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Case study of Hungary


Case study of Hungary

By Laszlo Kulcsar 1997

I Economic background and rural situation

Since 1990, Hungary has developed a market-driven economic system and a democratic system of politics which have had a great impact on rural regions, rural people and Hungary's agricultural C sector. This chapter presents a brief summary of the main recent economic trends and a profile of rural Hungary.

1. Economic trends influenced rural changes

1.1 Unemployment The unemployment rate in January 1991 was 2.1 percent but by February 1993, it had increased to 13.6 percent. Although there has been a gradual decrease since then, unemployment has left many people in Hungary without opportunities for the future because of low job skills or because they live in rural areas. The situation is even more difficult for those employed in agriculture, because they have little training and their chances of being employed in other sectors of the economy is very low. In 1994, the average duration of unemployment in the countryside was 75.3 weeks, while in Budapest, the capital, it was 56.5 weeks¹.

Unemployment in Hungary mainly affects rural regions. Of those who are unemployed, 45 percent live in villages, especially the undeveloped rural regions in the eastern part of the country. Three major factors have led to this enormous percentage of rural unemployment.

Table 1. The unemployment rate by gender and location 1994

Location

Female
unemployment rate

Male
unemployment rate

Total
unemployment rate

 

(%)

(%)

(%)

Budapest

2.9

5.8

4.4

Big cities

6.7

8.1

7.0

Other towns

8.9

12.0

10.6

Villages

10.7

14.1

12.6

Total

10.6

13.9

12.4

Source: National Labour Center, Budapest.

The highest level of unemployment among both men and women is in the small towns and villages.

In Hungary the employment structure in agriculture has a great, however decreasing, significance. Industrial employment declined in the last two decades, while the rate of employment in service sectors began to rise. These tendencies have continued since 1990. Between 1990 and 1993, the number of employed people dropped almost 1.35 million. Industry accounted for 28 percent of that drop, but the decrease in agriculture has been even more dramatic. Between 1993 and 1997, there was a 60 percent drop in agricultural employment. This was partly relieved by the new land property rights under which many people were compensated or given back land that had been taken away by the previous government, and more than 1.5 million new private farms, with limited average size. were established.

Table 2. Agricultural employment in Hungary 1988-1994 (in thousands)

 

Full-time agricultural employment

1988=100 percent

1988

1028.0

100.0

1990

955.0

92.8

1992

647.7

62.9

1994

370.0

36.0

1.2 Regional inequality With the development of capitalism, the economic and social differences among the regions of Hungary increased. Economic deterioration has become especially intensive in eastern and rural Hungary. No new capital is flowing into these regions and the dissolution of the former economic institutions has left villages with no opportunities for future development. Workers from small villages cannot reach distant places of employment because of the increasingly expensive public transportation. Companies often dismiss employees coming from remote distances because they do not want to pay their travelling fees.

1.3 Transition in agricultural ownership The system of agricultural production has been significantly transformed. There are more small holdings. Certain groups such as gypsies or the poor cannot access land. Many of the food industry organizations that helped small-scale family agricultural production or cooperatives have gone bankrupt or have undergone transformation. This has led to a complimentary and significant family income decrease.

1.4 Migration constraint Lack of income opportunities has forced many workers to migrate, some to big cities looking for work, others back to villages looking for family support. Those with enough personal resources move to other regions of the country, but those with no personal resources or support have difficulties integrating into new surroundings, e.g. large cities. As a result, poverty is appearing on the peripheries of large cities, building up an even more difficult situation to handle. Between 1992 and 1994, the ratio of permanently poor in the villages was 10.4 percent, while in Budapest, it was 1.2 percent².

1.5 The range of social welfare implements Until the 1990s, social welfare policy benefits were mainly granted to youth (age 15 or younger) and older people (age 60 or older). Now, the support and care of people of active age groups has emerged as a new challenge. Social welfare policy has had to be changed to include a broader system for implementing aid to this group.

2. Rural characteristics

According to the OECD definition³, Hungary is a fundamentally rural or characteristically rural country, except for Budapest and its surrounding areas. A large group of towns situated on the Great Plain, in southeastern Hungary, were country market towns or big villages with large agricultural areas. In more than 50 subregions, there is no settlement with a population density of more than 150 persons/ km². These subregions are considered rural, according to the OECD definition which is based on the ratio of the populations of rural settlements (population density under 150 persons per km²) and urban settlements (more then 150 persons per k0). In spite of the criticism that the OECD definition is based on major characteristics and does not factor in other sensitive issues4, this method does show the primary regional inequalities.

Table 3. Rural Indicators in Hungary

Community level: communes

3114

Total population (inhabitants):

10375000

Regional level: small statistical regions

138

Total area (km²):

93 033

   

Rural population (%):

75.4

   

Rural area (%):

97.7

Selected rural indicators by type of region.

Year

Predominantly
Rural

Significantly
Rural

Predominantly
Urban

Total/ Average

1. Population, area

         

Distribution of regions (db)

1994

94

43

1

138

Distribution of population (percent)

1994

42.4

51.9

5.7

100.0

Distribution of area (percent)

 

62.9

35.4

1.7

100.0

Population density (inh./km²)

1994

60.50

131.24

296.83

89.64

2. Population change

         

Total net annual change (%)

80-90

-1.82

0.45

0.61

-0.52

Net migration (%)

80-90

-3.76

-1.41

-0.41

-2.37

Natural balance (%)

80-90

-5.58

-0.97

0.20

-2.89

3. Employment by sector

         

Agriculture

1990

27.02

12.68

9.69

18.48

Industry

1990

33.93

41.85

42.03

38.56

Services

1990

39.05

45.47

48.28

42.96

5. Labour market

         

Employment rate¹

1990

76.42

77.99

80.40

77.46

Unemployment rate (% of labour force)²

1993

14.23

11.1

7.30

12.21

6. Productivity and income

         

Persona 1 tax per ca put

1992

9302.7

14549.4

18035.1

12503.8

7. Land use

         

Agriculture

 

69.26

62.29

49.62

66.47

Forestry

 

16.90

21.27

23.43

18.55

Other

 

13.84

16.44

26.95

14.98

These data give an indication of the importance of the rural sector in Hungary's economy. Almost one-half of the rural population lives in the underdeveloped subregions that have a high dependence on agriculture (employment and land use). Rural people pay very little in personal taxes due to low income. Although there is no valid income data, these factors are indicators of income and standard of living, and the high level of unemployment.

Some population trends might indicate that economic prosperity, social well-being and rapid urban growth peaked in the 1980s in Hungary. The net migration of the villages was -8.1 percent in 1980, but -0.3 percent in 1990, because there has been less and less outmigration from villages. On the other hand, the migration from towns to villages has increased since 1990, for two reasons.

Table 4. The migration balance in cities and villages in Hungary

Year

Budapest

Other cities/towns

Villages

1991

-1.070

-2.195

+3.265

1992

-3.602

-1.758

+5.360

1993

-6.634

-3.168

+9.802

The increase in the population of villages can be traced to the economic crisis that resulted from the 1990 transition: workers who had been commuting from rural areas to jobs in the cities often were fired because of poor training or lack of skills, or because companies were saving money by not paying travel expenses. Many urban people moved back to the villages where relatives could help them. Although the relatives could help them survive, villages people depend on agriculture for their livings. Their relatives can help with daily needs, but these households are closely connected to agriculture which offers only a limited number of jobs. There are very few non-agricultural jobs in the rural areas.

Summarizing the situation of rural Hungary, it seems that rural people have been the losers in the transition process. High unemployment, high dependence on agriculture, lack of capital, low level of human resources, low income and increasing overpopulation are characteristics of contemporary rural Hungary.

II Rural women

1. Target groups

1.1 Unemployment among rural women

In Hungary, mostly in the rural areas, unemployed women fall in two main categories - the registered unemployed who are the beneficiaries of employment policy and actions, and the hidden unemployed who do not register because of negative attitudes toward the unemployed. In many villages, it is considered shameful to go to an employment office or to the local government and receive money without working for it.

1.2 Women in rural poor families

Women in less developed areas and in the poorest families have the responsibility and stress of managing the family livelihood. Most of these women have big families or are gypsies.

1.3 Rural entrepreneurs

Since 1990, many unemployed women, particularly the younger ones, have started small business in the villages. Most of them are self-employed and have created businesses in the service sector

1.4 Rural women in local politics

The role of women in community development is very important. Women participate in NGOs because these organizations often focus on social welfare problems and cultural and local art issues which are the traditional interests and activities of village women.

2. Socio-economic background

2.1 Education

In 1996, 0.7 percent of the Hungarian population over the age of 10 had no schooling. However, among women, it was 0.9 percent, and among people living in villages with populations under 2000, it was 1.3 percent.

Table 5. Education level in rural areas by gender 1990

 

Low

Medium

High

Total

Male

81

15

4

100

Female

77

1

9

100

Not only are rural women in small villages likely to have lower educational levels, they have less knowledge and fewer skills for both private farming and household management. There is a lack of information and experience in private business (housekeeping, small business development, entrepreneurship) among rural women, particularly among young women. Recognizing these disadvantages, the Ministry of Agriculture has renewed the training programs for farm women that were very important and popular in

Hungary in the period between the First and Second World Wars.

There are now 29 villages with training programs for farm women. These programs have been sponsored by the Ministry of Agriculture, through its educational budget, since 1993. The programs are designed to last from one to two years and are offered to rural girls between 14 and 18 years old.

Table 6. Rural girls involved in farm women training

 

1993-95

1996

Total

Number of rural girls who passed the exam

2060

588

2648

The training programs includes lectures and practical work in home economics, horticulture, animal husbandry, tourism, social care, finance, cooking, housekeeping, health, gardening, fashion, music, child care and nutrition.

2.2 Health

There is not enough information on the health status of rural women. According to national data, an increase in alcoholism, smoking and drug abuse among women is more likely in rural areas. Alcoholism and smoking are more likely among adult women (50 percent smoke) which contrasts with traditional rural life. Drug abuse is observed among young rural girls. In 1993, 33 percent of adult women were tested for cancer.

2.3 Division of labor

The division of labor between men and women is very traditional in rural Hungary. While rural women have entered the labor market, a more balanced division of home labor has remained a dream. Women spend three times more time with household work and child care than men. According to the data of the Central Statistical Office, in 1993, working women (18-to-60 years old) spent 180 minutes per day with household work while men spent 64 minutes. The decrease in social welfare services in the villages, such as kindergarten, school breakfast and lunch programmes, and insufficient physical (roads, gas, telephones, electricity) and human (schools, information) infrastructure has put increased pressure on women.

2.4 Women in and out of labor

The industrial policy of the socialist economy created a huge number of semi-skilled and unskilled jobs for former agricultural workers and rural women who had worked hard in their peasant farms and households but had not been previously employed, i.e. worked for wages. The employment structure of rural people shows the impact of this policy.

Table 7. Rural employment structure by gender 1990

Gender

Skilled
workers

Semi-skilled
workers

Unskilled
workers

Managers

Skilled
administrators

Unskilled
administrators

Central region

           

Male

47.8

23.0

13.9

6.6

7.7

1.0

Female

14.1

34.1

14.0

5.0

21.6

11.2

Western region

           

Male

47.5

24.9

14.5

6.7

5.8

0.6

Female

15.1

40.0

15.1

4.5

17.2

8.1

Northern region

           

Male

49.7

25.1

12.4

6.4

5.9

0.5

Female

14.0

42.3

14.0

4.4

17.4

7.9

Southern and Eastern region

           

Male

40.6

29.3

18.5

6.0

5.1

0.5

There are two significant groups of employed rural women: semi-skilled workers and skilled administrators. These groups include 50-to-60 percent of the active, wage-earning women in the villages. These data explain the structure of rural women unemployment after 1990 (Table 8).

In Hungary, the majority of rural unemployment is male. Female unemployment is less likely in villages than in big cities. But these numbers do not present the entire picture, because of the attitude of rural women toward unemployment registration. Many rural women do not register because they remain at home and manage the household and garden, or work in their private farms.

Table 8. Unemployment by gender and settlements 1994

Settlement

Women

Men

Total

Budapest

51.0

49.0

100.0

Big cities

43.8

56.2

100.0

Other towns

41.3

58.7

100.0

Villages

39.1

60.9

100.0

Total

39.4

60.6

100.0

Most of the registered unemployed rural women were semi-skilled or unskilled workers and represented the majority of the administrators and almost one-half of the semi-skilled workers.

Unemployed rural women are relatively young with low education, e.g. 56 percent are 35 years old or younger, 49 percent have elementary school education or less, and 58 percent were dismissed from agricultural or food processing jobs.

One major opportunity for rural women to become employed is by developing their own small businesses. Thousands of rural women have become entrepreneurs, mainly in service sector. There were 217 000 self-employed female entrepreneurs in 1993. According to a 1994 survey, 66 percent of women who responded said they had no work option, other than self-employment. The six months survival rate for these businesses was 65 percent.

Table 9. The rural unemployment by gender and status 1995

Last job status

Male

Female

.% of females
in the groups

Skilled worker

41

21

24

Semi-skilled worker

23

35

49

Unskilled worker

31

24

33

Manager

3

2

29

Skilled administrator

1

10

78

Unskilled administrator

1

8

89

Total

100

100

39

A recent labor force distribution shows a concentration of women in the service sector and of men in industry. Among full-time workers, agriculture has reduced importance.

Inequality remains in the service sector. For instance, the percentage of women in management in Hungary was 33.7 percent, 68 percent in the banking sector in general and 44 percent in the banking sector in rural areas.

Table 10. Labor force distribution by gender and sector 1994

 

Agriculture

Industry

Services

Total

Male

19

43

38

100

Female

10

32

58

100

The income gap is quite wide. In 1991, in blue-collar jobs, women earned 38 percent less than men, and in white-collar jobs, women earned 58 percent less than men. Female managers in rural bank offices earn 23 percent less than men.

2.5. Extension services

There are some trends caused by the reduction of extension services in rural areas.

III Political arena

3.1 Social and legal status

Hungary has adopted all international conventions related to the status of women and has done so, with few exceptions, unconditionally. Article 66 of the Constitution of Hungary ensures equal rights as: "The Republic of Hungary guarantees equality for both men and women with regard to exercising all civil, political, economic, social and cultural rights." This de jure guarantee does not exist de facto. The data (as shown in this report) indicate inequality for women in the division of labor, in wages, in the labor market, and in politics. Rural women are in a more difficult situation because of tradition, lower education and limited opportunities to represent their interests.

3.2 Political representation

The Hungarian Government established the National Office for Equal Chances (NOEC) in 1996, as part of the Ministry of Labor. This office focuses on disadvantaged groups (women and others). As of 1998, the NOEC will report on the status of women every year. The following list outlines the main focus of the NOEC.

Table 11. Women in the Hungarian Parliament

 

1990

1994

 

Total

%

Total

%

All elected female representatives

28

7.5

49

12.7

Women elected In Budapest

2

3.7

7

14.3

Counties without female representatives

8

6

The number of female representatives increased from 28 to 49 between the 1990 and 1994 general elections. In 1994, there were six counties in Hungary with no female representative in Parliament.

3.3 NGOs and grassroots organizations

During the transition, the importance of NGOs and grassroots were recognized early on by the government. But the development process was quite complicated. At the beginning, particularly in rural areas, people had negative attitudes toward new organizations, although they eventually recognized the significant role of NGOs for providing services.

There is no information on the number and activities of rural NGOs, but it is likely that most work focuses on social welfare and local culture. In both of these areas, rural women play very important roles.

There are some NGOs especially for rural women, such as the Club of Women Village Mayors, but they are exceptions. Most rural NGOs were initiated by local governments as a way of getting more funds for services and community development.

Grassroots organizations are underdeveloped. Local societies, and economic and community development processes do not favour this type of organization.

IV Action plan

4.1 Priorities and goals

There is a strong need to separate these requirements into those of prevention and those of restructuring. In one respect, we have to think about initiatives which improve the position of rural women and give them more opportunities in local and family life. But, we must also think of the next generation of rural women, which means we need changes that will prevent the current situation from becoming worse.

We have to distinguish between two types of initiatives. First, the specific initiatives closely related to specific problems of rural women, and second, the more general initiatives which are connected to general problems of rural development in Hungary. In other words, there are direct and indirect possibilities for change. Both are very important, but if we are thinking of long-term effects, then, strategically, we must not concentrate only the short-term effects.

The strategic objective of this National Action Plan for Rural Women in Hungary is: To improve the economic, social and cultural status of rural women, involving them in the local decision-making process and in economic and social development, and to reduce social and economic discrimination against women in Hungarian rural society.

The following are goals of the Action Plan according to the strategic objective.

4.2 Action Plan

Action

Responsible
person/group

Target group

Methods/procedures

Begin - end date

Duration

More support for NOEC rural activity

National Government, Ministry of Labor

All rural women

Public Administration

1998

Continuous

Establish a Coordination Board to make efforts more powerful

National Government

All rural women

Public administration

Jan 1998

 

Analysis of local legislation process in the rural areas from the women's point of view

Local government

All rural women

Local administration, legal analysis

Jan-Dec 1998

One year

Support set up of local- level NGOs by technical assistance and experts

National Government, local government

Rural women in local politics

Training, technical assistance

Fall 1998

Continuous

Support, through training, rural women candidates in local elections

Local government

Rural women in local politics

Training

1998

Every election year

Youth programmes in village schools about women

National and local government

Rural women in local politics

Training

1998

Continuous

Village teacher and NGO training for managing rural women's interest and needs

Local government, foundations, organizations

Rural women in local politics

Training

1998

Continuous

Action/task

Responsible
person/group

Target group

Methods/procedures

Begin - end date

Duration

Re-analysis of existing research data to define the rural women's situation

National government

All rural women

Scientific analysis

Jan-May 1998

5 months

Develop gender-disaggregated statistical system, focused on rural areas and rural people (including unemployment database, census, agricultural census, and the national and local databases of entrepreneurs)

National and local government

All rural women

Administrative, scientific

Jan 1998

Continuous

Publish a six-month statistical report on rural women

NOEC

All rural women

Statistical analysis

1998

Every six months

Develop local (village) or regional information centres for technical assistance, training

Regional and local government

Rural entrepreneurs, unemployment

Training, technical assistance

1998

Continuous

Modify social security and labour laws to reduce the discrimination against women

National government

All rural women

Public administration

June 1998

1 month

Pay more attention to elderly and poor rural families by subsidies (food; school expenses, taxes)

Local government and NGOs

Rural poor families, elderly women

Local implementation

1998

Continuous

Action

Responsible
person/group

Target group

Methods/procedures

Begin - end date

Duration

Extension training in home economics, health, nutrition

Local governments, foundations, local organizations

All rural women

Training

Sept-Nov 1998

3 months

Develop supporting systems for rural business development

National government

Rural entrepreneurs

Public administration

Jan 1998

Continuous

Local subsidies (taxes and others) for rural small business development.

Local government

Rural entrepreneurs

Local rules

Jan 1998

Continuous

Support additional income resources (e.g. rural tourism), income diversification

National and local government

Rural entrepreneurs, unemployment

Legislation, local rules

Jan 1998

Continuous

Training for small business development

Foundations for small business development

Rural women entrepreneurs

Training

1998

Continuous

Incubators, telehouses for rural women entrepreneurs

Local governments, foundations, foreign organizations

Rural women entrepreneurs

Training, extension, technical assistance

Jan 1998

Continuous

Extension for women farmers

Agricultural chambers, universities

Women farmers

Extension, training

Jan 1998

Continuous

Training and retraining for unemployed women

Ministry of Labor, regional unemployment offices

Unemployed rural women

1998

Every 4 months

 

Reform credit and tax systems to help modernize rural households

National and local government

Rural households, all rural women

Legislation

June 1988

 

New credit conditions for agriculture and rural business

National government

Women farmers and entrepreneurs

Legislation

June 1988

 

Develop rural extension network

National government universities, chambers

Women farmers, entrepreneurs, poor families

Legislation

June 1988

 

More support for social land programs focused on poor rural families and women's activities

Ministry of Social Welfare

Women in rural poor families

Public administration

Jan 1988

 

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