Print-Friendly Version    

Hungary, a country of 10 million, has the highest per capita income in eastern Europe: $3,300 GDP per person per year in 1994, versus $1,100 in neighboring Romania, with 23 million residents. Hungary has also been successful in attracting foreign investment--$8.5 billion since 1989.

One result is that there are a large numbers of Romanians working illegally in Hungarian agriculture and construction--by some estimates, 50 percent of the workers in these sectors are illegal aliens. Under pressure from Hungarian unions, the government is trying to crack down on illegal immigration, but the crackdown is complicated by several factors, including the large informal economy --an estimated 40 percent of Hungary's GDP is from the informal sector, and the fact that Romanians can enter Hungary without visas and, if they find jobs, they can usually obtain work permits.

Hungary already has employer sanctions laws on the books, but they are rarely enforced, especially in eastern Hungary. The penalty for not obtaining a work permit is a fine which amounts to twice the salary paid to the foreign worker throughout the period that the employer did not have the permit. The fine is paid into the Hungarian Unemployment Fund. In eastern Hungary, ethnic Hungarians from Romania can enter fairly easily, and sometimes friends and relatives help them to find jobs.

Like Germany, Hungary is trying to tackle both the underground economy and illegal immigration. The trick is to bring the underground economy above board, and curb illegal immigration, without further slowing down the economy.

Between 8,000 to 10,000 Chinese are in Hungary, mostly retailers operating in 30 markets. In Budapest, there are two major Chinese markets, one of which has 1,000 Chinese retailers. The cheap prices of Chinese products make them popular with Hungarians.

One Chinese businessman in Hungary says that 80 percent of the Chinese retailers working in Hungary make between $100,000 to $200,000 a year-- ten reportedly have $2 million annual incomes.

The Chinese community has 20 interest associations, established an education foundation and opened an elementary school. There are four Chinese business papers in Hungary.

An estimated 40,000 Chinese were in Hungary between 1989 and 1990, but the number dropped in 1995 because of changes in visa requirements.

Hungary's immigration quota for 1996 is 2,000, the same as 1995. In order to apply for permanent residence status, a foreigner must live in Hungary legally for at least three years. Last year, only 118 foreigners were granted permanent resident status.


"Chinese Traders Say Customs Tariffs Are Too High," MTI Econews, January 18, 1996. "Immigration quote for 1996 again 2,000," MTI Econews, January 12, 1995. "Hungary: Employment of Foreigners," EIU Investing Licensing and Trading, December 1, 1995.