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How to better attract investment

Hungary’s default in attracting foreign capital is mainly caused by her shortage of proper workforce, András Inotai, director of MTA World Economy Research Institute said at a press conference where the published 2007 report of UNCTAD (United Nations Conference on Trade and Development ) was presented.

Labor should be cooperative, innovative, self-retraining and of great endurance, he said. It is no longer a question of education policy only, but that of the education the society provides. Hungary should make a shift primarily toward activities representing higher added value and R&D, and the education policy should adapt to this necessity, he proposed. After the end of the Cold War, it is the first time experts have thought of political risk as such.

As an example he mentioned the populist tendencies in the CEE countries, which deteriorate the operational atmosphere for the transnational companies. In 2006 the new capital flowing in Hungary amounted to $6.1 billion, placing Hungary 3rd in the region, with Poland and Romania coming 1st and 2nd. Capital export exceeded $3 billion. Total Hungarian capital invested abroad was nearly $13 billion, with $81 billion placed in Hungary. Foreign working capital was 25% of the annual volume of investment and amounted to the 72% of GDP, the second highest proportion after Estonia. (GR)