ABSTRACT
Both the Czech and Slovak republics are now undergoing a process of social transformation. In November 1989, at the time of the collapse of the communist regime, the Czechoslovakian economy was in a comparatively good position. It had a low foreign debt and low inflation, with a well-developed industrial tradition and a skilled labour force. Strategies for economic transformation have proceeded hand in hand with political changes. The first free elections were held in June 1990 and the implementation of economic reforms began in early 1991. These consisted of: the liberalization of domestic prices; the liberalization of foreign trade; establishing a convertible currency; devaluation of the koruna (crown); restitution of property; privatization of small busi-nesses; and deregulation of the labour market. These measures have created the basis for the transition to a market economy.
