Growing inequalities, irresponsible growth

Editors: Ondřej Lánský a Tomáš Tožička (Social Watch CZ)
Contributors: Radek Hábl (Otevřená společnost), Marie Mottlová (Forum 50%), Milan Smrž (, Linda Sokačová, Pavel Šremer (STUZ), Ilona Švihlíková (Alternativa Zdola), Peter Tkáč (Nesehnutí), Daniel Vondrouš (Arnika)
Social Watch Czech Republic

The Czech Republic (CZE) is divided. The liberal political right, which has more or less dominated public discourse since 1989, reiterates that we are living in the best of times. It forgets that a large part of the society gained little from the transition to a market economy, or was put directly at a loss. The loss is mainly connected to the erosion of social security and a fall into social degradation. A large part of the scholarly and scientific community and the cultural elites have been unable to pay attention to growing social problems. The church organizations and key non-governmental organizations mainly focused on giving paternalist assistance to the most vulnerable in the population and did not contests the view of social problems as a phenomenon that is determined individually. Such a reality of socially unequal development was also expressed by a growing distrust of vast sections of the society towards politics in general. This reality is exploited by a number of so-called new political movements that are closely connected to the oligarchic circles. On a programmatic or ideological level, they mostly promise guarantees – or mere promises – of a more dignified status of the lower and middle classes while increasing their attention to the population living outside of the main cities.

People: Growing Inequalities, especially in terms of gender

The Czech Republic has long been listed in unfavourable positions in international comparisons focusing on gender equality. In the 2017 Global Gender Gap Report, the Czech Republic placed 88th of the 144 countries under scrutiny.1 Compared to 2006, the country fell by 35 steps. The weak overall result is primarily given by the unequal position of women in the labour market and a low level of participation of women in politics. Women in the Czech Republic on average earn 21.8 percent less than men (what is known as the gender pay gap) and the country ranks next to the last in the comparison of EU countries.2 Lower wages and unequal participation of women and men in unpaid household and care-giving work also have an impact in the form of lower pensions and a greater threat of poverty among elderly women.

In 2018 the Government decided to make cuts in its gender equality financing, eliminating activities such as free legal advice, taking up cases of discrimination in the labour market based on sex or parenthood, support for disadvantaged groups of women on the labour market (single mothers, women on parental leave, women over 55, women of ethnic origin) or the implementation of the Government Strategy for the Equality of Women and Men in the Czech Republic for 2014–2020. If that is the case, it will have severe impact on the institutional grounding of the issue of gender equality. It would also prove quite destructive to the organizations devoted to women‘s rights, which tend to substitute for the role of the State in a number of fields and provide a critical approach to the policies of the State in the area of gender equality.3

Distraint, the seizure of property for non-payment of mostly trivial debts, is a major issue that affects an increasing number of Czech households. It is a deep-rooted problem and it will take years until we are able to sanction the debt trade at least to some extent. Usurers and traders with poverty pose a great threat to any society, a threat that was reinforced by the Czech privatization of the business of distraint.

Compared to the previous year, the number of people in distraint has risen by 3.4 percent; these now number 863,000 and, counting in family members, approximately 2.5 million people are nowadays affected by distraint in the Czech Republic. The number of active distraint orders is approaching 5 million, the number of people with more than 10 distraint orders has reached 150,000 individuals. Over 70 percent of all those affected (approx. 600,000) are facing a number of distraint orders simultaneously.4    Up to 6,000 children under 18 years, and over 120,000 people over 60 years are currently in distraint.

In order to reduce the number of people in the trap of debt, we need to pass the revision of the law on insolvency that would enable people to achieve personal debt relief as is common in other EU countries, and the indebted could therefore restart their lives – even in cases that nowadays fail to meet the conditions. We need to put the institution of distraint under State or public control as soon as possible.

At the moment, it is necessary on the local level to broaden the capacities of assistance to the indebted, support the struggle against predatory companies, create access to free legal advice and, primarily, increase the level of communication of information among citizens and therefore decrease the asymmetry in access to information at least to some degree.

Housing is also a major problem. As stated by the Czech Statistical Office (ČSÚ) in its overall report,5 the issue of accessibility of places of residence has become even more painful in the last year. The yearly surge in the housing offers reached approx. 10 % since the end of 2015. The surge is mainly due to the prices of housing in Prague. The dynamics of the rise in housing costs is therefore greater than the rise in the income of households, which supports the acute nature of the question of affordable housing.

The Planet--The Environment

In terms of support for nuclear energy, the Ministry of Industry has abandoned, in connection with the long-term low prices of uranium, its intention to open a new uranium mine. In the long term, the Government is still considering mining uranium and also building new reactors in nuclear power plants. In 2017, preliminary negotiations took place considering the conditions for suppliers that should have concluded by Spring 2018.8 That is despite the fact that the figures by major institutions from the end of 2014 show that it was, at the time, three times as expensive as wind or solar energy. Everything points in the direction of widening of the gap regarding the costs.9

At the beginning of November 2017, Czechia was the last to join the Paris climate treaty. The treaty came into effect on November 4, 2016. The states have come to the conclusion that the undergoing climate change will put an end to the use of fossil fuels and the destruction of forests. The Czech Republic however, produces nearly 11 tons of CO2 per capita, which is far above the EU average (7 tons an individual per year).10

The Council of Economic and Social Agreement suggested to the government on January 16, 2017 to withdraw the task of Minister of the Environment to put forward a bill on reducing Czech dependence on fossil fuels. The government stated that accepting the proposal on reducing Czech  dependence on fossil fuels would be accompanied by severe impacts on the country‘s ability to compete on the world markets.11

Prosperity: Growth without Responsibility for the Future

For the Czech economy, the year 2017 was a successful one. The economy managed to gather strength for the second upturn – there were even speculations in the first quarter of 2018 that the economy is overheating. All of the components of the GDP contributed to the results. Household consumption was reinforced by the growth in wages, 12 still supported by the tense situation in the labour market, and there was also an increase in investments. The greatest impulse to the GDP, however, came from foreign demand that also mirrored the state of the global environment: a synchronized upturn in all the major economic centres.

The positive macroeconomic developments had an impact on the labour market. A number of figures broke records: employment, low unemployment (in comparison other countries within the EU), yet there was also a strong dynamic and a fall in the number of long-term unemployed. The record number of jobs available contributed greatly to the rise in wages together with further surge in the minimal wage to 12,000 CZK (490 euro) since the beginning of 2018. As ČSÚ reports,13 the yearly rise in jobs is mostly due to a higher demand for less qualified jobs. Such findings confirm the conclusions of our previous reports. The Czech economic model is based on cheap labour and attempts to change it are unsuccessful.

Due to tensions in the labour market, wages continued to grow, the average untaxed monthly wage exceeding 30,000 CZK (1,200 euro). The wage median rose even faster than the average, which is made clear by the fact that the wages rose mainly in lower-income categories. The median, however, points at vast differences between the wages for men and for women. While the average wage was 29,639 CZK (1,185 euro) for men, women were paid approximately 16 percent less.

Despite high wage dynamics, the degree of profit, although slightly lower, remained far above the EU average (49.4% versus 40%). As the ČSÚ stated, profits are still going up.14 It means far more wealth is located in firms’ profits than in employee compensation. Despite a rise in wages, little has changed in this disparity and a major change is hardly foreseeable unless there are deeper structural changes in the economy.

ČSÚ reports that the outflow of income amounted to up to 8.3 percent of GDP, which is a very large figure in comparison to other countries within the EU.15

The state budget was also in good shape. The deficit reached mere 6.2 billion CZK (248 billion euro). The budget revenue still mostly consists of the regressive Value Added Tax (which is not adequately compensated by the progressive taxation of individuals or by property taxes) and taxation of the employees.

Peace and Justice: Arms and the Czech Republic

The world is experiencing the most prominent rise in armament and arms sales since the end of the Cold War. The Czech Republic is by no means a bystander: its export of weapons quadrupled during the last six years. In 2017 it is estimated to have reached more than 20 billion CZK (800 million EUR).16 The official statistics of 2016 show that Czech weapons and military equipment still find its way into non-democratic regimes or countries continuously devastated by war.

By far, the most prominent receiver of Czech weapons and military equipment was war-torn Iraq. Other major receivers were the United Arab Emirates, Nigeria and Egypt, where the Czechs help arming the repressive forces.

Exports worth up to 14.5 million euro went to Saudi Arabia, which is currently bombing Yemen and creating a humanitarian disaster in this neighbouring country. Some 7 million euro worth of military equipment went to Russia, which is facing an embargo by the EU.

Arms were also exported into countries that might threaten the balance of power and, in some cases, the exports contradicted the country’s international obligations. The most modern Czech howitzers and rocket launchers appeared in a promotional video of the Azerbaijani army. Azerbaijan has been under non-compulsory embargo by the OSCE since the 1990s and the CR vowed to keep it. But the material was sent via several providers into Israel which passed it on to Azerbaijan. According to EU directives, the member states must not export arms if there is a risk that they end up elsewhere than in the hands of its declared receiver, and the CR does not follow the rule.

Partnership: Implementation of the 2030 Agenda in the Czech Republic

As far as the implementation of sustainable growth according to the UN 2030 Agenda17 is concerned, this is supposedly grounded in two documents. The first is the implementation of the Strategic Framework Czech Republic 2030 (ČR 2030), which was passed in 201718 and presented at the UN High Level Political Forum in 2017.19 Although the document was compiled roughly at the same time as the global 2030 Agenda, it actually failed to respond to all of the goals and aspects of the Agenda.20  The Government, following the outputs of the UN Summit on Sustainable Development, decided to prepare a proposal for the implementation of the 2030 Agenda in the Czech Republic.21 The goal is to supplement the ČR 2030 in terms of relevance and regarding all the goals – in both their internal and external dimensions.

Preparations of the implementation of the ČR 2030 were postponed until 30 September, 2018, also because the new Government transferred responsibility for the 2030 Agenda from the Office of the Government to the Ministry of Environment.22 Since January 2018, when an inter-ministerial reflection process took place, 850 remainders are in the process of being processed, a task that is hampered by the aforementioned transfer of the Agenda and the demotion of the section under the Ministry. The degree of importance granted to the implementation documents is also unclear, as is the case with the very strategic materials of the ČR 2030 Agenda and 2030 Agenda.

If the new Government, however, decides to halt further activities that would lead to the implementation of the goals of the 2030 Agenda and ČR 2030, there is some hope that at least a number of goals could be achieved at lower levels – as has been the case with the continuous work of the Workgroup for Agenda 21 and of the local Agendas in individual municipalities at the time the general implementation of the strategic framework of sustainable development ČR 2010 was halted after 2010. Since the Czech Republic can hardly remain isolated from the developments in the world around it, it is clear that the 2030 Agenda will have to be implemented.


3  Such planned transfers of means was introduced at the meeting of the Committee on the Equality of Women and Men on February 19, 2018 by the deputy directors of the Ministry of Labour and Social Affairs Jana Jirků.  See:

11   The Government Office of the Czech Republic, Council of the Economic and Social Agreement of the CR. Record of the meeting of the 134. plenary committee of the Committee for Economic and Social Accord of the CR, taking place on January 16, 2017 at the Government Office. 2017, p. 9; available at:

12  ČSÚ: Zaměstnanost i výdělky rostou.

13   ČSÚ: Vývoj ekonomiky České republiky v roce 2017, available at:

14  Quarterly sector balance – 4th Quarter of 2017, available at:

15  Čtvrtletní sektorové účty – 4. čtvrtletí 2017, available at:

17  Přeměna našeho světa: Agenda 2030 pro udržitelný rozvoj, přijatá na summitu OSN 25.9.2015, available at:; v češtině:

18  Strategický rámec Česká republika 2030, Úřad vlády České republiky, odbor pro udržitelný rozvoj, available at: Strategický rámec byl přijat usnesením vlády č. 292 z 19. dubna 2017 ke Strategickému rámci Česká republika 2030. Podle tohoto usnesení měl být předložen implementační plán do 30. listopadu 2017.

19 National Report on the Implementation of the 2030 Agenda for Sustainable Development Czech Republic, Voluntary National Review 2017, High-Level Political Forum on Sustainable Development. Praha: Office of the Government of the Czech Republic, 2017; available at:

20 Janoušková S., Moldan B., Hák T. Analýza relevance cílů udržitelného rozvoje pro Českou republiku. Praha: Centrum pro otázky životního prostředí Univerzity Karlovy, 2017.

21  Usnesení vlády č. 61 z 25. ledna 2016 ke Zprávě o průběhu a výsledcích Summitu OSN o udržitelném rozvoji. Gestorem agendy udržitelného rozvoje a koordinací implementace Agendy 2030 byl určen Úřad vlády ČR. Do 31. prosince 2016 měl být vládě předložen návrh implementace Agendy 2030 v ČR, včetně relevantních indikátorů, available at:

22 Usnesení vlády č. 167/18 ze dne 14.3. 2018 o přesunu agendy udržitelného rozvoje, available at: