid she would be fired from her job and left penniless with two young daughters and no family to help. My grandmother was a writer and translator. To this day, she feels guilty about ever supporting the party which ruined so many lives, and she is one of the many people who have absolutely no victims to her name.

The anti-communist attitude, so prevalent after the Velvet Revolution, still taints much of the discourse today. Just this very day, for instance, in the paper Lidove noviny, commentator Martin Zverina argues that if former communist dignitaries and party members are let into the classroom as speakers, they will corrupt children's minds and whitewash history. He compares the atrocities of the communist regime to those of Nazi Germany, almost a cliche analogy by now, opining: "Pretty soon, will it have to be 'the Jews' for five minutes and Hitler for the next five in the classroom?" A classic slippery slope argument, which, in fact, typifies much of the tone of the debate today: if we let one communist era voice from the left-wing camp out of the closet, will the communists start brainwashing our children and pushing their way into influential positions around the country? Will the communists take over again?

Such outlandish claims and fear-mongering only help in stifling a much-needed dialog between those from the communist and those from the dissident camp (though keep in mind that that distinction is often quite blurred). Such a conversation could truly help the Czechs make sense out of and provide closure for a complicated era, from which relatively fresh wounds still remain. It would behoove the young generation to be invited to partake in such a conversation; to learn from their predecessors. It should be done and done while the witnesses and actors alike are still with us.

everyday people are saying enough is enough

Since I've been back in the Czech Republic, I have noticed a certain degree of a pro-business, anti-union and anti-socialized anything slant in mainstream media.

The most recent example of this was the Prague public transportation employee strike, which was supposed to happen sometime this month. It was, however averted last week after the transportation union leaders succeeded in forcing the Minister of Finance to take the proposed tax and salary law changes off the table until a new proposal is written up and consulted with the union leadership.

Based on the press coverage of the looming strike, one could walk away with the impression that the bus and train drivers are a whole bunch of whiners, willing to bring the country to a halt because of a few puny perks like stravenky, or meal discount vouchers, a popular benefit many Czech workers receive from their employers. The reason for the strike was most often explained in the press as a change in tax law, slated to take effect in 2010, which would transform benefits such as discounted bus passes and meal vouchers into a lump sum cash contribution, thus reclassifying these perks as taxable income.

According to Sodexo, the leading whole sale vendor of meal vouchers, "89% of private companies and 94% of state institutes have been providing their employees with meal voucher benefits."

To explain, meal vouchers are purchased by companies from enterprises (such as Sodexo) specializing in this arena, then resold to employees. The employer covers half the cost of the meal voucher value, which s/he can then deduct for tax purposes. The employee covers the other half of the cost, an expense which is tax-exempt unlike a cash substitute would be. Thus, many benefit: the employer gets a tax break and a good feeling that the employees are well taken care of, employees get meal discounts, restaurants and supermarkets get business.

The problem was not only the slashing of employee benefits that could ensue, but also the freezing of contract-specified salary increases for the transportation department employees. The city, which spends approximately half of its budget on Prague public transportation, also wanted to cut some transportation services and increase fares, which it had done a year ago as well. All this because the city's public transportation budget has been shrinking. This year, the city transportation department will be allotted about a quarter less than in previous years.

The public transportation unions were up in arms with the Ministry of Finance about these proposed changes. As the vice president of the Railway Union, Petr Bazger, says, they're calling for a strike not so much because of the monetary issue, but out of principle.

This is key. I would argue that much of what is happening on the labor front in the Czech Republic today has its roots in the economic reforms of the early 1990s. It was in September 1990, only ten months after the fall of communism, that the Czechoslovak Federal Assembly approved the "Scenario of the Economic Reform," the blueprint for trade liberalization and a massive-privatization scheme of state-owned enterprises.

At the time of the vote, 97% of businesses were state-owned, the highest percentage of any Warsaw Pact country. Today, nearly twenty years later, 86% of all the state-owned enterprises have been privatized. Free trade enthusiasts laud the Czech Republic for making fine progress, though the more radical Friedmanite types would have preferred a more rapid process.

The government is trying to shake off as many expenditures as it can, as quickly as possible, while playing into the hands of (largely foreign-owned) big business, in the form of outsourcing, tax breaks, etc. The Czech government is now focusing on the last and most guarded and controversial aspects of privatization: health care, education, worker benefits and protections, and social services.

Is the press connecting the dots between what the working people are fighting for and the effects on them of the priorities of those at the top? Not so much. Let me demonstrate. It was just announced last month that the Prague Transportation Enterprise (Dopravni podnik hlavniho mesta Prahy, or DDP) has signed a contract with the German-owned companySiemens for maintenance and servicing of one of the three subway lines in Prague, thus freeing a portion of the city-run enterprise from some of its "financial constraints." Supposedly the contracts of the 120 DDP employees Siemens will be taking under its wing will remain the same. However, most unions were opposed to the deal and future outsourcing deals in the works because it paves the way for the tunneling and selling-out of a publicly-owned enterprise. Only days after the contract with Siemens was signed, it was announced that the very same subway line (and others) will reduce frequency and shorten the routes. The government cites cost-saving needs as the reasons for its service cuts and for outsourcing.

It seems to me that the Czechs are getting fed up with the gutting of labor rights and state social supports. Many are saying enough is enough. Last fall, in every district in the country a left-wing party, the Czech Social Democratic Party (ČSSD), won majority seats in the local and Senate elections, thus upsetting the majority rule of the right-wing Civic Democratic Party (ODS). The ČSSD party's base has traditionally been the working-class voters in industrial towns.

Privatization efforts in health care seemed to be the straw that broke the camel's back. A year ago, in January 2008, patient fees were instituted by law for visits to the doctor. This decision created vast opposition. Many, including the ČSSD party leadership, argued it was unconstitutional because the Czech constitution guarantees free health care to "citizens have on the basis of public insurance the right to free medical care and free medical aids under the conditions defined by the law." Despite the opposition, in May, the Constitutional Court upheld the unpopular health fees.

So the voters spoke up. ČSSD promised to eliminate the patient fees and won the election by a landslide. Their victory was in the press frequently attributed to the people's dismay at having to pay fees at the doctor on top of the insurance costs they accrue. However, I believe there is a deeper cause. The Czechs seem to be saying: "No more. We did not sign up for this gutting out of all the state-guaranteed securities and protections. Profit before people is not what we want."

possibly the world's largest deposits of rare metal found in Czech mountains

Czech Radio reported today that German scientists have discovered deposits of the rare metallic element indium in the Krušné Hory mountains on the north-western Czech border. The deposits could turn out to be the world’s largest known single reserve.

This would be good news if the Czech Republic could reap some yummy profit from the proceeds and if mining could be done with minimal impact on the environment.

Indium is a soft, easily fusible metal, chemically similar to tin, but more closely resembling zinc. It is widely used in the manufacturing of electronics, particularly in the computer industry for LCD and LED, plasma flat screen displays and in thin film solar-cell technology.

"As indium metal is extremely rare," states the Czech Radio report, "it also extremely expensive, currently selling for around 700 euros a kilo – a ten-fold increase on prices a mere five years ago."

It is estimated that the extraction could begin in approximately three years, provided the price of zinc and tin, the other metals with which the indium is mixed, goes up, as it is predicted to do.

I am imagining the investors lining up at the speed of lightning. My prediction is that many of the local residents would likely support the drilling, if it gets the go-ahead, hoping for job offers, because the north-western region of the country has a solid history of mining and the largest unemployment rate of the entire Czech Republic (more than 10%).

Dr. Thomas Seifert, a member of the German team from the Freiberg Mining Academy that surveyed the site, was quoted in the article as saying that underground mining technologies "are so highly developed that the environmental impact is very, very low.”

Indeed, in my search around for information on the toxicity of indium, I have found that indium is considered a non-toxic substance, though some indium compounds are highly toxic.

According to a 2004 U.S. Department of the Interior Geological Survey, "metallic indium and most of its compounds are relatively inert and are not considered to be hazardous in industrial use. Exceptions include nitrogen dioxide, which may explode in the presence of indium. Some of the advanced semiconductor materials that contain indium must be considered toxic, not for their indium content, but for the antimony and arsenic components of the compounds, which include gallium indium arsenide phosphide, indium-gallium arsenide, and indium antimonide."

The most problematic aspect of indium production is the use of highly toxic chemicals in the extraction process. China, for example, which is the world's second largest indium producer after Canada, has a history of spills of toxic waste from the process of extracting indium from zinc slag. Though well-designed and carefully managed processing plants have the capability of recycling much of the material used for the refining, accidents and leaks can happen and waste still exists. We in the Czech Republic don't have a very good history of environmental conscientiousness on the part of industry. That coupled with corruptibility is not a very good combination.

Other issues that come to mind as far as building and operating mines are environmental destruction as well as excessive uses of resources, including energy and water for the extraction process. Furthermore there is the pollution resulting from the release of sulfur dioxide into the air by the processing plant. More research for on the environmental impacts of mining to come.

the president: an envirosceptic Czech maverick?

The Czech president Václav Klaus seems to revel in being controversial. Perhaps he thinks of himself as the "Czech maverick?"

Over the last two years, Klaus has received a lot of attention for his highly publicized opposition (and book!) to what he calls the "myth of global warming." The climate skeptic he is, Klaus delivered a keynote speech at the international envirosceptic gathering in March 2008 in New York, the International Conference on Climate Change, sponsored by a plethora of international right-wing free-market advocate think-tanks such as the National Center for Policy Analysis, Committee for a Constructive Tomorrow, and the Austrian Hayek Institute.

American media, including conservative talk show host Glenn Beck almost wet their pants at the pleasure of featuring a climate skeptic and free-market advocate who happens to be the head of a state.

The previous year, Klaus also addressed the delegates at the UN Climate Change Conference, which caused some Czechs (including the author of this blog) some embarrassment.

About environmentalism, Klaus says that it "is a metaphysical ideology and a worldview that has absolutely nothing in common with science and the climate." According to Klaus, environmentalism "is a new anti-individualistic, pseudo-collectivistic ideology based on putting nature and environment and their supposed protection and preservation before and above freedom."

Global warming is, asserts Klaus, "similar to the Avian flu propaganda, the Y2K propaganda, the end of resources propaganda, the overpopulation propaganda."

Klaus worries: "A rational response to any danger depends on the size and probability of the eventual risk and on the magnitude of the costs of its avoidance. I feel obliged to say that – based on my knowledge – I find the risk too small and the costs of eliminating it too high."

His main fears seem to stem from his libertarian ideas of an unrestricted market, which "ideologies" such as environmentalism threaten. In a nut shell, he clearly advocates the tired old 'profits before people and the planet' ideology which is precisely that which got the planet as sick as it is today.

He, like many Czechs I know, refuses to acknowledge the gravity of the environmental degradation that plagues the world. "Nature is powerful. It will come back and regenerate itself," argue so many Czechs I have spoken to. But do they not realize that extinctions caused by human activity are taking place at at least 100 to 1,000 times nature's normal rate between great extinction episodes? Do they not see that climate change is a life-or-death matter for not only animals but whole communities of people who are fleeing their ancestral lands because of the quickly melting polar ice caps and rising ocean levels?

Sometimes I laugh at the foolishness of the global warming deniers, but other times the gravity of the matter sinks in and Mr. Maverick et al are just not so funny anymore.

the Czechs steer the ship

Apologies for my long absence. I plan to return to posting bilingual podcasts, but for now, I will be posting blog entries related to my interest Czech politics and history.

As of this month, the Czechs have, for the first time, assumed the six month rotating European Union presidency. That is a big deal, especially in light of the economic crisis, sweeping across Europe.

To add drama to the mix, the Czech president Václav Klaus, who is undeniably one of the only world leaders doubting climate change is real and manmade, is playing prima donna with his "Euroscepticism." He wallows in the fact that he is the only head of state in Europe who is opposed to ratifying the Lisbon Treaty, sighting a significant loss of Czech sovereignty as his primary motivation. As the UK Daily Mail posits, Klaus "looks certain to use his tenure as an opportunity to publicise views which will enrage other EU leaders."

Though his role in the Czech EU leadership is largely ceremonial, unlike that of the diplomats representing the Czech Republic in the EU headquarters in Brussles, Klaus's anti-EU views and climate skepticism are creating tensions within the union, leading to bad press and premature accusations of incompetency on the part of the Czechs to lead.

True, the French president Sarkozy is having a hard time passing the baton, and has even tried to fudge the law to extend his EU presidency for another two years as head of an alternative EU governing body comprising the powerful players, fortunately to no avail.

Though the International Herald Tribune stipulates that economic crisis may provide the perfect opportunity for Sarkozy to push the "inexperienced" Czechs aside jump into the drivers seat again as a capable crisis manager, it is clear that Sarkozy hasn't moved over yet to let the Czechs lead. Just days ago, Sarkozy led the "official EU" delegation to negotiate ceasefire in Gaza, while the Czechs embarked on their own diplomatic mission, further enforcing the image of a fractured Europe.

Will the big players move over and let the Czechs show their chops?