OMRI DAILY DIGEST
No. 26, 6 February 1995

HUNGARIAN-ROMANIAN DEFENSE MINISTERS DISCUSS JOINT MILITARY EXERCISES.
Hungarian Defense Minister Gyorgy Keleti and his Romanian counterpart,
Gheorghe Tinca, met on 4-5 February in Debrecen to discuss, among other
things, plans for joint military exercises drawn up in 1994. The meeting
was described as "unofficial." The two ministers decided to continue
talks in Bucharest within two weeks at "expert level" to clarify
"technical aspects" of their armed forces' presence on each other's
territory. It was also agreed to host an international seminar on the
implementation of the "Open Skies" agreement within the framework of the
Partnership for Peace program. Tinca told Radio Bucharest he was pleased
to see that the Hungarians were as willing to collaborate and establish
"good relations between the two armies and countries" as were the
Romanians. Keleti said the signing of a basic bilateral treaty was
closer now than ever and that the two countries' exemplary military
relations helped prepare the ground for it, MTI reports. -- Michael
Shafir and Edith Oltay, OMRI, Inc.

[As of 12:00 CET]

Compiled by Jan Cleave

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Foreign Journal Hungry for Their Roots

  JOHN POMFRET (WASHINGTON POST FOREIGN SERVICE)
  
  (C) 1995 THE WASHINGTON POST (LEGI-SLATE ARTICLE NO. 222155)


BUDAPEST

 Five years after tossing off the cloak of Soviet domination in the social
sciences, Hungarians are again asking a question that has bewitched them for
centuries: Where are our roots?
             During communist times, Soviet scholars backed the idea that the
Hungarians, like the Finns, originated in Russia's Ural Mountains, a
hypothesis that somehow justified Hungary's inclusion inside the Soviet
orbit.
             But new research has brought that hypothesis into question, and
Hungarians are looking even farther east for the sources of their culture.
             In Hungary's universities, the study of Inner Asia is booming,
bucking a trend throughout CentralEurope favoring more practical subjects
such as science, computers and business. In Hungarian cities, Buddhist
temples, inquiries into the mysteries of shamanism, epic songs and
traditional healing abound. Among the rock-and-roll set, dreams of a nomadic
existence and horses from the steppe run through their raucous tunes.
             Two years ago, Budapest's Eotvos Lorand University began
offering degrees in Tibetan and Mongolian -- perhaps two of the most obscure
languages one  could study in a small Central European country. This year,
for the 10 spots in each discipline, the Inner Asian studies department got
80 applications for Tibetan and more than 40 for Mongolian.
             "It is flourishing," said Alice Sarkosi, acting head of the
department and a noted Mongolian scholar. "When you are 18 years old, a lot
of students are not so interested in economic problems. But they are
fascinated by these subjects."
             Hungarians say the revived interest in their roots is partly a
result of the unavoidable growth of patriotism or nationalism following the
collapse of the Soviet Bloc, which kept a tight rein on such passions,
especially in Hungary following its failed 1956 uprising against Soviet
domination. Another reason is that with the social sciences now
depoliticized, Hungarians can exercise the natural curiosity they have about
themselves.
           A self-described ethnic riddle caught in the middle of a triangle
of Slavs, Latins and Germans, Hungarians first came to Europe in A.D. 896,
moving into the Carpathian Basin, which contains present-day Hungary, from
the east. From the onset, Hungarians have felt and been a people apart from
the rest of Europe. Their language has only vague similarities with just one
other European language, Finnish; their food is by far spicier, and their
nostalgia for a nomadic existence appears anomalous in settled Europe.
                While scholars agree on the date of the Hungarian arrival in
Europe, they have bickered about almost everything else. Hungarian scholars
have claimed variously that their people were descended from Turkic tribes in
central Asia, from the Mongols, from the ancient Finns in Siberia or from a
tribe of their own people who were lost amid the Mongol invasions in the 13th
century.
             The latest research began in 1986, when, after a break of 79
years, the Chinese government allowed Hungarian researchers back to a
graveyard about 30 miles east of Urumchi, the capital of Xinjiang Province in
the northwest corner of China. The cemetery was discovered in 1907 by the
Hungarian explorer Aurel Stein.
               Hungarian researchers have excavated 1,200 graves and have
found archaeological objects similar to those found in Hungarian cemeteries
dating from the 9th and 10th centuries. Weapons placed in the graves are
similar, and the methods of burial and the writing systems are the same.
             "In these parts are hidden secrets never before seen," said
Istvan Kiszely, a prominent Hungarian ethnographer.
             Near the grave site, Kiszely and other researchers happened upon
a small ethnic group called Ugars by the Chinese -- a group distinct from the
more populous Uighurs, a Turkic people that dominates Xinjiang. The
scientists discovered that among them, the Ugars, who only number 9,000, knew
73 songs that fit exactly into the pentatonic, or five-toned, musical scale
that has made Hungarian folk music, popularized by composer Bela Bartok,
famous worldwide.
             "We found the last lady who is singing their folk music, and she
sings it just like we Hungarians," Kiszely said.
             While the Ugars adopted Islam centuries ago, he said, they also
maintained a strong shamanistic tradition of medicine men and spiritual
healers. Their use of these echoed practices popular in Hungary before the
11th century, when it adopted Christianity. "We think we have found our
roots. But we must return again and again to be sure," he said.
          Kiszely said he believes ancient Hungarians left Xinjiang no later
than the 5th century and fell into a pattern of settling down and then moving
westward. As centuries passed, and they mixed with ancient Finns, their
unusual language evolved. Over time, they approached Europe and their present
home.
                The search for the cradle of Hungarian civilization dates
back to 1235, when a Hungarian monk, Julian, traveled to a region near the
Volga River about 600 miles northeast of Moscow in search of a Hungarian
tribe.
     But the man revered as the greatest Hungarian explorer of all is
Alexander Csoma de Koros, a 19th-century linguist who ultimately became the
father of Tibetan studies in the West. De Koros spent more than a decade
living with Buddhist lamas in western Tibet and authored the first English
Tibetan dictionary as well as a number of groundbreaking studies and maps of
Tibet.
     His original destination had been Xinjiang, where he believed the roots
of the Hungarian people lay. But when he ended his Tibetan sojourn and set
out for Xinjiang in 1842, he contracted malaria and died.
             In Budapest, students of Inner Asia look to de Koros for
inspiration. Judit Szelenge, who is studying Mongolian at the university,
traveled to Mongolia several years ago -- following what she said was a
feeling that the two peoples have intangible links.
             In the capital, Ulan Bator, she met a Mongolian who later became
her husband. They have since returned to Budapest and are studying at the
university.
             "I know that Hungarians are not a European people," she said.
"We have a lot in common with Asian people, especially with the Mongolians."
She listed several commonly cited examples: Both cultures revere horses, both
have strong traditions of shamanism. Then she paused.
             "We're both quite melancholic," she said. "Also, even though
Hungarians are starting to become time-oriented like you Americans, it's not
in our nature. We tend to be late, forget about dates. That is normal, too,
in Mongolia."

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Tuesday, 07 February 1995
Volume 2, Issue 27


REGIONAL NEWS
-------------

**ROMANIAN OFFICIALS FEUD OVER MINORITY ISSUE**
  Resurgent Romanian nationalists clashed with their allies in
  Bucharest's leftist government yesterday over the treatment of
  minority ethnic Hungarians.  Anti-Hungarian leader Gheorghe
  Funar accused President Ion Iliescu of selling out Romania by
  trying to conclude a much-delayed bilateral treaty with
  neighbouring Hungary.  Funar's Romanian National Unity Party
  is beginning to flex its muscles as a member of the governing
  coalition.  Funar is mayor of the Transylvanian regional
  capital Cluj.  He's banned Hungarian language signs and
  newspapers in the city.  Funar wants the Hungarian Democratic
  Union of Romania party banned, has called for weapons to be
  seized from Hungarians in Romania, and wants the singing of
  the Hungarian anthem to be made illegal.  Iliescu is anxious
  to resolve tensions with Hungary as part of his drive to get
  Romania admitted into NATO and the European Union.


**HATE CRIME TARGETS HUNGARIAN DOCTOR**
  Police say neo-Nazi arsonists destroyed a Hungarian doctor's
  office in southern Germany yesterday, leaving behind swastika
  leaflets.  A police spokesman says a group calling itself the
  "Defense Group South" signed the leaflets, which contained
  personal attacks on the doctor.  They concluded with the
  words: "We are setting a fire."  No one was injured in the
  blaze in the Bavarian town of Krumbach.


**MORE FRIENDSHIP UNDER EU FLAG**
  Slovenia's new Foreign Minister, Zoran Thaler, visited Hungary
  for the first time yesterday.  Meetings with his Hungarian
  counterpart have born fruit.  It seems the two countries have
  renewed ties established under communism.  Thaler says he's
  dicussed regional cooperation during his visit with Hungarian
  Foreign Minister Laszlo Kovacs and found lots of common
  ground.

  "This was a good opportunity to inform each other of where are
  joint interests lie in several fields and areas.  I'm talking
  about coming closer to the European Union and NATO."

  Ljubljana is seeking associate EU membership, a status Hungary
  already has.  Taking a step in that direction, Slovenia will
  soon join the Central European Free Trade Agreement, which
  includes Hungary, Poland, SLovakia and the Czech Republic.
  Trade between Slovenia and these countries should become
  easier after a new border agreement is reached with Hungary.
  Hungarian Foreign Ministry spokesman Gabor Szentivanyi says
  the two countries will develop a plan to prevent traffic jams
  during peak periods and possibly open more border stations.
  Budapest and Ljubljana also agreed yesterday to honor various
  treaties signed by the former Yugoslavian government.  The
  treaties cover everything from aviation to recognition of
  university diplomas.  --David Fink



BUSINESS NEWS
-------------

  **HUNGARY'S FREE DEMOCRATS STAND ON BEKESI'S PROGRAM**
  Hungary's minority coalition party -- the Free Democrats --
  says it won't stand for changes in the country's economic
  plan, despite the recent resignation of the plan's architect,
  Finance Minister Laszlo Bekesi.  Interior Minister Gabor
  Kuncze made his comments yesterday after a high-level meeting
  with Socialist Prime Minister Gyula Horn and top economic
  advisers.  Kuncze is a senior official in the Free Democratic
  party.  Horn has been heavily criticized for his personal
  interference in privatization and for the government's
  inability to name a new head of the National Bank for more
  than six weeks.


SURVEY
------

**SHADOW OF WAR LOOMS LARGE FOR SLOVENIA**
  By Duncan Shiels

  After its 10-day war with the Yugoslav Federal Army in 1991,
  the former Yugoslav Republic of Slovenia became known as the
  one that got away.  Since then it's become one of the
  better-performing economies of Central Europe, with inflation
  falling last year and economic growth topping 5 percent. But
  with the possibility of renewed fighting in neighboring
  Croatia, it remains to be seen if Ljubljana can keep up the
  pace. In an interview, Prime Minister Milan Kucan discussed
  the situation in Croatia and how it affects Slovenia.  Kucan
  says Slovenia is having a difficult time shaking off its image
  in the outside world of a country with war in its backyard.
  For him Slovenia has to be recognized for its achievments.

  CET: To what extent is Slovenia, as a former Yugoslav republic
  of only two million people, still struggling to establish its
  identity on the world stage?

  KUCAN: To me, what is important in a country's identity is, in
  fact, not its position on the map, but how this country is
  recognised and visible from the point of view of the results
  achieved.  If we take into account everything that happened
  ever since the independence of the country, the short war in
  this country and now having its own state, it seems
  particularly important to be known especially for good
  economic performance and being known as a stable country.

  CET: Just staying for a moment on the Balkan war, because
  President Franjo Tudjman of Croatia has declared his intention
  to require that the UN troops leave Croatia when their mandate
  runs out on March 31.  How do you view that development?

  KUCAN: In a way, Croatia's position and the stand of President
  Tudjman are undestandable because the protection forces have
  not fulfilled their function and the Croatian borders are not
  respected and the more the time elapses, the less time their
  is to shift the focus of the problem on the real problem,
  namely how to guarantee the rights of minorities and ensure
  the position of minorities in Croatia and not discuss the
  integrity of Croatia and Croatian borders.

  CET: One short-term result of the pull-out that has been
  predicted by many is a resurgence of fighting between the
  Croatian Serbs in the self-declared republic of Krajina and
  the Croatian Army.  Do you fear instability in Slovenia if
  that happens?

  KUCAN: Surely, this measure foreseen by Croatia alone does
  contain a serious risk regarding the political efforts to
  resolve the political Yugoslav crisis.  Should this extreme
  happen and the conflict breaks out between Serbia and Croatia
  - this is not going to be a conflict between Krajina's Serbs
  and Croatians but Serbs at large - that certainly would lead
  to a very serious new dimension of the problem and would no
  doubt affect also the neighboring countries, not also Slovenia
  but also Hungary, Austria.

  CET: I see here a sympathy for President Tudjman for pulling out
  the UN troops but a recognition of the risk that that would
  entail in terms of possible fighting.  What can be done in
  order for perhaps the UN forces to be pulled out but some kind
  of safeguard that fighting doesn't break out.  Is it possible
  for those two things to happen?

  KUCAN: This is not, let's say, a sign of sympathy for the move
  of Croatia but I am brought to reflect in this way.  I think
  it's a sort of rational way of thinking about this crisis,
  because the fact is that a solution to the problem of Krajina
  has to be found and so far there was no major result in these
  attempts.  And obviously, Croatia's move would be risky and I
  think this should be a reason for the international community
  to, in fact, try and face up to this new situation as soon as
  possible.



ABOUT CET ON-LINE
-----------------

* CET On-Line - copyright (c) 1995 Word Up! Inc. All rights reserved.
  This publication may be freely forwarded, archived, or
  otherwise distributed in electronic format only so long as
  this notice, and all other information contained in this
  publication is included.  For-profit distribution of this
  publication or the information contained herein is strictly
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Old East Bloc's Trade Starts to Revive 5 Years After Europe's Revolution,
Moscow's Foot Is Back in the Door

  JOHN POMFRET (WASHINGTON POST FOREIGN SERVICE)
  
  (C) 1995 THE WASHINGTON POST (LEGI-SLATE ARTICLE NO. 222023)


           BUDAPEST -- Soon after the revolution of 1989, the Ikarus Bus Co.
of Budapest was tottering, like thousands of other factories in Eastern
Europe, on the brink of bankruptcy.

             During communist times, the firm exported 10,000 buses a year to
the Soviet Union as part of a huge Soviet-led trading bloc. Last year it sold
just 789. Its total bus production has plummeted from 13,000 to 1,500, its
work force from 11,000 to 4,500.
             But the firm's managers are not contemplating going broke.
Orders are up and while more layoffs are predicted, the head of the trade
division said things have "hit the bottom and . . . look like they'll get
better."
             Ikarus's secret is an unusual one in a region transfixed by
dreams of a market economy and the West. The plucky bus company is part of a
growing number of firms that have stuck with the nations of the former Soviet
Union for their future. In Ikarus's case, a Russian company saved the factory
from closing by investing $50 million. It guaranteed Ikarus some sales in
Russia and helped negotiate a series of deals for its buses to be assembled
and sold in Ukraine, Russia and Kazakhstan.
             The deal illustrates a new development in Eastern Europe. Five
years after the collapse of the Soviet trading bloc, business among its
former countries is growing again.
              Poland's exports to Russia in the first 11 months of last year
jumped 56 percent -- its first increase since 1989. Hungary's trade with the
countries of the former Eastern Bloc grew 22.5 percent for the second
consecutive year, led by a 67 percent increase with Ukraine. Czech and Slovak
trade with former Soviet Bloc states also grew -- by 20 percent and 13
percent respectively.
             The region's trade with the East is not yet close to rivaling
its strong economic ties with the West; Poland, for instance, does three
times more business with Germany than with Russia. But throughout Eastern
Europe, there is renewed interest in the capricious but potentially lucrative
markets to the east.
             The revival of Eastern Europe's trade with the nations of the
former Soviet Union, especially Russia, points to Moscow's desire to reassert
itself in the region. In the opinion of many businessmen in the region, it
also indicates that Eastern Europe is moving past its psychological rejection
of "Mother Russia" and coming to a realization that it must trade and deal
with the great but volatile power looming to its east.
            The revival also illustrates one of the economic consequences of
the recent electoral successes throughout Eastern Europe of parties with
links to the old communist system. After the region's 1989 revolution, its
first governments rushed to embrace the West and pleaded for entry into the
European Union, NATO and other Western organizations. The current
governments, especially in Hungary and Poland, while maintaining their
interest in such ties, are seeking a more neutral stance and at least
economic links within Eastern Europe.
             "After 1989 the countries of Eastern Europe declared
independence and said we won't do business with Moscow because we've been
forced to do business with Moscow. It was a psychological decision," said
Alexander Waldstein, managing director of AWT International Trade and
inance, a Vienna-based wing of Creditanstalt Bank that facilitates trade
between Eastern Europe and the ex-Soviet Commonwealth of Independent States
(CIS). "Now everybody acknowledges that Russia and the rest of the CIS is one
of the most interesting markets for the next 50 years. They cannot ignore the
CIS."
             Before its collapse in the years following Eastern Europe's
revolution,   --  Vienna banker Alexander Waldsteinthe Council for Mutual
Economic Assistance, or Comecon, united the communist countries of the Soviet
Bloc in a gigantic trading union stretching from the shores of the Pacific to
the Berlin Wall. Communist businessmen bought and sold through government
trade monopolies; the contracts were denominated in something called a
transferable ruble, which had little real value. Businesses generally didn't
worry about getting paid, about how much an item cost to produce, or about
its quality. Their only concern was to fulfill a government production quota
so the deal could go through.
             Starting in 1989, as East European countries launched economic
reform programs, especially in Czechoslovakia, Poland and Hungary, the
trading system that had sustained many of the communist-era industries
collapsed, leading to widespread unemployment, drops in wages and fiscal
crises.
             In 1990 and 1991 the bottom fell out. Exports from Poland to
other Comecon countries plummeted 87.5 percent; from Czechoslovakia, 76.4
percent, and from Hungary, 74.4 percent. Altogether, economists estimate that
total trade fell 80 to 90 percent, driving hundreds of factories into the
ground. Workers in heavy industry, farmers and government employees were hit
hardest, and this is where political parties with links to the communist past
found support for their calls to impede market reforms.
             At the same time, however, many East European firms found new
markets in the West. Poland, Hungary and the Czech Republic now do more than
75 percent of their trade with the West. Before 1989, 75 percent of their
trade went in the other direction.
             Upon gaining power in Poland and Hungary in 1993 and 1994, the
parties of ex-Communists pledged to improve trade ties with the former
Eastern Bloc. Hungary has recently established an export-import bank to help
finance trade with Russia. Poland's Ministry of Industry and Trade came out
this month with a six-point program to boost exports to the east.
            Trading among these nations can be a life-threatening endeavor,
loaded with huge financial risks but tantalizing profits as well. The
experience of the firm of Jozsef Stadler, a Hungarian trader, is one example.
             Last year Stadler Inc. did $100 million in business, selling
wine, champagne and canned food to what he calls "Russian high society."
             But life has not been all roses for this former truck driver who
sports two garish gold rings on each hand.
             Several weeks ago Stadler was negotiating a contract with
businessmen from Ukraine when he received a call from a senior customs
official demanding an urgent meeting. There were problems with one of his
convoys of champagne bound for Moscow, the official barked over the phone,
and they had to sort it out right away.
             Stadler hurried to a restaurant near his office in Akaszto, a
village about 100 miles east of Budapest, to find the man. The trap was set.
As he entered the dingy establishment, 10 Ukrainians, Russians and Chechens,
toting automatic weapons, surrounded it, grabbed him and stuffed him into the
back of a black Mercedes.
             After a weekend in handcuffs and several beatings, Stadler
agreed to buy his freedom for $1 million. But a chance police checkpoint
nabbed two crooks and the cash ransom. And although seven men escaped, three
men, including the customs officer, face life in prison. Stadler has since
employed a stable of bodyguards.
             "I can't give up all this just because of the mafia," he said,
leaning back in a huge, throne-like chair.
             To conduct business with the Eastern countries, Stadler contends
that creativity and close personal relations with his partners are a must.
Russian, Ukrainian and Kazakh companies often don't have any dollars, so
barter is the only option. Stadler once exchanged several tons of champagne
for some tractors that he hawked in Hungary.
             With his profits, Stadler recently bought a 620-acre plot in his
native village. There he is building a 20,000-seat stadium for his soccer
team, which entered Hungary's top league this year. Currently the team is
Stadler's main worry; it's playing near the bottom, 12th out of 13.

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