CZECHOSLOVAKIA affiliate with international bodies. In 1991 the government decided to expel the world headquarters of the Communist-dominated World Federation of Trade Unions, but the decision is being appealed. b. Right to Organize and Bargain Collectively A charge of anti-union discrimination may be filed with the Ministry of Labor and Social Affairs, and the Ministry may impose fines on those found to have violated the anti-union discrimination prohibition. Victims of anti-union discrimination may also institute proceedings in CSFR courts. The courts may issue injunctions against anti-union activities, as well as order reinstatement of dismissed workers and payment of back wages and other damages. A new collective bargaining law went into effect in Czechoslovakia in 1991. Substantial numbers of collective bargaining contracts were completed within the framework of the new law, but trade union officials noted that the ongoing process of converting government-owned enterprises to private enterprises on occasion make it difficult to identify employer representatives with whom to bargain. c. Prohibition of Forced or Compulsory Labor Forced or compulsory labor is expressly prohibited in a constitutional law on basic rights and freedoms adopted in January 1991. d. Minimum Age for Employment of Children Generally individuals must be 16 years of age before they may work, but individuals who are 15 years of age and have completed elementary school may work. Individuals who have completed the course of study at "special schools" (schools for persons with severe disabilities) may work at the age of 14. Workers younger than 16 years of age may work no more than 33 hours per week. There is no evidence that children in the CSFR engage in street trading, maritime, plantation or domestic work, work in sweatshops, or dangerous work. e. Acceptable Conditions of Work A standard work week of 42.5 hours per week is mandated by law. By law, a worker is also entitled to three or four weeks paid vacation annually. Overtime may not exceed 150 hours per year or 8 hours per week, without special permission from the ministry overseeing the industry. The Slovak and Czech offices of labor safety and the federal Office of Standards and Measurement enforce health and safety standards. Under the Communist regime, advances in occupational health and safety conditions failed to keep pace with conditions in the West. Government offices charged with the maintenance of health and safety standards are attempting to correct past deficiencies. Officials believe that workplace safety conditions have continued to deteriorate since the 1989 revolution. Obsolete industrial equipment complicates efforts to improve occupational safety and health. CZECHOSLOVAKIA f. Rights in Sectors with U.S. Investment U.S. investment in Czechoslovakia is still very low and is present in only three of the nine goods producing sectors listed: food and related products, chemicals and related products and electric and electronic equipment. Conditions in these sectors are comparable to conditions in other sectors. Extent of U.S. Investment in Goods Producing Sectors No sector by sector data is available on investments in Czechoslovakia. DENMARK Key Economic Indicators (Millions of Danish Kroner (DKK) Unless Otherwise Stated) 1/ Percentage by Gross Factor Income Distribution. 2/ Until end-1990 M1. As of 1991 the M1 (and M2) money supply figure is no longer available. The figure shown for 1991, which comes closest to the Ml definition, is made up of the nonbank sector holdings of coins and notes plus actual demand deposits in Danish banks (by contrast the Ml definition includes as demand deposits, deposits available upon one month's or less notice). 3/ Savings as a Percent of Personal Disposable (after tax) Income. DENMARK 4/ Excluding EC Agricultural Export Subsidies (rebates), valued at close to three percent of total commodity exports. 5/ End of Period. 6/ Including advance payments on the principal. 1. General Policy Framework An industrialized market economy dependent on imported raw materials, coal and petroleum coke, Denmark has pursued a liberal trade policy to maintain supply security. The standard of living is one of the ten highest in the world. There has been substantial progress in correcting some of the fundamental structural imbalances which plagued the economy throughout the 1980s. The recurrent and large balance of payments (BOP) deficits shifted into surplus in 1990, a situation expected to continue. This has allowed Denmark to begin to reduce gradually its foreign debt. The public sector deficit in 1991, although larger than expected, has been reduced to about 1.5 percent of Gross Domestic Product (GDP), compared to 5.5 percent of GDP in 1982, when the first of a series of non-socialist coalition governments took office. The annual inflation rate over the same period has been reduced from 10 percent to 2.5 percent. The major remaining problems are the high level of unemployment, and the second highest tax burden among OECD countries. Although self-sufficient in oil and gas, Denmark is not richly endowed with natural resources, and most of the Danish GDP results from value added in industry and in the production of services. More than one-quarter of the labor force is employed in the public sector, most of them providing services under the highly developed Danish social security system. Denmark has been a member of the European Communities (EC) since 1973 and is therefore subject to EC legislation in a variety of fields. The EC common customs tariff is fully applied. Denmark has implemented the largest number of EC directives of any member state leading up to the single market by the end of 1992. Following several years of near economic stagnation, the Danish economy is now showing improvement. The GDP in 1990 increased 2.1 percent, led mostly by strong export sector performance. Prospects for 1991 are that GDP will increase by close to two percent. The improved growth rate is the result of a revival in private consumption and continued strong exports (due in part to the German reunification). The result has been a sharp improvement in the balance of payments (BOP), which in 1990 saw a surplus (almost 10 billion kroner) for the first time since 1963. The surplus for 1991 is projected to drop slightly to nine billion kroner, due to increased development assistance payments and contributions to the EC. Since the center-right coalition governments headed by Prime Minister Schlueter first took office in 1982, their goal of reducing public spending and the central government budget deficit has been generally accomplished. The budget drifted back into deficits after surpluses were achieved in 1986 and 1987, but at more manageable levels (i.e., ranging between two and three percent of GDP, compared to 10 percent in 1982). For 1991, the deficit is projected to be 36 billion kroner, or DENMARK 4.3 percent of GDP, due to continued growth in unemployment expenditures and stagnant tax revenues. The central government's deficit in 1991 will be financed entirely by domestic sales of government bonds and drawing on the Central Bank. Foreign debt will be reduced by advance payments on the principal. At the end of 1991 the central government's total debt is projected to stand at 523 billion kroner, of which 17 percent will have been borrowed abroad, compared to 25 percent at the end of 1990. The debt will also largely be held in currencies tied together in the European Monetary System, rather than in dollars. The public sector as a whole, including local governments which have their own taxing authority, has generally had a budget surplus as local governments' budget surpluses have more than offset the central government's deficit. However, local governments are now also facing a tight financial situation, and it is projected that public sector budgets as a whole will show a deficit of about 1.5 percent of GDP in 1991. Monetary policy is the responsibility of the Central Bank, which in principle is an independent institution. The primary tools used to regulate money supply are sales and purchases of bonds, and adjustments of conditions for commercial bank deposits with and borrowing from the Central Bank. For a long period the Danish interest rate has been kept well above that of its neighboring countries, especially Germany, in order to finance the recurrent BOP deficit. However, as a result of the Danish BOP surplus and the low inflation rate, the interest differential between Denmark and Germany in the second half of 1990 narrowed to about one percent. For the first time since the Deutsche mark was created in 1948, the Danish six-months money-market rate in October 1991 dropped below the German rate. These developments have placed Denmark among the economic "hard core" EC countries and have triggered a significant change in the previous "reluctant" Danish attitude towards the EC Monetary and Economic Union (EMU). Denmark is now one of the EC member states that most strongly advocates the creation of the EMU with its attendant common currency and European Central Bank. Denmark supports a Central Bank unit with the primary objective of ensuring price stability, while supporting the EC's general economic policy. 2. Exchange Rate Policies Denmark is a member of the European Monetary System (EMS), which has helped the Government maintain its stable krone policy. Since 1982, the Government has successfully opposed attempts to solve Denmark's economic problems through exchange rate adjustments, i.e., a devaluation of the krone. In August 1991 the trade-weighted krone rate was three percent lower than in August 1990, due almost entirely to increases in the values of the dollar and the yen. Following erratic developments in the size of foreign exchange reserves in 1988 and 1989, reserves have since been stable ranging between 55 and 65 billion kroner. The value of the krone against the U.S. dollar in September 1991 was about nine percent lower than in September 1990. This may have some negative impact on |