Share this story
Close X
Switch to Desktop Site

Want to see free market in Hungary? Call a cab

THE cabbie handed me his neatly printed business card. ``City Taxi. Quick, punctual, comfortable service guaranteed, pre-booking day and night.''

``Trips to countryside, decorated cars for weddings,'' it went on.

About these ads

``Our drivers,'' it informed me, ``can also help with hotel bookings.''

Finally, it indicated that payment could be made in foreign currency through Hungary's National Bank.

All around town these days the company's eye-catching logo can be seen -- a small gold-colored shield on the roof of the cab.

What makes City Taxi interesting is that it is without doubt the largest private entrepreneurial venture in any East European country so far.

``The company has 700 owner-drivers and it is managed by a committee of five, elected from among ourselves,'' my driver explained.

Although the cars are individually owned, each can be assigned two drivers, which allows the company to provide virtually 24-hour service.

For most of the drivers, being a cabbie is a second job. My driver is still in school. He wants to go into computers. ``In two years I can make it,'' he said confidently. ``Meantime I have this,'' he added, caressing the steering wheel.

About these ads

Hungary's market reform is unique in the East bloc. The nation has shown more imagination, flexibility, and awareness of consumer needs than any of its allies.

And City Taxi is just the latest entry to the nation's private-enterprise system.

Another field for entrepreneurs is castles. Would you like a rent-free, 50-year lease on a Hungarian castle to convert into a guesthouse or restaurant? Hungary has hundreds to offer.

The showpieces of the nation's imperial past are carefully preserved by the state as museums. Some are 1,000 years old. But all over Hungary there are smaller fortress-like keeps and manor houses that were once the homes of landowners and lesser nobility. Most are badly run down, and many are in ruins.

All were nationalized after the last war. The best have been repaired by Hungary's National Monuments Board, but the board does not have enough cash to restore the rest.

Backed with government funds, the board gives grants to companies or private citizens willing to renovate the buildings for their own use. Once good faith is established, the lessees qualify for a grant (which can go up to some $6,000), and for a bank credit of the same amount.

In two years, the board has had nearly 300 applicants, from companies planning vacation and study centers for employees to individuals -- usually married couples -- who want to start up hotels.

One team -- the husband used to be a hotel employee, and the wife was a teacher -- left Budapest to take over a country manor in western Hungary, parts of which date back to 1731.

They are creating a hotel that they hope will attract other Hungarians, or foreigners stopping off en route to Alke Balaton, Hungary's traditional vacation spot for central Europeans.

Sixteen rooms and a restaurant are available now, but it will probably take the couple another 10 years before restoration, with modern facilities, is complete.

As the husband told a local reporter, their Budapest apartment was in a cramped and overcrowded neighborhood.

``We can breathe here,'' he said, ``and my wife and I can work together and bring up our children together. To raise our part of the money we sold our Budapest apartment, but no regrets -- we have congenial work and a better family life here.''

Nowhere else in Eastern Europe is there so free a rein on private enterprise. Even in Hungary there are ideological misgivings about the opportunities people have in the private sector to earn much more than the average monthly income.

People here grumble about ``millionaires'' (though a million forints is only $20,000). The bustling City Taxi drivers are eyed suspiciously by disgruntled employees of the municipal taxi enterprise.

In Poland, the private sector faces a much harder task. The government instituted two-year tax holidays to encourage Poles to set up shop in areas starved of goods and services. But many dodged taxes by closing down one business and starting a new one in a different line -- with another tax holiday, of course.

Given the Polish economy, one can understand why this happened. Polityka, Warsaw's leading weekly, spoke recently of ``harassment'' of self-employed tradesmen by local authorities.

``Life is being made tough for them all over the country,'' the article said. It gave many examples.

``Forty years ago, a maker of special industrial brushes, a man who moved his workshop to more convenient premises a few blocks away, was deprived of his license for not first telling the council of the move.

``An experienced master builder was denied a private building license on the ground that he would harm `state interests.'

``That in a country where at least 2 million people are facing up to 10-year waits for a flat under the government's own housing program!''

A Supreme Court ruling reversed the latter decision, saying that such behavior by local authorities undermined the state interest rather than protecting it.

The court, however, is not always so mindful of the public welfare. The ruling upheld objections by Lodz textile plant managers to private-business licenses for women workers who had quit because of notoriously appalling pay and other conditions and planned to start up their own modest linen and knitting workshops.

Despite officially offered inducements -- and consumer need -- only 20,000 private traders went into business last year, Polityka revealed. ``The view from the courtroom shows why these statistics are so unimpressive,'' it said.

In other East European countries, the private sector is either confined to the tiny plots allowed to peasants on state farms, or to moonlighting and under-the-counter activity that are subject to severe penalties.

And even in the Soviet Union, under Mikhail Gorbachev, new ideas appear to be sprouting. Rather surprisingly, the government newspaper Izvestia said recently that the contribution of Soviet private enterprise to the nation's quality of life could not be replaced by what the paper termed ``our clumsy service sector.''

The newspaper called for a ``changing of the rules.'' Private enterprise should no longer be called ``criminal'' and it should be legally allowed to produce those goods and services that the state economy has clearly failed to provide.

Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.