OMRI DAILY DIGEST
No. 179, 14 September 1995

HUNGARY'S SMALLHOLDERS GAIN IN OPINION POLLS. Opinion polls indicate
that while the popularity of the governing Socialists has dropped from
28% to 23% over the summer, that of the Smallholders' Party is
increasing, Hungarian media recently reported. Experts say the growing
number of supporters of Jozsef Torgyan's party, which has often been
accused of populism, is owing to frustration among Hungarians toward the
ruling parties and not to the achievements of the Smallholders. The
party has often criticized the ruling coalition but lacks a
comprehensive political and economic strategy to solve Hungary's current
problems. The next general elections are in 1998. -- Zsofia Szilagyi,
OMRI, Inc.

HUNGARY: WORLD IS IGNORING SERBIA'S HUNGARIANS. Hungary on 13 September
warned that the world is ignoring the plight of ethnic Hungarians in
Serbia's northern province of Vojvodina, where a flood of Serbian
refugees threatens to unsettle the delicate ethnic balance, Reuters
reported. Csaba Tabajdi, senior official responsible for national
minority issues, said that refugees are not voluntarily settling in
Vojvodina but are directed to this area by Serbian authorities. He
pointed out that Hungarians now only represent some 6% of the Vojvodina
population, compared with 28% at the end of World War II. Budapest last
month protested to Belgrade over the treatment of ethnic Hungarians and
called on the authorities to stop forcible evictions. -- Zsofia
Szilagyi, OMRI, Inc.

[As of 12:00 CET]

Compiled by Jan Cleave


Thursday, 14 September 1995
Volume 2, Issue 178


REGIONAL NEWS
-------------

**SERBIAN RELOCATION ALARMS HUNGARY**
  Hungary warned yesterday that the world is ignoring the plight
  of ethnic Hungarians in Serbia's northern Vojvodina province.
  An influx of Serbian refugees could upset the ethnic balance
  in that region.  Leaders of the 300,000 ethnic Hungarians in
  Vojvodina have accused Belgrade of planning to settle Serb
  refugees there and force the Hungarians out.  The Hungarian
  government said it has evidence that 10 ethnic Hungarian
  families have been evicted from their homes in Vojvodina and
  more than 100 Hungarian families have been pressured to sign
  disadvantageous agreements, putting their houses at the
  disposal of the refugees.


**A RESERVIOR OF TROUBLE FOR SLOVAK DAM**
  The Worldwide Fund for Nature, or WWF, says Slovakia's
  Gabcikovo dam is threatening up to 90 percent of the region's
  plants and wild-life.  A WWF study said the dam, which has
  been diverting up to 90 percent of the Danube river's flow
  since 1992, is causing ground-water levels to drop by up to 10
  feet.  The study also said a 42,000 foot area of water-filled
  gravel containing Europe's best and largest drinking water
  reserve is now threatened by pollution.  The dam project
  started out as a joint venture between Hungary and
  Czechoslovakia when both were under communist rule.  Hungary
  pulled out in 1989 under pressure from environmentalists.



BUSINESS NEWS
-------------

**COURT DILUTES HUNGARIAN AUSTERITY FURTHER**
  Hungary's Constitutional Court invalidated more of the
  government's austerity measures yesterday, saying they put to
  much of a burden on the average Hungarian.  This is the second
  time the court has ruled  key provisions of the package
  unconstitutional.  The Hungarian government first introduced
  the austerity package in March.  It slashed social welfare
  payments, raised import duties, and devalued the forint.  But
  in yesterday's ruling, the court said it won't allow major
  changes in sick pay, severance pay, or family support
  payments.  The ruling is a setback for the government which is
  trying to reduce the deficit by cutting its spending on social
  services.  But the court's Chief Counselor, Gabor Halmai, said
  the justices aren't trying to change the government's economic
  policy.

  "I don't think that the court has to make economical policy.  I
  think the only thing the for the court is the
  constitutionality of a legal regulation.  And if it is
  unconstitutional the court has to be annulled the regulation."

  Halmai added the finance ministry should draw its own
  conclusions from the court's decision.  The finance ministry
  had no immediate reaction to the ruling. --David Fink


**HUNGARY ADVISED TO PERSEVERE**
  Hungary is getting a completely different message from the
  Organization for Economic Cooperation and Development, or
  OECD.  The OECD said Hungary will only return to the path of
  successful transition to a market economy if the austerity
  program is fully implemented.  Ministry of Industry and Trade
  Deputy State Secretary Istvan Major said the OECD has
  confirmed that Hungarian reforms have made considerable
  progress over the past two years in establishing the legal and
  institutional framework for a successful transition.  But the
  OECD also said Hungary has lost its economic lead in the
  region.


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(Elnezest az esetleges kisbetukert, de az eredeti szoveg csupa
nagybetuvel volt irva, amit at kellett cserelnem.)

Buchwald Amy

*****************************************************************

date=9/13/95
type=correspondent report
number=2-185259
title=Hungary Econ
byline=Barry Wood
dateline=Prague
content=
voiced at: 

Intro:  The Paris-based Organization for Economic Cooperation and
Development (O-E-C-D) has released a new survey of the Hungarian 
economy. V-o-A's Barry Wood reports that while the study applauds
the tough austerity measures introduced in March, it faults the 
current and past Hungarian government for moving too slowly to 
remedy the country's budget and trade problems.
 EText:  The O-E-C-D says Hungary can  no  longer be regarded as 
one of the leaders in the transformation to a market economy. 
That lead has been sacrificed since 1993 because there was   not 
enough strong action to contain looming budget and balance of 
payments problems. The result, says the O-E-C-D, has been slower 
growth and higher inflation as Poland and the Czech Republic 
moved ahead in the economic transformation.                      
              
This is the third report O-E-C-D economists have issued on  
Hungary since Budapest established an associate relationship with
the paris-based research group at the beginning of the decade. 
Hungary is on track to become a full member of the O-E-C-D in 
1996. The Czech Republic is expected to join before the end of 
this year.
 

O-E-C-D economists are strongly supportive of the austerity 
measures introduced last March. An import surcharge, new 
restrictions on welfare payments, and a faster pace of 
devaluation are intended to bring down the potentially 
destabilizing budget and payments deficits. The O-E-C-D praises  
prime minister Gyula Horn' s government --  but it is quick to 
add that more must be done if Hungary is to regain its 
international credibility as a fast reformer.
 
The O-E-C-D says the essential question for Hungary is whether 
its large payments deficit can continue to be financed. Until 
last year, the payments deficit was paid for by large inflows of 
foreign direct  investment. In 1994 Hungary had to add to its 
foreign debt to finance the deficit. 
 
The Hungarian Ministry of Trade and Industry says the O-E-C-D
report should help the government win public backing for its 
austerity policy. The ministry,  not  surprisingly, disagrees 
with the  conclusion that Hungary has lost its leading position 
in the transformation.
 
The O-E-C-D expects the Hungarian economy to grow by about one 
percent this year. That is below the two percent growth of 1994. 
Hungary's exports are up this year, as is industrial production. 
Foreign currency reserves have risen to a record eight billion 
dollars.
 
Hungary has a large foreign debt, but it has scrupulously met all
its  payments. The country is easily the most popular destination
for  foreign direct investment anywhere in the former east bloc. 
This hospitable climate for investors has resulted in 39 percent 
of Hungarian manufacturing being foreign owned. The O-E-C-D says 
investors are attracted to Hungary because of its political 
stability, central location, industrial proficiency, a solid 
legal system, and competitive wages. (Signed)
 
neb/bdw/aden/bg

13-Sep-95 12:36 pm edt (1636 utc)
nnnn

source: Voice of America