Hungary, long at the crossroads of marching armies, hopes to emerge from the post-communist era as a hub of international travel, finance and marketing, said its new ambassador to the United States, Gyorgy Banlaki, to a noontime audience in the Mary Pickford Theater on Sept. 14.
Dr. Banlaki set the stage for Hungary's future against the backdrop of its 1,100-year history during the lecture sponsored by the European Division. In his introduction, David Kraus, assistant chief of the division, highlighted the speaker's distinguished diplomatic career.
Although he is new to the United States in the role of ambassador, Dr. Banlaki served as consul general in New York from 1986 to 1990 and in his earlier days graduated from Woodrow Wilson High School in Washington, D.C.
A Ph.D. in economics, he spoke on "Hungary: the Pioneer of Change in the Post-Bipolar World." Dr. Banlaki traced the challenges Hungary has faced because of its unique geopolitical position in Central Europe.
"Through the centuries, Hungary has won battles and lost wars with crusaders, Mongols and other armies tramping through," said Dr. Banlaki. "It sure doesn't improve the landscape," he quipped.
In more recent decades, Hungary strived to become an innovator and at the forefront of change within the confines of the Warsaw Pact, said the ambassador. "In the early 1980s, at a time when East-West relations had deteriorated with the Afghanistan debacle, Hungary, in a bold measure, joined the International Monetary Fund," he said. "During this time, Hungary also took pioneering steps in establishing diplomatic relations with South Korea and Israel."
The envoy noted that even before the fall of communism in 1991, a Hungarian law took effect in 1988 that began to privatize certain segments of the economy. "Personal income tax and the value added tax were already in place when Hungary moved toward a market economy," said Dr. Banlaki. He called Hungary the "happiest barracks" among the Warsaw Pact countries, because it was better off economically than many other East Bloc nations. "Now that they have switched to democracies, Hungary has lost this relative advantage," he said.
Yet the changes have resulted in a stable working democracy for Hungary, he added. "We have the perspective of two free elections in which the electorate went to the polls and changed the government," Dr. Banlaki said. "In the last election, the former government became the opposition, and the prior opposition put together the ruling coalition."
The ambassador is quick to admit that the reforms have not been a panacea for his country's problems. "The solution of one problem often results in numerous new problems," he said.
Dr. Banlaki touched upon the dilemma his country faces in the near future. "The transition to political democracy, rule of law and elections has been much easier to achieve than the economic transition," he said. The challenge, he added, is not to let the frustrations with the economy frustrate the political democracy before the new systems yield economic benefits.
He noted that there is no template for Hungary to follow in trying to develop a free enterprise system while slowly dismantling a state system that still manages many daily transactions. Yet he noted that Hungary has been successful in attracting $8.5 billion to $9 billion in foreign investment, with the United States as the largest foreign investor, at $3.5 billion.
"Hungary has been able to draw in as much as all the other countries in the region combined," said Dr. Banlaki in underscoring the crucial role foreign investment plays in developing private enterprise.
In another departure from the other newly emerging democracies, Hungary has steered away from the mass distribution of stocks in which the entire population becomes a shareholder. "Only time will tell which way is best," said the ambassador.
Looking ahead to the future, Hungary plans to complete the process of privatization with 75 to 80 percent of the gross domestic product in the private sector by 1998, according to Dr. Banlaki. Calling his government's goals "interrelated" rather than "prioritized," he said Hungary wants to join the international organizations of the West. "In plain English, we want to join NATO, the EU [European Union] and OECD [Organization of Economic Cooperation and Development]," he said. "We. also, want to improve our relations with the neighboring countries in the region and protect the rights of Hungarian minorities living beyond our borders."
Hungary has a vested interest in seeing the other countries in the region prosper, he said.
"For the first time in history, we don't see the enemy surrounding us, but rather we are at a new crossroads where Hungary can become an international banking and air traffic center."
