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    ========================
    The Hungary Report

    Direct from Budapest, every week

    Also available on the World Wide Web
    (http://www.isys.hu/hrep/)

    No. 1.35, January 29, 1996
    ========================


    SPONSORED BY: iSYS Hungary Kft., providing full Internet solutions
    for companies and individuals in Hungary. For further information,
    send e-mail to <info@isys.hu>, view our World Wide Web home
    page(http://www.isys.hu) or call (+36-1) 266-6090.


    =========
    CONTENTS

      BRIEFS

      Austerity plan part II in the works
      Hungary and Romania to trade freely
      Hungarian troops leave for Croatia this week
      American may be jailed for causing fatal accident
      Debrecen refugees return to Bosnia
      Group lobbies for cleaner air
      Internet providers upset over Matav's Internet plans
      Alitalia may acquire more of Hungarian airlines
      Bokros declared a winner

      NUMBERS CRUNCHED

      Hungarian emigres living in the United States
      Hungary's tourism ranking
      Guest workers abroad
      National birth rate in 1995
      Businesses using the Internet

      FEATURE STORY

      Foreign 'stars' rise in the Magyar movie business

      PARLIAMENT WATCH

      Horn puts more steam in the PR machine

      CORRESPONDENCE

      Letter from Venezuela

    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: <madarasz@mti-eco.hu>. (It's not automated -- write a nice
    note.

    ======
    BRIEFS

    By Jennifer C Brown
    Copyright (c) 1995

    ------------
    GENERAL NEWS

    Austerity plan part II in the works

    Minister of Finance Lajos Bokros, who initiated the unpopular
    austerity plan last year, plans to introduce a package to cut social
    spending in March, writes the Budapest Sun.

    The last austerity measures designed to reduce consumption
    were considered to be a heavy dose of shock therapy for the average
    citizen. According to the Sun, real wages dropped by 11% last year
    while inflation stood at 30%.

    The new package will involve more cooperation between the industries
    effected, according to economic director at GJW Consulting Kft Karoly
    Fekete. The ultimate goal of the reforms, he said, is to signal to
    investors that Hungary is serious about economic reform. The Sun
    writes that Prime Minister Gyula Horn may have a difficult time
    supporting Bokros since he is under attack from the Socialist Party's
    left wing.

    ---------------------
    BUSINESS & ECONOMICS

    Hungary and Romania soon to trade freely

    Hungary and Romania could be trading freely by Jan. 1, 1997, reports
    the Budapest Business Journal. Romania has free trade agreements with
    the European Union and the Czech and Slovak Republics, but not
    Hungary. A free trade agreement would help Hungarian products become
    more competitive with goods from Western European countries.

    Hungarian agricultural exporters have to pay 12 times as much in
    duties on consumable goods compared to their Western European
    competitors. Hungary's exports to Romania increased 84% in the first
    11 months of the year over the previous year to total US$ 315
    million. Hungary imported US$ 18 million from Romania last year, an
    increase of 12% from the year before. Last year, agricultural
    products made up 30% of Hungary's exports to Romania.

    -----------
    SHORT TAKES

    THE MAJORITY OF IFOR'S HUNGARIAN TECHNICAL CONTINGENT WILL be
    deployed to Okucani, Croatia on Jan. 31, announced Defense Minister
    Gyorgy Keleti last week. He also said the Hungarian troops will be
    under the protection of several American officers. According to
    Vilaggazdasag, the maintenance of the Hungarian unit in Croatia will
    cost HUF 2.5 billion (US$ 18.5 million) to be financed from a HUF 10
    billion (US$ 74 million) budget reserve. Soldiers will earn a stipend
    of US$ 950 to US$ 1,300 a month in addition to their regular and
    supplemental earnings.

    ONE 29-YEAR OLD HUNGARIAN MAN DIED AND THREE OTHERS WERE seriously
    injured when a American working in Kaposvar allegedly caused an car
    accident in downtown Kaposvar, according to police reports. Paul
    Anthony Camarce, 31, could face five years in a Hungarian prison if
    he is found responsible for the crime. The fatal accident comes after
    a series of accidents between U.S. military trucks and civilian
    vehicles. Brown & Root, the Houston-based engineering and
    construction firm that employed Camarce, has tried to improve safety
    by limiting access to vehicles, writes the Budapest Sun.

    BOSNIAN REFUGEES SHELTERED IN THE EASTERN HUNGARIAN CITY OF Debrecen
    will be leaving the refugee camp soon. Those who still have homes to
    go to will leave before the end of January. The second group whose
    homes have been destroyed or occupied but can find other shelter will
    leave shortly afterwards. The last group to leave will be those
    immigrating to Western Europe.

    A NEW CAMPAIGN FOR IMPROVEMENTS TO MASS TRANSIT HAS BEEN launched by
    a New York-based environmental organization called the Clean Air
    Group. The group hopes to collect 110,000 signatures for a petition
    that calls for more incentives for people to use public
    transportation. But statistics say Hungarians love driving their cars
    more than they love commuting. Between 1988 and 1994, nitrogen oxide
    levels have doubled in Budapest. The number of commuters have dropped
    from 86% of the population in 1985 to 65% of the population in 1994.

    LOCAL INTERNET PROVIDERS ARE REACTING TO HUNGARIAN telecommunications
    company Matav's plans to launch an Internet service. Email and
    Internet providers CompuServe, Magnet, iSYS and EUnet are taking
    their complaint to the national Office of Competition. They say Matav
    can use its position as a massive telecommunications provider with
    countrywide contacts and subsidized prices to shut other providers
    out of the market. While Matav denies it wants to kill the
    competition, its planned email package will go for HUF 900 a month
    ($6.50). The lowest price for email services is HUF 1,700 a month
    ($12.31). The Journal reports that the Competition Office will likely
    fine Matav.

    ITALIAN AIRLINE COMPANY ALITALIA MAY INCREASE ITS 30% stake in
    Hungarian airlines company Matav, reports the Budapest Business
    Journal. The State Privatization and Holding Company owns 64% of the
    company and is expected to sell another 10% to 35% soon. The Journal
    reports that if the foreign company acquires over a majority of the
    company, other national carriers could renegotiate Malev's flight
    schedule.

    ------------------
    NUMBERS CRUNCHED

    *  Number of Hungarian emigres living in the United States
    (Government Office for Hungarian Minorities Abroad, 1992-1993
    statistics):  1.7 million

    *  Hungary's ranking among top 10 tourism destinations in Europe
    (Deloitte Touche Tohmatsu International):  fourth

    *  Hungarians working as guest workers abroad (Hungarian trade
    mission in Cologne): 40,000

    *  Hungary's birth rate in the first ten months of 1995, down 3,000
    from the year before (Central Statistics Office): 112,000

    *  Number of businesses in Hungary using the Internet, up from 500 a
    year ago (Budapest Business Journal):  5,000

    --------------
    EXCHANGE RATE

    January 24, 1995 (National Bank of Hungary)

    US dollar -  $ 143.16 (buying), $ 145.20 (selling)

    Deutschemark - DM  97.10 (buying), DM  98.10 (selling)

    ---------------
    WACKY AS USUAL

    Bokros declared a winner

    The International Monetary Fund and other international financial
    institutions may want to pat Finance Minister Lajos Bokros on the
    back for his austerity measures. Here in Hungary, the Independent
    Lawyers Forum decided to send him a prize for promoting
    unconstitutional laws. It was an empty package labeled "fragile" and
    "decaying".

    He received the prize after a unanimous vote by the board of the
    Independent Lawyers Forum. Some elements of Bokros's austerity
    package were earlier rejected by the Constitutional Court early this
    year. This was the first year the Forum has ever awarded such a
    prize.

    =============
    FEATURE STORY

    Foreign 'stars' rise in the Magyar movie business

    by John Nadler
    Copyright (c) 1996

    During the early years of Hollywood when Magyar-born
    emigres such a Paramount president Adolf Zukor, London Studios'
    founder Alexander Korda, and Warner Bros. director Michael Curtiz
    reigned supreme in the US film industry, a famous joke went: "You
    don't have to be Hungarian to get a job in the movies, but it doesn't
    hurt.'

    Now 60 years later, the reverse is true in the old country. You don't
    have to be an American to make it in the Hungarian cinema, but it can
    certainly help. Hungary has been more than helpful to the careers of
    a small circle of Americans who have found furious and unexpected
    success in Budapest's small but energetic movie industry.

    New York-actress Kathleen Gati, who apprenticed on the off-off
    Broadway stage, saw her career surge ahead when she won a role on the
    soap opera 'All My Children'. At the time Gati hoped her next step
    would be primetime TV, feature films, or Broadway. Little did she
    realize her career would take a sharp detour through the Danube bend.

    In 1991, Gati came to Budapest for four months to do location work on
    the independent film 'The Diary of the Hurdy-Gurdy Man.' She has been
    here ever since, and is now recognized as one of Hungary's top film
    actresses, winning in 1992 the Hungarian equivalent of the
    best-supporting-actress academy award for her role in the movie
    'Goldberg Variations,' directed by famed Magyar filmmaker Ferenc
    Grunwalsky.

    Gati also starred in the 1992 Magyar-French co-production 'Parallel
    Lives,' directed by the noted film maker Andras Jeles, and the comedy
    'We Never Die', one of the most commercially successful
    locally-produced feature films in the history of Hungarian cinema.

    Gati's ascent in Hungarian cinema has been dizzying. But not
    inexplicable. Canadian-born Gati is the child of Hungarian emigrants
    who understands the exotic nuances of Hungarian culture, and speaks
    the language fluently, and with just enough accent to conjure up a
    foreign mystique ... similar to the type which has served actresses
    such as Greta Garbo and the Gabor sisters so well in the US.

    As Hungary's cinema breaks with the past, Gati's greatest asset is
    her New York training and subtle on-screen presence which differs
    from the more melodramatic method that has long been the fashion in
    Magyar cinema. "What I represent to [Hungarian directors] is the
    American style," she says. "When I first came here they thought I was
    an amateur. They thought I was a natural. That's one of the biggest
    compliments I get: 'You are so believable in your work.'"

    American actors are so believable partly because there is a mystique
    which surrounds them, says NYU-trained film maker Gabe von Dettre who
    has made two feature films and several documentaries since journeying
    to Budapest in 1991: "There is truth in what they say: 'You cannot be
    a prophet in your own land... The point is that Hungarians and all
    eastern European have turned in a snobbish, excited and apologetic
    way to America."

    And the effects of this infatuation can be felt throughout Hungarian
    culture. Hollywood fodder from 'Apollo 13' to 'Pulp Fiction' are hits
    in Magyar movie houses. US series from 'Dallas' to 'Beverly Hills
    90210' lead Hungary's TV ratings. Professionals with American
    credentials are treated with reverent respect by Magyar colleagues.

    Von Dettre, a Magyar who defected from Hungary in 1980, admitted that
    his apprenticeship and education in the US has vastly increased his
    currency here. "When I came back [to Hungary] people were suddenly
    interested in me who hadn't been 12 years before," he explained.

    The same respect -- sometimes deserved, sometimes not -- is given to
    US directors and actors who travel here to practice their crafts, and
    are finding opportunities in the Carpathian basin, all but
    unattainable back home.

    Since coming to Hungary four years ago, Canadian-born
    cinematographer Keith Hlady has not only worked behind the camera on
    films such as the European co-production 'Charlemagne the Great', the
    HBO made-for-cable movie 'Rasputin', and the British TV series
    'Brother Cadfael,' he has worked with and studied the techniques of
    veteran Magyar director-of-photography Elemer Ragalyi.

    Ambitious expatriate actors have seized upon opportunities most fowl.
    The Hungarian voice for Donald Duck belongs to visiting New York
    stage actor Michael Melhmam who has learned the local tongue well
    enough to quack it. Melhmam, a veteran New York actor who journeyed
    to Budapest because of the city's dramatic opportunities, plays
    featherless characters as well. He acted with Jeremy Irons when David

    Cronenberg's feature film 'M. Butterfly' was shot in Budapest three
    years ago, and John Hurt in the independent film 'Living on Borrowed
    Time'.

    Melhmam is not the only working actor in Budapest's expat flock. US
    actress Charlene Dorais has found choice roles in foreign productions
    shot in Hungary such as the Granada TV series 'Maigret,' and the NBC
    network movie 'Passport to Murder.'

    Most of these actors and film makers see Hungary as a detour not a
    destination in their careers. And given the ascendancy of British
    actress Emma Thompson -- from third-string actress to Academy Award
    winner -- the narrow streets of Europe could be as direct a road to
    Hollywood as the pavement of Sunset Boulevard.

                                *  *  *
    John Nadler (jnadler@magnet.hu) is a freelance journalist residing in
    Budapest who frequently writes for Hollywood Entertainer and other
    media and entertainment publications.

    ----------------
    Parliament Watch

    By Tibor Vidos
    Copyright (c) 1996

    Horn puts more steam in the PR machine

    Being a government minister has not meant really good business in
    Hungary over the past five years. And thanks to Prime Minister Gyula
    Horn it is not going to be one for at least another year. The prime
    minister confirmed at a press conference that a report published by
    the daily, Nepszabadsag that he has withdrawn a draft resolution that
    would have raised top government officials' salaries by 20%

    Salaries of ministers, state secretaries and deputy state secretaries
    are calculated according to a formula determined by law as a multiple
    of the civil service base salary. Since last year the prime minister
    has the right to increase or decrease the calculated figure by 20 %.
    This time he decided not to.

    As a consequence ministers will earn HUF 227,950 (US$ 1,657) gross
    per month in 1996, state secretaries HUF 165,000 (US$ 1,195) and
    deputy state secretaries HUF 140,000 (US$ 1,014) gross per month. The
    prime minister's income is HUF 331,500 (US$ 2,402). These figures,
    though significantly exceeding average salaries, are in the medium
    range of managerial earnings in the business sector.

    When asked by reporters about the reasons for withdrawing the
    resolution, the prime minister replied: "To take a  step like this
    seemed unreasonable in the current economic situation of the country.
    We may reconsider the proposal should the economic situation
    improve."

    Sweet words for the man on the street suffering from the austerity
    measures of the government. It seems that the prime minister has
    launched his campaign for the Socialist Party's March convention
    while simultaneously attempting to improve his poor standing in the
    national pools. This suspicion is enhanced by the fact that the
    information about the blunted pay was "leaked" to the press almost
    two weeks after the "decision" was made, and that the prime minister
    appeared in person to discuss it at the press conference following
    the Jan. 25 government meeting. That's a gesture I don't remember
    having witnessed before.

    To put even more steam into the PR engine, the prime Minster has also
    announced that the government will reconsider the drug reimbursement
    policy of the Social Security Fund and plans to re-introduce
    free-of-charge dental treatment. Universal fees for dental treatment
    were introduced only a few month ago and were seen as a first step in
    reorganizing the bankrupt and wasteful social security system.
    Finance Minister Bokros did not hesitate to ensure the public that
    all this will not effect approved budget figures.
    Conclusion: fasten your seatbelts, the campaign is on !


                                * * *
    Tibor Vidos is a lobbyist and political consultant in charge of the
    Budapest office of GJW Government Relations. <vidos@ind.eunet.hu> or
    <CompuServe: 76702,2227> A version of this article appeared in the
    Budapest Business Journal.

    ============
    Correspondence

    This message comes from Akos Farkas in Caracas, Venezuela:

    I am interested in Hungary news, also genealogy research, listserv
    groups held in Hungary. I am 2nd generation of Hungarian Parents
    raised in Venezuela South America. I would like to communicate with
    anyone interested on this topics, via E-mail or regular mail directly
    at the address below.

            Akos Farkas
            P.O. Box 2633
            Caracas 1010-A Venezuela
            South America

            E-mail:  akos.farkas@ccxbbs.uunet.ve

    Any help Appreciated, thanks,
    Akos...


    ===========
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    =================
    END TRANSMISSION


