The Széchenyi Plan for Economic Development
The Széchenyi Plan for Economic Development
The decade during which Hungary’s political system had undergone a transformation was over by the turn of the millennium, and the institutions of constitutionality, market economy, and democracy had all been established. The Hungarian economy is undergoing dramatic growth, whose consequences could even be felt in everyday life.
The modernization of the economy was implemented mostly through global investments. In addition to being based on a cheap domestic labor force, the economic development model followed in the nineties relied on foreign capital injection, which was essentially implemented in the form of privatization in the first half of the decade and increasingly through green-field investments in the latter part of the same period. In terms of capital injection, Hungary was the first country in the region to work out and fashion a stable, calculable, and easily apprehensible investment environment and legal system. This rapid change definitely contributed to Hungary becoming the leader of the whole region in terms of working capital inflow.
Economic growth reached 4-5% in the past few years, which amounted to double the EU average, whereas the GDP index was 6.2% in the first half of 2000. The external and internal balance improved concurrently and the rate of inflation was moderated, which truly demonstrated that accelerating economic growth and macroeconomic balance could indeed be harmonically amalgamated. Irrespective of the fact that the global economy was hit by crises, rugged changes took place in the international monetary markets, and that Hungary had to compensate for the adverse effects of various natural disasters hitting the country, favorable results could still be achieved.
The enrolment of Hungary in OECD and NATO further improves the judgement of the country. Additionally, our accession by the European Union also progressed considerably. The required preparations are carried out according to schedule and are likely to be completed by 2002. At the same time, the relational structure of our foreign trade turnover demonstrates that the Hungarian economy and its business sector are already integrated, since the key group of commercial countries covers the ‘fifteen’, moreover the product structure of Hungarian export is also similar to that of the most developed countries.
The Hungarian economy managed to reach a position in 2000 whereby it could take advantage of its so-far unused resources. Various major economic development projects – all initiated within the framework of the national development plan named for István Széchenyi – should lead to economic and social developments that result in the Country’s catching up and massive social upheaval. This objective can be met if Hungary’s continued economic growth is maintained and if the efficiency of the Hungarian economy is improved even further. The Széchenyi Plan is aimed at supporting this purpose by providing a strategic direction, a framework, as well as favorable investment opportunities for all the market players.
As the projects covered by Széchenyi Plan are implemented jointly by the business sector, the regions, and the government, the process of planning already and naturally requires a common way of thinking. Consequently, the government prompted far-reaching technical, and social negotiations concerning the first published version of the plan. This open planning procedure is still a novelty in Hungary, yet the great number of comments and proposals proved that the first and foremost objective of the undertaking, i.e., the launch of a common way of thinking, could be realized. Numerous useful ideas and opinions had been incorporated the final version, which will eventually contains seven operative projects. Dozens of applications and tenders, all launched as of January 2001 within a well-arranged and controllable judgement system, are connected to the projects and sub-projects. The government hopes that the state funds will be financed by at least three or four times more business capital, leading to a breakthrough in the development of Hungarian economy. This in turn could contribute to the accelerated development of branches which can boost Hungary’s economic growth by as much as the annual ‘dream limit’ of seven percent.
