HUNGARY, HISTORY OF

Hungary in 1360. Hungary, history of The partition of Hungary in 1568. Hungary The economy Overview Hungary remained mostly agrarian until World War II. Beginning in 1948, a forced industrialization policy based on the Soviet pattern changed the economic character of the country. A centrally planned economy was introduced and millions of new jobs were created in industry (notably for nonworking women) and, later, in services. This was accomplished largely through a policy of forced accumulation: keeping wages low and the prices of consumer goods (as opposed to staples) high made it possible for more people to be employed, and, because consumer goods were beyond their means, most Hungarians put more of their earnings in savings, which became available for use by the government. In the process the proportion of the population employed in agriculture declined from more than half to one-eighth by the 1990s, while the industrial workforce grew to nearly a third of the economically active population by the late 1980s. Although Soviet-type economic modernization generated rapid growth, it was based on an early 20th-century structural pattern and on outdated technology. The heavy industries of iron, steel, and engineering were given the highest priority, while modern infrastructure, services, and communication were neglected. Moreover, the lack of entrepreneurial interest and market incentives prevented the development of new technologies and high-tech industries, as did Western restrictions (the Coordinating Committee for Multilateral Export Controls) on the export of modern technology to the Soviet bloc. In the late 1960s a mixed economy was introduced in Hungary. Market prices and incentives gradually gained ground, and a partial privatization program was initiated. By the end of the 1980s one-third of the gross domestic product (GDP)nearly three-fifths of services and more than three-fourths of constructionwas being generated by private business. The Hungarian economy, however, failed to meet the challenge of the world economic crisis after 1973. The dramatic price increases for oil and modern technology created a large external trade deficit, which led to increasing foreign indebtedness. Growth slowed down and inflation rose, leading to a period of stagflation. After 1989 Hungary's emerging market and parliamentary systems inherited a crisis-ridden economy with an enormous external debt and noncompetitive export sectors. Hungary turned to the world market and restructured its foreign trade, but market competition, together with a sudden and radical opening of the country and the abolition of state subsidies, led to further economic decline. Agriculture was drastically affected and declined by half. A large portion of the iron, steel, and engineering sectors, especially in northeastern Hungary, collapsed. Industrial output and GDP decreased by 30 percent and 25 percent, respectively. Unemployment, previously nonexistent, rose to 14 percent in the early 1990s but declined after 1994. By the mid-1990s the economy was again growing, but only moderately. Inflation peaked in 1991 and remained high, at more than 20 percent annually, until the second half of the decade. As a consequence of unavoidable austerity measures that included the elimination of many welfare institutions, most of the population lost its previous security; the number of people living below the subsistence level increased from 10 to about 30 percent of the population between 1988 and 1995. Adjustment to the world economy, however, is evident. Major multinational companies made investments in Hungary that represented more than half of the entire international capital investment in central and eastern Europe in the first half of the 1990s. Modernization of telecommunications also began, and new modern industries (e.g., automobile manufacturing) emerged. Significantly, some 750,000 small-scale, mostly family-owned enterprises were established, while state ownership of businesses declined to roughly one-fifth. Another important contributor to economic growth has been a flourishing tourist industry, as the number of foreign tourists reached more than 20 million by the mid-1990s. Resources The most important natural endowments of Hungary, particularly in its western and central areas, are its fertile soil and abundant water resources (notably Lake Balaton, a major asset for tourism). Half of the country's land is arable, and less than one-fifth is covered by woods. The climate is also favourable for agriculture. Fossil fuel resources are relatively modest. High-quality anthracite (hard coal) is extracted only at Koml, and lignite (brown coal) is mined in the Northern Mountains (notably at zd) and in Transdanubia (at Tatabnya). Coal once satisfied half of Hungary's energy requirements; it now represents less than a third of energy production. Oil and natural gas were discovered in the late 1930s in Transdanubia and during the postwar decades at several localities in the Great Alfold, especially near Szeged. Their share of energy production increased from one-third to one-half between 1970 and 1990; however, Hungary is able to meet only a fraction of its oil requirements with domestic resources. The country's only significant mineral resources are bauxiteof which Hungary has some of the richest deposits in Europemanganese, in the Bakony Mountains, and the undeveloped copper and zinc resources at Recsk. Extraction of various metal-bearing ores increased significantly in postwar Hungary, but iron ore is no longer mined. Other minerals that are found include mercury, lead, uranium, perlite, molybdenum, diatomite, kaolin, bentonite, zeolite, and dolomite. The land Relief Dominating the relief are the great lowland expanses that make up the core of Hungary. The Little Alfold (Little Hungarian Plain, or Kis Alfld) lies in the northwest, fringed on the west by the easternmost extension of the sub-Alps along the border with Austria and bounded on the north by the Danube. The Little Alfold is separated from the Great Alfold (Great Hungarian Plain, or Nagy Magyar Alfld) by a low mountain system extending across the country from southwest to northeast for a distance of 250 miles (400 kilometres). This system, which forms the backbone of the country, is made up of Transdanubia (Dunntl) and the Northern Mountains, separated by the Visegrd Gorge of the Danube. The former is dominated by the Bakony Mountains, with dolomite and limestone plateaus at elevations between 1,300 and 2,300 feet (400 and 700 metres) above sea level interspersed with volcanic peaks; the latter, which consist of volcanic rocks, comprise the Mtra Mountains in the north, reaching a height of 3,327 feet (1,014 metres) at Mount Kkes, the nation's highest peak. Regions of hills reaching elevations of 800 to 1,000 feet lie on either side of the mountain backbone, while to the south and west of Lake Balaton is an upland region of more subdued, loess-covered topography. The Great Alfold covers most of central and southeastern Hungary. Like its northwestern counterpart, it is a basinlike structure filled with fluvial and windblown deposits. Four types of surface may be distinguished: floodplains, composed of river alluvium; alluvial fans, wedge-shaped features deposited at the breaks of slopes where rivers emerge from the mountain rim; alluvial fans overlain by sand dunes; and plains buried under loess, deposits of windblown material derived from the continental interior. These lowlands range in height from about 260 to 660 feet above sea level, with the lowest point at 256 feet, on the southern edge of Szeged, along the Tisza River. Drainage and soils Hungary lies within the drainage basin of the Danube. The Danube and two of its tributaries, the Rba and the Drava, are of Alpine origin, while the Tisza and its tributaries, which drain much of eastern Hungary, rise in the Carpathian Mountains to the east. The Danube floods regularly twice a year, first in early spring and again in early summer. During these phases discharge is up to 10 times greater than that recorded during the low-water periods of autumn and winter. The Tisza forms a floodplain as it flows through Hungary, and large meanders and oxbow lakes marking former channels are typical features. At Szolnok, peak discharges 50 times greater than average have been recorded. Devastating floods have occurred on the Danube, the Tisza, and their tributaries. About 2,500 miles of levees have been built to protect against floods. The relatively dry climate of the central and eastern areas of the Great Alfold has necessitated the construction of large-scale irrigation systems, mostly along the Tisza River. Lake Balaton from the northwestern shore, near Badacsony, Hung. There are few lakes in Hungary, and most are small. Lake Balaton, however, is the largest freshwater lake in central Europe, at 231 square miles (598 square kilometres). Lake Ferto (Neusiedler Lake) lies on the Austrian border, and Lake Velence lies southeast of Budapest. Gray-brown podzolic (leached) and brown forest soils predominate in the forest zones, while rich black-earth, or chernozem, soil has developed under the forest steppe. Sand dunes and dispersed alkali soils are also characteristic. The people Ethnic and religious structure From its inception in the 11th century, the Kingdom of Hungary was a multi-ethnic country. Major territorial changes made Hungary ethnically homogenous after World War I, however, and more than nine-tenths of the population is now ethnically Hungarian and speaks Hungarian (Magyar) as its mother tongue. The Hungarian language is classified as a member of the Ugric branch of the Uralic languages; as such it is most closely related to the Ob-Ugric languages, Khanty and Mansi, which are spoken east of the Ural Mountains. It is also related, though more distantly, to Finnish and Estonian, each of which is (like Hungarian) a national language; to the Sami languages of far northern Scandinavia; and, more distantly still, to the Samoyedic languages of Siberia. Ethnic Hungarians are a mix of the Finno-Ugric Magyars and various assimilated Slavic, Turkish, and Germanic peoples. About 3 percent of the population is Gypsy (Rom), and nearly another 5 percent is made up of Slovaks, Romanians, Croats, Germans, and others. More than two-thirds of the people are Roman Catholic, most of them living in the western and northern parts of the country. About one-fifth of the population is Calvinist (concentrated in eastern Hungary), and relatively smaller groups belong to various Christian denominations (Lutherans, Greek Catholics, Eastern Orthodox, and Unitarians). The Jewish community, which constituted 5 percent of the population before World War II, has represented less than 1 percent of the population since the Holocaust. Demographic trends Owing to major changes in Hungary's borders following World War I, the republic's population decreased to less than eight million. Since then population growth has been rather slow, as both birth and death rates generally declined in the post-World War II years, though the latter returned to prewar levels by the mid-1980s. Life expectancy for women increased consistently from the 1930s; that for men also increased until the 1970s, when the trend reversed, and women now outlive men by about 10 years. The population reached its peak in 1980 at some 10.7 million, but, because death rates exceeded birth rates, it decreased thereafter. Demographic trends were influenced by the modernization process and by a rate of suicide that was among the highest in the world. Roughly three million Hungarians live in the neighbouring countries of Romania, Slovakia, Croatia, and Serbia. As a consequence of a net overseas emigration of 1.3 million people before World War I and a continuous, though much smaller, emigration related to major political upheavals in 191819, the 1930s, 1944, and 1956, large Hungarian communities live in North America and western Europe. After the collapse of communism and the splintering of Yugoslavia, roughly 100,000 refugees immigrated to Hungary from Romania and the former Yugoslav federation. Half of them were ethnic Hungarians.