Czechs pin hopes on billionaire Babis to fix their country

PRAGUE (Reuters) - The traffic jams and roadworks that snarl the 200 km main highway from the capital Prague to the southeast are a symbol of how many Czechs feel their government is broken - and how they are looking for a new champion to fix it.

The leader of ANO party Andrej Babis poses for a photo with a supporter during an election campaign rally in Prague, Czech Republic September 28, 2017. REUTERS/David W Cerny

A ring road around Prague is nowhere near completion after decades of zoning setbacks, a rail link to Prague’s airport has been debated for 20 years without a shovel going in the ground.

The World Bank ranks the country 130th in the world when it comes to efficiency in issuing building permits, the worst in the European Union.

In the Oct 20-21 election, voters look set to hand power to a man who says he can sort it all out: billionaire businessman Andrej Babis, whose anti-establishment rhetoric is reminiscent of U.S. President Donald Trump.

“I see results, the others are only talkers,” said Erwin Heinl after meeting Babis at a pensioners club in Varnsdorf, 125 km (75 miles) north of Prague. “It is the only possible choice.”

The central European country joined the EU in 2004 and has made great strides in economic development. But people feel wages and public services have been slow to catch up with the richer West while business sharks made billions in often murky privatizations and public contracts.

Babis, whose ANO party is far ahead of rivals in the polls, has been able to sell himself as a man fighting obstacles from coalition partners, while taking credit for popular decisions such as pension hikes during his time as finance minister.

The bet on Babis is not straightforward. As the second richest Czech, he grew his chemicals, food and media empire in the same environment he and voters criticize. He is also not a new face, having governed as junior partner to the center-left Social Democrats since 2014.

“Social Democrats still stand for the old rule and ANO is a symbol of the new rule, hence its credit for the economic success, government stability and so on,” said Daniel Prokop from the Median polling agency.

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Many people respect Babis for his business approach to management which he says politicians lack.

“He is skillful as a businessman, he could show that also running the state,” Karina Brtinska, 63, said after meeting Babis at a campaign stop at the main square in Varnsdorf.

His successes include a budget surplus last year. Babis, as finance minister until May this year before he was removed by the prime minister, raised revenue by introducing value-added tax cross-checks and real-time reporting of shop sales.

But the budget was chiefly helped by economic growth, low interest rates, and a drop in public investments resulting from issues such as slow preparation of road building that meant less spending.

His ANO has held the Transport Ministry for the past four years. Czechs built close to 160 km of highways in the past 10 years, compared with 2,300 km in Poland 250 km in Slovakia.

The Czechs also pledged to raise defense spending, but under ANO running the Defence Ministry it dropped below 1 percent of GDP before a small pick up this year, still far away from the NATO goal of 2 percent.

Babis has also shaken off the impact of investigation for alleged fraud in tapping a 2 million euro subsidy - a charge that could carry a jail sentence. He denies any wrongdoing and portrays it as an attempt by adversaries to block him from sweeping out graft.

“He is not afraid of anyone. He is honest,” said Anna Havelkova, an ANO supporter in Varnsdorf.

Babis put his Agrofert group of more than 250 companies into a trust fund this year but remains the fund’s beneficiary. Agrofert has been receiving farming and investment subsidies and also has numerous deals with the public sector, raising criticism from rivals and media of conflicts of interests.

Babis had acknowledged having conflicts of interest prior to moving Agrofert to the trust funds but said he never abused it.

Forbes puts Babis’s net worth at 88 billion crowns ($4.01 bln), up from 40 billion in 2013 just before he joined the government.

ANO voters are also unfazed by Babis’ membership of the Communist party before a democratic revolution in 1989, or his contacts with secret police at the time.

“Success is always accompanied by envy. Everyone has a past, but I am interested in the present. He has a vision and I believe he can fulfill it,” said businessman Slavomir Svitana attending Babis’ rally in downtown Prague.

Additional reporting by Marcin Goettig in Warsaw and Tatiana Jancarikova in Bratislava; Editing by Jan Lopatka and Alison Williams