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Hungary is one of the more successful of the former communist countries that have now joined the EU

Hungary is divided into roughly two halves by the Danube, which cuts through the country from north to south. The area to the west is called Transdanubia. The land is predominantly flat but has two higher areas: the uplands of Transdanubia in the south-west and the loftier Northern Mountains along the border with Slovakia. Hungary's plains also come in two main parts. In the north-west of Transdanubia is the Little Hungarian Plain. To the east of the Danube the Great Hungarian Plain accounts for more than half the country.

Most of Hungary's people are related to Finns and Estonians and are ethnically distinct from their Slavic neighbours. The most significant minority population are 190,000 Roma, or gypsies, who are among the country's poorest people. Most Hungarians suffered a steep drop in living standards after 1990. Since then there has been a steady recovery. Education standards are high, but health is worse than might be expected: middle-aged men tend to have particularly poor health, due to bad diet, smoking, and high alcohol consumption. Hungary also has one of the world's highest suicide rates.

Around one-quarter of ethnic Hungarians live outside Hungary. As a result of the historical redrawing of boundaries there are around 1.6 million in Romania, half a million in Slovakia, and many others in Serbia and Ukraine. This has frequently been a source of friction: Hungary has protested to Slovakia in particular about discrimination against Hungarians, though Hungary tends to have better relations with Romania.

Industry employs around one-third of the workforce and their output of machinery, other equipment, and chemicals accounts for most exports. Production slumped when markets in Eastern Europe collapsed, but thanks to extensive foreign investment these have now been replaced by sales to Germany and Austria—mostly of component parts, particularly for the car industry. Hungary produces around one million of Audi's engines annually, for example. Many of the companies involved come from the EU, the US, and Japan, but one-quarter of sales are by the local firm, Raba. Other important industries include pharmaceuticals and chemicals and more recently electronic goods and computer software. Around 80% of all Hungary's exports go to other countries in the EU.

Even in the communist era, Hungary had been creating elements of a market economy. And the government has since carried out a fairly effective privatization programme. The private sector is now responsible for 80% of GDP.

With fertile soils and a helpful climate, Hungary can grow a wide range of crops. And though agriculture accounts for only 4% of GDP and employs 6% of the workforce, the country is generally self-sufficient in food. The government has converted collective farms to cooperatives.

Workers leaving agriculture and industry have mostly been absorbed into a mushrooming service sector which generates around two-thirds of GDP. Tourism plays an increasingly important part, generating up to 10% of GDP; expenditure per visitor is increasing. Unemployment has come down steadily, to around 8%.


Subjects: History

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