URBANISATION AND URBAN DEVEUOPMENT IN HUNGARY
POST-SOCIALIST URBAN TRANSITION
Prior to 1990 towns of Hungary were organised in a hierarchy according to the level of their central functions. The share of urban settlements in the central budget depended on their position in the hierarchy. As Gy. Enyedi (1998) pointed out the availability of resources for development was determined neither by a city's actual endowments, nor by successful management, but merely by the city's effective bargaining power in the process of redistribution at its own level of the hierarchy. The political transition led to the dissolution of this practice of central planning and the role of state was replaced by the regulatory forces of market. Moreover, the shift of control from central (state) to local (community) level also meant that cities could adopt their own development policies, adjusted to their potentials and priorities.
All these resulted in the strengthening process of regional differentiation within the urban system. The possibility of turning local characteristics and advantages to account has released considerable energies and led to a spectacular development of some of the towns, especially Budapest and those located in the northwestern part of the country (e.g. Győr, Székesfehérvár, Szombathely). On the other hand cities located in regions with traditional heavy industries and agricultural sectors (e.g. Miskolc, Ózd, Debrecen) have been hard hit by economic restructuring under the new competitive circumstances. The geographical pattern of new types of businesses reveals some important features of strengthening regional differentiation within the country (Figure 4).
Fig. 4. Spatial distribution of join t ventures with foreign participation in Hungary 1994
Fig. 5: Balance o f migration between Budapest and Pest county
In the post-socialist urban development economic transition played a decisive role. In this respect we can distinguish two important sets of changes which affected the development of towns dramatically. With respect to sectoral changes, due to the collapse of COMECON market, Hungarian industry (especially the heavy industrial branches) sank into deep recession after 1989. Most of the former state complexes and mammoth firms went bankrupt and were either closed or disintegrated into smaller, more flexible units. In the meantime there was a real boom in the tertiary sector, especially in the fields of trade, tourism, financial and business services, which generally stand out with their high demand for qualified labour. A good example of rapid sectoral change is Budapest, where the number of industrial workers dropped nearly half between 1990 and 1995, and the total share of industry decreased to 18 percent of the labour market.
Thus, sectoral change has led Hungarian cities to the path of post-industrial development irreversibly.
From a structural point of view, as part of the post-Fordist type restructuring of the economy, the number of small and medium sized enterprises has increased rapidly in Hungary after 1989. These smaller firms with a handful of employees have become crucial in the development of local economies. Since the majority of the owners of local private enterprises are local residents therefore they are personally interested in the development of their cities or districts.
The investments of transnational companies have also had great impact on urban development. Towns which have enjoyed such investments have been rapidly integrated to the global economy (e.g. Budapest, Győr, Kecskemét).
Economic restructuring has set off profound societal changes within cities.
Owing to the growing differentiation of incomes, social differencies in Hungarian cities increased very rapidly. The remnants of social housing have become more and more the shelter of urban poor, whereas the better-off and the young are leaving the cities and invading the green suburbs, modelling the subsurbanisation process of western cities in the 1960s and 70s. As we pointed out earlier the population decline of Hungarian cities started in the final years of state socialism. This process has proceeded after 1990 and resulted in substantial population loss in most of the cities, whereas the population of rural areas slightly increased. According to the statistics the number of population in Hungary decreased by 1.7 per cent between 1990-1996, which was the consequence of
Table 2. Population change in Hungary 1990-1996
Population (1.000) in 1996
Population change 1990-1996 (%)
Natural growth 1996
Balance of migration
1996
Budapest 1,886 -6.5 -12,467 -7,980
Budapest
agglomeration 607 6.7 -564 9,340
County seats 1,798 -3.4 -3,383 -5,065
Other towns 2,700 -1.8 -7,149 -37
Villages 3,788 1.7 -14,723 13,082
Country total 10,174 -1.7 -37,858
a 3.7 per cent population decline in urban areas and a 1.7 per cent population growth in rural areas (Table 2).
The phenomenon of suburbanisation has perhaps been most typical around Budapest. The Hungarian capital lost a total of 130 thousand inhabitants (ca. 7 per cent
ADove average (10,1-13,0 %)
Average (8,1-10,0%) Below average
(6,0-8,0%) Very low
( <6,0 % )
Fig. 6: Intensity o f housing construction in the Budapest agglomeration 1 9 9 0 -1 9 9 6
Fig. 7: Office space development in Budapest. - a = foreign capital; b = domestic capital
of the population) between 1990 and 1996. Approximately 41 percent of this loss could be attributed to outmigration, the rest to natural decrease. Figure 5 shows that the outmigration from Budapest into the surrounding Pest county outnumbered the immigration as early as 1987, which reflects that the process has already started before the political changes.
We can also detect considerable differences in the intensity and directions of suburbanisation in the region of Budapest (Figure 6). According to our investigations (Dövényi, Z., Kok, H. and Kovács, Z. 1998) the intensity and direction of suburbanisation around Budapest is closely related to the attitude of local people and policy of local governments towards the newcomers. Although the suburbanisation around Budapest is fairly similar in nature to the West-European modell, yet, we can also observe some peculiar features e.g. in the suburbanisation not only middle-class families are involved, but also lower-class and elderly people, who utilised their fortune made via privatisation of state dwelling in the inner part of the city.
Another important characteristic of the post-socialist period is the transformation of urban landscape and the relocation o f urban functions. The inner cities have become the scene of high-spired business activity, attracting large scale office developments (Figure 7). In some of the historic town centres we could also observe excessive renewal, mainly generated by international tourism (e.g. Sopron, Pécs, Eger, Sárospatak, Esztergom). Despite the spectacular office development in inner cities there has been a great shortage of cheap office space in most of the Hungarian towns. As a result, many new firms rent or buy recently privatised flats directly from individuals at inner city location generating a gradual conversion from residential to office function in the core of Hungarian cities (Figure 8).
Fig. 8: Intensity o f urban renewal, October 1993 (developments and renewals under way and completed for the preceding 5 years)
CONCLUSIONS
The profound changes in the political and economic system seem to have resulted in a radical transformation both in the Hungarian urban system and within the individual cities.
Towns of Northern Transdanubia and Budapest have benefited most from their favourable geographical position and traditionally developed infrastructural background.
Following the collapse of communism Budapest has attracted approximately half of the 18 billion USD foreign investment (FDI) that has arrived in Hungary. This has also meant that the Hungarian capital has been re-integrated rapidly into the network of great European cities at the focus of the country's most dynamic region. Some towns such as Győr and Székesfehérvár have also fared exeptionally well in attracting western direct investment since 1990. Other cities, especially heavy industrial ‘socialist cities’ and towns of the eastern plain area have found themselves in deep economic crisis.
As our modell (Figure 9) shows the social structure and the pattern of segregation have also changed in Hungarian cities. The inner cities have been going
U rban m odel of Budapest
---Periphery
Social status in the different urban z o n es Social
status
West-European City Budapest
Fig. 9. Spatial structure o f Budapest
through a remarkable upgrading process, whereas the prestige and social status of the outer housing estate zone have been generally declining (Figure 9). In the intermediate transitional zone we can identify quite opposite processes: some quarters have been upgrading, others declining often in each other's immediate neighbourhood.
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