Hungarian Leader Opens Party Talks With Pledge to Continue Reforms

This country, with the Soviet Bloc’s freest economy and highest standard of living, opened a policy-making Communist Party congress Monday with pledges to continue the liberalizing reforms that have brought a blossoming of private enterprise.

Party leader Janos Kadar acknowledged that Hungary has fallen short of the goal set at the last party congress in 1980 to maintain the country’s standard of living in the face of a worldwide recession. Still, Kadar said, the Communist authorities feel secure in promising a modest upswing over the next five years.

“We have never made a secret of our problems, they have not been swept under the carpet,” Kadar told 1,800 party delegates and invited guests at the congress, which is held once every five years.

He added, in a note of caution, that while many professions were assembled before him in Budapest’s modernistic congress center, “there are no magicians, no miracle workers among us.”

By East European standards, Hungary has already worked economic miracles. The shops are filled with a variety and quality of foods and consumer goods unavailable in the Soviet Union and most of the rest of Eastern Europe, where long, dreary lines for scarce and shabby goods are the rule.

Lines Only at Cashier

“The only lines in Hungary are at the cashier,” observed one Western diplomat.

Aging but still vigorous, Kadar, who will be 73 on May 26, has presided over Hungary since the Soviet army crushed a nationwide anti-Communist uprising in 1956. Although he was installed in power by Soviet tanks, Kadar has won a broad measure of popular support over the years as he managed to defy Marxist-Leninist ideology with his economic reforms without alarming the Kremlin or deviating from its foreign policy.

The four-day party congress, which is to ratify the Kadar regime’s economic and social policies for the next five-year planning period, is the first in Eastern Europe since Mikhail S. Gorbachev, 55, became head of the Soviet party.

Hungarian officials and other East Europeans are privately expressing relief that the Kremlin now appears to be in the hands of a dynamic pragmatist--rather than a rigid ideologist--who seems to understand the need for economic reforms in the Soviet Bloc.

Hungary has encouraged the proliferation of small private enterprises to help provide goods and services that are taken for granted in the West but only dreamed of by millions in Eastern Europe.

Private Enterprise to Remain

According to official figures, private enterprise now accounts for 4% to 5% of the national economy, but Western analysts say this applies only to the industrial sector and that the actual figure is probably substantially higher. The policy guidelines submitted to the congress for ratification pointedly reassure Hungarians that this trend is not to be reversed.

“Our state recognizes and defends private property acquired through work in a legal way,” the guidelines declare. “It fulfills real social requirements and plays a useful role in society.”

The grip of central planners has been greatly relaxed since the reforms began in 1968, leaving farm and factory managers with freedom to make their own decisions. Beginning this year, factory employees are being allowed to elect plant directors from a state-approved slate.

Hungary’s trade in agricultural and industrial goods is thriving. And after weathering a debt crisis in 1982, when Moscow and others withdrew huge sums of hard currency from the state bank and left Hungary nearly insolvent, Budapest has managed to reduce its hard-currency debt to the West by 15% to about $8.2 billion.

“In 1982, we had serious problems in trying to maintain our solvency, but we succeeded,” Kadar said.

Economic Problems Remain

He warned, though, that a number of economic problems still plague the economy. The 20% of the population living on fixed pensions suffered a drop in their living standard, and young Hungarians face severe difficulties finding housing, he said.

This year’s goal is to stop the national economy’s decline and begin a slow upswing, with 14% to 17% growth expected over the next five years. Policy guidelines submitted to the congress call for a “perceptible increase in the standard of living” through greater efficiency in the economy brought about by continuing reforms.

The party is also calling for a concerted attack on corruption, patronage, nepotism and the “abuse of power” said to have grown with a relaxation of central controls.

In rare public slap at Communist allies, the guidelines also raise the sensitive problem of 2.5 million ethnic Hungarians living in Romania and Czechoslovakia as a consequence of post-World War I borders that awarded two-thirds of Hungary to its neighbors. In recent years, tensions have grown between Hungary and Romania, particularly over accusations that Romania seeks to eradicate the national identities of its ethnic minorities.

“We regard it as a natural demand that the citizens of Hungarian nationality living in neighboring countries be able to foster their mother tongue (and) develop their national culture,” the policy paper said. It made no direct reference to Romania or Czechoslovakia, but diplomats said the intent was clear.

Kadar also said Hungary is prepared to sign an extension of the Warsaw Pact treaty, which expires in May, but left unclear whether the Hungarians are still pressing for changes in the agreement, including limiting the extension to 10 years, rather than the 30 years Moscow is asking.

“What will happen 10 or 20 years from now we don’t know, but it is right to extend the lifetime of the treaty,” he said.