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The People’s Republic of Hungary By: Timur Dautov, Raki Wane, Charlotte Richards, Thais Caprioli.

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Presentation on theme: "The People’s Republic of Hungary By: Timur Dautov, Raki Wane, Charlotte Richards, Thais Caprioli."— Presentation transcript:

1 The People’s Republic of Hungary By: Timur Dautov, Raki Wane, Charlotte Richards, Thais Caprioli

2 Economy of the People’s Republic of Hungary Initially a centrally planned economy: Shaped along Soviet lines All industry and enterprises nationalized and under control of state planning organ Five-year plans which set goals Emphasis on heavy industry State regulated production, prices and all foreign trade

3 Economic reform In 1968, a set of reforms called ‘New Economic Mechanism’ was introduced Its main goal – increasing the efficiency of the economy by: Decentralisation of decision-making Increased autonomy of enterprises Introduction of some free market principles Relaxed price regulations

4 Stability of the 1970’s International relations in the world enter the period of détente As tensions relaxed, trade and economic cooperation between the East and West were encouraged – mentioned in Basket II of the Helsinki Accords Hungary takes large foreign loans from the West in the first half of the 1970’s Loans bring stability and an improved standard of living compared to the rest of Eastern Europe Because of the seeming successes of the economy due to foreign loans, the reform programme was deemed unnecessary and was frozen; centralisation of economy reintroduced

5 Change in economic policy In the late 1970’s, détente was over Hungary set to repay the foreign debt to the West In 1979, ‘New Economic Mechanism’ reforms continued, another drive for decentralisation began and more market innovations were introduced The goal was set to develop an export industry capable of competing on the world market in order to earn hard currency to repay the debt However, this turned out to be impossible as economic problems set in

6 Economic problems and recession All Eastern Europe was in a crisis by the 1980’s As détente was over, the East-West confrontation was restored and the arms race began anew; Soviet Bloc’s military spending increased drastically, placing a burden on the economies of East European countries Soviet Union was no longer able to provide economic aid and oil supplies to its “fraternal countries”, causing damage to Hungarian economy as well

7 Continuing crisis and collapse The latter half of 1980’s was marked by reformism in the Soviet Union, headed by Gorbachev Reforms also introduced in Hungary, including further political and economic liberalisation Inefficiency of planned economy and shortages continued, forming discontent of the population (however, not as bad as in the rest of Eastern Europe) Pressure for further economic reforms – a factor in the 1989 downfall of communism; new government introduced extensive liberal free-market reforms This caused certain economic difficulties in the early 1990’s – many inefficient businesses and factories closed, rising unemployment

8 Opposition to the communist regime Shown through posters of the time

9 Alliance of Free Democrats [1988] 1956 Soviet invasion to put down the Hungarian revolution

10 Hungarian Democratic Forum [1989]

11 Alliance of Young Democrats [1990]

12 Opposition to the communist regime Through actions

13 Hungary announces 1956 is a "People's Uprising“ [1988] “Personally, I think that it was a people's uprising; our declaration in December 1956 acknowledged it in the first paragraph, labeling it as the rightful discontent of the people. I do maintain, though, that hostile enemies gradually joined in, and they could have turned the wheel of history backwards, so the danger of counter-revolution was imminent.”

14 Government opened the border with Austria [1989] “In spite of the verbally declared willingness on behalf of the Hungarians to solve the problem facing the GDR” “... Hungarian media provoked and supported a campaign directed against the GDR”

15 Opposition Roundtable in Hungary met [1989] “[Communist party]...has made hardly any progress on the most important concrete issues.” “... [no intension of] ending party organizations at workplaces... abolishing the workers' militia... [eliminate] the political monopoly of the Party in the army and the police force...”

16 Everyday Life Rationing meant no clothing for children Used acquaintances abroad Schooling: – “There were kindergartens with normal schedules which allowed you to drop off the children in the morning and to pick them up at five when you finished work…there was much more order. I think from this perspective, things were better”

17 Everyday Life Subject to “political rape” (ordered around) – Smooth times – people tolerated it – Bad times – people didn’t tolerate things from before “It [Decree 770 and attendant policies] was purely and simply a crime! A crime... it was one of the worst things that happened.... It was political rape... we were raped, obligated, at all times to do what the party wanted”

18 Social – Mortality Rates

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