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| + - | OMRI Daily Digest - 16 May 1995 (mind) |
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OMRI DAILY DIGEST
No. 94, 16 May 1995
OSCE CONVOY FIRED ON IN CHECHNYA; CUNY'S BODY BELIEVED FOUND.
Individuals from the OSCE permanent mission in Chechnya seeking the
whereabouts of Fred Cuny, a former adviser to the Open Society Institute
who has been missing since April, came under fire from Russian units on
13 May, Hungarian Radio reported on 15 May. Earlier reports that a
member of the OSCE team had been killed in the incident that occurred in
the Shali district were later denied, according ITAR-TASS on 14 May.
Hungarian Foreign Ministry spokesman Gabor Szentivanyi stressed that the
individuals involved, including the American member of the delegation,
were acting under the auspices of the U.S., not the OSCE. Szentivanyi
said the incident is under investigation. Meanwhile, a body believed to
be Cuny's was found near Geldugin in the Chechen Shali region, Interfax
reported on 15 May. -- Michael Mihalka, OMRI, Inc.
TURMOIL AT HUNGARIAN TV. Hungarian Television president Adam Horvath on
15 May announced that Janos Betlen, editor-in-chief of the major
newscast, is to be replaced, Magyar Nemzet reported. Betlen was
appointed to that post last summer, and his programs have been
repeatedly criticized by the Hungarian Socialist Party, including Prime
Minister Gyula Horn, for alleged bias and insufficient coverage of the
government's views. The opposition parties protested Betlen's dismissal
and accused the government of conducting political purges. Betlen's
replacement comes in the wake of government plans to dismiss 1,000
television personnel. While the government says the cuts are a necessary
cost-saving measure, the opposition and Hungarian TV staff believe they
are politically motivated and endanger the independence of television.
-- Edith Oltay, OMRI, Inc.
[As of 1200 CET]
Compiled by Victor Gomez
Compiled by Jan Cleave
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A tovabbterjesztest a New York-i szekhelyu Magyar Emberi Jogok
Alapitvany tamogatja.
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| + - | CET - 16 May 1995 (mind) |
VÁLASZ |
Feladó:  (cikkei)
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Tuesday, 16 May 1995
Volume 2, Issue 94
REGIONAL NEWS
-------------
**HUNGARY BEGINS GREAT SOCIAL WELFARE DEBATE**
Hungary's parliament has begun to debate its austerity package,
which aims to cut the social welfare system, giving hand-outs
only to the poorest people. Although it appears the bill will
pass, debates could deepen divisions within the Socialist
party over which direction economic reform should take. There
is also a chance that the plan, created by Finance Minister
Lajos Bokros, may be watered down by some of the party's
parliamentarians. The plan has also caused many Hungarians to
go to the streets in protest, however, the International
Monetary Fund and the World Bank have said the plan is crucial
if Hungary wants new loans. The package, which cuts the 1995
budget deficit to 3 percent of gross domestic product (GDP)
from 5.4 percent, would reduce Hungary's huge debt. The
country owes a net $19.9 billion to foreigners, around half of
the country's GDP. Figures for the first four months of 1995
indicate Hungary's fiscal and equally important trade balance
shortfalls will be larger this year than earlier thought.
BUSINESS NEWS
-------------
**SALE OF MAJOR HUNGARIAN BROACASTER UNDERWAY**
Hungary's national broadcasting monopoly Antenna Hungaria will
be privatized by the end of this year. But the company said
privatization revenues won't come in until 1996. Antenna
Hungaria is the country's second largest telecommunications
company after the national telephone company Matav. Under
Hungary's new privatisation law, passed earlier this month,
state shares in Antenna Hungaria will be reduced to 25 percent
plus one vote. Hungary's State Holding Company now owns 83
percent of Antenna Hungaria, which posted after-tax profits of
$3.25 million last year.
**HUNGARIAN BULL RUN SURPRISES TRADERS**
The Budapest Stock Exchange continued an upsurge yesterday that
most analysts predicted would end a week ago. The index
neared a new 1995 high, rising 31.85 points to 14 68.46.
Pharmaceutical company Richter Gedeon hit an all time high of
$18 a share, up 75 cents. Heavily capitalized issues Egis,
Primagaz, Pannonplast, Graboplast, and Danubius all hit new
highs for the year. Traders said the demand for Hungarian
stocks may still run out of steam and attribute yesterday's
heavy gains to foreign investors. They said the companies
themselves are good but the country risk associated with
Hungary might discourage some buyers.
BUSINESS FEATURE
----------------
**THE PEACE CORPS: IT'S NOT JUST FOR IDEALISTS ANYMORE**
By David Fink
The Peace Corps does a lot more than teach English and
agriculture techniques. In Central European countries
including the Czech Republic, Poland, and Hungary, Peace Corps
volunteers are helping small business development.
When people hear the name Peace Corps, they often think of long
haired college kids in jeans digging irrigation ditches. But
in Hungary, many Peace Corps volunteers wear a suit and are
helping the country develop into a succesful market economy.
Take Dan Wilson. He was once a banker in Atlanta. Now he's
one of 15 volunteers based in Hungary as part of the Peace
Corp's Small Buisiness development program.
"When someone used to tell me they were going into Peace Corps.
I used to look at them like, "what's wrong with you-get a life
or whatever". I think Peace Corps has an image of the 60's
and Berkeley and flower children wannabes. The people I've
met here clearly do not fit that image."
In fact these volunteers often had 30 or more years business
experience. They're usually sent to regional business
development centers to help small companies get off the
ground. Volunteer Wilson said it's taken him about a year to
understand doing business in Hungary. But all along he's been
able to help new entrepreneurs solve universal problems, like
how to develop a marketing strategy. In other cases, he said,
just being there to listen and offer advice helps the most.
"A lot of the time I feel like a psychiatrist more than a
consultant. I think people just need someone to talk to and
to throw their ideas out to and get an opinion. I think 30
years from now some of the Hungarians I met and work with will
remember there was this American guy who took time out to talk
about my business and work through my problems for free."
According to Small Business program director Georgette Verdin
the Peace Corps is not competing with the private sector
because small businesses can't afford western consultants
anyway.
"There's no competition. Most consultants who come to Hungary
from the United States ask Peace Corps, or seek out Peace
corps volunteers, the business volunteers, and talk to them
because the volunteers know what's going on in the field."
Hungarian small business experts said the free help is
invaluable. And the knowledge they give to Hungarians will
remain once the Peace Corps volunteers are no longer here.
Andrea Frenyo is managing director of the Business Basics
Foundation.
"They leave but the projects stay. I know personally at least
two or three projects that have been initiated by peace corps
volunteers. Proposals have been made. Projects were set up.
And that's going to be on."
A Computer networks and a business college are just two examples
of the Peace Corps success. And since small businesses are
essential for a strong economy and a strong economy is
essential for democracy, Peace Corps small business
development could be as important for human survival as
digging ditches in an impoverished land.
ABOUT CET ON-LINE
-----------------
* CET On-Line is Copyright (c) 1995 Word Up! Inc., New Media
Group, all rights reserved. Not-for-profit redistribution of
CET On-Line in electronic format is allowed only if the
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information contained in this publication is included.
For-profit distribution of this publication or the information
contained herein is strictly prohibited without the express
written permission of Word Up! Inc., New Media Group. These
conditions are subject to change without notice. For further
information, contact Cameron M. Hewes at  >
* All "Letters to the Editor" and other comments about
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 >.
**CET On-Line** is a Word Up! Inc., New Media Group
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A tovabbterjesztest a New York-i szekhelyu Magyar Emberi Jogok
Alapitvany tamogatja.
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| + - | Washington Post 1. (mind) |
VÁLASZ |
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Hungary's New Cash Source: Tax Cheats Government Hopes Crackdown on
Off-the-Books Employment Will Ease Budget Crisis
CHRISTINE SPOLAR (WASHINGTON POST FOREIGN SERVICE)
(C) 1995 THE WASHINGTON POST (LEGI-SLATE ARTICLE NO. 229446)
BUDAPEST -- When Zsuzsan Antal went job hunting after the meatpacking
company where she worked went bankrupt this winter, the 46-year-old
bookkeeper found prospective employers winking and nodding about what she
could earn.
Almost all told Antal that they would pay her nearly as much as she
earned as a 14-year employee at the plant -- about $340 a month -- but only
one-third of her salary would be paid through a company check. The rest would
be slipped to her in a stash of take-home pay never to be reported to the
Hungarian government.
Antal worked for three months at one upstart transportation company and
hoped, without success, to change the owner's mind. "I just think it's
immoral to be part of the black market," said Antal as she cared for her
grandson in the solitude of her suburban backyard. "I tried to tell him: I
don't want to cheat the government -- and I don't want to cheat myself. I
want my real salary to be used to determine my pension.
"But he didn't care," she shrugged. "The day I told him I wanted to
leave, he found a replacement. She was much younger. And I had to train her."
What people here call the "black economy" -- more commonly known as the
"gray economy" across eastern Europe -- has become a flashpoint for anxiety
in a country that has stumbled badly on its way to a stable market economy.
Over the past several months, as it struggles to contain a 7 percent
budget deficit, Hungary is reexamining what it once dismissed as a benign
side effect of capitalism -- and finding a potential multibillion-dollar buoy
for its economy.
Prime Minister Gyula Horn has appointed a task force of police, national
security advisers and tax and custom authorities to begin monitoring the
black economy and its links to large-scale criminal trade. About 250 new
police officers -- 50 for Budapest alone -- will be hired to track down an
estimated 200 to 300 illegal profiteers.
No one is quite sure when or how the crackdown will occur. But
attempting to collect some big-money tax revenues -- the possible gain is
estimated at three times the $1.74 billion that the government hopes to gain
from new and unpopular social cuts -- is seen as a positive step from a
government that has long vacillated on privatization and fiscal reforms.
"We're going through a very tough time here. In simple ways, people have
lost faith," said Peter Zwack, former ambassador to Washington and a member
of Parliament who campaigned for the reform. "People need to see the
government acting in their behalf. When the government is canceling so many
social benefits that people here consider a normal part of life, people have
to see that the government is doing something to correct other wrongs in the
system."
Zwack, who owns a distillery and the rights to much of the hard liquor
distribution market here, said outside investors and potential economic
partners, such as the European Union, also need assurances that attitudes are
maturing here. "In the old days, it was chic to steal from the state," he
said. "We have to show that's changed."
All emerging economies in eastern Europe have, in some ways, survived
the transition from communism by allowing unfettered shadow economies to grow
and bolster household incomes. Second jobs became second nature in largely
educated work forces, and entrepreneurs who reported paper losses to the
government still managed to live well.
In this capital city of 2 million people, the black market is part of
the gritty landscape. Every morning, dozens of men from rural Hungary and
Romania crowd the Moszka Ter metro stop, one of the largest stations in Buda,
looking for day jobs that can pay up to $20.
Jozef Pozsany, 36, a stonemason, joined the crowd one day last week
because he said he has notbeen able to find steady construction work. "If
somebody likes to work, you can usually find it," he said. "But you have to
figure out first if you can trust the employer. It depends on the person."
Businesses began paying only minimum-wage salaries on the books to avoid
paying state contributions for health insurance benefits that boost personnel
costs by 43 percent. Black market traders worked the angles to avoid paying
taxes that, in the case of cigarettes and liquor, add 40 percent to the
consumer price.
But recent studies here show the cheats have cost Hungary dearly.
Nearly one-third of the gross domestic product this year, expected to
reach $50 billion, will occur in off-the-books activity, a report from the
private Economic Research Institute shows. That means a loss of about $4.5
billion in much-needed revenues that many link to illicit alcohol, tobacco
and coffee trade.
"The little people, the little businesses making some extra money along
the way? That's not a problem. It helps create stability for people who need
it," said former finance minister Ivan Szabo, now a member of Parliament and
administrative president of the opposition Democratic Forum party. "But there
comes a time when this 'black economy' becomes destructive and we have to ask
if we're at that point now."
Customs officials here have been working sporadically with trade
associations, which can offer an insider's view on how illegal competition is
hurting their market. So far, the authorities have had the most success
battling black-market importers of flowers and exotic fruits, two industries
in which smugglers routinely deal in false, understated receipts to escape
duty fees, custom official Laszlo Laczo said.
"In principle, we should be going after" all the illegal trade, Laczo
said. "But we don't have the people. And then there are other problems.
People can be persuaded to take bribes and things don't happen as they
should.
"In the Western world, there is an assumption that business will be
fair. As Hungary is starting this new democracy, there is a big argument
going on over what is fair and what is not."
The government's commitment to breaking the black economy has come under
question. A week ago, a local newspaper reported that the state's
privatization agencies had used dozens of off-the-books workers.
One of the few government officials who would answer questions raised by
the Budapest Business Journal refused to take responsibility for illegal work
done by a contractor. "It's not my job to supervise how a contractor fulfills
a contract," a deputy manager of the state holding company said.
The government's proposed reform is part of a fiscal austerity program
announced March 12. Hungary immediately devalued the forint by 9 percent,
added 8 percent import charges to existing customs fees, introduced tuition
for all university students and slashed family and day care benefits. Unions
and trade associations blasted the social cuts, and thousands have
demonstrated in protest.
One of those was Antal's husband, Arok, the head of the teachers'
union, who said the government is punishing the wrong people with its new
austerity program: those who pay their taxes.
"None of what they are doing so far will hurt the people who are making
money," Arok Antal said. "A teacher pays every penny of tax that he or she is
supposed to. What are they making the people in the black economy do?
Nothing. No one knows what they earn."
The Antals, who live in a small house in a distant suburb of Budapest,
planned their monthly budget with two incomes in mind. They once thought they
would be set at retirement. For the last few years, they've stretched their
money every spring by planting rows of green peas, string beans and white
onions in their back yard.
Zsuzsan Antal, who said she will have to find work again soon, sounds
bitter when she talks about "the bright future" that democracy was supposed
to bring. "To tell you the truth, for me, it was better to live in socialism.
I could calculate the future," she said. "We didn't live so well before, but
we were sure of our salaries month to month.
"This is not liberty. This is not freedom. This is a policy of misery."
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A tovabbterjesztest a New York-i szekhelyu Magyar Emberi Jogok
Alapitvany tamogatja.
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and Information Service.
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|
| + - | Washington Post 2. (mind) |
VÁLASZ |
Feladó:  (cikkei)
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Editorial- It's a Long Way to Bratislava The Dangerous Fantasy Of NATO
Expansion
(BY CHARLES A. KUPCHAN)
(C) 1995 THE WASHINGTON POST (LEGI-SLATE ARTICLE NO. 229513)
PRESIDENT CLINTON is having lots of trouble convincing Boris Yeltsin that
expanding NATO into Central Europe is a good idea. Five months ago in
Budapest, the Russian president told a chastened Clinton that Russia does not
want to "live in isolation" and that NATO expansion will leave Europe
"plunging into a cold peace." Last week in Moscow, Yeltsin toned down the
rhetoric and signaled that Russia will participate in NATO's program of
military cooperation with the new democracies -- the Partnership for Peace.
But on NATO expansion, Yeltsin warned that his views "remain unchanged."
Despite Russia's sharp objections, the Clinton administration intends
to proceed with plans to bring Poland, Hungary, the Czech Republic and
Slovakia into the Western alliance. Zealous U.S. negotiators, led by
Assistant Secretary of State Richard Holbrooke, have already convinced NATO's
15 other members that enlargement should take place. As Clinton has stated
repeatedly, NATO expansion "is no longer a question of whether, but when and
how."
But isn't the Clinton team getting a little ahead of itself? The NATO
allies may be on board, even if reluctantly. The Russians may ultimately give
in, if only because they have no choice. But what about the American people?
When it comes time for two-thirds of the Senate (as well as legislatures in
each of the other 15 NATO countries) to ratify security guarantees to the new
democracies of Central Europe, will NATO expansion fly? Will Americans be
prepared to foot the bill and, in keeping with Article V of the North
Atlantic Treaty, pledge their lives to defend countries many would have
trouble locating on a map?
The administration is under some pressure to proceed merrily on its way.
The most vocal and influential critics of the Clinton policy -- Henry
Kissinger and Zbigniew Brzezinski among them -- continue to attack Clinton
for not moving quickly enough on NATO expansion. The Senate last year passed
by a wide margin a resolution calling for NATO's enlargement into Central
Europe. And Congress legislated measures to facilitate the admission of new
democracies into NATO.
Republican control of Congress has only strengthened this sentiment. The
Contract With America and the legislation that has followed from it call
for NATO expansion. And in the Senate, Republican Hank Brown, with Democratic
cosponsors, introduced last March a bill that would require Clinton to
establish a program to ensure that Poland, Hungary, the Czech Republic and
Slovakia become full NATO members.
This widespread support for NATO expansion is, however, skin-deep. When
the promises now being made to Central Europeans come due, feel-good
resolutions will give way to hard-headed debate about how much NATO expansion
will cost U.S. taxpayers and whether Americans should be prepared to die to
defend Bratislava (that's the capital of Slovakia). The domestic consensus
will unravel. The Poles and their neighbors will be left hanging. Russia will
be relieved, but alienated anyway. And the United States and its NATO allies
will have lots of mud on their faces.
The intellectual coalition that is driving NATO expansion is already
beginning to founder. And it should. This coalition represents an unholy
alliance of conservative Russophobes and liberals on a democratic crusade.
For Kissinger and Brzezinski, NATO expansion is a deliberate strategy
for redividing Europe just a little further east than before. According to
Kissinger, Germany needs to be wedged into a broader NATO to prevent it from
roaming around Central Europe on its own. It would unsettle Europe, he
writes, "even to hint at a solitary and preeminent role for a country whose
disasters have been caused by its inability to manage a purely national
policy in the center of the continent." And Russia, for historical,
geopolitical and cultural reasons, simply does not belong in Europe. The
continent will be more stable if the West's boundaries are clearly defined.
Let's get it over with.
The Clinton folks are up to something entirely different. According to
Defense Secretary William Perry, "Far from drawing new security divisions in
Europe, NATO wants to erase what lines remain." Holbrooke explains that the
goals of U.S. policy are "the expansion of democracy and prosperity, the
integration of political and security institutions, and a unity that has
always eluded Europe." As democracy spreads east, NATO will follow, knitting
together country by country a broader, like-minded Europe.
These incompatible strategic visions will clash head-on as soon as NATO
stops debating expansion and starts doing it. Many on the right will want to
limit expansion to Central Europe, broadcast the establishment of a new
frontier, and hunker down for the long-haul. Liberals meanwhile will be
preparing the next wave of NATO entrants (probably the Baltics), opposing
frontier defenses and any notion of a permanent dividing line. So much for
the coalition of pundits and policymakers now uneasily joining forces to back
NATO expansion.
Capitol Hill too will face a rude awakening when it comes time to act on
its rhetoric. Thus far, Congress has managed to debate NATO expansion with
barely a mention of the cost and responsibilities it entails. The Clinton
administration is partly to blame for Congress's dream-state. For whatever
reason, the Pentagon has yet to produce an estimate of the cost of
incorporating four more countries into the alliance and getting their
militias up to snuff. The price tag would depend on just how much defense
preparation NATO thinks its new members would need. But, as one Pentagon
official told me, "We're talking about tens of billions" of dollars.
Is Congress really prepared to spend billions to upgrade the militias of
Central Europe? Doubtful. Although it doesn't mind padding the U.S. defense
budget, Congress is not in a philanthropic mood. It is already going after
the tiny foreign aid budget. And it won't even approve a loan guarantee for
next-door Mexico.
Even if Congress somehow coughs up the cash, a higher hurdle remains. In
ratifying the accession of Central European countries to the North Atlantic
Treaty, the Senate would be pledging American lives to defend their borders.
But by what feat of magic will the Senate muster such determination? In the
America I live in, political willingness to send troops into harm's way has
been steadily shrinking since the Cold War's end, not expanding.
The Contract With America may call for NATO expansion, but even
remaining internationalists among the Republicans show no enthusiasm for
deploying U.S. troops in dangerous places. Congress virtually skewered the
president after U.S. soldiers were killed in Somalia. The same would
doubtless have happened in Haiti if casualties had begun to mount. Neither
Republicans nor Democrats have backed sending ground troops to Bosnia, except
to enforce a peace settlement or help U.N. forces pull out. As Americans and
their representatives do little more than fidget over the slaughter in
Bosnia, by what stretch of the imagination can anyone be so nonchalant about
guaranteeing the borders of Slovakia?
It is not surprising that both parties are content to debate NATO
expansion without ever discussing what's really at stake. With the 1996
election just over the horizon, everyone is counting votes. And NATO
expansion appears a clear winner -- that is, until it happens.
In the run-up to the election, Democrats and Republicans will trip over
each other to cater to Polish, Czech, Slovak and Hungarian communities -- the
only voters now getting excited about NATO expansion. It is not by accident
that some of the main supporters of NATO expansion in Congress come from
states that have large communities of Central European extraction. Or that
many of the administration's main speeches on the issue have been delivered
in the Midwest.
As Dick Kirschten pointed out in a recent issue of National Journal,
Americans with ethnic ties to Central Europe are concentrated in the Midwest
and Northeast in sufficient numbers to be a potential swing vote.
But as soon as debate on the Senate floor gets serious and turns to
dollars and lives, the rest of the country will suddenly pay attention.
Overnight, NATO expansion becomes a big loser. Less than 6 percent of the
electorate has roots in the four Central European countries now earmarked for
membership. That makes for lots of voters who will want nothing to do with
guaranteeing the Polish-Belarus frontier.
Presidential leadership, backers of NATO expansion respond, is the way
to overcome these domestic constraints. Just as Harry Truman and Franklin
Roosevelt before him convinced Americans to shoulder a heavy burden to defend
democracy in Europe, so too should Clinton or whoever follows make the case
for NATO expansion to today's commitment-wary electorate.
But wait. There is no Soviet Russia. Nazi Germany is not around to
galvanize the electorate. Although it might be nice for Americans to
guarantee the security of Central Europe's new democracies, these countries
now face no threat. How is the president supposed to make the case?
Efforts to sell foreign commitments in the absence of a clear and present
threat to American security run two big risks. First, asking too much might
backfire and fuel isolationism -- exactly what happened when Woodrow Wilson
tried to sell the League of Nations to the country after World War I. Not
only did the Senate fail to approve U.S. membership in the League, but the
bloody debate left the country more wary of engagement abroad than had the
issue not been raised to begin with.
Senate rejection of NATO expansion would deal a severe blow not only to
the states of Central Europe, but also to NATO itself. Opponents would ask
not just why American soldiers should defend the Poles, Hungarians, Czechs
and Slovaks, but even why the country needs to maintain its defense
guarantees to Western Europe now that the Soviet Union is gone.
It is way too soon to expose NATO to a debate that could lead to its
dismantling. The alliance is still needed to ensure against the possible
resurgence of a Russian threat and, above all, to reassure states in Europe's
east and west that the United States remains committed to helping preserve
European stability.
Second, as George Bush did when garnering support for the Gulf War, the
president will flail around for a justification for NATO expansion that
resonates with the electorate. And rest assured, the debate will gravitate
toward the one rallying point that has done the trick in the past: a Russian
threat. Helping the Poles sleep better at night will not wash as a
justification for putting American lives on the line. Only a revived threat
from Moscow will.
Relying on anti-Russian rhetoric to make the case for NATO expansion
will produce the worst outcome of all. The Russian government already claims
that expansion will exclude Russia from Europe and strengthen conservative
nationalists looking to undermine pro-Western reformers. If enlarging NATO is
justified on the grounds that Russians are congenital aggressors, it is sure
to become a self-fulfilling prophecy.
NATO expansion is a train wreck in the making. It will either never take
place, dashing the hopes of Central Europeans and damaging NATO, or it will
go forward, but produce as a consequence a Europe again divided into hostile
halves. The sooner the Clinton administration gets off its NATO expansion
kick, the sooner the United States and its NATO allies can get on with a more
sensible approach to stabilizing Central Europe and drawing it westward.
Enlarge the European Union and its markets. Deepen military cooperation
between NATO and Central European countries through the existing Partnership
for Peace. Invest more in preventive diplomacy and build mechanisms to
protect minorities and avoid ethnic conflict. But NATO expansion? Get real.
Charles Kupchan is senior fellow for Europe at the Council on Foreign
Relations and a professor of international relations at Georgetown
University.
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A tovabbterjesztest a New York-i szekhelyu Magyar Emberi Jogok
Alapitvany tamogatja.
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and Information Service.
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