See Article History Alternative Titles: Formerly known as Bessarabiathis region was an integral part of the Romanian principality of Moldavia untilwhen it was ceded to Russia by its suzerain, the sultan of the Ottoman Empire. Nistru to form the Moldavian Soviet Socialist Republic.
Hungary's strategic position in Europe and its relative high lack of natural resources also have dictated a traditional reliance on foreign trade. For instance, its largest car manufacturer, Magomobil maker of the Magosixproduced a total of a few thousand units.
From the late s, the Communist government started to nationalise the industry. At first only factories with more than workers were nationalized, later this limit was reduced to only In the agriculture, the government started a disastrous programme of collectivization.
From the early s more and more new factories were built. This rapid and forced industrialization followed the standard Stalinist pattern in an effort to encourage a more self-sufficient economy. Most economic activity was conducted by state-owned enterprises or cooperatives and state farms.
InStalinist self-sufficiency was replaced by the " New Economic Mechanism ", which reopened Hungary to foreign trade, gave limited freedom to the workings of the market, and allowed a limited number of small businesses to operate in the services sector.
In the face of economic stagnation, Hungary opted to try further liberalization by passing a joint venture law, instating an income tax, and joining the International Monetary Fund IMF and the World Bank.
ByHungary had developed a two-tier banking system and had enacted significant corporate legislation which paved the way for the ambitious market-oriented reforms of the post-communist years. Transition to a market economy[ edit ] ING headquarters in Budapest After the fall of communism, the former Eastern Bloc had to transition from a one-party, centrally planned economy to a market economy with a multi-party political system.
With the collapse of the Soviet Union, the Eastern Bloc countries suffered a significant loss in both markets for goods, and subsidizing from the Soviet Union.
As a result, many people in Hungary suffered incredible hardships during the transition to a market economy. Byhowever, the costs of government overspending and hesitant privatization had become clearly visible.
Cuts in consumer subsidies led to increases in the price of food, medicine, transportation services, and energy. Reduced exports to the former Soviet bloc and shrinking industrial output contributed to a sharp decline in GDP.
In Marchthe government of Prime Minister Gyula Horn implemented an austerity program, coupled with aggressive privatization of state-owned enterprises and an export-promoting exchange raw regime, to reduce indebtedness, cut the current account deficit, and shrink public spending.
By the end of the consolidated public sector deficit decreased to 4.
Consequently, Hungary enjoys favorable borrowing terms. In Hungary's currency, the Forint HUFbecame convertible for all current account transactions, and subsequent to OECD membership infor almost all capital account transactions as well.
SinceHungary has pegged the forint against a basket of currencies in which the U. The government privatization program ended on schedule in These successes allowed the government to concentrate in and on major structural reforms such as the implementation of a fully funded pension system partly modelled after Chile's pension system with major modificationsreform of higher education, and the creation of a national treasury.
Remaining economic challenges include reducing fiscal deficits and inflation, maintaining stable external balances, and completing structural reforms of the tax system, health care, and local government financing. Recently, the overriding goal of Hungarian economic policy has been to prepare the country for entry into the European Union, which it joined in late By the end ofHungary had shifted much of its trade to the West.
Germany is Hungary's single most important trading partner. The US has become Hungary's sixth-largest export market, while Hungary is ranked as the 72nd largest export market for the U. Foreign capital is attracted by skilled and relatively inexpensive labor, tax incentives, modern infrastructure, and a good telecommunications system.
By Hungary's economic outlook had deteriorated. Wage growth had kept up with other nations in the region; however, this growth has largely been driven by increased government spending.
This prompted Nouriel Roubinia White House economist in the Clinton administration, to state that "Hungary is an accident waiting to happen.
Another reason for discontent was that the state offered large tax subsidies and environmental investments, which sometimes cost more than the selling price of the company. Along with the acquisition of companies, foreign investors launched many "greenfield investments". These people or their descendants could exchange their vouchers for land previously owned by agricultural co-operatives, who were forced to give up some of their land for this purpose.
He introduced a string of austerity measures the " Bokros Package " on 12 March which had the following key points: The package also included welfare cutbacks, including abolition of free higher education and dental service; reduced family allowances, child-care benefits, and maternity payments depending on income and wealth; lowering subsidies of pharmaceuticals, and raising retirement age.
These reforms not only increased investor confidence,  but they were also supported by the IMF and the World Bank,  however, they were not welcome widely by the Hungarians; Bokros broke the negative record of popularity: Because of the austerity program, the economy of Hungary slowed down in Dear Twitpic Community - thank you for all the wonderful photos you have taken over the years.
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AUSTIN, Texas (AP) — The owner of a Texas company that sells plans to make untraceable 3-D printed guns was back in the U.S. Moldova: Moldova, country lying in the northeastern corner of the Balkan region of Europe.
This region was an integral part of the Romanian principality of Moldavia until , when it was ceded to Russia.
Upon the collapse of the Soviet Union in , it declared its independence and took the name Moldova.