Good morning to everybody. Your Excellency, with your kind permission I would like to speak in Hungarian. Thank you.
Ladies and Gentlemen,
Thank you for organising this business forum. What I have to say can be summarised in a single sentence: We have come here today from Hungary to convince the Singaporeans to take part in the success story created by the Hungarian economy’s development trajectory, and we have come to convince Hungarian entrepreneurs to take part in the Singaporean success story created by Singapore’s development trajectory.
Imagine a country with a population of ten million people. This country has no raw materials, no natural resources and no energy. We do, however, have large neighbours with healthy appetites, we have a long and difficult history, and we can lay claim to an experience of statehood stretching back a thousand years. Hungarian statehood has a history of over one thousand years, and it is from this, and from these capabilities, that we must produce something. The modern age is knocking on Hungary’s door, as global development is increasingly shifting away from an economic order geared to raw materials and towards one geared to knowledge. It is precisely this which brings it to the doorstep of countries such as Hungary and Singapore. In our view, competition between countries in the future will not be decided on the basis of size, but on the basis of speed: who is capable of most rapidly incorporating cutting-edge science into its economic life.
Ladies and Gentlemen,
We respect Singapore, and we have arrived here with great interest, because this is a country that has recognised the law I’ve just mentioned. It has realised that it must quickly break with traditional methods and ways of thinking, and create something totally new: something which has not existed before. I spoke about this yesterday with your Prime Minister, who is a prudent man and speaks in much more measured tones than we do in Hungary. When we say “unconventional” or “unorthodox”, the Prime Minister of Singapore says “everyone needs their own formula”. Yesterday he explained at length the nature of Singapore’s formula, and from this we understood that the key to Singapore’s success is precisely the fact that you have dared to approach something in a way which is different from the custom previously followed.
Ladies and Gentlemen,
Europe – and within it Hungary – needs something like this, because we can all see that in the global economy the balance of power is shifting. Asia is on the rise, while the West is stagnating. And since overall the global economy is growing more slowly than emerging countries, simple mathematics proves that therefore someone must lose out; and those who until now have been in the lead are falling behind. Whether we like it or not, this is a restructuring; this is how economic competition works. But everyone has a chance to adapt, and Europe also has such a chance to adapt. If we look at European attempts to adapt, then it is clear that these are made in two clear directions: there are countries in the western part of Europe that traditionally play a major role and are well-acknowledged in the global economy; and then there are the countries of Central Europe, which represent Europe’s emerging region. We will see who reacts more wisely to the challenges we face. For the moment, what we can certainly state is that Central Europe – including Hungary – has provided a solution, the best aspects of which include speed, flexibility and market-friendly regulation. It is my firm belief that in 2010, when we came up with our own formula to use in the witches’ cauldron of Hungarian economic policy, we selected the right criteria: speed, flexibility and the establishment of a market-friendly environment. My Singaporean friends, the Hungarian formula – or, as we call it, the Hungarian model – has achieved results. Our growth is dynamic, and is particularly outstanding in a European context. We have introduced a flat rate for corporation tax – which now stands at 9 per cent – and a 15 per cent rate for personal income tax, which is also now a flat rate tax. And we have also introduced Europe’s most flexible labour code. In the meantime we have also reorganised our vocational training system. We’ve announced that we are aiming to achieve full employment, and have introduced a policy which enables us to adopt the central budget a full six months prior to the following fiscal year. In Hungary, therefore, by July 2017 we had already adopted the Budget Act for 2018. This measure was in response to the market’s demands for predictability, dependability and the need to be able to plan ahead. The business community in Hungary always has at least six months to prepare and react to foreseeable changes. According to our expectations, and providing the Minister of Finance – who is here with us today – has not made a major error, this year the combined effect of these decisions will be that Hungary achieves economic growth of around 4 per cent. We believe that this is a figure we can achieve, and in the first two quarters our economy grew by 3.6 per cent.
Ladies and Gentlemen,
This, however, is all in the past, in the successful years which are already behind us. Another question – and perhaps a more difficult one – now looms before us; this relates to the fact that the conditions for competitiveness have changed. Full employment is effectively within Hungary’s grasp. We have reached the limits of our economic policy so far, which has developed extensively. In Hungary, as elsewhere, the great question for the future is how we can link production and digitalisation. I would like to tell my Singaporean friends that Hungary is making good progress in this. As far as funding goes, over the past six years we have made 3 billion forints [EUR 9.6 million] available to the research and development field. Foreign working capital investments in technologically intensive industrial sectors is significant – in fact outstanding – and in 2016 we were fifth in the world in terms of the added value that new jobs provide to the national economy. We are also number one in Europe in terms of the rollout of superfast internet access. By 2018 the whole country will have 30 Mb/s broadband access, which will pave the way for 100 Mb/s broadband access across the country by 2020.
With regard to bilateral relations, Dear Singaporeans, in 2016 Singapore was Hungary’s thirty-first business partner in terms of trade volume. The numbers are encouraging, and the Minister not only quoted good figures, but also highlighted an important trend: a dynamically growing trade volume and also a dynamically rising investment volume. In Hungary we are all very familiar with the names of Singaporean companies. Singaporean businesses provide livelihoods for thousands of Hungarian families. I would like to encourage the Singaporeans to understand Europe and to see that Central Europe is an outstanding emerging region. The future lies in this region: over the next fifteen to twenty years the centre of European economic growth will be in Germany and Central Europe, and these two economies are very well linked. This is the region that is worth investing in, and it is here that it is worth searching for business opportunities.
I can assure Singaporean investors, Minister, that Hungary has an extremely friendly attitude towards businesspeople from Singapore. This is in large part because we see the Singaporeans as kindred spirits, who a few decades ago decided that fortune favours the brave, and that the future belongs to those who dare to be different and who dare to choose their own path, their own model and their own formula. You have succeeded in achieving this, and we hope that we Hungarians too will succeed; and then the next time we meet, we will be able to report on the growing economies of two countries that are following their own paths.
Thank you for your kind attention.