[Congressional Record Volume 140, Number 100 (Wednesday, July 27, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: July 27, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                       CIPE's PROJECT IN HUNGARY

                                 ______


                        HON. BENJAMIN A. GILMAN

                              of new york

                    in the house of representatives

                        Wednesday, July 27, 1994

  Mr. GILMAN. Mr. Speaker, I would like to take this opportunity to 
commend the Center for International Private Enterprise, an affiliate 
of the U.S. Chamber of Commerce and one of the core institutes of the 
National Endowment for Democracy, on its participation in producing 
``Crossed Paths: Strengthening the Road to Private Sector Growth.'' 
This study was produced as a part of CIPE's legal and regulatory reform 
in Hungary project with funding from the U.S. Agency for International 
Development.
  The most exciting part of CIPE's project was that it forged a 
strategic partnership between seven leading Hungarian think tanks and 
set up an advisory board of Hungarian business, media, and academic 
leaders. This kind of real partnership is all too rare in our foreign 
assistance efforts and I commend USAID for supporting this work.
  The joint study issued a set of recommendations, including a decrease 
in corporate taxes of up to 30 percent, major social security reform, 
and a national land registry and mortgage loan system. The 
organizations making these recommendations were: the Budapest 
University of Economic Studies, real estate market; Financial Research, 
Ltd., financial sector; the Foundation for Market Economy, informal 
sector; the Institute for World Economics/Blue Ribbon Commission 
Foundation, privatization process; the Kopint-Datorg Foundation for 
Economic Research, tax system; and the Public Policy Institute, private 
sector development and local government.
  CIPE will sponsor a conference in Budapest in September, which will 
produce a more complete analysis. The final report will be disseminated 
to leading Hungarian policymakers.
  To date, the list of recommendations of the report include:
  In order to channel more personal savings into privatization, the 
dumping of government securities must be restricted.
  A customer-friendly network of local branch banks must be established 
where local bankers and small entrepreneurs can prepare business plans 
together.
  The corporate tax should be decreased to 30 percent and the minimum 
tax must be eliminated.
  Capital investments, especially as regards the application of 
advanced technology, must be promoted with tax allowances and 
accelerated depreciation.
  Basic social security reform is inevitable. The mandatory social 
security contribution, which entitles contributors to the basic 
services, should be decreased to between 15 and 25 percent.
  Venture capital companies, following the successful example in some 
Asian countries, and regional or sectoral companies should be formed to 
promote investment into small enterprises.
  In order to boost the market for turnover to land, a new system of 
land valuation and registration must be developed and adhered to. An 
inevitable prerequisite for a workable mortgage system is the 
establishment of an up-to-date, legitimate land registry system.
  A national network of mortgage loan and land loan financial 
institutions must be established having the overriding mandate to serve 
the needs of the entire agricultural community.
  ``All in one'', one-stop offices must be created where 
representatives of all the applicable agencies and authorities, 
together with the banks, are housed under one roof so that a candidate 
may establish a company with minimal effort.

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