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1 Ministry of Foreign Affairs - Newsletter nr.6 (mind)  106 sor     (cikkei)
2 CET - 13 March 1995 (mind)  266 sor     (cikkei)

+ - Ministry of Foreign Affairs - Newsletter nr.6 (mind) VÁLASZ  Feladó: (cikkei)

March 1995
> ---------------------------------------------------------------
Budapest 1241, Pf. 181. Tel: (36-1)262-1920 Fax: (36-1)264-9623

Commanders' Consultation

On February 21st 1995, a command meeting was held for the Hungarian Defence
Force (HDF). Participants included the President of the Hungarian Republic,
Arpad Goncz, the Commander of the HDF and Gyorgy Keleti, Minister for Defence.

The President opened by stating that the HDF can in itself make a significant
contribution to the stability of the country. Hungary's aim is to join NATO,
and in the interests of achieving this it requires a modern army. The task
is to make the Army suitable for joining NATO. Compatibility is not primarily
about military-technical issues, but much more importantly concerns issues
of leadership, structure and language abilities. There is a need for
up-to-date language training and the adoption of certain standards. Beyond
this, the President said that the country cannot forsake the process of
continual reorganisation of the Armed Forces.  A correct proportion must be
obtained amongst career, extended service and conscript soldiers.

In the opinion of the President, there is no great likelihood of armed attack
against the country. He said that the armed conflicts in our region do
however represent a danger and the HDF needs to prepare itself for the
possible accompanying tasks. Naturally, given the budgetary framework,
this will not be easy, but the forces will also receive support proportional
to what is available.
The Minister saw the fundamental aim as the creation
of a smaller, modern and prepared defence force, which would satisfy the
security interests of the country and stay within its burden-carrying capacity.
A force which would be able to join the military structure of NATO. In the
mid-term, cuts in staffing levels and structure must be achieved. This
firstly applies to mid-level management, the number of conscripts and
out-of-date armaments. He saw it as important to raise the role and
independence of lower level units.
The Minister emphasised the importance
of restructuring the HDF and the general Hungarian Forces Reform. Even
during the "system change" of a few years ago, it was clear that changes
would have to be made in the size and structure of the armed forces. In
accordance with the obligations laid down in the CFE Treaty, certain
structural reorganisation and reductions in staffing numbers have already
taken place. The significant long-range changes have not yet however taken

If the Defence Budget were to drop  below present figures, the levels of
supply and conditions for functioning would both degrade said the Minister.
The content and implementation of training within the HDF is at present
satisfactory. Evenso modernisation will be a prerequisite. The present
staffing levels and structures cannot be financed, the organisational
and control structures have to be modified. Complete reorganisation can
be executed on a long-term basis (10-15 years) and on the basis of the
proposals accepted by Parliament and the planned design for forces reform.

In the first phase of restructuring the HDF Command will grow by 80 persons
because it will absorb some of the tasks of the mid-level management which
will later be abolished. In this fashion, a direct and more effective
relationship will be created between the upper echelons and the body of
defence as a whole. The functional and directive order of the MoD should
also thus improve.

Mr. Keleti emphasised that the basic and definitive element of the
restructuring of the HDF was the political decision stating Hungary's
desire to join NATO. The military side of this decision warrants
significant support. Hungary aspires to cooperate with NATO in ever more
fields and to eventually integrate completely. NATO has promised specialist
aid for the country in the areas of standards, codification, modernisation
and defence budget planning.
Emphasis was brought to bear on the Partnership for Peace programme (PfP),
within the framework of which, on the 15th November 1994, Hungary signed
its concrete programme of activities, its Individual Partnership Programme
(IPP). Several practical tasks are to be executed in the coming year of
1995. The success of these tasks is said to depend upon the HDF.
The establishment of a Military Language Training Centre  within PfP
represents a significant task. A programme of English, French, German and
Russian language training is being drafted at the moment.

There was also mention of the fact that the first run of company training at
the Hungarian Peacekeeping Training Centre  had been completed and in this
way the HDF had created the necessary conditions for Hungarian participation
in peacekeeping tasks.
The defence leadership jointly stated the importance
of deepening military relations internationally, the significance of
maintaining contacts continually and  discussing  issues of mutual interest.

> ----------------------------------------------------------------------------

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

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Reposting is supported by Hungarian Human Rights Foundation News
and Information Service.

+ - CET - 13 March 1995 (mind) VÁLASZ  Feladó: (cikkei)

Monday, 13 March 1995
Volume 2, Issue 51


  Weekend talks between the foreign ministers of Hungary and
  Slovakia ended in stalemate with several key points left
  unresolved.  In Bratislava, Hungarian Foreign Minister Laszlo
  Kovacs met with Slovak counterpart Juraj Schenk and Prime
  Minister Vladimir Meciar to try to end an impasse threatening
  prospects for a treaty.  Under the treaty, Hungary would
  recognize Slovakia's existing borders in return for guarantees
  of the rights of 600,000 ethnic Hungarians living in Slovakia.
  Both sides want the treaty signed by March 21 when a Central
  European stability conference in Paris begins.


  Hungary will devalue the forint by 9 percent today.  The
  government also announced yesterday, plans for sweeping
  changes to help with Hungary's fiscal and current account
  deficits. The 9 percent devaluation is the first major move
  since Hungary's new economic team took office March 1.  New
  Finance Minister Lajos Bokros says the move is designed to
  increase exports and keep a cap on inflation.  But it counters
  the statements of central bank chief Gyorgy Suranyi, who
  earlier this month said there would be no large currency
  mark-down anytime soon.  Analysts have been predicting the
  devaluation for weeks, saying it'll provide a major kick to
  Budapest's languishing bourse.  Foreign investors have
  recently avoided the stock market, anticipating a devaluation
  would make stocks all the more cheaper in foreign currency.
  This is the first major currency mark down since August's 8
  percent devaluation.

  Hungary's gross domestic product rose 2 percent last year to $38
  billion.  That's about $4,000 per person, up from $3,500 in
  1993.  The rise was attributed mainly to increased investment.

  Hungary's Transelektro has won a $52 million contract to help
  build a power station in Kuwait.  It'll join the Swiss firm
  GEC Alsthom-Cagelec in the project, worth a total of $107
  million.  The two companies were selected from a group of 13
  firms competing for the tender.


  Interview with Nick Wergen, analyst with Smith New Court, London
  By David Fondler

  The Prague stock market slide continues, while investors in
  Budapest and Warsaw seem to be waiting for some clear
  political signals.  We begin with an general assessment of the
  week's activity:

  Wergen:  It wasn't a particularly good week at all, and it
  wasn't a week where there was any particular volume, be it
  domestic or international, so no real change from the
  sentiment of the first quarter as a whole.  For the week, the
  Czech market had the most difficult time, the PX50 was off by
  7 percent.  Poland then was off by 2 percent.  Hungary having
  a slightly better week, up by 1.8 percent, but the volumes in
  all markets not particularly impressive at all.

  CET:  Prague seems to be making the most news, all of it bad,
  I'm afraid.  Stocks from the second wave of privatizations are
  still languishing since their introduction March 1.  Fifteen
  straight down days through last Friday and no end in sight.
  What's your prognosis there?

  Wergen:  It is not as if there's a great deal of new money
  coming into the Czech market, the invisibility of Czech
  trading, the invisibility of Czech accounts, is such that
  you're not seeing US mutual fund money wanting to come in, so
  if you're seeing money going in to second wave stocks, albeit
  at prices that are crumbling, then it must be coming out of
  first wave stocks, which is helping the whole of the PSE, not
  just the second wave stocks on the PSE, to approach RM System

  CET:  And that inevitably will help the bourse, which has been
  overpriced all year.  For the sake of clarification, the RM
  System refers to Prague's over-the-counter market, right?

  Wergen:  It's the electronic, as you say, OTC trading, which has
  low volumes but is setting indications for pricing and value
  that has a heavy discount to the main Prague stock exchange.
  Stocks are going to move toward RM System prices.  In a way it
  is inevitable because the market again as a whole was looking
  overpriced in comparison to fellow emerging markets fellow
  European markets.

  CET:  What about the second wave stocks?  Are things going to
  improve once they find their own valuations?

  Wergen:  The action of the second wave stocks finding their own
  level brings down the main first wave stocks as well.
  Internationals are sitting and waiting, saying, `fine, there's
  some interesting stocks in the second wave.  There's some
  interesting stocks on the main market, I can buy them
  cheaper.'  I think they're right.

  CET:  Okay, turning to Hungary, we see the government's new
  economic team settling in, and yet the volumes there remain
  flat as ever.  What's need to be done now?

  Wergen:  At the beginning of this week, I think one of the most
  important figures that has come out is the budget deficit
  growing by 83.6 billion HUFs, that's close to 30 percent of
  the year's target achieved in the first two months, which
  isn't a particularly helpful achievement.

  CET:  So what needs to be done?

  Wergen:  I think it becomes more compelling than ever either to
  have a devaluation that shows that the budget deficit can be
  attacked from a trade point of view, or for privatization to
  be advanced pragmatically and quickly.  Movement on either of
  the two could kick the market back into action.

  CET:  But, even still, there are some good values on the BSE,
  why aren't people just picking them up now?

  Wergen:  The point is you still invest in HUFs.  Yes, there are
  some very good opportunities, some of the most advanced,
  restructured, westward looking companies and they are now at
  good prices.  The problem is you still to have to wait if
  you're going to be hit by 10 to 15 percent on your currency.
  Once the currency falls into line, then the market can start
  looking quite interesting.

  CET:  Let's turn now to Poland, and it's ever changing political
  situation.  What's the mood this week?

  Wergen:  I think from Poland some of the best news is that
  towards the end of the week, I've had very little to say about
  politics, and that's the first time for about six months that
  I've been able to concentrate correctly on companies sectors,

  CET: So, things are looking up?

  Wergen:  We do have a new government.  We have some form of
  tacit consensus between prime minister and president.  We have
  a budget that has been signed.  We ave an increase in foreign
  reserves of upwards of a billion dollars this year; we have a
  relative increase in competitiveness in poland by the strength
  in the Duetschemark and the weakness of the dollar.  The macro
  situations is at worse calm and at best looking encouraging.
  Certainly, the excuses to avoiding investing in Poland are
  beginning to get less.

  CET:  And despite all the political wrangling, we see the same
  economic program.

  Wergen:  That's really the whole point is that there haven't
  been any long term doubt about either Polish politics or
  Polish economics.  There have been short term problems caused
  basically by a forthcoming presidential election, that enabled
  the domestics to panic, the domestics to cause volatility --
  and the international to say fine we'll sit on the sidelines
  until there's some consensus


  By Joe Hughes

  In the euphoria following the democratic changes in Hungary, a
  political career seemed like an attractive chance for many of
  Hungary's best and brightest.  Now, however, Hungary's youth
  seem to have taken the road to money.

  When the democratic changes occurred in Hungary in 1989, young
  people flocked to government.  Government seemed then to hold
  out the promise of change to a society long mired in the
  status quo.  The calling to serve inspired a generation which
  never dreamed it would have a chance to try its hand in a
  democratic government.

  When the conservative coalition came to power in 1990, much of
  the best young talent chose the public sector over private
  business.  At that time, the local infrastructure for doing
  business was in its infancy and foreign businesses had not yet
  arrived in full force.   Now, however, business is in and
  government is out.  Jobs in the private sector pay on average
  three times more thn jobs in the public sector.   Professor
  Attila Agh from Budapest's University of Economics explains:

  "Nowadays in some periods of British History there was a slogan
  'Go East Young Man', and they meant India in the 18th century.
  In the 19th century U.S., there was a slogan 'Go West Young
  Man' and they meant the unbroken frontier.  So the slogan of
  the late 20th century Hungary may be 'Young Man Go to

  But not all young people are committed to money. Take Kristoff
  Varga.  He's committed to change.  Two years ago, he heeded the
  call to go into politics while working at a former dissident
  publication in Budapest.  Today, he's press spokesman for the
  Alliance of Free Democrats, a liberal party.  Varga says he's
  turned down  lucrative jobs in the private sector to work in

  "I think it is a great experience.  I think this is such an
  intense way of living, basically doing politics in Eastern
  Europe at this stage in our history that you cannot have this
  kind of experience anywhere else."

  But Gyorgy Such is glad he's not in politics.  He was a former
  cabinet chief but dissension in his party, The Young
  Democrats, plus the offer to work in the private sector
  altered his course.  As Marketing Manager at Budapest
  Communications, Such sells air time and the rights to films.

  "I'd rather do this work because I try to follow what's going on
  in politics but I don't want to take part in politics."

  For now, it seems the luster of the private sector will continue
  to outshine the government for many young Hungarians. But an
  idealistic few will continue to serve their country.


* CET On-Line - copyright (c) 1995 Word Up! Inc. All rights reserved.
  This publication may be freely forwarded, archived, or
  otherwise distributed in electronic format only so long as
  this notice, and all other information contained in this
  publication is included.  For-profit distribution of this
  publication or the information contained herein is strictly
  prohibited.  For more information, contact the publishers.

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

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           [*]   [*]  [*]   [*]  [*]  [*]  [*]    
           [*]   [*]  [*]   [*]  [*]   [*] [*]

Reposting is supported by Hungarian Human Rights Foundation News
and Information Service.