INDUSTRIAL PLANNING IN HUNGARY
| Published date | 01 February 1960 |
| DOI | http://doi.org/10.1111/j.1467-9485.1960.tb00122.x |
| Author | G. F. Ray |
| Date | 01 February 1960 |
INDUSTRIAL PLANNING IN
HUNGARY
THE object of this paper is to give some account of the experience
of industrial planning in Hungary in the years 1948-56.
My
remarks
relate to three main levels of the planning process: first, a few ob-
servations on the nature of the over-all plan; second, some account of
the organisation of the planning process; third, a somewhat more
detailed description of certain aspects of planning at the level of an
industrial enterprise.
I
The characteristic features of the overall plan in Hungary have
been an over-ambitious industrialisation programme overwhelmingly
concentrated on heavy industry and geared to an exaggerated invest-
ment drive.
The
period under discussion
is
mainly covered
by
the
first Five Year Plan, relating to the years 1950-1954. In this
period
44 per cent.
of
total investment went into industry, and of this,
92
per
cent. went to heavy industry, including mining, metal-producing
and -using industries, chemicals and building materials. In contrast,
there was no major investment programme
in
the light and consumer
goods industries, and little attempt to develop any of Hungary’s
traditional industries.
The excessive concentration on heavy investment was uneconomic
and contributed little to Hungary’s urgent balance of payments prob-
lem. The huge new steelworks on the Danube, for instance, draws
its iron ore from Russia, several thousand miles away, and, in ad-
dition to Polish coke, uses coke manufactured from domestic coal at
three times the cost of the better quality imported coke. In addition,
a new town had to be buiIt for the
20,000-25,000
employees of the
plant, with vast blocks
of
flats, shopping centres, cinemas, and new
public buildings.
The need for foreign currencies has been enormous since the war,
but plans for meeting this problem have been ill-chosen and extremely
costly.
Thus,
in an attempt to increase self-sufficiency, Hungary made
an expensive experiment in growing cotton in the southern region.
This attempt failed and now even the most orthodox party spokesman
admits that the climate of that region is not suited to cotton-growing.
But in the meantime, new cotton mills had been erected in anticipa-
tion of increased supplies of home-grown raw materials. Further,
since Hungary already had an over-developed textile industry more
than sufficient to meet her domestic demand, the utilisation of the
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