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Poor Show Resentment : Money Talks Ever Louder in Hungary

September 08, 1989|DENISE HAMILTON | Times Staff Writer

BUDAPEST, Hungary — In the bowels of the city, polyester sticks to sweaty skin and buses belch exhaust.

But on a hillside patio high above the traffic's din, the afternoon breeze wafts the fragrance of apricots through the air. A servant glides silently, bearing mineral water in crystal pitchers and trays piled high with finger sandwiches.

"Socialism is a most corrupt system, " muses businessman and film director Istvan Bacskai Lauro, leaning back in his crisp white cottons to survey the hills below him like a ruler taking inventory of his kingdom. "The secret is knowing how to manipulate it and who to bribe. . . . One must use connections and money."

Burying the Sickle

Much blood has been shed in Hungary this century in the name of the proletariat. But most Hungarians today would much rather march within the ranks of the moneyed class, whose shiny sports cars, A-frame homes and satellite dishes dot the Rozsa Domb (Rose Hills), the Hungarian equivalent of Bel-Air.

Throughout these hills ring the sounds of construction as workers wield their hammers to build three-story, half-million-dollar homes for those who have buried the sickle of communism forever.

Hungary has always had an elite, of course. The Communist system even has a name for it--the nomenklatura , whose power and privilege were passports to an easy life. But Hungary's wealthy have long been forced by the reigning ideology to enjoy their fortunes discreetly, behind locked doors.

No longer. As Hungary moves steadily toward a market economy, those with money and Western-style business skills find themselves increasingly courted by the same government that threatened to jail them for "speculation" 20 years ago.

Scathing Reviews

The result is an emerging entrepreneurial class that pays little attention to socialism, except to dismiss it scathingly.

"Socialism? That's against human nature," one businessman says.

"Everyone hated communism. They were just acting," says another.

Some, like Lauro, speak candidly about bribing people. Others pepper their conversations with discussions about burgeoning art collections and his-and-her Mercedes.

The Western concept of conspicuous consumption has taken firm root.

Hungarian yuppies zip down the grand leafy boulevard of Nepkoztarsasag Utca (People's Republic Street) in new BMWs. They drop bundles of forints--Hungary's currency--at chic, privately owned bistros where everything from the lobster to the avocados is flown in from the West.

These are the most obvious signs that the gap between the rich and poor is widening in socialist Hungary. But in the side streets and alleys there are others: the growing numbers of homeless men and women rooting through the trash.

In a country where the average Hungarian lives with her or his family in a three-room, high-rise, cinder-block apartment and earns $130 a month, there is growing resentment and envy toward those whom the economic reforms have helped make rich.

"They hate my car," said Gabor Varszegi, staring gloomily at an ugly gash inflicted by vandals on his sleek, black Mercedes 560 SL. Varszegi, 43, founded a financial empire around one-hour photo-processing shops in a joint venture with Kodak.

"Twenty years ago, if you wore a pair of blue jeans and drove a Czech car, you were rich," recalled Varszegi, who got his first taste of wealth in the 1960s as the bass player for a successful Hungarian rock band called Gemini.

In 1986, Varszegi took a $200,000 investment and opened a Fotex-Kodak shop in Budapest's Scala department store. The first year, he made a 500% profit, he says. Last year, he made $6 million with six shops.

Today, he employs 105 people and has branched out into contact-lens manufacturing, picture-frame and animal-feed factories and a state-of-the-art eye clinic with 20 doctors. Launching a weekly newspaper and opening a Budapest diamond exchange are next.

"I am very familiar with the rules in Hungary. I have very good connections," said Varszegi, sinking into a green velvet chair at the Ballantine's Club, a posh, private watering hole for wealthy businessmen in the city. But he admitted that most Hungarians aren't so lucky. Many feel betrayed, he says, by 40 years of Communist rule that promised social equality but has delivered little social security.

"It's the system. The people feel they have no chance, no opportunity," he asserted.

Ottilia Solt, a Budapest sociologist who studies the poor, agreed that there is growing resentment and that it could lead to social unrest.

"People are angry with those who are at the top, who are given advantages and privileges as never before under the slogan of capitalism," Solt said.

20% Live in Poverty

She cited a study that found that one in five Hungarians lives below the poverty level. The state Department of Statistics said that in 1987, the last year for which figures are available, only 5% of Hungarians made more than 10,000 forints (about $170) per month.

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