March 1995
No.6
NEWSLETTER
HUNGARIAN OFFICE OF NATO / WEU INFORMATION
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Budapest 1241, Pf. 181. Tel: (36-1)262-1920 Fax: (36-1)264-9623
E-mail:
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out-of-date armaments.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
place.
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.
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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.
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Monday, 13 March 1995
Volume 2, Issue 51
REGIONAL NEWS
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**HUNGARIAN, SLOVAK TREATY TALKS GO ON**
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.
BUSINESS NEWS
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**HUNGARY DEVALUES FORINT BY 9 PERCENT**
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.
**HUNGARIAN PRODUCTION CLIMBS**
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.
**HUNGARIAN, SWISS FIRMS WIN KUWAITI POWER TENDER**
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.
BUSINESS FEATURE
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**PRAGUE SLIDE DOMINATES WEEK'S STOCK NEWS**
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
prices.
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,
results.
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
NEWS FEATURE
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**THE CALL OF BUSINESS LURES HUNGARY'S BEST AND BRIGHTEST**
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
Banking'."
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
politics.
"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.
ABOUT CET ON-LINE
-----------------
* CET On-Line - copyright (c) 1995 Word Up! Inc. All rights reserved.
This publication may be freely forwarded, archived, or
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A tovabbterjesztest a New York-i szekhelyu Magyar Emberi Jogok
Alapitvany tamogatja.
[*] [*] [*] [*] [*][*] [*][*][*]
[*] [*] [*] [*] [*] [*] [*]
[*][*][*] [*][*][*] [*][*] [*][*]
[*] [*] [*] [*] [*] [*] [*]
[*] [*] [*] [*] [*] [*] [*]
Reposting is supported by Hungarian Human Rights Foundation News
and Information Service.
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|
