Investment incentives were a key tool of the previous left-leaning government for luring foreign investors to this country.

Říman, a member of the right-of-center Civic Democratic Party (ODS), which won the parliamentary election in early June, insists that the system of incentives discriminated against homegrown companies, adding that incentives were given only to select companies.

"We want to create a fair and equal business environment for everyone," Říman said. "Investment incentives only distort competition on the market."

He said the government would give out incentives already commissioned.

Despite the seemingly cut-and-dried proclamation, Říman gave himself some wiggle room.

"The only imaginable support in the future should go to high-tech fields," Říman said.

Previous governments granted foreign companies incentives ranging from tax relief for up to 10 years to subsidies for newly created jobs and staff training. The government also developed special industrial zones and infrastructure to accommodate foreign investors.

Říman said that, rather than providing incentives to selected foreign companies, the government will focus on creating a "flat investment incentive" in the form of lower corporate taxation.

Since launching the system of investment incentives in 1998, the state has doled out more than 5 billion Kč ($222.7 million) to 288 foreign companies. In return, the recipients have already brought about 22 billion Kč into the country and have committed themselves to another 347 billion Kč.

Those companies created nearly 74,000 new jobs, according to state investment agency CzechInvest.

Říman's initiative brought mixed reactions.

Representatives of domestic companies agreed that the current system is discriminatory and that it must be curbed.

Economic Chamber President Jaromír Drábek said the system of investment incentives is bad because foreign firms enjoy preferential treatment.

"The system is bizarre because it not only provides one-sided advantages to foreign firms, but also Czech firms are effectively forced to sponsor the incentives to their foreign competitors from taxes paid to the state," he pointed out.

Bedřich Danda, chairman of the Association of Small and Midsize Enterprises, agreed.

"There is no way for smaller Czech firms to reach any of the incentives," Danda said. "They can only reach them if they are subcontractors to major foreign investors here."

Some analysts, such as Patria Finance's David Marek, insist incentives are the only way to keep the influx of foreign investment.