1988. 1988.05.10. Interjú Kádár Jánossal / HU_BFL_XIV_47_2

percent. You've introduced an income tax with a Progressive income tax with the highest rate of 60 percent. You've introduced a value-added tax that in somé instances leads to a 17 percent add-on in product cost. I've enjoyed myself greatly here, bút somé Hungarians have said to me that this is a Scandinavian tax system with Third World wages. In addition to that, one billión dollars have been cut in subsidies to firms, to companies, and that means unemployment. Does that alsó mean that you are striking at the heart of the socialist system which is a guaranteed job from the cradle to the grave?

You've got unemployment fór the first time. In brief, if

Hungary is a model fór reform, is it a defective model? Is it a model that has nőt fully worked, and what does the future hold?

KADAR: Well, I have been following this process and

taking part in it fór a long time in a position of responsibility. There are various distinguishable stages of the process of development that is let's say, three decades old. The first period was one of consolidation. This lasted about three years. Then came a period of quite dynamic development, which lasted approximately 14, 15 years. After this, our developmental process came to a halt. There were many reasons fór this halt. One of these was the

unsatisfactory natúré of our domestic work. The other involved certain International circumstances which were nőt favorable to us. I'm talking here about the realignment of international markets, of the oil price explosion, etc., and whatever follows from these, [all of which] had a negative effect on us. That is, the prices of our exports feli while the prices of products that we had to purchase increased, and over and above this, we had sales problems, that is we ran up against various limitations in the form of tariffs. Now, I, nőt only because of my part in it, consider the path of reform important, vitai, successful, that is functioning, that is an operative reform. I would alsó underscore this with the fact that our progress has halted approximately seven or eight years ago, that is that production development and the standard of living have been substantially slowed down, bút we were able to tide over this period and stay afloat because we stayed on the path of reform. It is my conviction that the path, in economic terms, continues to be that of reform. Naturally, there are certain problems here. We cannot consistently follow exactly the same path that developed captitalist countries use to change their product structure.

' This cannot be reconciled with the essence of our social system. We must find the socialist road of development. However, the purpose and the goal of this [kind of

development] is the establishment of the conditions fór efficient economic management.

MCLAUGHLIN: The situation, however, appears to be quite

grave. The extemal debt is $18 billión, which works out to $1,500 fór every person in Hungary per year to pay on the basis of an average of $120 a week. Therefore, you have Hungarians holding three jobs. The mortality rate is up, the birth rate is down, because people don't want to have children. It takes too much time; it interferes with their

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