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Business Profile: As Hungary's commercial capital, Budapest is sheltered from the worst of the country's unemployment; the 1999 rate was 7% compared to around 9% on a national level. The economy is dominated by the engineering, pharmaceutical, electronics and computer industries, and by scientific research. The main business district is in Pest.

The first democratically elected government took office in 1990, after the collapse of the Soviet Union and the rapid privatisation of state assets made Hungary attractive to foreign investors, particularly after the country joined NATO. In 1999, approximately 25% of Hungary's GDP was generated by companies with a majority of foreign investors, and over 70% of GDP was in the private sector. About three-quarters of Hungary's banks are governed largely by Western European financial institutions; for example, the German Bayerische Landesbank is a strategic shareholder in the MKB, currently Hungary's principal corporate bank. ITD Hungary, founded in 1993 to stimulate trade development and investment, has helped multinational corporations, such as Sony, GE Lighting Tungsram, Clarion and TDK, settle in the country. The main investors in Hungary are Germany, the USA, Austria, France and Italy.

The Hungarian stock exchange began to revive in the mid-1980s after a forty-year pause, a decisive factor being the opening of the Budapest Stock Exchange in June 1990. Agriculture is becoming increasingly important. Wheat production amounted to 67 tonnes in 1999, compared to just 29 tonnes in 1998. Wine is also an important concern (1998 production totalled some 470 million litres). Western analysts predict that Hungary is set to benefit from strong economic growth in the medium term. The two major problems facing the Government, however, are controlling wages and cutting the budget deficit. In 1998, this was Ft/person 997,000, but in 1999 it had risen to Ft/person 1,141,000. While it is predicted that Hungary will take at least one generation to adapt to Western business culture, Hungary itself is keen to be seen as an emerging market, little different from Western economies.

Business Etiquette: The dwellers of Budapest like to do business with people they know and trust so it is worth taking the time to build relationships. This is particularly true of the older generation; the younger generation are usually more direct and to the point. They are also much more likely to speak English. Twenty and thirty year olds occupy important positions, a fact that the older school resent. Business cards are vital. The business year is busiest in spring and autumn. Standard working hours are generally 0800-1630 Monday to Thursday, finishing earlier on Friday, but meetings can be fixed outside these hours, even at weekends.



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