Regional specialisation in a transition country - Hungary



the share of the products of the labour intensive branches also fell in the structure of the
Hungarian export. Their share was increasing in the first half of the 1990’s - 19% in
1989, and 23% in 1993 - but by the end of the decade it fell below the level of 17%.

In the course of the 1990’s the contribution of agriculture and the metallurgy to
the GDP was decreasing while that of the services was spectacularly increasing. These
figures forecast the fact that Hungary has just entered the another phase of development.
These days the major share of the GDP is provided by the services. In 1999 the
contribution of agriculture to the GDP was 5%. It was 33% in the case of industry and
building industry and 62% in the case of services. Considering examples of closing up
in the Union, similar figures describe the economy of Finland, where before the
intensive catching up of the last decade, in 1987 such was the distribution of the GDP
among the sectors of economy: agriculture: 6%, industry: 32%, services: 62%.

Owing to the transition into market economy the number of the employed in
Hungary fell by 1.5 million between 1988 and 1997. The job of 1.1 million workers and
400 thousand pensions ceased to be. Between 1988 and 1997 the elimination of
workplaces was restricted primarily to agriculture and the industry, meanwhile in
services the reduction was scarce. It is the consequence of this drastic decrease that the
rate of the economically active population in the group people in working age (15-64
years) at the turn of the century is still under 60.5% while its average in the European
Union is about 68%. However, since 1997 an opposite tendency can be also felt namely
that the number of the employed started to rise. Since this year the number of the
employed has increased by 185 000 and in the third quarter of the year of 2000 it
reached 3.8 million in the country.

Regarding the changes in the rate of unemployment we can separate two easily
distinguishable phases in the decade. In the first half of the 1990’s the rate of
unemployment was growing rapidly but since the peak of 1993 we have been
experiencing a decrease. In the second half of the decade the decrease in the
unemployment happened along with a rise in the rate of employment. As the result of
this tendency at the end of 2000 the unemployment rate was as low as 6%.

Looking at the regional breakdown, despite rising employment rates in all seven
statistical areas, the overall improvement has not caused these areas convergence. As
the central and western areas of Hungary also experienced a sharp rise in employment,
even though the rates in these areas have been better than national average for a
considerable period of time. This poses the treat of bottleneck developing, since while

C:anyuwork/ace/ersa/paper01.07.2412:14



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