After forty years of Communism, the Czech Republic became a democracy in 1989. In the years after, especially in Prague, it soon became evident that the country would make a relatively smooth transition into free market economy.
Indeed it has become one of the most prosperous and stable post-communism markets in Central and Eastern Europe with one pitfall still, the corruption rate ranks among the highest in the OECD countries.
Once an industrial powerhouse, the Czech Republic has made a huge shift into the service sector. During Communism a strong focus was on the heavy industry, with the country producing about 80% of the products it consumed. In comparison, today only about 9% of Prague’s population still works in manufacturing (metals, machinery, brewing, textiles, automobiles) while an estimated 60% of the capital’s income comes straight from tourism.
Whereas the nation-wide unemployment rate is an average of 9%, Prague’s holds steady at approximately 3% and whilst the Czech GDP is still a little under the European standard, Prague has a GDP exceeding the European average. Thus compared to its neighboring Czech cities, Prague is considerably rich having long stepped out of its European competitors’ shadow at least on the tourism sector.
Ever since the Czech Republic joined the European Union in 2004, capitalism has further stabilized with the Czech Government's domestic and foreign indebtedness remaining relatively low. The introduction of the Euro was planned for 2010 but so far has been postponed.
Situated at the river Vlatava, Prague is the largest city of the Czech Republic; it covers an area of 496 square kilometers of total 78, 866 square kilometers. The capital is divided into ten city districts; while more than one tenth of the total Czech population actually lives in Prague, mainly a tiny percentage actually lives in its historical center.
Still, it is evident that the city’ center is a hotbed for activity; hence in order to spread the international and national focus a little bit more on the surrounding areas and thus conveniently taking some pressure off the city’s center, the government has moved some development plans into the inner suburbs.
The River City project, for instance, is part of the endeavor; on the borders of the river Moldau a new modern neighbourhood is striving. It is a district of offices, shops, hotels and restaurants attracting a hip, international community.
Also, Prague is getting rid of a last Communist residue; the poorly and hastily planned traffic system is overhauled and the public transportation system is constantly developed.