Economy

During 1948–89, when it was under Communist control, Czechoslovakia had a centrally planned economy. The government owned nearly all productive resources. All factories and almost all farms were put by the Communists under state control. The economy's focus was changed from light industry, such as glass and textiles, to heavy industry, such as machinery and steel. In the mid 20th century, poor planning, labor shortages, and other problems caused this economy to decline. After the Communists fell from power in 1989, measures were introduced in Czechoslovakia to transform the economy to one based on private enterprise and market forces. Many new businesses were established, especially in retail trade and other service industries. Leaders in the Czech Republic favored a rapid transition while those in Slovakia wanted a slower transformation. Differences concerning the pace of Czechoslovakia's economic changes were a major cause of the breakup of that country in 1993.

Approximately, 50 per cent workers of the Czech Republic have jobs in service industries. Although the service sector was largely undeveloped during the Communist period, it is growing rapidly today. There are many new, privately owned insurance and real estate firms, medical and other professional services, repair shops, and retail stores. There has been a large increase in tourism since the late 20th century, which has led to the expansion of hotels and travel agencies.

Manufacturing is well developed. It employs about 40 per cent of the Czech Republic’s labor force. Heavy industries, including the metalworking, chemical, and electric-power industries, are especially important. These industries were extensively developed during the Communist era, often with little concern for the environment; the resulting air and water pollution has become a major problem, especially in northern Bohemia.

Products made in the Czech Republic include machinery, electrical equipment, chemicals, machine tools, transportation equipment, textiles, footwear, glass, processed foods, beer, wood products, and ceramics. Much of the Czech Republic's manufacturing is concentrated in and around Prague, Brno, Hradec, Kralove, Plzen, Ostrava, and Usti nad Labem..

The Czech Republic's main trade relations are with Austria, France, Germany, Hungary, Italy, Poland, Russia, Slovakia, and the United States. Its chief exports are automobiles, coal, footwear, iron and steel, and machinery. The country is very dependent on imports of natural gas and petroleum. Other major imports include iron ore, other ores, and automobiles.

Agriculture employs about 10 per cent of Czech Republic’s workers. During the Communist era virtually all farms in Czechoslovakia were owned and operated by the governmentor they were collectives. State farm workers earned a salary from the government, while collective farm workers received a share of the farm's profits, some of its products, and a small wage. Legislation passed in 1991 allowed farmland to be returned to private farmers. By 2000, about 80 per cent of the farmland was privately owned.

About 40 per cent of the country's land is suitable for farming. The main crops grown in the Czech Republic are wheat, barley, corn, sugar beets, oats, potatoes, and hops, rapeseed, rye and other vegetables. Cattle and hogs are the chief livestock, along with poultry and sheep. The harvesting of the country's forests, especially of conifers, is also important.

The Czech Republic has only a few valuable mineral resources, although it does have large deposits of brown coal. The Oder valley around Ostrava is the source of good-quality bituminous coal, especially the kind used to make coke. Other minerals produced include kaolin, graphite, fluorspar, uranium, tungsten, lead, and zinc. Large deposits of uranium and small amounts of antimony, mercury, and tin are found in the Ore Mountains.

Transportation is well developed. Prague, with several railways and highways radiating from it, is the hub of the country's transportation system. It has a subway system and an international airport. Railways and highways link all of the major cities and provide links to bordering countries. There are nearly 35,000 miles (56,000 kilometers) of highways and 5,900 miles (9,500 kilometers) of railways. The Elbe, Oder, and Vltava rivers are used extensively for inland shipping. The country has several international airports, including ones serving Prague, Brno, and Ostrava.

The basic currency unit of the Czech Republic is the koruna.