On Thursday at a roundtable discussion held on the topic of competitiveness in Tusnádfürdő, Finance Minister Mihály Varga urged the building of new Hungarian brands.
At the stage discussion held as part of the 30th Bálványos Summer Open University and Student Camp (Tusványos), Mr Varga pointed out that once these new Hungarian brands have been created, it will be possible to assign competitive Hungarian technologies to them in the form of suppliers.
The Minister stressed that competitiveness does not start abroad; we must first build ourselves up so that we can enter external export markets with competitive products.
Mr Varga highlighted that we must put an end to the notion that competitiveness that is based on cheap labour can be long-term; we are reaching “the end of this era more and more”. We must move in a direction where Hungary is able to join increasingly the manufacture of sophisticated small- and medium-scale products because this has a future also from the viewpoint of the Carpathian Basin.
He also spoke about the importance of the ability to respond to changes swiftly as what is in demand on the market today will not necessarily still be in demand in six months’ or a year’s time.
According to the Minister, they are likewise beginning to come to the end of the period when production technologies that in Germany already qualify as “second-hand” emerge in Central Europe. Today it is possible to procure the latest technologies and equipment that are used in Germany and Austria; however, we are still lagging behind in the area of the sales revenue falling on one unit of work force and one hour of production. The task is to reach the same efficiency as in Germany, and to this end, we must move in the direction of robotisation, the Minister pointed out, adding that we must find the means and opportunities with which it is possible to substitute live work force. The work force so released will then be able to find employment in the fields of programming, production logistics and quality control, Mr Varga observed.
Additionally, it is well worth concentrating on competitiveness in areas where there are new technologies, and where others do not yet have a significant competitive advantage. He mentioned as an example autonomous electric vehicles, but he believes there are opportunities in the green economy, solar and wind energy, geothermal energy and the “silver economy” as well. Regarding the latter, he highlighted that the ageing of Europe results not only in elderly people living longer, but also in that new needs emerge in the fields of care for the elderly and health care.
Mr Varga further highlighted that a national competitiveness council – whose mission is to prepare proposals tabled for the government – has operated in Hungary since 2016.
In the first year and a half, they concentrated on corporate competitiveness and the improvement of the business environment, in addition to tidying up state finances: the rate of the sovereign debt is on the decrease, and unemployment stands at 3.4 per cent in contrast to 12 per cent a few years earlier.
These were the pre-conditions of starting an effective competitiveness programme, the Minister pointed out. He spoke about the five-year government programme which lays down objectives in the fields of taxation, employment, the public sector, health care and education as well as in the interest of the further improvement of the business environment.
Mr Varga said the Hungarian government believes it is its mission to connect Hungarians beyond the borders in the Carpathian Basin to the country’s economic blood circulation as much as possible. He also said twin-town relations could be used better in the future than today.
György Bacsa, MOL Group Managing Director of Corporate Business Development said statistics and rankings can even be reversed over a period of ten years. If we are able to make long-term plans, it is even possible to aim for ranking 20 instead of 40, he said.
He agreed that contract manufacturing based on cheap labour should not be a preference, and pointed out that robotisation is equally important as robots increasingly take over the role of cheap labour.
Jenő Mátis, President of the Board of the Hungarian People’s Party of Transylvania said the foundations for Transylvania’s competitiveness were laid locally and this process could come to fruition with Budapest’s support. He added that the completion of the Mikó Imre Plan – which is aimed at the development of the economy in Hungarian territories beyond the borders – itself indicates how deep they had to dig upon the development of the region.
He highlighted that there are significant shortcomings in the fields of the infrastructure and transport by rail and road. He mentioned the shortage of labour – which has caused a serious crisis situation in Romania – as a further problem.
Jenő Szász, President of the Hungarian Research Institute for National Strategy pointed out that, at this point in time in Szeklerland, economic performance and growth are below the Romanian average. The rate of employment, too, falls behind the national average, he observed. There are hardly any driver sectors in the region, and there is likewise a significant shortfall in the area of research and development. Large corporations are under-represented and demographic indicators are also deteriorating, he said listing current problems. He mentioned the region’s economic structure as a positive feature: small and medium-sized businesses are responsible for a considerable proportion of the region’s economic output.
He further said that tourism is growing intensively, though the number of Hungarian guests is on the decrease at present, and the Szekler people are particularly enterprising.
(Ministry of Finance)
