Observing Czech Republic's growing pains of an economic revolution
It’s been 50 years since the Russian occupation of the Czech Republic to “restore order,” when in-fact, was to install the communist economic agenda. Prague locals celebrated in the streets of Wenceslas Square on August 21 with concerts and large-screen videos of that era, to serve as a reminder to those unfamiliar with history. This land-locked country has come far from its communist past.
Now the Czech Republic, Hungary, Slovakia, and Poland, the “Visegrad Four”, are facing a record labor shortage^1. A sign of significantly improved economic strength, not seen since before the first World War.
According to CzechInvest, the country’s official organization to help bring in new business to the Czech Republic, explains that companies would do well there. From cheap(er) labor to significant tax-breaks for startups and multinationals willing to move operations their.
The CR is a shining display of success after a half of century of controlled economics from communism. Less expensive than the nordic states and Germany, Czechs offer an educated population, many who are familiar in IT and industrial mechanics.
They have their share of challenges. Populations are shrinking at a record pace, anticipating another 13% decline by 2050^1. Low-birth rates and a fierce immigration halt are contributing to the labor shortage. It will be up to these central nations to overcome homogeneousness in favor of further economic growth.
As an investor it’s important to understand the dynamics of European economics as they are a manufacturing powerhouse in a wide range of industries. Considering slower growth in China, instability in Turkey and Venezuela, it’s critical to weigh your options as you invest overseas.
At Eureka Wealth Management, I help my clients understand where and why they invest from a geoeconomic perspective. Investing is no longer, “plug and play and do okay.” Instead, understanding global growth dynamics will help your portfolio follow the trend and find opportunities for growth, and most importantly, be less affected by short-term volatility. Call for a free, initial consultation at (760) 537-0791 or online at eurekawealthmanagement.com.
^1: FT BIG READ. EUROPEAN ECONOMY, Running out of steam, 8/28/18, by James Shoffer