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SPECIAL ADVERTISING SECTION
Hungary 
Hungary recently announced that it would implement a new economic plan. This news took the rest of the world by surprise. The surprise was entirely understandable. The rest of the world was still marveling at the wonders wrought by the prevision plan, which transformed Hungary into one of the industrialized world's fast-rising stars. No country in central and eastern Europe--and very few in the world as a whole--has grown as steadily and strongly as Hungary over the past eight years. This upswing has elevated Hungary into one of Europe's leading providers of high-end capital goods and technical services. The upswing has also slashed unemployment and inflation to enviably low levels, has boosted corporate and personal incomes, and has put Hungary at the forefront of European and trans Atlantic unity. Making these results even more remarkable is that they have been achieved while the economies of the EU (with which Hungary now conducts more than two-thirds of its trade), the USA, Russia and Hungary's other major economic partners have sputtered. The results recorded and the resiliency shown by Hungary's economy have caused the rest of the CEE region to adopt the key features of the country's economic plan--also with commendable results. Compounding the surprise: the previous plan was showing no signs of losing its effectiveness. Thanks to it, Hungary looks set to record a further, 3% to 4% rise in GDP in 2002. The question arises: why scrap a winning approach? "We didn't scrap the previous plan. Rather, we further developed it. Over the past eight years, due to the previous plan, Hungary's situation has changed profoundly and positively, and this new situation called for a new approach," explains Istvan Csillag, the country's minister of economic affairs and one of the plan's mentors. "The new plan retains all of the elements of the previous one, including its uncompromising insistence on making our country the smartest in Europe, the smartest at securing international investment, the smartest in using that to build an advanced business base, and the smartest in helping our companies sell these advanced products and services abroad," notes the minister. He adds: "To show that we have retained this focus, we have christened the new plan 'Smart Hungary.'" As the minister explains, the center of Hungary's "smartness" is greater Budapest's cluster of universities and research institutes (many owned by multinationals). It is here that the bulk of the country's market-making products and services are developed, here that many of the managers, scientists, and technicians staffing the companies manufacturing and providing these items are educated. To foster the country-wide spreading of this smartness, the new plan furthers the forming of clusters in five other Hungarian metropolises. To ensure that investors will settle in and around these clusters, Smart Hungary has established a stock of sites. These are to be leased to investors. "This arrangement minimizes investors' up-front capital expenditures," notes Csillag. "To encourage them to ramp output at the facilities built on these and other sites in our country, we have instituted a new system of investment incentives. Conforming to EU directives, these incentives reward output and value creation," the minister states.  International investment in 2002: The multinationals are homing in on Hungary Each year, the world's companies are called on to rate the competitiveness of the countries in which they do business. Of late, Hungary has been steadily rising in these rankings. Should present trends continue, it will crack the top 20 next year, placing it in pretty select company. Companies assess national competitiveness in another, very practical way: in their selection of sites for key facilities. And here Hungary would seem to be near the very top of the world in competitiveness, as several recent selections show. Life Sciences: Very Much Alive in Hungary General Electric's pursuit of excellence has made it one of the world's most admired companies. One of the main venues for this--very successful--pursuit is the life sciences sector, itself, along with automobiles, one of the business world's best long-term performers. On May 27, 2002, General Electric Medical Systems announced plans to build a facility in Budapest. The facility will develop and manufacture state-of-the-art X-ray systems. Significant about the investment were the reasons given by GE, with literally the entire world to choose from, for locating its new facility in Hungary. "Our decision to base our newest global center of excellence in Budapest is the direct result of our ability to locally recruit the superior technical talent needed to develop and commercialize the world-class, high-technology products in our portfolio," states Reinaldo Garcia, president and CEO of GE Medical Systems in Europe. The quality of the country's brainpower has led GE to commission or launch no less than three other such facilities in Hungary during the last year. These facilities have brought the company's total investment in the country to $1.1 billion. In addition to medical systems, GE's operations in Hungary develop, produce and service illumination systems, power plants, jet engines, and industrial controls, and software. Joining GE in setting up advanced Development and Manufacturing (D&M) facilities in Hungary have been IBM, Nokia, Philips, Siemens, Glaxo-Wellcome, and many others. Fast cars from fast-growing manufacturing facilities Recession or not, high performance automobiles continue to sell very well. A large number of the sleek coupés and sports cars so prized by the world's auto-lovers stem from Hungary. Case in point: Audi. On August 28, 2002, the German manufacturer commissioned a Euro 135 million extension of its facility in Györ. The new halls will turn out the powerhouse of Audi's fleet of engines: a 4.2 liter, eight cylinder job. The latest investment brought Audi's outlays in Hungary to over Euro 1.4 billion. These investments have made Györ one of Audi's major centers of production. In 2001, Audi's facilities in the western Hungarian city turned out 1.2 million engines and 50,000 completed vehicles. Joining Audi in locating major facilities in Hungary have been Ford, Suzuki, and Opel. They, in turn, are but a few of the 25,000 foreign companies which have set up production, distribution, administrative, and logistics facilities in Hungary.  The Republic of Hungary Facts and Figures Area: 93,000 square kilometers Population: 10.25 million Capital: Budapest (1.93 million) Other major cities: Debrecen (210,000), Miskolc (182,000), Szeged (169,000), Pecs (163,000), Györ (131,000) Useful addresses ITDH Los Angeles Office 11766 Wilshire Blvd., Suite 410 Los Angeles, CA 90025 Phone: (310) 479-7878 Fax: (310) 479-5119 itdlosangeles@hungariantrade.org ITDH Chicago Office 500 North Michigan Ave., Suite 810 Chicago, IL 60611 Phone: 312-377-7722 Fax: 312-377-7723 itdchicago@hungariantrade.org ITDH New York Office 150 East 58th Street, 33rd floor New York, N.Y. 10155-3398 Phone: (212) 752-3060 Fax: (212) 486-2958 itdnewyork@hungariantrade.org U.S. Websites: www.business2hungary.com/usa www.hungariantrade.org Designed by dotCOMMS.net |
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