WHEN THE “VELVET” revolution took place in Czechoslovakia in November 1989, the country’s private sector was virtually nonexistent, with state-owned enterprises accounting for 97 percent of the gross domestic product. Rapid privatization became one of the new government’s main priorities in its move toward transformation to a free market. In Slovakia, many state-owned firms were grossly overstaffed, and critics feared that quick privatization would lead to high unemployment. The employment question was especially crucial because in certain Slovak towns and regions, a single factory may be the sole source of jobs. Nonetheless, a Czech-devised plan for privatizing large firms through the coupon, or voucher, method was implemented in both the Czech Republic and Slovakia in February 1992. The program’s primary goal was to transfer property as quickly as possible in the capital-starved economy. But by allowing all citizens to participate – any Czech or Slovak aged 18 or over could pay a nominal sum of 1,000 crowns for a voucher booklet – the government also hoped that the program would create the public support necessary to continue with market reforms.
