Market economy is
unijary: buying po
Budapest is full of magnificent
buildings. The former Royal
Palace is one of the architectur
al gems. Today, three museums
are housed in the palace.
5 ungarians can be described as
passionate beer drinkers. A per
capita consumption of 106 lit
res ought to be fertile soil for Heine-
ken. But things have not reached that
stage by a long way. The import seg
ment is tiny, lleineken's market share
is negligible.
A visit to the capital city of
Budapest in 1992 will be an eye-open
er for many. At first sight there is little
to remind you of Hungary's Com
munist past. Budapest is a beautiful
city with Western attractions and with
shops full of products from the West.
In particular, fashion clothes (jeans),
audio and video equipment and the
familiar brands of grocery products
are on display in the shop windows.
One exception in the street scene is
formed by the many East European
cars. Currently, one out of four cars in
Hungary is of Western or Japanese
make. That ratio will soon change.
Hungarians would love to trade in
their antiquated and uncomfortable
Wartburgs and Trabants for a West
ern make. Status is important to the
average Hungarian and a Western
automobile is seen as the ultimate
status symbol.
Budapest is a centuries-old city
with many grandiose historic build
ings. The total surface area of the city
covers as much as 547 km2. The River
Danube bisects the city. West of the
river lies Buda (which means 'water'),
on the East bank lies Pest ('fireplace').
Buda is clearly the residential area and
also the site of many embassies. Most
of the economic activity can be found
in Pest: many offices and industry.
The change-over from a centrally
planned economy to a market econo
my is not easy in Hungary either. In
contrast to several other East Euro
pean countries like the CIS (Com
monwealth of Independent States)
and Poland, the Hungarian govern
ment opted several years ago for a
gradual transition to a free-market
economy.
The Hungarian economy does not
yet seem to be prospering. With infla
tion running at 29% on an annual
basis, mortgage interest rates of 34%
and very high social security contribu
tions for its citizens, the buying power
of the population is low. High street
window displays full of Western goods
may attract many onlookers, but only
a few actually enter the stores.
Despite the grumbling about the
T li K O K I I) O I II I I I K I N
