From hungary-report-owner Mon Feb 26 06:58:50 1996 Received: from localhost (daemon@localhost) (fnord) by nando.yak.net (8.6.5/8.6.5) id GAA01260; Mon, 26 Feb 1996 06:58:50 -0800 Received: from localhost (daemon@localhost) (fnord) by nando.yak.net (8.6.5/8.6.5) id GAA01251; Mon, 26 Feb 1996 06:58:32 -0800 Received: from jbrown@isys.hu () via =-=-=-=-=-= for hungary-report@hungary.yak.net (1249) Received: from kingzog.isys.hu (KingZog.iSYS.hu [194.24.160.4]) (fnord) by nando (8.6.5/8.6.5) with ESMTP id GAA01240 for ; Mon, 26 Feb 1996 06:57:24 -0800 Received: from [194.24.161.32] (dialup-1-032.dial.isys.hu [194.24.161.32]) by kingzog.isys.hu (8.7.Beta.11/8.7.Beta.11) with SMTP id PAA05874 for ; Mon, 26 Feb 1996 15:57:00 +0100 (MET) Date: Mon, 26 Feb 1996 15:57:00 +0100 (MET) X-Sender: jbrown@mail.isys.hu 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 1.39 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. 1.39, February 26, 1996 =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 CONTENTS BRIEFS New finance minister to be named soon Bidders line up for MTV2 Horn tries to reasurre IMF Hungarian Civic Cooperation society created Hungarian-Romanian basic treaty completion nears Conservation laws passed Nuclear rods draw protest at Paks Private Jewish school opens Polgar sister wins world chess title NUMBERS CRUNCHED Cars stolen in 1995 Slovaks positive about treaty with Hungary Consumer spending on the black market EBRD money received in 1995 FEATURE STORY Dead and buried... and very useful PARLIAMENT WATCH Meeting certain criterion The Hungary Report is also supported in part by: MTI-Econews, a daily English-language financial news service. For online (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) 1996 ------------- GENERAL NEWS Bokros replacement gets reviewed today Former Finance Minister Peter Medgyessy may get Prime Minister Gyula Horn's nomination for finance minister today, reports Nepszabadsag. The leading bodies of the Socialist Party and the Coalition Consultative Council are expected to discuss his nomination.Outgoing finance minister Lajos Bokros resigned due to a lack of government support for his public finance reform. Medgyessy, 53, served as finance minister from December 1986 to December 1987. He currently serves as president and general manager of the Hungarian Investment and Development Bank. Medgyessy said that he agrees with Bokros's policy and supports the implementation of public finance reform and the overhaul of the social care system. But he also said the government should do more to make austerity measures more acceptable to the public. Privatization Minister Tamas Suchman dropped out of the candidacy o avoid further debate. The other candidate in consideration is Zsigmond Jarai, CEO of the Hungarian Credit Bank and a former deputy finance minister. While Jarai is the most favorable candidate among foriegn investors for his cost-cutting measures at MHB, Medgyessy's background shaping policy under the transitional government also gives him credibility among multinational companies, writes the Budapest Business Journal. Meanwhile, a public opinion poll of over 900 people showed that 36% were happy to hear of Bokros's resignation. Another 39% were indifferent to the news, while 13% regretted his departure, and 12% had not heard the news or did not want to comment. Some 33% said they believe Bokros's departure would have no effect on economic prospects. --------------------- BUSINESS & ECONOMICS Bidders line up for MTV2 The multinational CLT Multi Media plans to bid for the TV channel MTV2 along with the international advertising agency IP Groupe and the German publisher Suddeutscher Verlag, reports Magyar Hirlap. The consortium's Hungarian partners include film distributor Mafilm, Pannonia Filmstudio, the Hungarian Dubbing Co. and MTM Communications. The Hungarian branch of IP Groupe, IP Hungary, is responsible for selling over half of the ad time on Hungarian TV. Central European Media Enterprises also wants to acquire the frequency for MTV2, according to Napi Gazdasag. The company has backing from a German consortium comprising of Siemens, media company BTS, Bayerische Landesbank and the Bavarian and the German governments. The backers have offered to build the new headquarters of Hungarian Television. In return, the Hungarian government would provide a long-term lease. ----------- SHORT TAKES PRIME MINISTER GYULA HORN SENT A LETTER TO THE International Monetary Fund officials last week to assure the organization that Hungary would continue on with its present economic policy despite the resignation of Finance Minister Lajos Bokros. The IMF delegates reacted by saying that they expected financial austerity measures to be continued consistently. State secretary Ferenc Somogyi met with EU ambassadors in Budapest to discuss the situation following Bokros's resignation. While there, experts concurred that no matter who is the next Minister of Finance, Hungary cannot avoid making major sacrifices that come with austerity measures. A NEW GROUP CALLED THE HUNGARIAN CIVIC COOPERATION SOCIETY was formed in Budapest yesterday to lobby for civil organizations. The group's president, Ferenc Madl, served as minister of culture in the Antall government. He told journalists that the group's values lie close to the moderate opposition parties. He said the group will try to ensure that ideas of European Christian Democracy are incorporated into Hungarian democracy. The group's leaders include the late Prime Minister's elder son Gyorgy Antall, sociologist Agnes Hankiss, Young Democrat vice-president Laszlo Kover, Democratic Forum vice-president Ferenc Kulin, former Foreign Ministry state secretary Janos Martonyi, and Ferenc Rabar, finance minister in 1990. THE HUNGARIAN-ROMANIAN BASIC TREATY IS CLOSE TO BEING finalized, reports Magyar Hirlap. Foreign Ministry state secretary Ferenc Somogyi said the treaty would probably not be signed in March, as was previosly agreed upon by Prime Minister Gyula Horn and President Ion Iliescu. Questions still exist about the Council of Europe's recommendation of minority rights, language rights, the right to establish political parties and the creation of a minority joint committee which would sit in on the negotiations. THE HUNGARIAN CABINET THURSDAY PASSED TIGHTER RULES ON natural protection, last week Magyar Hirlap reports. The bill stipulates that 18 regions and four new national parks would be designated as protected areas and seeks to protect natural resources and biological variety. Those in violation of the law could be fined up to Ft 200,000, up from the current fine of Ft 50,000. A TRAIN CARRYING NUCLEAR FUEL RODS FROM GERMANY ARRIVED at the Paks nuclear plant in south Hungary last week. The used fuel rods have a life of one year and will be in use by April. Environmentalists object to the use of the rods and say Paks is not as safe as the authorities say. The delivery of the fuel rods costs HUF 600 million. HUNGARY'S FIRST JEWISH SCHOOL IN 50 YEARS OPENED ITS DOORS yesterday in the Buda hills, reports Nepszabadsag. The Lauder Javne Jewish Community School school, which will offer Jewish education to 600 students ages 5 to 18, is the first school financed from private capital since World War II. The five acre-site was donated by the City of Budapest. Attending the ceremony were President Arpad Goncz and the ambassadors of the U.S. and Israel. Goncz gave the Officer Cross degree of the Order of Merit of the Republic of Hungary to American politician and businessman Ronald S. Lauder for helping to establish the school with a US$ 4.5 million grant. A bomb alert was reported after Gonz left but no bombs were found in the area. ZSUSZA POLGAR HAS BECOME THE FIRST HUNGARIAN WORLD CHESS champion, according to Magyar Hirlap. Polgar, 27, scored a victory over top title-holder Hsie Chun of China last week. Polgar earlier lost a world chess champion title to Georgian player Joseliani. The three Polgar sisters, which besides Zsuzsa, include Judit, 20 and Zsofia, are among the world's top female chess players. ------------------ NUMBERS CRUNCHED * Percentage increase of the number of cars stolen in 1995 over the previous year (Magyar Hirlap): 20% * Percentage of the Slovak population who consider the signing of the Slovak-Hungarian basic treaty a positive move: (the Statistics Office in Bratislava): 63% * Percentage of income the average Hungarian spends on the black market, estimated at HUF 694 billion annually. (Kopint-Datorg): one-fourth * Amount of money Hungary received from the European Bank for Reconstruction and Development last year. (Vilaggazdasag): $500 million -------------- EXCHANGE RATE February, 23 1996 (National Bank of Hungary) US dollar - 144.10 (buying), 145.30 (selling) Deutschemark - 99.06 (buying), 100.16 (selling) =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D FEATURE STORY Dead and buried... and very useful By Emmanuelle Richard Copyright (c) 1996 Thousands of dead Hungarians are helping the living pull illegal capers. In the old days, when the Grim Reaper made his rounds, the Hungarians only had to worry about the redemption of their souls. Now in the capitalist jungle of the 1990s, they have to wonder about being exploited after they are dead and gone. Dead Hungarians, or at least their names, are active all over Hungary, providing advantages to their living counterparts. The dead can help avoid taxes, obtain false documents, illegally receive services and cash, and commit other crimes. "It seems that Hungarians have read Gogol's The dead souls," says Janos, a Hungarian journalist, between laughs. The novel was set in 19th century Russia, when a landowner's wealth was measured partly by the number of serfs he kept. Gogol's hero was a lord who made a fortune selling the identity papers of dead serfs to landowners. Janos is, himself, enjoying the benefits of his dead mother's phone 12 years after she passed away. He inherited the apartment from her but never told Matav, the telecommunications company, about her death. "They would have cut the line and I would have had to wait for years in order to get it back under my name," he says. Every month, Janos pays the bill "for his mother." The Phone Book of the Dead Multiplied thousands of times, this makes for trouble: The phone book could be mistaken for a Hungarian Book of the Dead. "This is a real problem", says Agnes Mandelik, of Matav's Residential and Small Business Customer Assistance Office. She explains that under communism, the number of phone lines was so small the state telephone company used to immediately transfer a dead person's line to someone on a waiting list, with a priority to administrative offices. Lines were only maintained in the flat for a widow or widower. No wonder Hungarians are used to keeping Matav away from their obituary notices. But, as Mandelik notes, "It's everybody's interest to update the phone book, and we are working on it." Along these lines, the telephone company is encouraging people to declare deaths and relocations. "According to a law in effect since July 1994, people can keep a dead parent's line without having to wait for a new attribution," says Aniko Barbocz, a lawyer in Matav's Code and Practise department. Still, the bereaved customer must pay a connection fee of HUF 1,500 (=A37) which can run up to HUF 37,000 (=A3180) if the phone line was established before 1971. "People have reacted very well to our information campaign," says Mandelik. "They prefer to pay and be able to contact us when they have a problem with their phone, which is impossible if they are officially 'dead clients'," she adds. The long-awaited phone book updating will also comfort companies fed up with sending mailings to deceased Hungarians. "We used to buy listings from direct mail firms that were full of dead people and impossible to refresh," says Peter Hivatal, business manager of Reader's Digest Hungary. He adds that, considering the lack of accurate data and that 80,000 Hungarians die every year, listings are hard to control. "Now we manage to get accurate listings from the Central Registration and Elections Office," he says, "but it is very expensive". Meanwhile, less wealthy firms keep sending mailings according to the phone book, causing anger among Hungarians. A magazine recently published the letter of an outraged reader complaining that his late mother received by name a discount offer for a vibrator. Ghost companies Other schemes using dead people, however, make for more serious consequences, like defrauding the government. According to one Customs and Excise officer at Budapest airport who asked not to be named, importers - usually of expensive items with a high value-added tax- take advantage of the terms of payment on customs charges by simply disappearing with the goods and never paying the bill. When customs clearance officials eventually track down the company, they find the registered owner is dead. The defaulter had in fact created a limited company (Kft) under the name of a deceased person. "These are called 'ghost companies,'" explains Erno Kiss, head of the economic crime division of the Hungarian National Police. He says that since the economic reforms, a great number of companies importing petrol have been registered under fake identities. A crook mostly use a foreign passport but sometimes also the identity papers of ''zombies'' -patients in lunatic asylums or ailing people- or of someone dead and buried. "It's easy to create a limited company here," explains Laszlo, a translator who launched his own business. "When I went to the registration office, they hardly looked at my ID," he says. He adds that he recently wrote to the mayor's office of his home village to get a new birth certificate. He received it by mail without any problem. "Anyone could have written this letter, got the certificate and started procedures to get a passport under my name, " he adds. This means it could be possible for any unscrupulous individual to use the good old trick seen in many movies: Go to a countryside cemetery and find the grave of someone born in a remote area about the same time as your own birth. Then, write to the major's office requesting a birth certificate by post and start procedures to get a passport. In the capital, such a scheme "seems possible but quite unlikely," says an official in Budapest Mayor's office Press Department. He says majors' offices usually know about the deaths of citizens. In addition, he says, within a few days after a death, the next of kin are required to inform the municipality's registration office and hand in the deceased's identity papers. "In some rare cases, people fail to do this and hide the corpse for a while," he admits. Sniffing out the problem In the town of Szekesfehervar, man there would regularly bring his ailing mother to the post office in order to get her pension. But when the woman finally gave up the ghost, he wrapped her corpse in a plastic bag and put her on the balcony, as if she were sunbathing, in order to bluff the postman. If such stories remain exceptional, they do, however, demonstrate there is a traditional hiatus between death and administration in Hungary. And this is likely to continue or even worsen. According to the National Police's Erno Kiss, today's Hungarian administration lacks the resources to control the situation, largely because of a lack of funds and the fact that no census has been conducted since the political changes. "In the case of ghost companies," he says, "the Business Court is overwhelmed with work. There are 1 million limited companies in this country of 11 millions people. Every day, some new ones are created, others close. How can officials check which ones are owned by clear, honest, living people and those who aren't?" he asks. "For us, it makes no difference if the crook is officially dead or alive. It's all crime." * * * Emmanuelle Richard is a Budapest-based freelance journalist who works for French Radio and regularly contributes to the Budapest Week. =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D Parliament Watch Meeting certain criterion By Tibor Vidos Copyright (c) 1996 "The Prime Minister will name the new Minister of Finance at the beginning of next week" was the news this morning on the radio. So, another weekend will pass before gossip passes and an appointment will be made. The new Minister of Finance -whoever he may be (sorry for using only the 'he' word, but the fact is that none of the candidates talked about is female)- must : - be a person trusted by the Prime Minister and accepted by the various interest groups and factions inside the Socialist Party. - be acceptable to the Alliance of Free Democrats, the minor coalition party in government. - be an internationally accepted financial expert, who can successfully negotiate with the international financial and business organizations. - be a good administrator, who is able to manage the diverse and bureaucratic Ministry of Finance. - be an extremely good manager of his time as the finance minister is responsible for the drafting and execution of the budget, supervises the customs and tax authorities and is responsible for the economic and monetary policy of the country as the head of the Economic Cabinet of the government. - be a good negotiator with immense patience and duration. - be a good public performer and communicator with exceptional thick skin to withstand public curse. - be a good political contact builder and deal maker, but one who at the same time has no political ambitions, since the Prime Minister does not seem to tolerate this. - speak English. - be a team worker who is hated by most members of the team, as he has to cut their budgets constantly. - be responsive to social pressures and yet determined to steer the economy of the country through the current crisis. - be willing to find another job soon since ministers of finance rarely last for longer than a year. If at the time of reading this the position is still vacant and you know someone who could satisfy these conditions, please call the Prime Minister's Cabinet Office on (361) 268-4439. * * * 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 FINAL 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. * * * For information on becoming a corporate sponsor of The Hungary Report, contact Steve Carlson by email. Feedback is welcome. Rick E. Bruner, Creator <74774.2442@compuserve.com> Steven Carlson, Publisher Jennifer C. Brown, Editor Tibor Vidos, Parliament Watch Attila Beno, Magyar Net Watch * * * For 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) , as well as most Hungarian-language media (e-mail addresses to come). =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D END TRANSMISSION