date=9/8/94
type=correspondent report
number=2-164779*
title= Hungary Econ (l only )
byline= Barry Wood
dateline= Budapest
content=
voiced at:

// rerunning with new title, to clarify different from
backgrounder //

Intro:  Hungary's economy is set to grow by at least one percent
this year, the first growth since the collapse of communism.
V-o-A's Barry Wood reports from Budapest.

Text:  The business community in Budapest gives mostly high marks
to the government of prime minister Gyula Horn, whose Socalist
Party was the big winner in parliamentary elections in May.

There had been fears that the socialists -- whose roots are in
the communist era -- would back away from the market based reform
energetically pursued by the previous right-wing government.  In
fact, the Hungarian reforms are being strengthened and the
Budapest stock market has advanced since the May elections.

One foreign banker here predicts the Horn government will give a
boost to Hungary's privatization program and will speed up sales
of domestic enterprises to foreign multi-nationals.  Hungary has
attracted about half of all the foreign direct investment that
has gone into Eastern Europe in the past five years.  That trend
is likely to hold steady.

But there is  no  mistaking the hard times associated with the
transformation recession that has afflicted Hungary for four
years.  Living standards are below levels of 1989 as output has
declined more than 20 percent since 1990.  One percent growth,
projected for 1994, represents a remarkable turnaround from the
nearly two and a half percent decline of last year.  Growth is
expected to rise to nearly three percent in 1995.

Hungary's main problems have been inflation and large budget and
trade deficits.  The currency has been repeatedly devalued but
exports have generally failed to rise to a Western Europe that
has until recently likewise been mired in recession.  (Signed)

neb/bdw/mh/cf

08-Sep-94 12:42 pm edt (1642 utc)
nnnn

source: Voice of America
*****************************************************************


date=9/8/94
type=background report
number=5-18159
title= Hungary/Privatization
byline= Barry Wood
dateline= Budapest
content=
voiced at:

Intro:  Of all the post-communist European economies, Hungary has
been most successful in attracting foreign direct investment.
V-o-A's  Barry Wood reports from Budapest that considerable
foreign capital has gone into Hungary's important wine industry
which is in the midst of being privatized.

Text:  // voice over music, which fades //

On a cloudless late summer day Budapest's Vorosmarty square has
been transformed into wine bazaar. From a dozen green and white
pavillions a rich variety of wines are offered for a small fee to
tourists and local residents as well.  It is the third annual
Budapest International Wine Festival, set up to promote the new
vitality in what still is a critical Hungarian export industry.


B. Herpay is the managing director of Hungary's association of
wine traders.  He says his industry has undergone a series of
structural shocks in the past nine years.  The first shock was in
1985 when then Soviet leader Mikhail Gorbachev launched his
campaign against alcohol.

                     // Herpay act //

         Our biggest market (at that time) was the Soviet Union.
         Can you imagine that we produced four and one-half
         million hectoliters, or if we had a very good vintage,
         five million hectoliters, and (about) 50 percent was
         exported, mostly to the Soviet Union.

                       // End act //

As a result of the anti-alcohol campaign Hungarian wine exports
to the Soviet Union fell by 50 percent.  Production, which had
peaked in the mid-80s, has today only recovered to half those
previous levels.  The collapse of the Russian market was, says
Mr. Herpay, a catastrophe for the industry.

By 1988 diligent efforts had resulted in rapidly rising Hungarian
wine exports to East Germany.  But that market collapsed with
German reunification two years later.

Caught with a sub-standard product in a saturated, competitive
world market, Hungary's wine industry faced its greatest post-war
challenge.  Beginning in 1990 the industry has been progressively
privatized and capital investment from abroad has modernized
production methods and improved product quality.

Now 50 percent in private hands, Mr. Herpay believes the
Hungarian wine industry, is winning new markets in the non-wine
producing parts of Western Europe and, increasingly in North
America.

It is estimated that 15 percent of the Hungarian wine industry is
in foreign, mostly German, hands.  Mr. Herpay would  not  mind if
that figure increased further.  What is apparent at this wine
festival is that Hungary is now producing a greater variety of
higher quality wines which are attractively labeled and
competitively priced.  (Signed)

neb/bw/mh/cf

08-Sep-94 12:17 pm edt (1617 utc)
nnnn

source: Voice of America


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A tovabbterjesztest a New York-i szekhelyu Magyar Emberi Jogok
Alapitvany tamogatja.

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