According to the Minister of Foreign Affairs and Trade, the country should set no less of a target than seeking to provide the most competitive investment environment in the region, by combining production with digitisation in the most effective manner, and turning into the most competitive research and development venue.
Péter Szijjártó added at the summit of the Confederation of Hungarian Employers and Industrialists held on Wednesday in Budapest: at the current turning point in the world economy, the success of Hungary as an open economy depends on whether it is able to provide an appropriate digital environment and an appropriate fiscal environment for investments with a high added value against the background of appropriate labour market supply.
Péter Futó, President of the Confederation of Hungarian Employers and Industrialists stressed in his opening speech that the Federation represents more than 6,000 businesses which cover some 60 per cent of the Hungarian economy from the respect of invested capital, turnover and employees. He said: at the request of the Stock Exchange, they prepared a study, as part of which they contacted successful businesses owned in majority by Hungarians which employ more than 20 workers, and they found 203 companies which would be evidently capable of going to the Stock Exchange: these businesses conduct sales in excess of HUF 1,000 billion and have an 8 to 10 per cent profit to sales ratio.
Mr Szijjártó pointed out in his speech that in the current labour market situation that is compelled to face a number of challenges, it may help if grants are calculated solely on the basis of workers participating in training, and there are negotiations with the Ministry for National Economy about the possible raising of the maximum rate of these grants from the present EUR 3,000 to the forint equivalent of EUR 4,000. They are also conducting consultations with respect to the possibility of increasing the training period of participants from 18 to 24 months, he remarked.
He said that “due to fierce opposition”, they have removed from the agenda the amendment regarding settlement based on a time frame of working hours, but with due preparations, action will have to be taken with a view to increasing the time frame of working hours from one year to two because the country will otherwise find itself at a competitive disadvantage.
According to the Minister, the automotive industry which continues to remain an emphatic player of the Hungarian economy, too, plays a leading role in the changeover to new technologies, and he remarked that we may expect a major announcement also in the field of electromobility during the period to come. He highlighted that several development centres have been created in Hungary for self-driving cars as well, and they wish to pay particular attention to increasing the Hungarian supplier base.
The Minister took the view that processes in the world economy will be determined in the future by a more patriotic US economic policy than observed before, and Hungary will have to adapt to this in light of the fact that there are US investments worth more than USD 9 billion in the country. The other criterion to take into consideration is China’s ongoing expansion which has a major influence on Europe’s competitiveness as well. Capital no longer flows only from the West to the East, but also the other way round: companies from the Far-East are increasingly looking for European production potential, he argued.
Mr Szijjártó described Brexit, the departure of Britain from the European Union as an enormous failure which, in his words, indicates that certain reforms and changes are necessary in the EU. He took the view that the scenario in which European negotiators regard Britain’s exit as a personal insult is a “nightmare” because this means that the Brits will enter into free trade agreements with the world’s strongest economic players, with which the EU has no such agreements, on their own. This would be extremely negative for open economies such as Hungary, he remarked.
In answer to a question, Mr Szijjártó said that Hungary’s foreign policy will have to continue to focus on trade relations because it is too small a country to only have a foreign policy in order “to say clever things about the world’s processes”.
Regarding Eximbank’s branch network in the provinces, he said that the set of tools available in foreign trade must be taken closer to businesses in the countryside as well, and the enlargement of the network may also be on the agenda. In the context of the size problems of businesses, he said that they are seeking to develop the system of grants in such a way as to enable more and more players to gain access “from below”.
(MTI)
