Causes and Regional Impacts of the Crisis of Metallurgy in the Borsod Industrial Region
Causes and Regional Impacts of the Crisis of Metallurgy in the Borsod Industrial Region

Summary/Abstract: The Borsod Industrial Region became a crisis area during the political changes (1998-1992) in Hungary. The paper examines the effects of the bankruptcy of two major metallurgical companies on the emergence of the regional crisis. The study analyses the causes and consequences of the crisis in sectoral and regional approaches, ex-plores the determinant inductors of the crisis and those affecting demography and employment. In Hungary a change in social and economic structure begun in the last decade of the 20th century was successful in the regions where well-developed internal resources (human and technical capital), valuable assets, and high-standard infrastructure were available, and the investment conditions for working capital were favourable. The Borsod industrial region, which previously used to have considerable capacities, did not belong to that category. The Borsod industrial region was characterised for many years by production capacities kept alive artificially by the state, a distorted economic structure, underdeveloped and out-of-date infrastructure, adventurous privatisation ending in failure, several thousands of unemployed people, and large-scale emigration in the 1990s. The problems were given mostly symptomatic treatment. There developed an economic crisis, the consequences of which can still be shown to exist today. The paper analyses the causes of the crisis in the valley of the river Sajó, with special re-gard to the metallurgical industry of the region, and examines the consequences of the crisis and the efficiency of the interventions.

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