POLICY CHANGES IN THE FOREIGN TRADE UNDERTAKINGS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00810A002400630002-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 22, 2016
• Document Release Date: November 20, 2009
• Sequence Number: 2
• Publication Date: September 25, 1953
• Content Type: REPORT

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Sanitized Copy Approved for Release 2009/11/20: CIA-RDP80-0081000240063002-
CENTRAL INTELLIGENCE AGENCY
INFORMATION REPORT
This Document contains information affecting the Na-
tional Defense of the United States, within the mean-
ing of Title 18, Sections 793 and 794, of the U.S. Code, as
amended. Its transmission or revelation of its contents
to or receipt by an unauthorized person is prohibited
by law. The reproduction of this form is prohibited.
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SECURITY INFORMATION
Hungary
Policy Changes in the Foreign
?ade Undertakings
REPORT
DATE DISTR.
NO. OF PAGES
25 September 1953
REQUIREMENT NO. RD
REFERENCES
THE SOURCE EVALUATIONS IN THIS REPORT ARE DEFINITIVE.
THE APPRAISAL OP CONTENT IS TENTATIVE.
(FOR KEY SEE REVERSE)
Vol CIiRR[ 51111 it-OW
lAlB Ao01T IS N01 7G WhkS
MATES, `OR OEYO D TIDE
IE. D STALES, rat 1.4
In .. I'S IN
1. At the end of July, 1953, a conference of the foreign representatives of
ChemolimpeX took place in Budapest,. 'at which important changes of policy
were made known and new directives issued.
2. Organization.
The Hungarian Ministries for Internal and Foreign Trade have been merged into
a single Ministry. Thus a large number of officials became superfluous, and
many of these were transferred to the'.,foreign trade undertakings (Chemolimpex,
Metalimpex, Technoimpex, etc.), which are to be given a far larger measure
of independence.
3. lrocurement Activities.
The procurement activities of Chemolimpex have undergone a radical change in
the sense that the requirements of heavy industry have been abandoned in favor
of the light and consumer goods industries. At the Budapest conference the
Chemolimpex representatives were given the following explanation for this
change;
a. Asa result of the top priority given to the requirements of heavy
industry during recent years, there has been a shortage of certain
consumer goods which has had a detrimental effect on the morale of
large sections of the population.
b. Today heavy industry has fulfilled its program to a point where its requirements
may be"negleotedll in favor of consumer goods. The government has accordingly
decided to out out future orders for heavy industry requirements, and even
to cancel current orders where possible.
4. In view of these considerations the Chemolimpex representatives were instructed
to negotiate with suppliers under current contracts either:
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a. cancellation of the contracts, or
b. substitution in these contracts for heavy industry requirements of
the following goods:
i.) ester oils for the soap, cosmetics, and similar industries; 1
5?
6.
2.), medicaments required by the general public;
3a chen .gels required for the manufacture of washing and polishing
matert$ .e and other houeehola gOode f
the export of which has hitherto been strictly banned.
dy sr ate. for the textile industry.
9 llin od vitie+
The reu ca c e in the selling e,etivitio of(,Cksnm : pl x 0614pt see "k, i? a
t.eieps for sale in the West of a number o: itc Lc T.r lc ~'or t};ao honey indua l,ry)
7. The Chemolimpex representatives have been instructed to keep secret this decision
to sell fotaer:ly banned exports to the West. If and when a deal materializes,the
Hungarian origin of the goods must, whenever possible, be concealed.
8. The Relegation of Heavy Industry.
It would be false to speak of any abandonment of heavy industry. Present heavy
industrial concerns will be maintained. However, the decision has beer! taken
to suspend for the time being all further capital investment in,heavy industry.
9. The main reason for tY. relegation of heavy industry in favor of the light and
consumer goods industries is the insuperable problems which have been confronting
the former as the result of bottlenecks in essential raw materials. Thus, the
aluminum industry suffers from shortages of Slj derberg electrtddec and "Anode-
Masse". 't'hese are in no sense offset by the synthetio ureolite . hj.q} Hungary
can lmpurt in any desired amount t'rom r;ast (ermany. The ttiiy possible solutiony
to the present crisis is to try to sell.surplue.. alumina and to use the proceeds'-for
procuring the bottleneck materials.
,ECR,T/CONTRQL - U.S. OFFICIALS Q .
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10. The fall of Minister Vas was due.-primarily to his mistaken policy forcing
capital investment in heavy industry on the understanding that within 2-3-
Years such profits would be gained from it that consumer goods could be
bought cheaply abroad. In the aluminum industry Vas planned an excessive
alumina production. There are 3 large factories producing it today. O4ae
example of vast and unjustifiable capital investment in heavy industry is
the joint Hungarian-Rumanian combine, for the refining of Ease Hungarian'
(.(.s.c)'bauxite and the production of the natrium hydroxide required for this
refining.,
t,n connection with this project an underground natural as
pipe
was laid between Sarmas in Rumania and the I y-'ir'..region.... . $ungary?
11. Sugar Rea' 4ements.
Prior to the Budapest conference, one of the Chemoliinpex representatives had
received instructions to buy sugar in the West against Hungarian chemical
exports. During recent months he has bought 3,000 tons. At the conference
he was told that it was no longer necessary to buy sugar as there were now
sufficient reserves to cover the period until the sugar; beet harvest is
collected. Last yea,%?'"s sugar beet harvest, it was explained, had been
only 50% of the average as a result of "bad weather, etc."
12. Similar changes of policy have been formulated for Technoimpex and the
other Hungarian foreign trading undertakings.
Comments:
om 'idea of the significance of'these new instructions may be gathered,
from the fact that until recently Hungary has been buying ester oils,
camphor derivatives,. etc. in China for resale to the West. Now the
Chemolimpex representatives are instructed to buy'these oils in the West
for the Hungarian home market.
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Sanitized Copy Approved for Release 2009/11/20: CIA-RDP80-0081OA002400630002-4