From hungary-report-owner Mon Jan 15 08:20:15 1996 Received: from localhost (daemon@localhost) (fnord) by nando.yak.net (8.6.5/8.6.5) id IAA01911; Mon, 15 Jan 1996 08:20:15 -0800 Received: from localhost (daemon@localhost) (fnord) by nando.yak.net (8.6.5/8.6.5) id IAA01896; Mon, 15 Jan 1996 08:19:57 -0800 Received: from jbrown@isys.hu () via =-=-=-=-=-= for hungary-report@hungary.yak.net (1894) Received: from kingzog.isys.hu (KingZog.iSYS.hu [194.24.160.4]) (fnord) by nando (8.6.5/8.6.5) with ESMTP id IAA01875 for ; Mon, 15 Jan 1996 08:16:16 -0800 Received: from [194.24.161.32] (hrep.dial.isys.hu [194.24.161.32]) by kingzog.isys.hu (8.7.Beta.11/8.7.Beta.11) with SMTP id RAA25113 for ; Mon, 15 Jan 1996 17:15:50 +0100 (MET) Date: Mon, 15 Jan 1996 17:15:50 +0100 (MET) X-Sender: jbrown@mail.isys.hu (Unverified) Message-Id: Mime-Version: 1.0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable To: hungary-report@hungary.yak.net From: jbrown@isys.hu (Jennifer Brown) Subject: The Hungary Report 1.33 Sender: owner-hungary-report@hungary.yak.net Precedence: bulk Reply-To: hungary-report@hungary.yak.net =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D The Hungary Report Direct from Budapest, every week Also available on the World Wide Web (http://www.isys.hu/hrep/) No. 1.33, January 15, 1995 =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D SPONSORED BY: iSYS Kft., providing full Internet solutions for companies and individuals in Hungary. For further information, send e-mail to , view our World Wide Web home page (http://www.isys.hu) or call (+36-1) 266-6090. =3D=3D=3D=3D=3D=3D=3D=3D=3D CONTENTS BRIEFS Controversial reformer Grosz dies Hungarian Finance and Trade reacts to "oilgate" Ministers may see compromise on extra revenue spending Clinton thanks Hungary during weekend visit Balkan refugee halt proposed Unarmed Hungarian police to serve in Bosnia More hard currency available to Hungarians Hungarian exports to U.S. increased last year NATO operation wrecks havoc on southern Hungary NUMBERS CRUNCHED Public transportation riders caught without tickets last year Average gross earnings in November Real wage drops for 1996 High government officials' pay raises Largest tax revenue source of 1995 Hungary's currency reserves at the end of 1995 January flu victims FEATURE STORY Hungarian wine could cause more than a hangover PARLIAMENT WATCH 1996 kicks off with spending debate The Hungary Report is also supported in part by: MTI-ECONEWS, a daily English-language financial news service. For on-line (fee-based) subscription information, contact the Internet address: <->. (It's not automated -- write a nice note.) =3D=3D=3D=3D=3D=3D BRIEFS By Jennifer C. Brown Copyright (c) 1995 ------------ GENERAL NEWS Early communist reformer Grosz dies =46ormer prime minister Karloy Grosz, who played a major role in launching economic reforms in the late 1980's, died last weekend at his home outside of Budapest at the age of 66 following a long illness. Grosz served as Prime Minister from June 25, 1987 until November 24, 1988. He served as General Secretary of the Hungarian Socialist Workers' Party from May 22, 1988 to October 7, 1989 and also held membership on the executive committee of the new Hungarian Socialist Workers' Party. He retired from political activity on November 15, 1989. =46ollowing his death, the Hungarian government released a statement calling Grosz an outstanding but controversial leader, writes the Budapest Sun. He initiated political reforms to help save Hungary's economy in the mid-1980's and took measures to help Hungary's relations with western countries. But later he tried to stop political changes when his own reforms began to outpace him. Grosz will be buried at Farkasret cemetery on Saturday, January 20. Hungarian Television reported last week that Prime Minister Gyula Horn will not attend. --------------------- BUSINESS & ECONOMICS Hungarian Finance and Trade reacts to "oilgate" The National Savings Bank (OTP) has dismissed top man Andras Patko from its New York-based Hungarian Finance & Trade Corp. (HFT) following the "oilgate" scandal, reports Magyar Hirlap. "Oilgate" involved accusations of favoritism on the part of Socialist politicians who allegedly contracted closely associated companies to import Russian oil to Hungary. Patko was deputy finance minister under the last communist regime headed by Miklos Nemeth. The government had contracted HFT to coordinate shipments of Russian crude oil to Hungary, the paper writes. It was also discovered that the head of HTF's Moscow office was Andras Dunai, son of Industry and Trade Minister Imre Dunai. OTP, a majority owner of HFT, plans to close two of the company's four offices, those in Budapest and Moscow, and plans to reduce its staff from thirty to four. Ministers may see compromise on extra revenue spending A possible compromise is in store for the spending of HUF 130 billion in privatization revenue. A new plan introduced last week proposes that the government would use extra revenue to help pay off state debts. The savings in interest -estimated to be about HUF 40 billion- would be use to reform Hungary's social security system, reports the Budapest Business Journal. =46inance Minister Lajos Bokros and Privatization Minister Tamas Suchman have battled over the spending of extra revenue since late November. Bokros, who originally believed that the money should be used to promote economic growth, backed the proposal to use the funds to help relieve debt, the Journal quotes socialist MP Laszlo Keller. He pointed out that the compromise is not yet finished and needs additional consideration. ------------ SHORT TAKES U.S. PRESIDENT BILL CLINTON VISITED THE TAZAR AIR BASE for three hours Saturday on his way to Tuzla in Bosnia, reports Magyar Hirlap. During his speech to IFOR forces he offered his thanks to Hungary for participating in the largest military mobilization in Europe seen since World War II, noting that only six years ago, Hungary was part of the Warsaw Pact. Following his speech, Clinton met President Arpad Goncz, Prime Minister Gyula Horn, Foreign Minister Laszlo Kovacs and Defense Minister Gyorgy Keleti. Horn and Clinton resolved that Defense Minister Keleti and the US Defense Secretary would work together on problems arising from the usage of Hungarian bases by American troops. DIRECTOR GENERAL OF THE OFFICE OF REFUGEE AND MIGRATION Affairs Bela Jungbert proposed to ban temporary refuge for asylum seekers from ex-Yugoslavia last week. He told the government that conditions that would force refugees into Hungary have calmed. He noted that Austria and Germany have also stopped granting temporary protection for Balkan war refugees. Some 8,000 refugees currently living in Hungary would not be effected by the ban. A 50-MEMBER HUNGARIAN POLICE FORCE WILL SERVE IN BOSNIA as a part of Hungary's contribution of a 420-member support unit to the implementation of peace in Bosnia. The contingent will be unarmed and defended by IFOR forces. The force may leave for Bosnia as early as =46ebruary for tasks that include providing security for escort teams and giving extension training to local police bodies. The area that the troops will be stationed in Bosnia has not been specified, according to Magyar Hirlap. Hungarian engineering troops sent to Bosnia will be stationed in the British sector near the Sava River where their task will be to build bridges. WITH THE NEW CURRENCY LAW ADOPTED JAN. 1, Hungarians can take out up to US$ 1433 each time they travel abroad, up from the previous amount of $458. Hungarian citizens can use forint-based credit cards in foreign countries. Foreigners working in Hungary are now allowed to convert 100% of their salaries into hard currency legally whereas before, only half of their wages could be converted. (Unfortunately, we still have to deal with a 1.2% monthly forint devaluation!) SEEN MORE "MADE IN HUNGARY" LABELS IN AMERICAN STORES? MTI reports that Hungarian exports to the U.S. rose by 20% last year, while imports remained unchanged from the previous year. The amount of trade between the two countries totaled $1 billion. According to ambassador Ferenc Furulyas, head of Hungary's trade liaison office in Washington who was interviewed by MTI, the U.S. must now pay duties of 60% on Hungarian exports since import preferences were suspended in August. But he said Hungarian export products are still competitive in the American marketplace and are expected to do even better this year. ------------------ NUMBERS CRUNCHED * Budapest public transportation riders caught without tickets last year (Budapest Transportation Authority): 667,000. * Average gross earnings of full-time workers in November (Central Statistical Office): HUF 47,033 (US$ 338) * Percentage drop in real wages predicted for 1996 (Magyar Hirlap): 2% * Pay raises for high government officials in 1996 (Maygar Hirlap): 30% * Hungary's currency reserves at the end of 1995, a US$ 4.1 billion increase over the same time last year (The National Bank of Hungary): US$ 11 billion. * Number of people effected by the influenza virus in the first week of January (Maygar Hirlap): 60,000 -------------- EXCHANGE RATE January , 1995 (National Bank of Hungary) US dollar - $139.22 (buying), $140.7 (selling) Deutschemark - DM 97.02 (buying), DM 98.02 (selling) --------------- WACKY AS USUAL Peacekeeping operation wrecks havoc on southern Hungary Southern Hungarian towns Kaposvar and Tazar were cast into the limelight late last year when they were chosen to be the logistics and supply site for the peacekeeping operation in Bosnia. Journalists anticipated that the arrival of the forces would bring burger joints, gambling and possibly a rise of AIDS cases to the area. But what they didn't forsee was about HUF 40 million to 50 million in damages to infrastructure and other calamities. Contributing to the infrastructural damages were 100-ton trucks weighing 10 times more than roads to IFOR bases can handle. A spokesman from the Defense Ministry said U.S. forces will be responsible within legal frameworks for the damages done. So far, local companies have taken responsibility for repairs. The Kaposvar City Council is requesting a state subsidy of Ft 300 million for road construction. A working group between the municipality and U.S. forces has even been established to help solve emerging problems such as increased air pollution. The operation, itself, has also run into its share of bad luck. A U.S. Army truck collided with a Renault car from Croatia last week, resulting in hospitalization of the car's passengers. Nepszabadsag reported that several soldiers who recently arrived from Belgium are being quarantined after contracting an unidentified virus during their trip to Hungary. =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =46EATURE STORY Alcohol may hit Hungarians harder Is Hungarian food responsible for making the country's inhabitants more susceptible to the effects of alcohol? That's what Dr. Janos =46eher, director of the Hungarian Institute of Internal Medicine, believes after conducting a research on the subject for several years. =46eher has been trying to explain why Hungarians break European record for the rate of liver cirrhosis and heart attacks. The mortality rate due to liver cirrhosis, he noted, is much higher in Hungary than in Germany, where the consumption of pure alcohol is exactly the same -12 liters per per person annually. The French, he added, consume even more -15 liters- yet their rate of heart disease is lower. Feher believes this paradox has partly to do with the difference in food quality. According to his theory, Hungarians are more susceptible to the detrimental effects of alcohol because their diet lacks selenium, a chemical necessary to form an enzyme that helps the body metabolize alcohol. It also helps to detoxify poisonous substances that can go through the liver such as pesticides on fruits or hormones in meat. Selenium enters the food chain through crops that absorb it from the soil. The Hungarian soil is known to be poor in selenium. Therefore, vegetables, fruits, milk or meat produced in Hungary lack the precious substance. =46eher explains the same phenomenon was noticed in Finland about 25 years ago. Since then, the Finns have compensated with tablets and the concentration of selenium in the soil has reached the level found in other European countries. According to Feher, it is possible a low-selenium diet can cause people to get drunk more easily. "I only know that a tablet of selenium taken before drinking alcohol can prevent one from becoming drunk," he says. Anyone living in Hungary who enjoys drinking alcohol may be at extra risk for liver damage in the long term. Selenium can be found in most vitamin supplements, but Feh=E9r stresses common sense. He says drinking alcohol in low quantity is acceptable, but men should drink no more than 60 grams of pure alcohol a day (equal to half of liter of wine or 1 liter of beer) to avoid endangering their health. This critical limit, he adds, is only 30 grams for women. But the lack of selenium in food wouldn't explain all the damage from alcohol consumption in Hungary. "Sadly enough, the Hungarian wines are pretty bad from a nutritional point of view," says Erno Dworschak, head of the Protein and Vitamin Research Department at the National Institute of Food Hygiene and Nutrition. Under the communist regime, Hungary had to supply the former USSR with a large quantity of wine, sacrificing the quality. "Most cheap Hungarian wines lack the good elements you can find in French wines, for example, and that are good for your heart," Dworschak says. * * * Emannuelle Richard works for French Radio and regularly contributes to the Budapest Week ---------------- Parliament Watch By Tibor Vidos Copyright (c) 1996 Politics is still moving slow with Parliament on recess until mid-February. But life is gradually returning to normal. Most members of the government have returned from vacations and even the first cabinet meeting of the new year was held. Domestic political news is slowly returning to the front pages and radio and television broadcasts. The major public debate of the past weeks concentrated on the way to spend the excess privatization income. One could say that it is a most pleasant when ministers publicly attack each other for having different ideas on how to spend the HUF 209 billion surplus income. In October it wasn't even clear whether there would be any income at all. Based on a government decision, the 1996 budget was amended at the last minute to require that all surplus privatization income be spent on decreasing internal debt. The amendment was sponsored by a Socialist and a liberal member of Parliament, with the consent of =46inance Minister Lajos Bokros. It seems that Tamas Suchman, the minister responsible for privatization, developed some personal attachment to the vast amounts of cash the government agencies under his control collected, and publicly attacked Bokros for staging a coup by introducing the amendment without any prior consultation. The debate became so nasty that the Prime Minister had to instruct the two to stop the public controversy and to take the issue before government. As is common in politics, the outcome can be predicted: a compromise is expected. Some of the money will be spent on debt repayment, the rest on - no one knows what. Mr. Suchman talks about re- introducing privatization income into economy by means of conforming with market economy. Unfortunately no details were given. Hungarian history shows few or no examples of government spending money wisely on economic projects, so doubts about Suchman's unknown proposals seem to be justified. The Socialist Party is preparing for another convention, scheduled for the end of March, and debates inside the party, and especially between ministers, are therefore particularly interesting to watch. It seems that no one is challenging the position of Prime Minister Gyula Horn as party leader, but the fight for the new position of the political vice-president is raging, just as the contest for seats in the nine-member party presidium. As a result, the first quarter of 1996 will be not much different from that of 1995. The country will watch as the Socialists fight their internal battles concerning leadership and control of state owned assets. A bit boring, isn't it? * * * Tibor Vidos is a lobbyist and political consultant in charge of the Budapest office of GJW Government Relations. or A version of this article appeared in the Budapest Business Journal. =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =46INAL BLURB The Hungary Report is free to readers. To subscribe, send an email message to the following Internet address: hungary-report-request@hungary.yak.net containing (in the body of the message, not in the headers) the single word subscribe Conversely, to stop receiving Hungary Report, simply send to the same address (in the body of the message) the single word unsubscribe Please note: all mailing lists suffer from frequent "error" addresses. If we have problems with sending to your address more than one week in a row, we will remove you from the list. If you haven't received the report for more than one week, feel free to inquire directly to Steven Carlson (but please wait for at least a week, as we're also just famously late in getting the thing out sometimes : ) * * * Back issues of The Hungary Report are available on the World-Wide Web http://www.isys.hu/hrep/ and via FTP ftp://ftp.isys.hu/pub/hrep/ * * * The entire contents of The Hungary Report are copyrighted by the authors. Permission is granted for not-for-profit, electronic redistribution and storage of the material. If readers redistribute any part of The Hungary Report by itself, PLEASE RESPECT AUTHORS' BY-LINES and copyright notices. Reprinting and resale of the material is strictly prohibited without explicit prior consent by the authors. Please contact the authors directly by email to inquire about resale rights. * * * =46or information on becoming a corporate sponsor of The Hungary Report, contact Steve Carlson by email. =46eedback is welcome. Rick E. Bruner, Creator <74774.2442@compuserve.com> Steven Carlson, Publisher Jennifer C. Brown, Co-editor Tibor Vidos, Parliament Watch Attila Beno, Magyar Net Watch * * * =46or its briefs, The Hungary Report regularly consults the news sources listed below -- for information about subscriptions, contact them by email: The Budapest Business Journal <100263.213@compuserve.com> & Budapest Sun <100275.456@compuserve.com> Budapest Week <100324.141@compuserve.com> Central Europe Today (free online) =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D END TRANSMISSION