3rd Policy Agenda to Help AmCham ‘Lead the way’ to Recovery

Initiatives

In the face of the COVID-19 pandemic, the American Chamber of Commerce in Hungary has pledged to foster a business community that is responsible for shaping a healthy, sustainable, and competitive Hungary. In its most recent Policy Agenda publication, AmCham aims to prioritize educating future generations, sustainability, industry cooperation and promoting a responsible and transparent business culture.

Policy Agenda, the strategic outline for AmCham’s advocacy work for the 2021-2025 period, has just been published for the third time since its launch in 2015. The document is based on input from a community of more than 300 companies, representing 200,000 employees in diverse sectors, as well as on the economic analysis of the country and assessment of the impact of COVID-19.

“Since 2015, the policy agendas have provided the foundation of our work, outlining our priorities and commitments. [….] We are very proud of the progress we have achieved over the years, the partnerships we have built, the projects we have started and the series of flagship events we organize every year,” AmCham CEO Írisz Lippai-Nagy said during the online launch of the latest Policy Agenda on January 26.

To reassert and improve Hungary’s competitiveness, AmCham Hungary emphasized it is committed to working with the business community and government stakeholders, as well as to marshal the organization’s resources, to make an impact in three vital areas.

Firstly, enabling smart growth in Hungary is essential to maximize the potential of digital transformation, foster innovation and increase productivity, while working on creating a more sustainable economy.

Secondly, the country must invest in human capital by transforming education to establish a highly-skilled, well-educated and resilient workforce. At the same time, labor law and market regulations need to be made more flexible.

Thirdly, the local business environment must become more stable. A transparent regulatory environment, a predictable and competitive tax system, and simpler administrative processes need to be applied, while adopting best practice governance and compliance.

Recovery

AmCham’s Policy Agenda 2021-2025 elaborates on these three pillars in 70 policy recommendations, all of which advocate for policies and regulations that support the recovery and growth of businesses and the creation of a more sustainable and competitive economy in Hungary.

Zoltán Szabó, the President of AmCham, said that while Hungary is facing the biggest crisis of recent history that disrupts businesses worldwide, the current situation also provides many opportunities and possibilities.

“It forces us to become more flexible and resilient. The pandemic accelerates the use of technology, the application of flexible working forms, innovation, digitalization and pure progress in other areas,” Szabó added.

He said that 2021 will be a year of transition. “For more than nine months, we learned and adapted. Now it is time to use the knowledge we learnt from the pandemic to start shaping the future.” The president also promised that AmCham would continue to provide a platform for professionals and companies who are ready to lead toward recovery and growth.

After a dark pandemic winter, light has started flickering at the end of the tunnel, according to Dániel Palotai, executive director of the International Monetary Fund (IMF). Palotai, the first Hungarian economist to be elected to the IMF’s decision-making body, connected to the online event from Washington D.C.

The lockdown of March and April and voluntary social distancing led to a fall in Europe’s GDP three times deeper than that during the global financial crisis of 2007-2008; however, the rebound in activity in Q3 brought positive surprises in almost all European countries, Palotai said.

He reminded that while more vaccine successes and additional fiscal support will positively affect global economies, delays in vaccination programs, possible mutations of the virus, stronger lockdown measures and tighter fiscal conditions are all possible scenarios that must be taken into consideration. Additionally, geopolitical tensions and social unrest may further escalate in the coming months.

The pandemic could pose long-term challenges in the labor markets and the crisis may leave persistent scarring effects, which policies will need to mitigate, Palotai said.

Effective

In such an uncertain environment, effective policies need to be established, offering more targeted support to achieve a resilient and equitable post-pandemic economy. Palotai added that crisis legacies need to be addressed and financial stability has to be maintained, while international cooperation needs further enhancement.

Based on the latest Article IV consultation with Hungary in 2019, the IMF concluded that Hungary was one of the fastest-growing economies in Europe, largely driven by domestic demand, including record-high EU funds-related investment.

While the IMF took a positive view of Hungarian economic activity in 2019, it also encouraged the authorities to advance structural reforms.

Policies have reduced vulnerabilities substantially; however, measures to support the targeted fiscal consolidation could be more ambitious to ensure that room for fiscal policy maneuver is rebuilt.

Wages outstripping labor productivity growth, slower export growth, and shortcomings in the business environment for SMEs call for invigorating structural reform efforts, Palotai added

“The Policy Agenda is also a reinforcement of our commitment to make this country more competitive,” Lippai-Nagy stressed.

“We believe that the timing is perfect for a new strategic plan because, now more than ever, the business community must work together to recover from one of the biggest economic setbacks of all times. AmCham Hungary must be, and will be with your support, at the forefront of this process,” she added.

Szabó added, “We stand for U.S., international and Hungarian businesses that drive our economy. We advocate for their ability to invest, employ, grow, and succeed. We are optimistic that Hungary will emerge stronger after these challenging times and businesses will help lead the way.”

This article was first published in the Budapest Business Journal print issue of February 12, 2021.

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