Czechoslovak Premier Urges Free Market

Declaring that only a free market system can reverse decades of economic decline here, Czechoslovakia’s new prime minister Tuesday proposed fundamental changes that would essentially dismantle his nation’s Communist economic structure.

After 40 years of Communist rule, “much of our inherited national wealth has been dissipated,” Prime Minister Marian Calfa told the Federal Assembly, Czechoslovakia’s Parliament, as he outlined the government’s legislative program.

Now, he said, “we have to accept the market with all its advantages, but also its disadvantages.”

Calfa, a Communist who presides over a largely non-Communist government, also said the government plans to introduce new laws in January that would guarantee freedom of religion, speech and association, the rights of the media and the functioning of a free democratic political system.

A few hours later, the Parliament, dominated by long-obedient Communist deputies, voted unanimously to approve the government’s policies.

At the same time, deputies one after another took advantage of live national television coverage of their meeting to assure constituents that they support the speedy election of activist playwright Vaclav Havel, leader of the Civic Forum democratic movement, as the nation’s next president.

The government plans to hold free elections here next spring, and even Communist members of the assembly who had opposed Havel only a few days ago appear to have decided that supporting him is their best hope for gaining reelection.

Deputies have been receiving a flood of letters, telegrams and petitions supporting Havel. And to reinforce the message Tuesday, they were greeted by thousands of students, many of whom had come to Prague in special chartered trains, who gathered near the assembly building with pro-Havel banners and placards.

Havel’s victory is now all but assured. “It does seem I am the likely person to be elected,” he said at a news conference Tuesday. Late Tuesday evening, the Parliament’s Presidium announced that the election will be held on Dec. 29.

Calfa’s speech was a remarkable embrace of free-market principles. The government, he noted, will continue to provide services for which the market is ill-suited, such as education and health services, and will strive to ensure full employment while fighting inflation.

But, he said, “we cannot afford to experiment” with half-measures that would mix some market principles into the nation’s current centrally planned system. Only a free market, he said, can “ensure economic rationality, an increase in the standard of living of the population and rational use of natural resources.”

During the first quarter of the new year, he added, the government would introduce laws to break up the giant state monopolies that now dominate the economy; legalize all forms of private property; authorize companies to sell stocks; establish open markets for money and capital, and begin a “progressive, but not hesitating, introduction of a convertible currency.”

The current state pricing office will be turned into an anti-monopoly commission, he said, and the government will move “urgently” to close old, inefficient factories.

The government, for the first time, also will introduce an unemployment compensation system. It will propose a new state budget that will sharply restrict government spending, reducing the size of the bureaucracy and cutting money for the army and the police.

Overall, he said, the aim will be to “create all conditions to make Czechoslovakia an equal partner integrated into the world economy.” Czechoslovakia will ask for some form of “association” with the European Community, he said.

Although Calfa pledged to try to make the transition to a free market as painless as possible, he also warned that “the government cannot permit rising wages without increasing productivity.”

Calfa’s speech went far beyond the ideas he outlined in a news conference after he was appointed last week. The new statements clearly reflected the thinking of his finance minister, Vaclav Klaus, who likes to call himself the “Milton Friedman of Czechoslovakia,” a reference to America’s most prominent conservative free-market economist.

In describing his goals, for example, the prime minister chose words that would fit easily into a Republican Party platform in the United States. The free market “gives every individual the opportunity to follow his own interests and, at the same time, benefit all others,” he said.

In the debate that followed, only a few hard-line Communist deputies departed from the basic direction set by Calfa’s speech. The government must preserve “the unchangeability of our socialist system,” one deputy said. “We’re entering into a new era of socialism,” said another.

Most deputies, however, chose instead a tack that would have been familiar to American legislators, using their time on television to press parochial concerns.

Several deputies from mining regions, for example, raised the plight of miners who are likely to lose their jobs in the coming economic restructuring. A deputy who represents an area with a large ethnic Hungarian population called for a new ministry to handle minority affairs. And a delegate from Prague asked government ministers to examine the city’s housing shortage.

The one common theme, other than support for Havel, was concern about the nation’s severe environmental problems, as delegate after delegate rose to complain about dirty air, contaminated food and rising cancer rates.

The parade of endorsements for Havel began with Calfa himself, who was quickly joined by the nation’s Communist minister of national defense and most of the other members of the new government.

When the vote comes, Havel is likely to be the only candidate nominated for the presidency. One potential opponent, Alexander Dubcek, who led the nation’s last reform effort in 1968, is expected to be elected chairman of the assembly. Another candidate, Cestmir Cisar, an official in Dubcek’s government, withdrew from the race Tuesday night and endorsed Havel.