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Vol 2, No 31
18 September 2000
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A Bubble Burst
Andreas Beckmann

It was meant to be a chance to gloat.

When negotiations were opened with the World Bank (WB) and the International Monetary Fund (IMF) in 1995 regarding the possibility of hosting their joint summit in Prague in 2000, the Czech Republic was still the shining star among post-Communist countries. The chance to host the two venerable institutions was seen as a sign of how far the country had already traipsed down the path from Communism to prosperity and global respect.

That was then; this is now.

Since the agreement to host the summit was sealed in 1996, the former "tiger economy of Central Europe" has been shown to be made of paper. Even the World Bank and the IMF have run into rough waters following the botched handling of the financial crisis in Asia and swelling protests against globalization.

With respect to the meeting itself, there, too, the Czechs have lost their smug grin. The prospect of a Seattle II, III or IV (depending on how you're counting) is making the whole event seem more and more like a nightmare rather than a chance to break out the champagne. The jitters are spreading not only among government and banking officials, the police and managers of McDonald's restaurants, but also, it seems, through much of the Czech populace.

The specter of pitched street battles between the police and hordes of demonstrators overshadowed the more substantive debate on globalization that filled the Czech press during the slow month of August. Reports put the number of demonstrators converging on Prague at anywhere from 15,000 to 50,000, with a good 10,000 or more expected to come from abroad.

The prospect of tens of thousands of people marching the streets has been unsettling enough for a population and press that (ten years after the Velvet Revolution!) still tends to regard street demonstrations as bordering on terrorism. But hysteria has been fanned to a fever pitch through the portrait of those anticipated 50,000 protestors portrayed on the nation's broadsheets and television screens: dread-locked, disheveled, rock-throwing, with poor personal hygiene habits.

According to the mayor of Prague, Jan Kasl, among others, the Techno party that overwhelmed a rural community in southern Bohemia in early August and which was attended by several thousand just such disheveled ravellers was a sure foreboding of what would soon befall the capital city on a much greater scale.

Daily reports have closely followed the rigorous preparations for the onslaught of protestors: 11,000 police have been mobilized; extra tear gas purchased; the number of ambulances doubled; hospital beds readied. The municipal government has reportedly prepared some 150 cots to accommodate residents whose homes may be damaged in street battles.

Zdeněk Hrubý, whom the government entrusted with overseeing preparations for the congress, finally accused the Ministry of Interior of spreading hysteria after it recommended people stock up on food and flee Prague if possible for the duration of the meeting.

With the congress seeming more and more like a nightmare rather than the dream come true originally anticipated, attention has turned to the event's financial prospects. Will all the trouble at least yield some financial returns?

The boosted police presence and other unexpected preparations have pushed the cost of staging the event over the CZK 1 billion mark [USD 242 million]. On top of the CZK 2.8 billion [USD 67 million] needed to convert the "Palace of Culture," the former site of Communist Party congresses, into a fitting venue for the bankers' jamboree, the total bill for hosting the World Bank/IMF congress will reach some CZK 4 billion [USD 96 million].

A study done by the consulting firm Deloitte and Touche sees the congress yielding between CZK 1.1 billion [USD 26 million] and CZK 3.3 billion [USD 79 million] for the city and country, with another CZK 7.8 billion [USD 188 million] to CZK 17.1 billion [USD 413 million] generated in the next five years in terms of added investment. Finance Minister Pavel Mertlík and Czech National Bank president Josef Tošovský see the gathering of bankers as a chance to show off the country to potential investors.

For the city of Prague, the congress is a good opportunity to boost tourism earnings. Visits to the golden city, by far the country's main attraction and tourist dollar earner, have leveled off in the past couple of years and seem likely to decline. The city's leaders have pinned their hopes on developing lucrative congress tourism to make up for the slump.

Whether the World Bank and IMF meetings indeed lead to new investment for the country and jump-start Prague as a congress Mecca will, of course, depend on whether the thousands of pin-striped delegates leave the city with fond memories. If they don't, the marketing exercise could very well backfire. To help improve the prospects, the Ministry of Finance has developed a special course and guide on politeness and personal hygiene for all of the hundreds of young people who have been hired to help stage the event.

Will this be enough? To my knowledge, no efforts have been made to discourage Prague's taxi drivers from fleecing their bonanza of well-heeled customers or to teach the city's shop assistants to be less surly.

Far from gloating, Czechs are crossing their fingers. At this point, they are hoping for little more than to be able to heave a big sigh of relief when the last of the pinstripes and dreadlocks depart.

Andreas Beckmann, 15 September 2000

For more information on the Septemeber IMF-WB meetings in Prague and their non-governmental counterparts see:

Moving on:


Catherine Lovatt
Sex is a Crime

Alexei Monroe
Laibach's Legacy

Kai-Olaf Lang
Leaving Liberalism

Brian Požun
Class Time

Mel Huang
Questionable Justice

Sam Vaknin
The Value of a Life

Jan Čulík
Ticket, Please!

Gusztáv Kosztolányi
Enough Problems

IMF in Prague:

Andreas Beckmann
A Bubble Burst

Tiffany G Petros
Old Friends

Ron Breznay
Greener Grass

Emil Kerenji
The Road to War in Serbia

Culture Calendar:

Timothy Hendon
Casting Calls


Press Reviews:

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