Privatisation in Hungary: Now comes the 'hard core'

Communist Economies and Economic Transformation

Volumn 8, Issue 2, 1996, Pages 205-216

  Mihályi, Peter ^a  

^a Hung Privatisation and Holding Co   (Hungary)

Author keywords

[No Author keywords available]

Indexed keywords

MARKET REFORM; POLICY APPROACH; PRIVATISATION; STRUCTURAL ADJUSTMENT; TRANSITIONAL ECONOMY;

HUNGARY;

EID: 0030454925     PISSN: 13514393     EISSN: None     Source Type: Journal    
DOI: 10.1080/14631379608427853     Document Type: Article

References (23)

1. Though the number of branch ministries was drastically reduced, a few remained as shown in Table 4.
2. For detailed analysis of earlier developments in such areas as corporatisation, small privatisation, land privatisation, restitution, etc., see Peter Mihályi, 'Hungary: a unique approach to privatization', in I. Székely & D. Newbery (eds), Hungary: an Economy in Transition (CUP, 1993) or 'Privatization in Hungary: An overview', in UNCTAD-KOPINT-DATORG, Privatization in the Transition Process-Recent Experiences in Eastern Europe (United Nations, 1994).
3. For detailed analysis of earlier developments in such areas as corporatisation, small privatisation, land privatisation, restitution, etc., see Peter Mihályi, 'Hungary: a unique approach to privatization', in I. Székely & D. Newbery (eds), Hungary: an Economy in Transition (CUP, 1993) or 'Privatization in Hungary: An overview', in UNCTAD-KOPINT-DATORG, Privatization in the Transition Process-Recent Experiences in Eastern Europe (United Nations, 1994).
4. I.e. prices reflect size and quality.
5. Liquidation procedures are in the hands of court-appointed liquidators, rather than the privatisation agencies. When company assets are sold, they always go to private owners. Losses are written off - partly or fully - by the owner(s) and the creditor(s).
6. See e.g. 'Slovak privatisation U-turn shocks funds', Financial Times, 9 June 1995; 'Russian officials seek curbs in privatisation programme', Financial Times, 17/18 June 1995; 'Pace of Poland's privatisation too slow, says PM', Financial Times, 24/25 June 1995.
7. See e.g. 'Slovak privatisation U-turn shocks funds', Financial Times, 9 June 1995; 'Russian officials seek curbs in privatisation programme', Financial Times, 17/18 June 1995; 'Pace of Poland's privatisation too slow, says PM', Financial Times, 24/25 June 1995.
8. See e.g. 'Slovak privatisation U-turn shocks funds', Financial Times, 9 June 1995; 'Russian officials seek curbs in privatisation programme', Financial Times, 17/18 June 1995; 'Pace of Poland's privatisation too slow, says PM', Financial Times, 24/25 June 1995.
9. In fact this is not entirely true. As a compromise between pro- and anti-privatising political forces, law-makers agreed that it was up to the government to decide on the privatisation conception of strategic companies. However, such a list must be submitted to the parliament for approval and the government may ask for a parliamentary decision on the modalities.
10. According to a press report, the following sectors are listed in the draft law: alcoholic beverages, oil and gas production, defence, banks, insurance companies, telecommunications, the electrical industry, coal mining, ports and harbours. Magyar Nemzet, 18 July 1995.
11. The list of industries in which shares held by the federal government could only be transferred with parliament's consent includes oil production, processing and shipping, production of precious and semi-precious stones and precious metals, transport, nuclear power, etc. Privatisation International, June 1995, p. 14.
12. At the time of writing, Presidents El'tsin and Walesa are both trying to veto these laws.
13. See 'Act LIII of 1992 on the Management and Utilization of Entrepreneurial Assets Permanently Remaining in State Ownership'. Note that the official translation of the title of this act was misleading: instead of assets 'permanently remaining in state ownership', a more precise translation should speak of 'long-term state assets'.
14. Though this development was entirely rooted in the realm of domestic policy and policy thinking, it is worth noting that other transition economies created similar structures as well; the equivalent agency was called Fund in Bulgaria, in the Czech and Slovak republics, in Russia, etc. For an overview of these parallel developments see P. Mihályi, 'Common Patterns and Particularities in Privatisation: A Progress Report on the Transition Economies', Acta Oeconomica, 46, 1-2, 1994.
15. According to the 1992 legislation on privatisation, the government was obliged to obtain annual approval from the parliament for privatisation targets. These were the so-called 'Privatisation Policy Guidelines'.
16. The full Hungarian name is Állami Privatizációs és Vagyonkezelö Részvénytarsaság.
17. Act XXXIX of 1995 on the Sale of State-Owned Entrepreneurial Assets, immediately modified by Act LXIX. on 30 June 1995.
18. In fact, sometimes individual ministerial departments came out with their own comments. E.g. the Ministry of Finance submitted 17 papers from its 17 departments.
19. The Government Commissioner for Privatisation was forced to resign in January 1995. On 1 March 1995 a ministerial post was created to guide the privatisation machinery.
20. The list is an integral part of the law, thus any modification will require a new parliamentary decision. It is interesting to note that such 'prohibitive lists' exist in other transition economies as well (e.g. Russia).
21. In 1993 12 coal mines were integrated into neighbouring power stations, adding almost 20 000 miners to the workforce of the electricity industry.
22. In 1991 only 4066 shops were privatised under the Preprivatisation Programme. In subsequent years 3571, 1428 and 805 units were sold, but in terms of market equilibrium these later changes did not have any further impact.
23. In 1990 and 1991 the volume of imported industrial consumer goods from the West rose by 29% and 76% respectively.