AmCham, HIPA and NHIT launch 1st Business Meets Government Summit
- November 09, 2015
In what is planned to be an annual event, the American Chamber of Commerce in Hungary, the Hungarian Investment Promotion Agency (HIPA) and the National Council for Telecommunications and Information Technology (NHIT) co-hosted the first ‘Business Meets Government’ summit at the Budapest Marriott Hotel on October 27.
Subtitled ‘10 in 10: How to Make Hungary More Competitive’, the summit aims to make communications between the business world and government more direct and more meaningful. It takes as its starting point a mutual goal to see Hungary and the CEE region rise ten places in ten years in the world competitiveness rankings.
The principal guest speaker was Péter Szijjártó, Hungarian Minister of Foreign Affairs and Trade. In the shadow cast by progress on the nine-country Trans-Pacific Partnership, growing cooperation between China and the United States, an emerging Russia-led Eurasian trading block and the rise of Latin America and Africa as investment destinations, he cautioned that Europe risked being left behind in the global competition.
“We Europeans debate the necessity of T-TIP, which is going nowhere,” he warned, talking about the much hyped Transatlantic Trade and Investment Partnership. He called for “pragmatic cooperation” with Russia and warned that Europe should not “limit ourselves regarding trade with China”.
Szijjártó said the EU should learn from the Hungarian experience in coping with the mass movement of people across the Continent. “We [Hungary] have proved that without gaining back control of the external borders of the EU, it is impossible to find any kind of answer to the migrant crisis.”
[In response to a question about why Hungary went its own way so often and seemed to pit itself against the EU, the foreign and trade minister said the Union had not been “able to react fast enough” to situations, despite policy suggestions being put forward by Hungary. He said his government had warned the EU “one year ago that the migration crisis will be very serious on the Western Balkans route”, but Brussels at the time had been focused on the Mediterranean. “Of course we are part of the EU: we are proud to be part of the EU; it makes sense to be part of the EU; we gain a whole bunch of benefits by being part of the EU. But that does not mean we should not speak out to highlight our opinion.”]
Noting that it was no longer enough to compete just in the immediate neighborhood (“the race has become global”), the trade and foreign minister asked AmCham members for feedback and suggestions in two particular areas. “First we need to have a skilled labor force in the country that can supply the demands of current and future investors in Hungary; so, education and training. Number two is that we have to widen the supplier base.”
He acknowledged a longstanding complaint about predictability and “decisions made too quickly” which unnerved the decision-making boards back in the corporate headquarters. “We do not want to give you ‘hard days’ any more in this respect. We would like to give just very limited surprises to the business community in Hungary in the future.”
He also admitted there was a problem in connecting the lack of labor in the west of the country with the lack of jobs in the east, although he did mention Hankook as an example of best practice in this area. “We would especially welcome your feedback in how to mobilize the Hungarian workforce, and how to incentivize and subsidize more vocational training. If we can address these two challenges, we will be able to have progress” in moving up the world competitiveness rankings, he said.
Second keynote speaker Kálmán Kalotay, economic affairs officer of the UN’s Conference on Trade And Development (UNCTAD), said that for both Hungary and its Visegrád Four peers it is “very important to nurture foreign investment because FDI is an essential source of economic development for the group”. Suggesting Hungary needs to improve access to finance and its capacity for innovation (“by far the lowest in the Visegrád Group”) by leveraging its scientific tradition, where it is a clear leader, he was hopeful the 1990s front runner in attracting FDI could regain lost ground (it now ranks third, behind Poland and Czech Republic). “Hungary and the Visegrád countries have the potential to attract more FDI, that is clear,” he concluded, adding that competitiveness must be strengthened, changes need to be made in the regulatory environment, and cooperation should be boosted within the V4.
In his closing remarks, Farkas Bársony, AmCham board member and head of its investment policy task force, said a summary of the summit and its four breakout roundtable discussions (Business Environment and Sophistication; Digital Economy; Labor Force; and Innovation), featuring both business leaders and government representatives, would be submitted to Prime Minister Viktor Orbán as soon as possible so as “to make sure not to lose momentum”.
An edited version of this article appeared in the print edition of the Budapest Business Journal of October 30, 2015.