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US's Man in Budapest: Visible and Vocal

TO his admirers, Mark Palmer is the prototype American ambassador, ever active and imaginative, formulating original new ways of piercing the Iron Curtain. To his detractors, Mr. Palmer is too visible and too vocal. One thing is sure: Ambassador Palmer is visible. Hungarian television showed him milling about the crowd both during the March 15 opposition demonstration and the June 16 reburial of executed Premier Imre Nagy. His ties with Hungarian Communist Party leaders also are excellent. His regular tennis partner is Harvard-educated Prime Minister Miklos Nemeth.

Perhaps more than any other single individual, Ambassador Palmer is responsible for articulating a Western policy toward a region where economic failure is forcing change, and where room for maneuver has expanded thanks to Mikhail Gorbachev's policies. In Palmer's opinion, the West should traverse the East-West divide with all kinds of links - between governments, businesses, churches, environmentalists, students, journalists.

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The US, for example, could send 1,000 English teachers to Eastern Europe, Palmer says. That would be a bargain way of propagating Western ideas. More students from Eastern Europe also could come live and study with Western families.

In economics, the Palmer approach calls for explicit market-oriented lending. World Bank and IMF credits would become conditional on specific reforms: reducing bureaucracy, promoting private enterprise, and liberalizing rules for foreign investment. Debt relief should be granted, but only ``in the context of far-reaching reform.''

Large-scale credits to the governments would be wasted in inefficient state industries. Instead, Palmer says, loans should be smaller and targeted to specific projects. Direct foreign investment should promote private enterprise.

Mr. Palmer has helped sponsor the communist world's first Western-style business school. It opened its doors in Budapest this spring. He has increased the amount fellowships for study in the US, ensuring that many go to leaders of Hungary's budding democratic opposition.

President Bush reportedly will announce a set of ``Palmerite'' proposals during his trip to Budapest. One is the launching of a $100-million mutual fund to invest in Budapest's stock market. Another is private funding for the democratic opposition.

These measures, ironically, draw applause from Hungary's reform-minded Communists.

``Palmer is a good friend of Hungary,'' says Janos Barabas, the Communist Party's new ideology chief. ``He's active, strong.''

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But many other Hungarians find him either too active or too strong. They criticize him for permitting a painting of himself to be hung in the new business school, and for reportedly trying to ensure that opposition members do not adopt a too radically anti-Soviet stance.

``He acts like a proconsul,'' complains Janos Betlen, a journalist at Hungarian national radio. ``The Russian ambassador here could never afford such an appearance. If he were the American ambassador to a Latin American [nation], he would be expelled in 24 hours.''

``I'm no procounsul,'' Palmer responds. ``I'm just ... keeping lines of communication open to everyone. We don't have any special powers here, we just have our values.''

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