FACTS ABOUT HUNGARY<br />Established: 1001 (by King Stephen I.)<br />Country name: Republic of Hungary<br />Local long form: Magyar Koztarsasag<br />Government type: Parliamentary Democracy<br />Location: Central Europe (Hungary occupies the low-lying areas of the Carpathian basin. Two-thirds of the territory consist of plains below 200 metres.)<br />Neighboring countries: Austria, Slovakia, Ukraine, Romania, Serbia, Croatia, Slovenia,<br />Area: 93,030 square km<br />Population: 10million (there are almost 5 million living in other countries who declare themselves as Hungarians)<br />Esztergom – Hometown of King Stephen I.<br />First Capital of Hungary<br />10-11-2010<br />3<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
<ul><li>Capital: Budapest (2 million inhabitants)
Official language: Hungarian “magyar” (a very special language, originating from the Finnougrictribe of languages)
International dialling code: +36</li></ul>Budapest - Building of the Hungarian Parliament<br />10-11-2010<br />4<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
FLAG DESCRIPTION<br />Three equal horizontal bands of red (top), white, and green; the flag dates to the national movement of the 18th and 19th centuries, and fuses the medieval colors of the Hungarian coat of arms with the revolutionary tricolor form of the French flag; folklore attributes virtues to the colors: red for strength, white for faithfulness, and green for hope; alternatively, the red is seen as being for the blood spilled in defense of the land <br />10-11-2010<br />5<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
WHO ARE THE HUNGARIANS?<br />It is not (yet) known quite precisely. It seems certain they arrived somewhere from Asia.<br />With regard to Hungary's location, world languages generally define it as: Eastern/Central Europe. <br />This small country is one of the great survivors of history: states and empires emerged, expanded or disintegrated and disappeared around it. <br />Hungary and the Hungarian nation survived the devastation of the Tartars and Turks, Habsburgs and Russians in the Carpathian Basin; survived the fact that it belonged among the losers of both world wars. <br />The national anthem describes the Hungarians as "people torn by fate".<br />10-11-2010<br />6<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
BRIEF HISTORICAL OVERVIEW 1<br />In the time of the Roman Empire, the Romans called the region Pannonia. After Rome fell, the Migration Period continued bringing many invaders.<br /> First came the Huns, who built up a powerful empire under Attila. The name "Hungary" may be influenced by the name of the Hun people<br />The Magyars migrated to Hungary in the late 9th century. The Kingdom of Hungary was established in 1000 by King St. Stephen I.<br />Gradually Hungary under the rule of the dynasty of the Árpáds turned into an independent kingdom which formed a distinct Central European culture with ties to greater West European civilizations. <br />Pannonia<br />King St. Stephen I.<br />10-11-2010<br />7<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
BRIEF HISTORICAL OVERVIEW 2<br />The non-dynastic king Matthias Corvinus, son of John Hunyadi, ruled the Kingdom of Hungary from 1458 to 1490. <br />He strengthened Hungary and its government. Under his rule, Hungary (notably the northern parts, some of which are in Slovakia today) became an important artistic and cultural centre of Europe during the Renaissance. <br />Hungarian independence ended with the Ottoman conquest at the beginning of the 16th century<br /> the parts of Hungary that were not conquered by the Ottomans were annexed by Austria (the rulers of which were Hungarian kings at the same time) in the West, and became the independent Principality of Transylvania in the East. <br />King Matthias Corvinus<br />Turks in Hungary<br />(1526-1686)<br />10-11-2010<br />8<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
BRIEF HISTORICAL OVERVIEW 3<br />After the final retreat of the Turks, struggle began between the Hungarian nation and the Habsburg kings for the protection of noblemen's rights (thus guarding the autonomy of Hungary). <br />The Austrians were finally able to prevail only with Russian help.<br />In 1867, manage to become an autonomous part of the Austro-Hungarian Empire.<br /> Having achieved this, the Hungarian government took an effort to nationally unify the kingdom by Magyarisation of the various other nationalities. <br />This lasted until the end of World War I, when the Austro-Hungarian empire collapsed. On November 16, 1918, an independent Hungarian Republic was proclaimed.<br />Ferenc II. Rákóczy<br />Kaiser Franz Joseph I.<br />10-11-2010<br />9<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
BRIEF HISTORICAL OVERVIEW 4<br />In March 1919 the communists took power, and in April, Béla Kun proclaimed the Hungarian Soviet Republic. <br />By August more than half of present-day Hungary, including Budapest, was placed under Romanian occupation, which lasted until November. <br />Rightist military forces, led by the former Austro-Hungarian Admiral Miklós Horthy, entered Budapest in the wake of the Romanian army's departure and filled the vacuum of state power. <br />In June 1920, the Treaty of Trianon was signed, fixing Hungary‘s borders. Compared with the pre-war Kingdom, the size and population of this new Hungary were reduced by about two-thirds; about one-third of the Magyar population became minorities in the neighboring countries. <br />Miklós Horthy<br />Treaty of Trianon<br />10-11-2010<br />10<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
TREATY OF TRIANON<br />10-11-2010<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />11<br />The Treaty of Trianon was the peace agreement signed in 1920, at the end of World War I, between the Allies of World War I and Hungary. The treaty dramatically redefined and reduced Hungary's borders. From its borders before World War I, it lost 72% of its territory, which was reduced from 325,111 square kilometres (125,526 sq mi) to 93,073 square kilometres (35,936 sq mi). I<br />t also lost 64% of its total population, which was reduced from 20.9 million to 7.6 million, and 31% (3.3 out of 10.7 million) of its ethnic Hungarians, who suddenly found themselves living outside the newly defined borders of Hungary.<br />Hungary lost five of its ten most populous cities and was deprived of direct access to the sea and of some of its most valuable natural resources. The military establishment of the country was reduced to an army of 35,000.<br />The principal beneficiaries of territorial adjustment were Romania, Czechoslovakia, and the Kingdom of Serbs, Croats and Slovenes.<br />Difference between the borders of the Kingdom of Hungary within Austria-Hungary and independent Hungary after the Treaty of Trianon. Based on the 1910 census. <br />
BRIEF HISTORICAL OVERVIEW 5<br />Horthy made an alliance with Nazy Germany in the 1930s, in the hope of revising the territorial losses that had followed World War I. <br />The alliance did lead to some territories being returned to Hungary. Hungary then assisted the German occupation of the Kingdom of Yugoslavia, occupying the Banat right afterwards. <br />Finally entered World War II in 1941, fighting primarily against the Soviet Union. Following the fall of Nazi Germany, Hungary became part of the Soviet area , after a short period of democracy in 1946–1947. <br />In the late 1980s, Hungary led the movement and shifted toward multiparty democracy and a market-oriented economy. Following the collapse of the Soviet Union in 1991, Hungary developed closer ties with Western Europe,<br />Statue of Liberty, Budapest<br />10-11-2010<br />12<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
DEMOGRAPHICS<br />10-11-2010<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />13<br />For 95% of the population, the mother language is Hungarian, a Finno-Ugric language unrelated to any neighboring language and distantly related to Finnish and Estonian. The main minority group are the Roma (2.1% - 3.0%). Other groups include: Germans (1.2%), Slovaks (0.4%), Croats and Bunjevcis (0.2%), Romanians (0.1%), Ukrainians (0.1%), and Serbs (0.1%).<br />
CULTURE & SOCIETY<br />10-11-2010<br />17<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />Nation of Horsemen<br />. The Ancient Hungarians lived in the Euro-Asian nomadic pastoral region, where the keeping and use of horses played an important role in their lives.<br />. Therefore it is not surprising that the horse and horse riding has a central place in Hungarian History, leading to Hungarians being regarded as the nation of horsemen.. Invitations to foreigners for horseback riding are not uncommon.<br />Family in Hungary<br />. The family is the centre of the social structure. . Generations of extended family often live together.. The grandparents play an important role in helping raise the grandchildren. . The family provides both emotional and financial support to its members. <br />Get Personal<br />. Hungarians expect friends to share private and intimate details of their personal lives. . If you ever feel you are being asked personal questions, this is simply meant as part of the getting-to-know-you process.<br />. Hungarians will even enjoy sharing details of their romantic life with you!<br />
ETIQUETTES & CUSTOMS<br />Meeting Etiquette<br /> . Both men and women greet by shaking hands, although a man should usually wait for the women to extend her hand.. The older generation may still bow to woman.. Close friends kiss one another lightly on both cheeks, starting with the left cheek. . In the business context is safest to address people by their titles and surnames.<br />Gift Giving Etiquette<br /> . When visiting a company it is not necessary to bring gifts.. If invited to a Hungarian's home for a meal, bring a box of good chocolates, flowers or Western liquor.. Do not bring wine as the Hungarians are proud of the wines they produce. . Flowers should be given in odd numbers, but not 13, which is considered an unlucky number. . Do not give lilies, chrysanthemums or red roses. . Gifts are usually opened when received. <br />10-11-2010<br />18<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
Dining Etiquette<br /> . Arrive on time if invited for dinner, although a 5-minute grace period is granted. . If invited to a party or other large gathering, arrive no more than 30 minutes later than invited. . You may be asked to remove your outdoor shoes before entering the house. . Do not ask for a tour of the house. <br />Table mannersare formal in Hungary. . Table manners are Continental -- the fork is held in the left hand and the knife in the right while eating. . The hostess will wish the guests a hearty appetite at the start of each course. . Do not begin eating until the hostess starts. . Do not rest your elbows on the table, although your hands should be visible at all times. . Hospitality is measured by the amount and variety of food served. Try everything. . If you have not finished eating, cross your knife and fork across your plate. . Indicate you have finished eating by laying your knife and fork parallel across the right side of your plate. . The guest of honour usually proposes the first toast which generally salutes the health of the individuals present. . At the end of the meal, someone toasts the hosts in appreciation of their hospitality. . An empty glass is immediately refilled so if you do not want more to drink, leave your glass ½ full. . Never clink glasses if drinking beer. <br />10-11-2010<br />19<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
BUSINESS ETIQUETTES<br />Relationships & Communication<br /> . Although Hungarians are transactional and do not require long-standing personal relationships in order to conduct business, being introduced by someone they know and trust can often help. Hungarians pride themselves on using proper etiquette in all situations and expect others to do the same. . Socializing is an important part of the relationship building process. . Expect many invitations to dinner or cultural events. If you have the time, reciprocate invitations.. Hungarians prefer face-to-face meetings rather than more impersonal vehicles of communication such as letters. . Hungarians are emotive speakers who say what they think and expect you to do the same. . They do not like euphemisms or vague statements. . Hungarians often use stories, anecdotes, and jokes to prove their points. . Hungarians are suspicious of people who are reticent and not willing to share their innermost thoughts. . Hungarians view eye contact as indicative of sincerity and believe that people who cannot look them in the eye while speaking have something to hide. <br />10-11-2010<br />20<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
Business Meeting Etiquette<br />. Appointments are necessary and should be made 2 in advance in writing.<br />. Punctuality for all social situations is taken extremely seriously. If you expect to be delayed, telephone immediately and offer an explanation. It is considered extremely rude to cancel a meeting at the last minute and could ruin your business relationship. <br />. Initial meetings are scheduled to get to know each other and for your Hungarian colleagues to determine if you are trustworthy. <br />. Expect some small talk and getting-to-know-you conversation before business is discussed. Do not move the conversation to business yourself.<br />. Do not remove your suit jacket without asking permission. <br />10-11-2010<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />21<br />
Business Negotiating Etiquette<br /> .Business is conducted slowly. <br /> .Deals in Hungary cannot be finalized without a lot of eating, drinking and entertaining.<br /> .Hungarians are very detail-oriented and want to understand everything before reaching an agreement.<br /> .Contracts should be clear and concise.<br /> .Contracts function as statements of intent. It is expected that if circumstances change, the contract will accommodate the revised conditions. <br /> .Hungarians are skilled negotiators. <br />10-11-2010<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />22<br />
Dress Etiquette<br />. Business dress is formal and conservative. <br />. Men should wear dark business suits with a white shirt and tie. <br />. Women should wear either business suits or elegant dresses, complimented with good quality accessories.<br />. Jeans are standard casual wear. <br />10-11-2010<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />23<br />
Business Cards<br />. Business cards are exchanged without formal ritual.<br />. Have one side of your card translated into Hungarian. <br />. The Hungarian side should list your surname before your first name, Hungarian style.<br />. Include any advanced university degrees on your business card.<br />. Include the founding date of your company on the card.<br />10-11-2010<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />24<br />
LANGUAGE<br /><ul><li>The Hungarians speak Hungarian. They are very proud of their language, because one of the most unique languages in the World!</li></ul>GOOD MORNING! JÓ REGGELT!<br />GOOD AFTERNOON! JÓ NAPOT!<br />HELLO! SZIA!<br />THANK YOU! KÖSZÖNÖM!<br />GOOD BYE VISZONTLÁTÁSRA<br />EXCUSE ME/I’M SORRY BOCSÁNAT<br />YES IGEN<br />NO NEM<br />RESTROOM Vécé<br />YOU’RE GREAT Ön nagy<br />I LIKE YOU Szeretlek<br />I APPRECIATE THAT Nagyra értékelem, hogy<br />DO YOU SPEAK ENGLISH? Beszél angolul<br />10-11-2010<br />25<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
WHAT IS HUNGARIAN FASHION?<br />Hungarian Fashion Print - ca 1842<br />10-11-2010<br />26<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
HUNGARIAN STREET FASHION<br />10-11-2010<br />27<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
Parties with fashion-show for the regular customers in restaurants, that’s how some fashion shops introduce their new collection (Fanatiq, Mark & Spencer). <br /> Layer<br /> clothing<br />10-11-2010<br />29<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
December 24- “Karacsony”: Hungarian Christmas</li></ul>10-11-2010<br />33<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
GEOGRAPHY<br />Hills in Baranya county<br />Sunset by Lake Balaton<br />Valley of Zagyva River, Western Mátra Mounts<br />Slightly more than one half of Hungary's landscape consists of flat to rolling plains of the Pannonian Basin<br />The most important plain regions include the Little Hungarian Plain in the west, and the Great Hungarian Plain in the southeast. <br />Hungary is divided in two by its main waterway, the Danube(Duna); other large rivers include the Tisza and Dráva, while Transdanubia contains Lake Balaton, a major body of water. <br />The largest thermal lake in the world, Lake Hévíz (Hévíz Spa), is located in Hungary. <br />10-11-2010<br />34<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
TRANSPORTATION<br />The Hungarian railway system is centralized around Budapest, the three main railway stations of which are the Eastern, Western and Southern<br />Hungary has a total length of approximately 920 km motorways <br />The most important port is Budapest, the capital. Other important ones include Dunaújváros and Baja.<br />There are 43 airports in Hungary, including smaller, unpaved ones too with five International Airports. <br />The Budapest Metro is the third-oldest underground metro system in the world, and its iconic Line 1 (dating from 1896) was declared a World Heritage Site in 2002. The rush hours are between 6 and 8 a.m. and between 2 and 5 p.m. on workdays, when trains run every two or three minutes. Early morning and night trains run every 10 minutes.<br />Keleti Railway Station, Budapest<br />M3 motorway<br />DELHI-BUDAPEST: 7736KM<br />AIRFARE: INR 44751<br />DURATION 16h30min<br />10-11-2010<br />35<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
MILITARY<br />Hungarian Armed forces" currently has two branches: <br />Hungarian Ground Force (Corps of Homeland Defenders). <br />Hungarian Air Force<br />10-11-2010<br />36<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
CULTURE<br />Architecture<br />Etnographical museum, Budapest.<br />Lánchíd bridge in Budapest.<br />Museum of Applied Art:<br />Wine & Dine<br />A nicely prepared Hortobágyi<br /> palacsinta served in Sopron<br />Dobos Cake<br />Tokaji & Unicum<br />10-11-2010<br />37<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
Spa culture<br />Rudas Baths is a thermal and medicinal bath <br />that was first built in 1550.<br />Lake Hévíz, It is the largest thermal lake in Europe.<br />Herend Porcelain's "kinai" pattern<br />Herend Porcelain<br />Woman's folk Costume<br />10-11-2010<br />38<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
SPORTS<br /><ul><li>Only seven countries (USA, USSR, UK, France, Italy, China and Germany) have won more Summer Olympic gold medals than Hungary. At the all time total medal count for Olympic Games, Hungary reaches the 9th rank out of 211 participating nations, with a total of 465 medals.
Hungarians are also known for their prowess at water sports, mainly swimming, water polo (in which they have defeated the Soviet team in 1956) and canoeing (they have won multiple medals). Two major rivers (the Danube and the Tisza) and Lake Balaton give excellent opportunities to practice these sports. Some of the world's best sabre fencing athletes have historically hailed from Hungary.</li></ul>10-11-2010<br />39<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
MEDIA<br /><ul><li>Hungary's private broadcast media compete with state-run radio and TV. The state broadcaster has faced financial struggles, dwindling audiences and allegations of political influence from government circles.
Public radio services operated by Hungarian Radio compete with many private national and local stations.
Hungary's national and local newspapers are privately-owned, some of them by foreign groups and investors.
There were 5.2 million internet users by December 2009 (Internetworldstats). </li></ul>10-11-2010<br />40<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
LEGAL SYSTEM<br />The Hungarian companies have made steady progress in the implementation of corporate governance codes. Hungary adopted the Act CXX of 2001 on the Capital Market, to ensure transparency, to improve regulations related to various participants in the capital markets, and to safeguard the investors and improve the efficiency of market supervision.<br />• Hungary has a comprehensive legal framework that ensures ease in doing business. The judicial system has also been transformed into a four level system, with the introduction of the high courts of appeal in 2003 to its existing local courts, regional courts and Supreme Court.<br />10-11-2010<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />42<br />
POLITICS<br /><ul><li>The President of the Republic, elected by the members of the National Assembly every five years is nominally the Commander-in-Chief of the armed forces and his powers include the nomination of the Prime Minister
He is to be elected by a majority of the votes of the Members of Parliament, based on the recommendation made by the President of the Republic.
The unicameral, 386-member National Assembly (Országgyűlés) is the highest organ of state authority</li></ul>POLITICAL PARTIES IN POWER<br />Hungarian Civic Alliance or Fidesz<br />Hungarian Socialist Party or MSzP<br />Movement for a Better Hungary or Jobbik<br />Politics Can Be Different or LMP [13-member leadership]<br />10-11-2010<br />43<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
LEADERS<br />President: Pal Schmitt (chief of state since 6 August 2010)<br />Prime minister: Viktor Orban (head of government since 29 May 2010)<br />Mr Orban, whose centre-right Fidesz party won a two-thirds majority in parliament in April 2010, previously served as prime minister from 1998 to 2002.<br />Pal Schmitt <br /><ul><li> Cabinet: Council of Ministers;</li></ul>prime minister elected by the National Assembly on the recommendation of the president; other ministers proposed by the prime minister and appointed and relieved of their duties by the president<br />Mr Orban has vowed to cut taxes and reduce bureaucracy<br />10-11-2010<br />44<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
10-11-2010<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />45<br />Hungarian Civic Alliance or Fidesz<br />Hungarian Socialist Party or MSzP<br />Movement for a Better Hungary or Jobbik<br />Politics Can Be Different or LMP [13-member leadership<br />
POLITICAL PRESSURE GROUPS & LEADERS<br />10-11-2010<br />46<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
ECONOMY<br />Hungary needs to reduce government spending and further reform its economy in order to meet the 2012–2013 target date for accession to the euro zone.<br /><ul><li>The private sector accounts for over 80% of GDP. Hungary gets nearly one third of all FDI flowing into Central Europe, with cumulative foreign direct investment totaling more than US$200 billion since 1989.
It enjoys strong trade, fiscal, monetary, investment, business, and labor freedoms. Inflation is low, it was on the rise in the past few years, but it is now starting to regulate.
Investment in Hungary is easy, although it is subject to government licensing in security-sensitive areas
Foreign capital enjoys virtually the same protections and privileges as domestic capital. The rule of law is strong, a professional judiciary protects property rights</li></ul>10-11-2010<br />47<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
With about $200 billion in foreign direct investment (FDI) since 1989, Hungary has attracted over one-third of all FDI in central and eastern Europe, including the former Soviet Union. <br />Of this, about $6 billion came from American companies.<br />Foreign capital is attracted by skilled and relatively inexpensive labor, tax incentives, modern infrastructure, and a good telecommunications system. <br />By 2006 Hungary’s economic outlook had deteriorated. <br />Wage growth had kept up with other nations in the region; however, this growth has largely been driven by increased government spending. <br />10-11-2010<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />48<br />
Credit rating<br />In June 2008, Standard & Poor’s assigned a ‘BBB-’ unsecured debt rating due to Hungary's proposed benchmark size euro bond due in 2018. The ratings remain constrained by high fiscal deficits, high and rising government debt levels, and a large external debt burden. The outlook remains stable.<br />Monetary situation<br />The primary objective of the central bank of Hungary is to encourage the stability of the financial system and conduct policies related to the supervision of that system. Hungary's central bank cut its main interest rate by a quarter point to a new all-time low of 5.25% in April 2010. The central bank has been continuing with the policy of monetary easing as inflation appears under control and financial investors are more confident in the country's stability.<br />10-11-2010<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />51<br />
INFLATION<br />A fall in agricultural and industrial output, along with cutbacks in Subsidies, resulted in high inflation in the early 1990s. However, the stabilization of the economy after 1997 helped to bring Inflation down from 14% in 1998 to 3.9% in 2006. <br />The introduction of higher-education fees and hospital charges, deregulation of prices, an increase in value-added-tax, and new cutbacks on subsidies has caused CPI inflation to spike up to 8% in 2007, before dropping to 6.3% in 2008. <br />Falling commodity prices along with demand weakness is likely to maintain downward pressure on prices in the coming months. Inflation averaged 4.2% in 2009, however, inflation is expected to rise marginally to 4.4% by the end of 2010 due to increase in taxes.<br />10-11-2010<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />52<br />
HISTORY OF HUNGARIAN ECONOMY<br />The Hungarian economy prior to World War II was primarily oriented toward agriculture and small-scale manufacturing<br />In the early 1950s, the communist government forced rapid industrialization in an effort to encourage a more self-sufficient economy. <br />In 1968, by the "New Economic Mechanism", reopened Hungary to foreign trade, gave limited freedom to the workings of the market, and allowed a limited number of small businesses to operate in the services sector.<br />both agriculture and industry began to suffer from a lack of investment in the 1970s, and Hungary's net foreign debt rose significantly—from $1 billion in 1973 to $15 billion in 1993—due largely to consumer subsidies and unprofitable state enterprises. <br />In the face of economic stagnation, Hungary opted to try further liberalization by passing a joint venture law, instating an income tax, and joining the (IMF) and the World Bank<br />10-11-2010<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />54<br />
TRANSITION TO MARKET ECONOMY<br />After the fall of communism in Eastern Europe, the former Soviet satellites had to transition from a one-party, centrally planned economy to a market economy with a multi-party political system.<br />Hungary, for example, "lost nearly 70% of its export markets in Eastern and Central Europe." The loss of external markets in Hungary coupled with the loss of Soviet subsidies left "800,000 unemployed people because all the unprofitable and unsalvageable factories had been closed.<br />Because of the lack of subsidies and a need to reduce expenditures, many social programs in Hungary had to be cut in an attempt to lower spending. As a result, many people in Hungary suffered incredible hardships during the transition to a market economy. <br />10-11-2010<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />55<br />
2008-09 FINANCIAL CRISIS<br /><ul><li>Hungary, which joined the European Union in 2004, has been hit hard by the late-2000s recession because of its heavy dependence on foreign capital to finance its economy and has one of the biggest public deficits in the EU</li></ul>Hungary's impending inability to service its short-term debt - brought on by the global financial crisis in late 2008 - led Budapest to seek and receive an IMF-arranged financial assistance package worth over $25 billion. <br /><ul><li>27 October 2008: Hungary reached an agreement with the IMF and EU for a rescue package worth about US$25 billion.
The 2008 financial crisis hit Hungary mainly in October 2008. When the Forint declined quickly against the euro, the Hungarian National Bank raised interest rates from 3.0% to 11.5% on 22 October.
The global economic downturn, declining exports, and low domestic consumption and fixed asset accumulation, dampened by government austerity measures, resulted in an economic contraction of 6.7% in 2009.
As the Hungarian Government asked financial rescue package worth $25.1 billion from the International Monetary Fund, the European Union, and the World Bank, promising to IMF that recalculate the 2009 budget, as Hungary's GDP declines 1.0%, and slow down government spending</li></ul>10-11-2010<br />56<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
ECONOMY: TODAY<br /><ul><li>Hungary, as a member state of the European Union may seek to adopt the common European currency, the Euro. To achieve this, Hungary would need to fulfill the Maastricht criteria.
In foreign investments, Hungary has seen a shift from lower-value textile and food industry to investment in luxury vehicle production, renewable energy systems, high-end tourism, and information technology.
The austerity measures introduced by the government are in part an attempt to fulfill the Maastricht-criteria.
Hungary's low employment rate remains a key structural handicap to achieving higher living standards. The government introduced useful measures in the key areas, namely early retirement, disability and old pensions.</li></ul>10-11-2010<br />58<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
<ul><li>Hungary has made the transition from a centrally planned to a market economy, with a per capita income nearly two-thirds that of the EU-25 average.
The private sector accounts for more than 80% of GDP. Foreign ownership of and investment in Hungarian firms is widespread, with cumulative foreign direct investment totaling more than $200 billion since 1989.
The government's austerity measures, imposed since late 2006, have reduced the budget deficit from over 9% of GDP in 2006 to 3.3% in 2008. </li></ul>10-11-2010<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />59<br />
EXPORT-IMPORT<br />Natural gas - exports: <br />85 million cu m (2009)<br />country comparison to the world: 42 <br />Natural gas - imports: <br />9.708 billion cu m (2009)<br />country comparison to the world: 22 <br />Electricity - exports: <br />9.446 billion kWh<br />Electricity - imports: <br />13.35 billion kWh<br />10-11-2010<br />67<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />
Reserves of foreign exchange and gold: <br />$44.18 billion (31 December 2009)<br />country comparison to the world: 36 <br />$33.87 billion (31 December 2008 )<br />Debt - external: <br />$116.8 billion (31 December 2009)<br />country comparison to the world: 31 <br />$212.1 billion (31 December 2008)<br />Stock of direct foreign investment - at home: <br />$238.5 billion (31 December 2009)<br />country comparison to the world: 20 <br />$237.1 billion (31 December 2008<br />Stock of direct foreign investment - abroad: <br />$19.38 billion (31 December 2009)<br />country comparison to the world: 37 <br />$17.64 billion (31 December 2008)<br />Exchange rates: <br />forints (HUF) per US dollar - 200.64 (2009), 171.8 (2008), 183.83 (2007), 210.39 (2006), 199.58 (2005)<br />10-11-2010<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />68<br />
EXCHANGE RATE<br />1 USD = 195.236236 Hungarian forints<br />1 Euro = 274.18977 Hungarian forints<br />1 INR = 4.44923858 Hungarian forints<br />10-11-2010<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />69<br />The graph below shows historical exchange rates between the Hungarian Forint (HUF) and the US Dollar (USD) between 5/11/2010 and 11/6/2010<br />
INTERNATIONAL INVESTMENT POSITION<br />Hungary has managed to attract large FDI inflows due to several factors, including its central location, the availability of cheap and skilled labor, modern infrastructure, tax incentives, relatively transparent investment environment, and favorable living conditions. The per capita capital inflow is the highest in the central and eastern European regions.<br />several multi-national companies have played an important role in the modernization of the economy, contributing to the addition of jobs and GDP growth. Automobiles, high-tech electronics, light manufacturing, chemicals and, more recently, the service sector, have attracted most of the FDI.<br />Foreign investments have played a dominant role in Hungary’s rapid expansion and have been a driving force of its economic growth engine. The stock of FDI reached $239 billion as of December 31, 2009 from around $237 billion as of December 31, 2008. A major part of the FDI came from Austria, Germany, the US, the UK, France, China, Japan, the Netherlands, Sweden, Finland, Norway, Hong Kong, Italy, Switzerland, Canada and Belgium. <br />10-11-2010<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />70<br />
POLITICAL ANALYSIS<br />10-11-2010<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />71<br />The country’s foreign policy focuses on strengthening its integration into the EU and various Euro-Atlantic institutions, and it has maintained strong relations with its neighbors over the years. Nevertheless, corruption at the institutional level has traditionally hindered prospective investments. <br />
ECONOMICAL ANALYSIS<br />10-11-2010<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />72<br />Hungary had been experiencing serious structural problems for several years before the global economic crisis in 2008. Short-sighted economic policies (e.g. government overspending and real wage growth exceeding productivity growth), followed since 2001, have led to ever increasing macroeconomic pressures. Hungary is a strongly export-oriented economy. The drastically declining demand in the most important export markets, most notably Germany, therefore, clearly inhibits a quick recovery<br />
SOCIAL ANALYSIS<br />10-11-2010<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />73<br />Hungary’s literacy rate is one of the highest in the world. The government has also taken several initiatives to improve education in the country, thereby enhancing productivity and the employment prospects of its citizens. However, Hungary’s <br />ageing population presents a significant challenge to the government as it could curb economic development and increase social security expenditure.<br />
TECHNOLOGICAL ANALYSIS<br />10-11-2010<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />74<br />Hungary’s ICT market has witnessed significant improvement and growth over the years. The Hungarian internet access market grew by 8.3% in 2007 to reach a value of $459 million. The total size of the IT market increased from $2.7 billion in 2006, to $3 billion in 2007 and is expected to stabilize to around $4 billion by 2010. Nevertheless, in terms of innovation, Hungary lagged considerably behind the EU25 average and is also far behind the developed EU nations in terms of the number of patents per million people. Furthermore, the country faces significant risk due to the lack of ICT skills, which remains a considerable roadblock to growth.<br />
LEGAL ANALYSIS<br />10-11-2010<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />76<br />Hungary has a comprehensive legal and regulatory framework, with a Constitutional Court for ensuring the constitutionality of laws, and a regular judicial system headed by the Supreme Court for adjudicating on civil, criminal and administrative cases. The independence of the judiciary was strengthened by the establishment of the National Council for Justice in 1997. Intermediate courts of appeal were established in 2003 to speed up the system but it is still overburdened. There are also significant problems related to loopholes, which are exploited by people aiming to evade the system.<br />
ENVIORNMENTAL ANALYSIS<br />10-11-2010<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />77<br />Hungary has been largely successful in managing its environmental concerns and has a strong environmental record among the industrialized countries. It has a strong environmental policy framework in place, and focuses on implementing environmental policies so as to address environmental and energy concerns. Furthermore, as a member of the EU, Hungary also has to meet the specifications with respect to GHG emissions, particularly those regarding the reduction of pollutants causing climate change. However, the country's environmental record is under constant scrutiny due to the amount of hazardous waste that it generates.<br />
KEY FINDINGS<br />Hungary has strong relations with its neighboring countries but internal corruption is a problem<br />Structural reforms but the economy is expected to take time to recover<br />The healthcare system has enjoyed significant reform yet unemployment is high, particularly in the public sector<br />Hungary is a strong player in international space research but lags behind in innovation and patents<br />Hungary has a strong judicial system; however, there are loopholes in the taxation system<br />Hungary has a rich natural resource base but has not tackled some environmental problems sufficiently<br />10-11-2010<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />78<br />
DID YOU KNOW THAT…<br />- The Rubik’s Cube was developed in 1975 by Ernö Rubik, aHungarian professor of mathematics? <br />- One of the centres of the Renaissance was here in the 15th century?<br />- A Hungarian journalist named Laszlo Biro created the first ballpoint pen in 1938?<br />- Vitamin C was discovered by Albert Szent-Györgyi. He received a Nobel prize in 1937 for his work related to vitamin C?<br /><ul><li>The Hungarians not only have birthday, but nameday as well?
The world's first institute of technology was founded in Kingdom of Hungary(today Slovakia) in 1735.</li></ul>- Hungary has 18 Nobel Price Scientists?<br /><ul><li>In Hungarian, the surname precedes any given names?</li></ul>Albert Szent-Györgyi<br />10-11-2010<br />79<br />ADITI KALA & ANURADHA SAJWAN, MFM-III, NIFT DELHI<br />