Running in place

Semi-good news from California. Calpers, the state's public employees' retirement fund, ranked the CR No. 2 (behind Hungary) on its list of permissible emerging markets. However, the CR rose in the rankings not because of improvements at home, but because the climate in Poland, Israel and S. Korea worsened. Likewise, a recent survey by the British Chamber of Commerce found that investors don't think the Czech government is improving things, but it has at least stopped making things worse. There's still concern, as expressed by MD Jan Binar of McCann-Erickson in MFD, that investors will start moving East in 5-6 years. If the CR wants to remain high on the investment map, it will have to deal with the bureaucracy, corruption and high taxes that could eventually outweigh the low labor costs. The Calpers and BritCham surveys show it's not enough for the CR to run in place.