Borvendég Zsuzsanna: Fabulous Spy Games. How international trade networks with the West developed after 1945 - A Magyarságkutató Intézet Kiadványai 24. (Budapest, 2021)
‘THE HUNGARIAN MAFIA’ - A Cold War Hungaricum
FABULOUS SPY GAMES number was beginning to grow in the first half of the 1980s. The appearance of these companies attracted the attention of western economic players, too.254 American intelligence prepared a report on joint ventures in the Eastern Bloc in 1986, which put the number of companies operating under joint ownership in Hungary at 50.255 This figure included the number of companies operating with headquarters in Hungary, and it must have been only a snapshot as we already know of 80 companies under foreign ownership operating in Hungary in 1987. That said, the data set published by the Americans is still intriguing as it allows us to compare willingness in the region to allow the entry of western capital. Based on the figures, Hungary comfortably outdid the trends in its sister countries. Even Romania only had ten joint ventures at the time according to the report, despite creating the opportunity for western owners to arrive in the country far earlier than Hungary, as we have seen. According to the information provided by American intelligence, Bulgaria had eight joint ventures with a capitalist background, Czechoslovakia had one such company and Poland had none at the time. Hungary was a particularly attractive target for investors as relevant legislation allowed companies to be established in a wide range of sectors of the economy from banking to tourism, while taxes were kept relatively low (20 percent in the first five years, then 30 percent). In addition, western investors enjoyed tax exemption in the first five years in certain priority areas, such as the energy and the pharmaceutical industries, and were granted considerable tax breaks thereafter. Let us also remember that they were able to purchase energy and raw materials at favourable prices, and the wages of Hungarian workers were determined based on the normatively low eastern wage rates, paid in forints, of course.256 Overall, investors regarded investment conditions in Hungary to be more favourable than in neighbouring Yugoslavia, even though the economy had been much more open there since the 1940s, and western capital had been present practically throughout the entire period. 254 Ter Borg - Lafeber 1987 255 CIA, FOIA, International Economic & Energy Weekly, 31 October 1986 https://www.cia.gov/library/readingroom/docs/CIA- RDP97-00770R000 100630001 - 3 .pdf (Downloaded on: 31 August 2019) 256 Ibid. 94
