Introduction

Abstract

Since 1989, Hungary has been trying to integrate its economy fully with the world market. Two crucial tasks have accompanied the transition:

• coping with one of the highest per capita debts in the world

• achieving international competitiveness for goods Made in Hungary

The legacy of external debt and the requirement of international competitiveness are, in short, the topics of this analysis. To be sure, many more problems have been encountered during the transition. The decade-long economic crisis of the 1980s still burdens the country in more than one way, and the establishment of a viable market system depends not just on how good or bad goods produced by Hungarian firms are. However, given the size of Hungary’s external debt, its small domestic market and hence the high trade dependence of the country, debt management and the achievement of international competitiveness are the key ingredients for a strategy of successfully opening up its economy to the world.