Page:NATIONAL INTELLIGENCE SURVEY 19 HUNGARY COUNTRY PROFILE CIA-RDP01-00707R000200110037-3.pdf/22

 APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200110037-3

Foreign Policy: A Function of Reality (S)

For years there was doubt that Communist Hungary had a foreign policy. In the cold war era it led a largely parochial existence as a Soviet satellite, and only in late 1955 was it finally accepted for membership in the United Nations. Recently a native Hungarian wit has allowed that there now is a foreign policy, but that it is mainly a screen behind which party leaders attend to their favorite occupation, the cultivation of the economy and the tranquilization of the country at large. This observation, while generally true, masks the more specific truth—that Hungary, as it focuses inwardly on all-important domestic reforms, must at the same time work skillfully for the best possible relations with its Communist neighbors. Kadar's liberalization steps tend to disturb other East European governors, who profess to see in them the seeds of Western capitalistic subversion. Thus far, Kadar's caution in prosecuting reform has staved off truly damaging criticism. More important, his hearty approval of most aspects of Soviet policy has served to insure that Hungary will continue to be accepted as a fully paid-up member of the "socialist commonwealth of nations."

Generally, Hungarian Communists find it easy to conform to Soviet world views. In many situations they already agree on the basis of a common ideology, while in others they feel the issue is so remote as to be of little concern. Occasionally, however, national self-interest intrudes, and then Hungarian leaders pursue their own special cause to the extent they believe Moscow will permit. In the halls of the United Nations Hungary regularly echoes Soviet positions. In particular, it mirrors the Soviet view on Vietnam, the Middle East, and the "struggle" of third world nations for unity and independence. Budapest backs Moscow against Peking, but, along with other East European capitals, frequently urges restraint. The Kadar regime hews closely to the Russian line on the large question of European security and cooperation, although here, given a choice, the Hungarians would seek to accomplish more. They have also shown interest in participating in the International Monetary Fund, but they have held off pending a Soviet move. In bolder action, Hungary has proposed, despite Soviet displeasure, that CEMA (Moscow's would-be common market for East Europe) be converted into an integrated system along the lines of the European Economic Community.

The basic logic of Budapest's position, as Kadar has acknowledged, is that Hungarians "cannot change geography." Hungary lies in the Soviet sphere of influence. It is an economic and military dependency of Moscow. And the U.S.S.R. is capable of strong, swift intervention at any time. By reason of this stark reality, Hungary's options are limited.

Specifically, the Soviets have an important, perhaps even decisive, voice in Hungary's economic course. The U.S.S.R., for example, supplies three-fourths of Hungary's iron ore and more than half of its lumber, coal, and oil. CEMA accounts for roughly two-thirds of Hungarian foreign trade, and half of this total is attributable to the U.S.S.R. Additional leverage is supplied by the 50,000-man military force the Soviets have "temporarily stationed" in Hungary, presumably at cost to the host nation.

In recent years, the Soviets have chosen to follow a "compromise" policy toward Hungary—neither heavyhanded intervention nor hand off. They know the location of the pressure points on the Hungarian corpus, and they are not afraid to squeeze them when necessary. The Soviets appear to have some sense of confidence in Kadar, on the grounds that he has managed rather well in difficult circumstances since 1956. On the other hand, Soviet suspicions of Hungarian domestic reform

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APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200110037-3