The economist Dušan Tříska, who was one of the creators of the coupon privatization, evaluates the change positively after three decades. He values democracy, capitalism and relative prosperity. He sees the problem in the fact that the Czechia is a country of assembly plants held by foreign investors.
“It was no different than that foreign capital invaded here and bought it all. But I would also see this as a consequence of the period before 1991, when we lagged behind, “Tříska explained in the broadcast ČT24 studies.
Economist Jan Švejnar, who was another guest on the show, claims that the goal of coupon privatization has been met: to stimulate the business environment and hand over state property to private hands.
He also mentions the negatives. “The event was very demanding because it required people who did not have the financial literacy to invest.” According to him, the managers of privatized companies, who were the only ones who knew their real value, had the advantage.
“The fact that the legal system has not yet been firmly established has led to large money transfers that have not been transparent. It was not possible to control all the corruption that was going on at the time, “thinks Švejnar.
The state distributed property to citizens for hundreds of billions of crowns
Coupon privatization, promoted mainly by the then Minister of Finance Václav Klaus, began on October 1, 1991 with the sale of coupon books and stamps. It was supported by a strong advertising campaign aimed mainly at young people.
It took place in two waves from 1991 to 1994. Each wave had a preliminary round where people could entrust their investment points to one of the privatization funds.
The coupon book cost 1,035 crowns. The investor received ten coupons worth one hundred investment points with which he could buy shares in state-owned companies. The first wave, which took place during the Czechoslovak Federation, was attended by eight and a half million people.
On one coupon book, the shares accounted for an average of thirty-five thousand crowns. In the later wave, in which only Czechs could participate, its average value was twenty-five thousand.
In both waves, the state privatized assets worth 367.5 billion crowns, which represented a total of 1,172 companies.
Discussions are still being held about the course of the coupon
“It could have turned out much better,” thinks Švejnar, who at the time of privatization was promoting a system in which citizens would directly receive portfolios composed of shares of companies representing the entire market. This would eliminate the sale of coupons.
“This is still being done in the world because similar funds are being created, and no special know-how was needed for that,” says Švejnar. He also cites privatization in Hungary as an example, where the state sold companies one by one for a comparatively long time and thus gained a lot of money.
“Hungarian privatization is often described as spontaneous. The managements de facto settled it and passed it on to each other, which was politically unfeasible in our country, “Opposes Opisa.
“We did not prefer any privatization method. We said let it be as fast as possible, that was our primary goal, “recalls Tříska. According to him, the political task was to involve as many people as possible in the redistribution of property.
Privatization has its winners and losers
Most citizens entrusted the shares acquired in the coupon privatization to investment funds, which then controlled most of the privatized companies. 264 funds participated in the first wave, 353 in the second.
For example, the successful financial group PPF was established as an investment fund during privatization. “I would definitely consider Petr Kellner a winner if we were to personify,” emphasizes PPF Tříska, the founder of PPF. “But there are always far fewer winners than losers,” he adds.
Viktor Kožený’s Harvard funds associated with the theft of investors’ property, on the other hand, are notorious. “The tunneling that came with it got into an international lexicon. Students in America are learning on cases from the Czech Republic, “recalls Švejnar.
After thirty years, according to him, the situation on the market has improved, successful acquisitions have taken place. Among the most successful are foreign ones, such as the purchase of the Škoda carmaker by the Volkswagen Group. Švejnar also mentions failures in the form of bankruptcies of large companies such as Poldi Kladno or ČKD.
Economic transformation was one of the biggest changes after the Velvet Revolution. The precondition for the introduction of a market economy was the transfer of state property to the private sector.
Part of the state property was returned to the original owners or their heirs in restitutions and part was transferred to the municipalities. Smaller establishments were sold at auctions and large companies were included in the so-called large-scale privatization. Some companies, such as Čepro and ČEZ, were retained by the state for strategic reasons.
One of the methods of large-scale privatization was coupon privatization.