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Grumbles in Hungary. As party meets next week, economic crisis irks public

By Paul LendvaiSpecial to The Christian Science Monitor / March 22, 1985



Budapest

Hungary's 13th Communist Party Congress opens Monday in an atmosphere of growing public pressure against continued belt-tightening and behind-the-scenes jockeying of potential successors to the nation's leader, Janos Kadar. Hungarians have profited from two decades of impressive economic achievements and relative political stability. Although ultimate control has always remained with Moscow (symbolized by the ``temporary'' presence of four Soviet divisions in Hungary ever since World War II), the regime of 73-year-old Janos Kadar has enjoyed a higher degree of popular acceptance than any other ruling party in the East bloc.

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But now there is increasing concern -- not only among the 870,000 members of the Hungarian Socialist Workers Party, but also among the public at large, that Mr. Kadar may leave the political scene at a critical time.

Much has been written about the daring Hungarian experiments, the green light given since 1980 for the entrepreneurial spirit. By the end of last year some 300,000 jobs had been created by private, semiprivate, cooperative, and small-scale state-controlled autonomous ventures in industry and services. It is reckoned that 3 out of 4 gainfully employed Hungarians make money on the side. This so-called ``second economy'' includes private farming plots, small shops, artisan workshops, and technicians and workers working for themselves after office hours on the premises of their factories.

Less well-known, however, is that, for all the extra earnings, real wages are estimated to have fallen by more than 20 percent in the past three to five years. Even according to official figures, some 1.5 to 3 million people still live at or under subsistence levels. Retirees -- 1 out of 5 Hungarians -- and large families are particularly hard hit.

Faced with a hard-currency debt of more than $6 billion, the government in the past five years has embarked on an austerity program, cutting investments, consumption, and nonessential imports. The skillful combination of reform and retrenchment has won confidence both at the International Monetary Fund, which Hungary joined in 1982, and with important central bankers in the West.

At the same time, however, public conflicts over income distribution and conspicuous consumption have gradually eroded popular support for the reform course.

In January 1984, for the first time since 1956, massive price increases (affecting basic foodstuffs, and raising fuel costs by 30 to 50 percent in the midst of a severe winter) led to vocal protests and rumblings in factories.

There are signs of rising social tensions, including growing juvenile deliquency, adult crime, and -- above all -- corruption. Although one-third of the industrial enterprises are not competitive by international standards, Hungary is a world-class nation in terms of alcoholism. The number of chronic alcoholics is officially put at more than half a million. The authorities have registered some 30,000 young drug addicts. The suicide rate (traditionally one of the highest in the world) has increased by 250 percent in the last three decades.

But despite the deterioration of the economic situation, there is no broadly-based opposition to Kadar's middle-of-the road course.

The small group of some 200 active young dissidents with a few thousand potential supporters does not cause the government serious concern. The main long-term danger to what is still the shop window of Comecon, the East bloc's ``Common Market,'' is the possible emergence of a temporary alliance between disgruntled low-income groups and ambitious hard-line party and state functionaries.

When talking to foreign visitors, the reformist politicians and intellectuals in Budapest often recall that it was the deadly combination of popular disaffection, political backlash of the party machine, and last but not least Soviet suspicions that stopped the first promising wave of reforms in 1972-73.

Today the regime is again becoming more vulnerable to economic and social pressures from inside and outside the country.

There is also a resurgence of nationalism, primarily directed against neighboring Romania and Czechoslovakia, where Hungarian minorities are seen as victims of discrimination.

It is against this complex background that the surprisingly gloomy mood in Hungary on the eve of the party congress must be seen. Some 950 delegates will have to elect a new leadership and adopt the main lines of strategy for the next five years.

The appointment of Mikhail Gorbachev as the new Soviet leader appears to have strengthened the hand of Hungary's reformers. In the long term, however, the very strength of Mr. Kadar's position is a weakness of the system -- because there is no established mechanism for succession.

Though Kadar is certain to be reelected as first secretary of the Communist Party Central Committee, attention will be focused on the fortunes of some of his potential successors: Ferenc Havasi, secretary in charge of economic affairs; Laszlo Marothy, moved on the eve of the congress from the Budapest party organization to the post of a deputy premier; and Karoly Grosz, the favorite of the party apparatus. Mr. Grosz, as the new secretary of the Budapest party organization, is certain to be named to the Politburo.