ISSUE #105

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TOURISM: Convention tourism on the rise
This year convention tourism revenues are up by one-third over last year. “If the trend of the first six months continues, we expect that convention attendees will spend between CZK 14 and 16 billion this year,” says Michael Hvížďala, chairman of the Prague Convention Tourism Association. Convention revenues will thus account for 15% of all travel industry foreign currency revenues. The only obstacle to this rising trend could be the higher VAT rate. “If the state stays with the 19% rate starting next January and the current 5% rate isn’t maintained, its decision will harm primarily its own budget revenues,” Hvížďala explains. He emphasizes that Prague still has enormous potential for organizing conferences and seminars. “Prague could become one of the top ten convention cities in the world,” he claims.

ECONOMY: Czech investments
Czech companies prefer trying to export domestically made products to setting up branches abroad. Between 1993 and 2003 foreign firms invested CZK 1.22 trillion, while Czech capital invested abroad was less than CZK 15 billion. The inexpensive work force is one of the most-often-cited reasons. However, Radomil Novák, director of CzechInvest, doesn’t think cheap labor is why Czechs aren’t investing abroad. “Cutting costs needn’t always be the most important reason for investing abroad. He says it’s impossible to expect greater Czech investor activity in the future, either. “Czech investments abroad will gradually increase, but I don’t expect a boom. Investing abroad is the prerogative of a strong economy.”

CRIME: Fighting fraud
“Over half of respondents are concerned about computer fraud, but only one-fifth are upset about accounting fraud. It’s ironic that the essence of all the great economic scandals in recent years involved falsified books,” says Martin Smekal, a partner in the Prague branch of Ernst & Young, which has published the results of its eighth global research project. The study shows the most common forms of fraud: embezzlement, falsified books, and corruption. Contrary to the idea that the threat originates mainly from outside, research shows that 85% of fraud is caused by employees and other insiders. In 55% of all cases management is the offender, followed by staff at 30%. Only 6% of offenders work from the outside.


Correction: In our last issue (no. 104 07-08/2004) on page 9 in the “Trans queens” panel, we misidentified Rubyz club as a transvestite club. However, Rubyz is a music bar presenting local and international DJs and UK cabaret shows, including Drag Queens. We sincerely apologize for the oversight.






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