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a) Economic factors
1. hungary
The Hungarian economy prior to WWII was primarily oriented toward agriculture
and small scale manufacturing.Hungary's strategic position in Europe and its
relative lack of natural resources also have dictated a traditional reliance on foreign
trade. In the early 1950s, the communist government forced rapid industrialization
after the standard Stalinist pattern in an effort to encourage a more self-sufficient
economy. Most economic activity was conducted by state-owned enterprises or
cooperatives and state farms. In 1968, Stalinist self-sufficiency was replaced by the
"New Economic Mechanism," which 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.Although Hungary enjoyed one of
the most liberal and economically advanced economies of the former Eastern bloc,
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.In the face of economic stagnation, Hungary opted to try further
liberalization by passing a joint venture law, adopting an income tax, and joining the
International Monetary Fund (IMF) and the World Bank. By 1988, Hungary had
developed a two-tier banking system and had enacted significant corporate
legislation which paved the way for the ambitious market-oriented reforms of the
post-communist years.
2. Belarus
This Country Economic Memorandum for Belarus takes stock of the growth trends in
the country’s economy since 1996, reviews the evidence of the accumulated
challenges and risks within the existing growth patterns, and provides
recommendations aimed at strengthening growth sustainability. In sum, while
economic growth in the last nine years has been impressive, the report argues that
maintaining the current growth strategy would lead to a gradual erosion of economic
competitiveness. The government should make significant policy adjustments by
reorienting its policies toward ensuring a better business environment and a smaller
size of government. Economic growth in Belarus has been broad-based and has
been driven primarily by the improvements in labor productivity, increase in energy
efficiency and capacity utilization. In contrast to some other CIS countries, where
growth and exports remain concentrated in the extracting sectors with limited
employment opportunities, the growth structure in Belarus has been much more
beneficial for labor. Growth in labor-incentive sectors coupled with wage and income
policies have helped to ensure that the benefits from recent growth were rather
broadly shared by population.
b) Cultural factors
1. hungary
The combined impact of World War II and the communist takeover in 1947
brought about great changes in the social structure. For more than a decade, the
new communist government sought to create a classless society through various
forms of social engineering.
Even though there were major differences in the ideological motivations of the
various postcommunist political parties and governments, they all agreed on the
main goals to be achieved. These included the privatization of state-owned assets,
the creation of a politically and culturally pluralistic society, and the attainment of
membership in the Western community of nations by joining NATO and the EU.
Reforms under the Antall regime left no sector of the economy untouched, as
the reintroduction of the market economy demanded a whole new economic and
institutional infrastructure. Despite fits and starts, the first postcommunist
government liberalized trade, deregulated most prices, and introduced and executed
a wide-ranging privatization policy.Within two years of attaining power, it relaunched
the Budapest Stock Exchange and a largely independent Central Bank and initiated
the most-liberal foreign investment policy among the states of the former Soviet bloc.
Moreover, despite the massive dislocation this approach caused, the government
also introduced a bankruptcy policy that wrung out many of the inefficient state
enterprises from the economy.Hungarian privatization policy differed from its
counterparts in other countries in east-central Europe.
2. Belarus
In 1517-19 Frantsishak Skaryna (ca. 1490-1552) translated the Bible into the
vernacular (Old Belorussian). Under the communist regime, Skaryna's work was
vastly undervalued, but in independent Belarus he became an inspiration for the
emerging national consciousness as much for his advocacy of the Belorussian
language as for his humanistic ideas.
From the fourteenth to the seventeenth centuries, when the ideas of humanism, the
Renaissance, and the Reformation were alive in Western Europe, these ideas were
debated in Belorussia as well because of trade relations there and because of the
enrollment of noblemen's and burghers' sons in Western universities. The
Reformation and Counter-Reformation also contributed greatly to the flourishing of
polemical writings as well as to the spread of printing houses and schools.
During the seventeenth and eighteenth centuries, when Poland and Russia were
making deep political and cultural inroads in Belorussia by assimilating the nobility
into their respective cultures, the rulers succeeded in associating "Belorussian"
culture primarily with peasant ways, folklore, ethnic dress, and ethnic customs, with
an overlay of Christianity. This was the point of departure for some national activists
who attempted to attain statehood for their nation in the late nineteenth and early
twentieth centuries.