The U.S.-Hungary Business Council (USHBC), a one-stop platform for dialogue between American corporate executives and top Hungarian government leaders, brought its second annual mission to Budapest this week to enhance bilateral business relations. The Budapest Business Journal spoke to USHBC President Eric Stewart, who says he is delighted that during talks the importance of reinvestment is getting more focus.
The U.S.-Hungary Business Council is the only organization in Washington, D.C., that is solely focused on economic and business relations with Hungary, and it represents a handful of major American companies doing business here. This year marks its second mission led by President Eric Stewart, to whom the country is far from unknown territory; he was U.S. Deputy Assistant Secretary for Europe and Euro-Asia under the Bush administration, and thus gathered lots of experience specifically about Hungary.
“Most of our member companies have invested or reinvested in finance, healthcare, automotive, and manufacturing, but some of them are new, like the ones in defense,” Stewart says. The latter area might be of particular interest, as there has been a recent commitment on the part of Hungary’s government to increase defense spending to 2% of GDP.
“We are not like AmCham, even though we are in lockstep with them,” Stewart says, referring to the close relationship between the business organizations, which is demonstrated by a joint meeting with the AmCham board during the mission to discuss key current affairs. One of the potential topics during that discussion could be the competitiveness of the country, after Hungary fell back dramatically on the OECD ranking in spite of AmCham’s joint efforts with the Hungarian government to move things in the opposite direction.
“Such a ranking is not the Bible, but it is definitely noteworthy,” Stewart says. “But I can tell you from the American investor standpoint that we find working with the Hungarian Investment Promotion Agency (HIPA) and the government to be absolutely fantastic. When talking to HIPA officials, you hear them continuously stressing the importance of reinvestment, which we also believe in very much.”
He understands that everybody wants to see who is bringing the new Walmart to Budapest and creating 1,000 new jobs. That makes a nice press release, he says. By contrast, creating 40 jobs in Orosháza, deep in the countryside, in an existing operation might not make such a splash in the headlines, but it is just as important.
USHBC is designed to be small. It serves as an exclusive club that allows member companies to talk to senior government officials in face-to-face meetings about what is important to them, like pending legislation, or existing legislation that is hindering growth, which then can be sorted out informally.
Normally, very few issues are raised, though, the biggest challenge being the labor shortage. “Labor costs are increasing, which is not good news for investors, but in order to have a skilled workforce, this is inevitable,” the president admits and emphasizes that companies keep looking for the same stable, transparent and efficient environment they want to invest in.
As to global political developments of late, Stewart further believes that you will see a different trade relationship between Hungary and the United States under President Trump, but the good news is that Europe has not been a negative focus for the Trump administration, unlike China or Mexico and NAFTA (the North American Free Trade Agreement).
On the other hand, Brexit might play out in favor of Hungary, as some businesses may need to relocate their operations. “And my assumption is that the Hungarian government has a plan as to how to attract those companies to Hungary,” Stewart concludes.