OMRI DAILY DIGEST
No. 85, 2 May 1995

SLOVAK OPPOSITION TO REMOVE EDUCATION MINISTER? Opposition deputy Jan
Langos, at a press conference on 28 April, said the participation of Eva
Slavkovska in the current government "damages the interests of Slovakia
on its path to the EU and NATO." He added that the opposition will try
to remove Slavkovska from her post at the next parliament session,
scheduled to begin on 3 May. Reasons for the decision include
Slavkovska's past as a historian, when she took part in "a falsification
of history," as well as her moves against the Hungarian minority,
particularly the decision to implement "alternative" (bilingual)
education in Hungarian schools, CTK reported. Slavkovska recently
attended an exhibit celebrating the achievements of Slovakia's World War
II President Jozef Tiso. The opposition Party of the Democratic Left has
said that the governing Movement for a Democratic Slovakia and the
Association of Workers should distance themselves from attempts by
Slavkovska's Slovak National Party to rehabilitate Tiso. -- Sharon
Fisher, OMRI, Inc.

HUNGARIAN PUBLIC EMPLOYEES DEMONSTRATE. About 5,000 public employees,
mostly teachers, marched through Budapest on 1 May to protest planned
government austerity measures, Western news agencies reported. Laszlo
Kispap, chairman of the Union of Higher Education Teachers, warned that
planned tuition fees of 2,000 forint per month for university students
"will spell the end of equal opportunity." Until now, higher education
has been free in Hungary. Union members representing government
employees also took part in the rallies to protest plans to cut ministry
staff by 10-20%. -- Edith Oltay, OMRI, Inc.

HUNGARIAN PARTY CHANGES ITS NAME, RE-ELECTS PRESIDENT. Hungary's
smallest parliament party, the Alliance of Young Democrats, voted
overwhelmingly on 30 April to add "Hungarian Civic Party" to its
Hungarian acronym, FIDESZ. It also re-elected its 31-year-old leader,
Victor Orban, Western news agencies reported. The party is seeking new
political allies after its former liberal associate, the Alliance of
Free Democrats, joined a coalition government with the Hungarian
Socialist Party. Orban said surveys showed that most of his party's
supporters are in favor of an alliance with the center-right Hungarian
Democratic Forum and Christian Democratic People's Party. -- Edith
Oltay, OMRI, Inc.

[As of 12:00 CET]

Compiled by Jan Cleave

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Tuesday, 2 May 1995
Volume 2, Issue 84

REGIONAL NEWS
-------------

**HUNGARIAN-JAPANESE RELATIONS GROW** 
  Japan's Deputy Prime Minister and Foreign Minister Yohei Kono
  had praise for Hungary's austerity package during his visit to
  Budapest yesterday.

  "The program that is currently being undertaken by the
  government of Hungary should, in the medium and long run,
  produce favorable results and generally, I believe, the
  International Monetary Fund and other international
  institutions have shown favorable feelings about this."

  Economic relations were high on the agenda during Kono's two day
  visit.  He met with Prime Minister Gyula Horn and Foreign
  Minister Laszlo Kovacs.  Kono said Japan's Eximbank will give
  Hungary a $154 million loan for small and medium businesses.
  But a final agreement on the deal must still be signed.  During
  the talks, Hungary urged Japan to increase investments here
  and open its market to Hungarian goods.  Japan had a $300
  million trade surplus with Hungary last year. --David Fink  
  
  
**HUNGARIAN MAY DAY PROTESTS PEACEFUL BUT POINTED**
  In May Day demonstrations yesterday in Budapest, Hungarian
  public employee unions handed Parliament a petition protesting
  the government's proposed austerity package.  Not even the
  rain kept some 5,000 white collar workers from demonstrating. 
  Teachers, scientists, civilian military employees and interior
  ministry workers marched from the Hungarian Academy of
  Sciences to Parliament, delivering a petition to Deputy
  Speaker Agnes Maczo.  The protestors said they oppose the
  government's plans to trim the deficit by what they estimate
  at nearly $1.5 billion.  They said the cuts will lead to lower
  wages, layoffs and a decline in the quality of government
  services.  Protestors also argued that cuts in education and
  science are shortsighted because they'll hurt Hungary in the
  long run.  But Hungary's government has said long-term
  economic recovery requires fiscal restraint now. --David Fink
    
  

BUSINESS NEWS
-------------

**AMERICAN FIRM BUYS HUNGARIAN AUTOMOTIVE COMPANY**
  Delco Remy America, or DRA, is going international.  The US
  company has purchased Autovill, the Hungarian state-owned
  producer of automotive starters and generators.  DRA was
  formed last year after General Motors sold three operations. 
  Various auto makers are looking to produce cars in Central
  Europe due to the growing market and cheap production costs. 
  The company's annual $550 million in sales comes mainly from
  North America.



BUSINESS FEATURE
----------------

**FORESTRY CONSERVATION TAKES ROOT IN CAPITALIST HUNGARY**
  By Ella Veres
  
  Privatizing Hungary's forests is no easy task.  The country has
  about 3.5 billion acres of forest.  Sixty-five percent of that
  is owned by the state, 31 percent by cooperatives and the rest
  is in private hands.  The State Holding Company (AV) is
  temporarily managing the state-owned forests until they are
  privatized.  In the meantime, the AV has given 21 forestry
  companies free use of the land.  The privatization process has
  helped some and hurt others.

  Forestry plays a minor role in Hungary's economy.  Last year,
  timber processing made up only 2 percent of the country's
  Gross Domestic Product (GDP).  The state-owned Borsodi Timber
  Processing Company processes the wood coming from 200,000
  acres of forest of which 6,000 acres are privatized.  The
  company makes as much as it did before the forest
  privatization began by exporting wood products all over
  Europe.  Borsodi's forest engineer Istvan Csucska explains:

  "Up to now forest privatization didn't influence our production.
  We are delivering the same quantity of wood as before.  The
  only complication is that we deal with more suppliers"

  Some of those new suppliers are small, private landowners. There
  are now 3,000 new forest owners in Hungary, with three acres
  each.  Many of them used compensation vouchers to buy their
  land.  So far, 80,000 acres of forest has been sold for
  compensation vouchers.  The AV recently selected an additional
  120,000 acres to be privatized in the same way and auctions
  are currently underway.  But the system isn't working for
  everyone.  Imre Kupo, from a village in Hungary's western Zala
  county, inherited six acres of forestland from his parents.
  But he said authorities aren't helping him reclaim it.

  "On paper they gave the forest back to me, but actually they
  didn't do anything.  We sit and wait though five years have
  passed.  We paid $80 to the Committee of Land Privatization
  for having the land measured and then they told us to take our
  money back for they don't have to measure it.  If I go to
  court the lawyer will cost me more than my heritage.
  Meanwhile, people walk freely on my property and cut my
  trees."

  Otto Stekler is a spokesman for the Hungarian Green Party.  He
  admitted that things can go wrong with the compensation
  process.

  "Privatization caused a lot of damage to our forests.  Everyone
  tries to adapt to the new ways and runs after money.  Here
  there is such anarchy, it's unbelievable!  Private owners are
  free to do whatever they want.  The result is that the forests
  are cut down and will slowly disappear, while animals migrate
  to other countries."

  According to current regulations, timber companies and private
  landowners must start replanting two years after cutting trees
  to insure reforestation.  In many cases the National Forestry
  Fund even offers subsidies to get the process underway. Istvan
  Balazs is the main advisor to the Forestry Department of the
  Hungarian Agricultural Ministry:

  "Both the state sector and the new owner have to respect our
  regulations.  It's true that the new owners were surprised
  when they found out that they can't do whatever they want and
  just cut the trees.  It's also true that frequently theft of
  wood is going on, but not as much as is rumored."

  But it is a problem.  Last year, some 5.7 million cubic meters
  of wood was legally cut, 50 percent for firewood and 50
  percent as timber, whereas 100,000 to 150,000 cubic meters of
  wood was chopped down illegally.  And public awareness of
  environmental issues is growing.  Seventy different
  organizations, including environmental groups and the
  department of forestry, have spent the past five years writing
  a new forestry bill they hope to present to Parliament by next
  month.   
  
  

ANALYSIS
--------

**WESTERN KNOW-HOW COMES TO EASTERN COPS**
  By Nancy Marshall
  
  The Federal Bureau of Investigation and three other American
  law enforcement agencies joined forces last week to open their
  first international law enforcement academy.  The centers
  first 30 students have now finished the first of their eight
  weeks of classes.  The next session will start in July and
  there will be one more this year in October.  The students are
  mostly middle managers from police departments throughout
  Central Europe.  They'll run there departments in five to ten
  years.  They're learning how to work together and, with
  western law enforcemnt agencies, to fight crime, especially
  organized crime.  Jim Pledger is the chief of the FBI's
  international training section.  He said he came across a few
  obstacles while establishing the center.

  Pledger:  Aside from the normal administrative and bureaucratic
  obstacles, the principle difficulty was the melding together
  of police officers from three different countries, three
  different languages in the same law enforcement training
  program.

  CET:  Do you see any threats to the Budapest center arising from
  plans by Republicans in the US Congress to cut foreign aid?

  Pledger:  I don't think so.  I think FBI Director Free has
  achieved the necessary consensus on Capital Hill to ensure
  continued support for our international efforts in law
  enforcement training.

  CET:  And what is the cost to the US government of the center?

  Pledger:  The initial cost of the center, hopefully, will be
  shared among a number of nations.  But the renovation costs of
  the facility are going to approach $3 million.  The US is
  going to contribute five-sixth of it and the Hungarian
  government is going to contribute $500,000.  We're also in the
  process of establishing agreements with some international
  trading partners such as Canada, Italy, Germany and Great
  Britain.  So hopefully, future costs can also be shared among
  these countries.

  CET:  If the Budapest center is successful does the FBI plan to
  establish others in other parts of the world?

  Pledger:  There has been some talk about this and there is a
  need for US presence in other areas of the world to facilitate
  similar types of training.  Central and South America is one
  area that's been talked about as well as Asia.

  CET:  So the Budapest center could become a model for those
  other parts of the world?

  Pledger:  I believe so.  The program that we've established here
  in Budapest is modelled after similar successful programs that
  we've had in the US for many years.

  CET:  There are allegations that organized crime has infiltrated
  some governments in Central Europe and the former Soviet
  Union.  How worried is the FBI about this problem?

  Pledger:  I don't have any information to provide substance to
  those kinds of allegations.  We do know that we're seeing
  organized criminal activity in the US that does have its roots
  in the countries of Central and Eastern Europe.  But at this
  point and time I know of no indication that organized criminal
  groups have infiltrated legitimate governments. 



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date=5/1/95
type=background report
number=5-20362
title=Central Europe Econ-Five Years Later
byline=Leo?S Rousek
dateline=New York
content=
voiced at:

Intro:  Businessmen and corporate lawyers discussed investment
opportunities in Central Europe five years after the fall of
Berlin Wall at a recent meeting of American Bar Association
(April 28th.)  V-o-A's Leo?S Rousek reports on views of an
American and German participants at the meeting.

Text:  In early 1990, foreign investors swarmed Central European
countries in search of quick financial killings (successful).
But Tiran Kiremidjian, the vice president of Central European
development corporation, says what he called this gold rush fever
has long since abated.

                  /// Kiremidjian actuality ///

         Really, anyone under the impression that the countries
         of the former Warsaw Pact would immediately embark on a
         economic boom were just mistaken.  Privatization happens
         slowly, so slowly it is still, with some notable
         exceptions happening today.

                      /// End actuality ///

The Central European development corporation was formed by Ronald
Lauder, the son of Este?E Lauder, a famous fragrance maker and
Mark Palmer, a former U-S ambassador to Hungary. Since 1990, the
corporation has made several investments in banking, light
engineering, real-estate and media industries in  former East
Germany, the Czech Republic, Hungary and Estonia.

Despite initial disappointment with the speed of reforms in
Central European countries, Mr. Kiremidjian remains optimistic,
especially about Poland, the Czech and Slovak Republics and
Hungary, the countries often referred to as Visserad four.

                  /// Kiremidjian actuality ///

         I think that Vissegrad four, plus the Baltics and
         Slovenia have turned the corner and will do well.  There
         will be bumps along the way, but I have  no  doubts that
         these countries will be very stable democracies, very
         prosperous economies, well integrated in the global
         economy.  I also think the same for Romania, and
         Bulgaria, although they will only follow in time.

                      /// End actuality ///

However, Mr. Kiremidjian suggests that the future investors in
Central Europe should focus on a few large enterprises as opposed
to making many small deals. The priority for investors should be
to concentrate on specific companies so they can closely watch
their investments, says Mr. Kiremidjian.

Geographic and cultural proximity makes it easier for Germans
than Americans to oversee their investments in Central Europe on
daily basis.  Statistics show that German investments in Central
Europe by far outnumber those from other countries.

Mr. Hartmunt H?Ollriegel, an attorney of D.E.G., a German
investment company, says companies in Central European countries
are often more appealing for German investors than similar
enterprises in former East Germany.

                  /// H?Ollriegel actuality ///

         It sounds strange a bit, but investments in East Germany
         are  not  that much of an interest for German
         entrepreneurs because there we have the same conditions,
         same labor costs and all that.  So the German industry
         is looking very much beyond the border and they find a
         lot of business in the neighboring countries: Hungary,
         Poland, Czech Republic especially.  Even the small
         scale, medium scale industry is very much interested in
         investing in these countries.

                      /// End actuality ///

In addition to its quest for profits, Mr. H?Ollriegel says
Germany has a clear political will to promote stability through
out the region including former Soviet Union using private
investments. (Signed)

ny/lr/es/mmk

01-May-95 12:02 pm edt (1602 utc)
nnnn

source: Voice of America

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

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