american chamber of commerce in hungary

VOICEVol III. issue 11, march 2013 Buda pest vs. the countryside And the demographic time bomb

MORE INSIDE:

Education that serves society Innovation – you can’t do it alone 3 Contents

4 introduction 15-19 COVER STORY 30 AmCham news Dear Members and Friends… Capital vs. Countryside New board, new president 5 PEOPLE 31 AmCham news The glass half full 20-21 COVER STORY Hungarian tax system: 6 PEOPLE The demographic time bomb Swedish taxes with Traveling at the speed Ethiopian wages of Google 22-23 lifestyle AmCham news 7 people András Török’s Budapest 32 Adding value, boosting Innovation – you can’t confidence do it alone 24-25 Focus 8 ANALYSIS Education that serves society 33 Chamber corner Will the largest grow larger? Providing a reasoned voice 26 Amcham news 91-11 ANALYSIS Business news roundup Hungary ‘not an island’ 36-37 AmCham news New members on board 12-13 analisys AMCHAM News Hungary moves deeper 27 38-41 AmCham news into recession Shifting toward growth Photo coverage 14 ANALYSIS 28-29 Amcham News BSE saw a drastic drop in 42 AmCham news turnover in 2012 A cooperative approach to tax CEO’s note

Voice is published on behalf of the American Chamber of Commerce by Absolut Media Zrt., Madách Trade Center, 1075 Budapest, Madách Imre út 13-14., Building A, 8th floor Editor-in-chief: ROBIN MARSHALL ([email protected]) • Contributors: GABRIELLA LOVAS, ROBIN MARSHALL, ANDRÁS TÖRÖK Photography: András Hajnal, Lázár Todoroff • Design: ABSOLUT DESIGN STÚDIÓ ([email protected]) • Art director: Tamás Tárczy • CEO: TAMÁS BOTKA Advertising: ABSOLUT MEDIA Zrt. ([email protected]) • Sales and Marketing: BALÁZS ROMÁN ([email protected]) Product Director: Ágnes balla • Subscriptions: [email protected] • Printing: Absolut Print Kft. Websites: www.amedia.hu, www.bbj.hu For AmCham Content: ZSÓFIA JUHÁSZ ([email protected] + 36 1 266-9880/360) Advertising: CSILLA PÁL ([email protected] +36 1 266-9880/319) HU ISSN 2062-1817 VOICE american chamber of commerce in hungary Introduction People 5

Dear Members and Friends, Q&A

welcome back Eszter Szabó and Mark Hetényi. With innovation in the focal point, we It is extremely gratifying to work with such a have a lot to contribute to this exciting The glass half full talented group of people comprising our board. challenge given the depth and breadth of by Robin Marshall our membership. Hence, it is a topic we will In March, AmCham will hold its traditional dedicate time to; what can AmCham further strategic meeting, the so-called “Woods do to help innovation become synonymous The annual meeting saw meeting,” where the board members and with the name of this country? the presentation of the committee chairs will delve into issues for our annual Dr. Iván Völgyes plan going-forward. The board has decided to continue forward another successful project and will ask its Award, which is made As you are likely aware, the government members to share their opinions regarding the to recognize outstanding has recently finalized its National R&D and Hungarian business climate through its annual efforts to promote Innovation Strategy 2020. It was satisfying Investment and Business Climate Survey to see that it has adopted several of the scheduled for March. Every member’s opinion Hungarian-American initiatives put forth by our Innovation counts and is most appreciated! I am optimistic business relations. This Committee. AmCham participated at about the future. Maybe not everything will go year’s winner was Dr. an innovation roundtable discussion on as we would like, but there are many areas in Photo: István Nagyapáti István Photo: February 14, in the Hungarian Academy of which we can make a solid contribution. I invite Charles A Huebner, hank you for the opportunity Sciences. The panel discussion centered on you to join me in this effort. As they say in the Q: What, in your opinion, is the a former President of to be the next president of what the key players in the economy – local Navy, “All hands on board.” There is always single biggest challenge to doing Previous winners AmCham Hungary, AmCham. I feel honored to serve and European governments, private industry, room to get involved and help make AmCham business in Hungary today? of the Iván Völgyes Award and Voice grabbed the T and look forward to helping this education and advocacy – can do via an even stronger organization. A: The single biggest challenge is to wonderful organization grow. collaboration to move innovation forward. focus people on opportunities that exist 2005 Péter Hegedűs chance to ask him a few Additionally, let me welcome our two newest The tone of the meeting was positive as the Hope to see you at an event soon, in spite of the economic difficulties in 2006 Lajos Sápi 2007 Ambassador András Simonyi key questions. board members: Edina Heal (see an interview participants were all focusing on the benefits Hungary, Europe and the U.S. 2008 Thomas Ramsey, Consul General with Edina on page 6), and Andrea Juhos, and of cooperation (see more on page 32). Willy Benkő It is very important to convince Hungarians 2009 László Czirják that the glass is half full, not half empty. 2010 István Gyarmati Q: What surprises you most 2011 Marcel Szabó about business in Hungary? A: AmCham Member’s Board Q: Looking forward, what is The most surprising thing about Hungary’s biggest opportunity? time needed to solve problems and consequent business in Hungary is the somewhat slower President First Vice President Second Vice President Secretary Treasurer A: William David Dr. Andrea Péter To focus on innovation and the costs for the customer and owner; adaptation by the leading layer of society to Benkő G. Young Jádi Fáth development of services and products (2) The increase in efficiency of health leading the education and development of Németh GDF SUEZ Rózsakert Amrop Kohl- bpv Jádi Energia that capitalizes on Hungary’s innate administration and reduction in the cost of the middle and lower classes in changing Medical Center mann & Young Németh Holding Ügyvédi Iroda Hungary Zrt. capabilities and resources. Hungary has a serving people as the population ages, and as their approach to business. It is important 1026, Budapest, Eszter utca 6/b, 1051 Budapest, 2440 Gábor Áron u. 1022 Budapest long history of innovation such as matches new diagnostic and healing procedures are to remember that the purpose of business is 74-78. Vörösmarty Százhalombatta, tér 4. Csenterics u. 8. (Irinyi), ballpoint pens (Biro), telephone successfully introduced; to create customers, in which a key element [email protected] [email protected] [email protected] [email protected] Phone: +36 1 225 7350 Phone: +36 1 391-0950 Phone: +36 1 429 4000 Phone: +36 23 502 400 exchanges, carburetors, the first Ford auto (3) The development of new energy sources, is marketing: who wants to buy what, why Fax: +36 1 391 0951 Fax: +36 1 429 4001 assembly lines, computers, BASIC soft such as thermal waters, and their applications; and where and for how much? In the U.S., Board Members at large ware programs, the start of e-mail and the (4) Capitalizing on Liszt Ferenc airport’s the Business Roundtable, an association Norbert Edina Márk László Fogarasi Heal Hetényi György internet, the hydrogen bomb, prevention advantages of being able to reach every major of the top 250 chairmen, focuses on how Morgan Stanley Cisco Systems of blood poisoning, Nuance-Recognita’s city of Europe in 1 hour and 40 minutes with society can affect constructive growth in the Hungary Google Flextronics Hungary Analytics Ltd. 1077 Budapest, International 1123 Budapest, Dragon dictating programs and many the delivery of products during the night, such country and what it has to do to accomplish 1095 Budapest, Wesselényi u. 1183 Buda- Csörsz utca 45. Lechner Ödön 16/A. pest, Hangár other unique products. Near term as outstanding vegetables and other services; that in terms of education, government fasor 8. utca 5-37 opportunities include, to name a few: (5) The development of health tourism, administration, taxation and support of [email protected] [email protected] [email protected] [email protected] Phone: +36 1 881 4113 Phone: +36 1 888 0501 Phone: +36 30 677 5029 Phone: +36 1 225 4658 (1) The rapid development of computer, iPhone capitalizing on the healing effects of thermal social training and development. Hungary Fax: +36 1 881-3700 Fax: +36 1 225 4611 and iPad applications, internet services and waters, expanding on the exiting and growing has an official administrative systems that Board Members at large chief executive officer their use in increasing efficiency, reducing the dental care business. is 40% larger than most fellow EU countries Andrea Frank Eszter Péter Juhos Klausz III. Szabó Dávid (according to The Economist), which has to be dramatically reduced but in such a way LHH Magya- Telenor Ma- GE AmCham Dr. Charles A Huebner: CV and citation rország, Career gyarország Zrt. 1138 Bp., 1051 that the administrators are cared for – a Consultants Kft. 2045 Török- Duna Tower, Budapest, Charles Huebner has done a great deal for Hungarian-American commercial relations since the change in the system in 1990 as 1021 Budapest, bálint, Pannon Népfürdő utca Szent István an investment adviser, an investment banker and the first representative of the American Hungarian Enterprise Fund. He is a significant challenge. It is a change that has Ötvös János út 1. 22. B-C. épület tér 11. committed member of AmCham, and a past President. He has been very active as a philanthropist and fundraiser for a number of u. 1-3. important Hungarian cultural institutions. to be designed and implemented by the [email protected] [email protected] [email protected] [email protected] Earlier in his career he worked for the United States Air Force and on NASA’s Apollo program as a project engineer, and manager. economic leadership. Phone: +36 1 392 5070 Phone: +36 20 930 4000 Phone: +36 1 237 6811 Phone: +36 1 266 9880 Later he joined the General Electric Company as a senior staff executive responsible for businesses with revenues in excess of $10 Fax: +36 20 930 4159 Fax: +36 1 266 9888 billion. He has been in Hungary since 1990 when he established, organized, staffed, and ran the operations of the Hungarian Ex officio members American Enterprise Fund (HAEF) in Budapest as executive vice president and managing director. He received a Ph.D. from The American University in Washington, D.C., earned an M.S. in Aero and Astronautics from M.I.T. and graduated first in his class, For more on the Iván Völgyes Award see Driving Hungarian-American Robert Peaslee, István Havas, Gusztáv Bienerth summa cum laude, from the University of Detroit. trade, in the January 2011 issue of Voice and the dedicated section of the AmCham website, http://www.amcham.hu/ivan-volgyes-award VOICE american chamber of commerce in hungary People in the news 7

PEOPLE PEOPLE

She has sold advertising, Traveling at the designed and made Adding value, children’s shoes for her speed of Google own brand, worked in boosting communications and the music industry, run confidence a leading radio station, and two years ago became AmCham’s new president, will work to build on that.” And that means country manager of Google an intelligent – rather than confrontational – William Benkő, was engagement with stakeholders. “We want to Hungary. Now Edina Heal elected unopposed at be known as an organization that creates and plans to put that mixed the chamber’s annual offers useful and workable solutions.” background to use as an assembly on December 6, He also wants to see more businesses AmCham board member. but says that wont alter engaging with and joining the chamber. the way he approaches Having headed the Membership Com- Hungarian businesses how they can use the mittee for two years, he believes a growth net to open up to world markets.” his latest role. “Would I in numbers is still possible, even in the have liked to have won in current economic environment. “I’d like to Diversity is another area where she wants to an open election contest? see a 10% growth in membership over this were all Americans. I guess if you forced me, I add value. “I would like to set up a diversity year and next. That’s only 40 companies, would say that my mentality is American, and group within the membership,” she explains. Yes; but it is what it is, I or three a month. If myself and the board certainly my optimism.” “I have got to get a plan together soon and can’t worry about that, and the office staff, who are already doing a start finding interested people so we can put and it won’t change my brilliant job, each bring in two members a He was living in Dallas, Texas in 1989 when, together some ideas. And it’s not just about month, we are practically there, so I think as he puts it, “the Wall started jiggling”. He suppose having dinner with professional experiences to the typical gender issues, but also minorities, disability plans or ideas: there are the numbers are achievable.” had a fascination for the country, fired by Tina Turner must be one of the board member,” she says. Google isn’t and race, and again it is about educating things that we need to do trips back to Hungary with his family every highlights of my career, or kissing exactly a typical company either, and Heal people, getting them to think beyond narrow in this country, and my Another priority area for Benkő is to create three or four years; it seemed like the perfect “I Brian May or Kylie Minogue, told the AGA she would bring “Google confines.” Changing society is a massive focus is on those.” more engagement with young people, not time to go. “I decided that this was the but actually my whole life has speed” to the chamber. challenge, of course, but Heal says it is least because if they are going to be joining opportunity if I ever wanted to test myself, been full of highlights,” says Heal, who important not to be discouraged by the size of the chamber 10 years down the line, when to see what I could make of myself and what was appointed a board-member-at-large “Google’s culture of business is just very the task. “We have to start somewhere. And enkő, 53, says the biggest they are in their 30s, they should be getting value I could add in Hungary.” at the December annual assembly. And different; it is well known that we do a maybe it’s not our job to finish it; maybe it’s challenge is the same one exposed to, and enthusiastic about, AmCham interestingly, she counts both positive and lot of things differently even from our our job to start the process and then hand it faced by his predecessor, now. “I’d like us to work more with youth, That could not come without some effort, of negative experiences as highlights: anything, peers like Apple and Microsoft. In the over to others to finish it.” B István Havas: making sure and I think it is an inevitable development course, not least in improving his language in fact, from which she can learn. last couple of years I have learned a lot AmCham can raise competitiveness related of our focus on entrepreneurism and skills. “When I came here 22 years ago, I about organization, meetings, the speed of Heal says she had wanted to get involved in issues with decision-makers and that its innovation.” Younger people tend to have was self confident in English, but not in Perhaps the most extreme example of that bringing business decisions, and I really an organization like AmCham for a long membership is represented well. “We more open minds, too, and Benkő says he sees Hungarian. Although I could speak the came towards the end of her five years as hope to share some of that with board time, but juggling her work commitments measure our significance or effectiveness real benefits in promoting that mindset in language, it had never been tried outside of a CEO of the American-owned commercial members who are open to it.” with her social and family life – she has in how well our voice is heard. Not a lot of and through AmCham. family environment, which is very forgiving pop station Sláger Rádió, which lost its two small children – always felt enough of voices will be listened too – that is a fact of all your mistakes. But I didn’t want to broadcasting license under controversial But she wants to share this knowledge with a challenge as it was. “In the end I thought of government, and it’s just the same in He is almost universally known as Willy, but operate in an English-only environment. I circumstances in 2009. “It got political, and the wider AmCham membership too. “I’d I have to stop putting this off, otherwise I America – and we want to make sure we the Benkő surname speaks of Hungarian wanted to make sure I could attend, and give, I had never experienced something like like to be part of the digital media working will be a pensioner before I find time to do are one of them.” ancestry. In fact, his parents left Hungary in Hungarian presentations.” that before, when the political world gets so group and hopefully I can contribute to something other than meet my commitments 1956, and his was a fairly typical upbringing deeply involved in the business world. In a that. There’s a lot of knowledge that can to work and family.” So she decided to take He thinks that is happening, and credits for the children of 56ers born and raised He somewhat overachieved on that front, lot of ways it was extremely negative, but as a be passed on: how do you use the web, the plunge, and AmCham felt like the “pretty Havas and the chamber office with the fact in the United States. “I grew up speaking to the extent that, well known as a public professional experience it was very useful. I how do you reach your partners, how do obvious choice”, as her career started in that AmCham became the first organization Hungarian at home, but it never really crossed speaker, he also teaches public speaking skills very quickly had to learn crisis management, you communicate, internally to your own San Franciso, and she has mostly worked to sign a strategic cooperation agreement my consciousness whether I was American, to Hungarian prisoners, in Hungarian. “If you crisis PR and communications; most people employees and externally to customers? There for American companies. “I really liked with the government. “That is one of the big Hungarian or American-Hungarian. People can boost their self confidence, you give them don’t get so much exposure to these things.” have been a lot of important changes in these the American professional and business successes of István’s tenure: there are always here would ask me what an American a better chance of being able to do something areas and in particular in Hungary there is culture and I share many of the same values: things you want to improve, but first of all Christmas was like, and I’d say I don’t worthwhile with their lives.” It is just another It all adds to the broad range of experience a lot of help we can offer companies,” Heal transparency, keeping your word and so you have to be part of the process. Once in, know, because we always had a Hungarian chapter of Benkő’s volunteer activities, which she has picked up. “I have worked in four or explains. “Actually a huge part of Google’s on. It is certainly a lot closer to me than the you can work on refining the process. That Christmas in America. But the guys I went to he says he will continue doing even while five different sectors: I guess I have different job in this country is education, showing Hungarian business culture.” agreement transcends his presidency, and we school with, and the people I hung out with, AmCham President. VOICE american chamber of commerce in hungary News & Analysis 9

Trade Will the largest Facts and Figures Business news According to the European Commission, It isn’t necessarily all doom transatlantic trade is the “backbone of the and gloom out there… grow larger? world economy”. Together, the EU and the roundup Unites States account for 47% of world GDP and one third of global trade flows. Compiled from Hungary AM’s news service “We, the Leaders of the United States and the European Union, are pleased to announce that, based on recommendations from the U.S.-EU High Level Working Group on Jobs and Growth…, the United States and Transatlantic Trade and Investment Part- “Each day goods and services of the European Union will nership would advance trade and invest- almost €2 billion are traded bilaterally, ment liberalization and address regulatory contributing to creating jobs and growth in our economies,” the Commission each initiate the internal and other non-tariff barriers. Through said. “Latest estimates show that a procedures necessary to this negotiation, the United States and the comprehensive and ambitious agreement European Union will have the opportunity between the EU and the U.S. could bring launch negotiations on a not only to expand trade and investment overall annual gains of a 0.5% increase Transatlantic Trade and across the Atlantic, but also to contribute in GDP for the EU and a 0.4% increase to the development of global rules that can in GDP for the U.S. by 2027. This would Investment Partnership.” strengthen the multilateral trading system.” be equivalent to €86 bln of added annual U.S.-based Forest Laboratories has submitted a new drug application to the U.S. Food and Drug Administration for income to the EU economy and €65 bln cariprazine, an antipsychotic agent developed by Hungarian peer Gedeon Richter, Richter announced in late November of added annual income for the U.S. 2012. Forest Laboratories submitted the application for cariprazine for the treatment of both schizophrenia and manic or The idea of a TTIP has been welcomed by economy.” mixed episodes associated with Bipolar I Disorder. The drug is licensed to Forest Laboratories in the U.S. and Canada. The hus started the joint statement business organizations on both sides of the application for the treatment of schizophrenia includes the result of three positive trials in more than 1,700 pat ients. The of United States President Atlantic. U.S. Chamber of Commerce Presi- According to a fact sheet released by application for the treatment of manic or mixed episodes associated with Bipolar I Disorder includes results from three Barack Obama, European dent and CEO Thomas J. Donohue said, “For the Office of the United States Trade positive placebo-controlled trials in over 1,000 patients. T Council President Herman the sake of jobs and growth, it’s time to forge a Representative , the partnership would, Van Rompuy and European Commission bold, new trade pact with Europe. The Cham- among other things, aim to: President José Manuel Barroso, announcing ber applauds the U.S. and European officials German carmaker Audi will contribute developments are taking place at the same office building at Corvin Promenade, a • Further open markets to grow the $459 what could be a hugely significant boost to who worked tirelessly to clear a path forward bln in U.S. goods and services exports to about €5.5 mln (HUF1.6 bln) to some time as Audi winds up a big expansion at big rehabilitation project in the capital’s transatlantic trade. for an ambitious and comprehensive agree- the EU, our largest export market, which €6.65 mln of developments at a regional its base in Győr. District VIII, Futureal Development CEO ment. The stars are finally aligned, and we already supports an estimated 2.4 million airport near its plant in the Hungarian Tibor Tatár said at a press conference on “The transatlantic economic relationship urge the U.S. and EU governments to move well-paying American jobs; city of Győr, business daily Világgazdaság Total French investments in Hungary since December 12. Just 5% of the space in a is already the world’s largest, accounting forward swiftly to negotiate a high-standard said on February 8. Under a proposal the collapse of communism have reached 42,000sqm office building completed in for half of global economic output and agreement that will foster economic growth • Strengthen rules-based investment approved by the local council of Győr €10 bln (HUF 2.9 tln), making it the third- the first phase of the rehabilitation project to grow the world’s largest investment nearly one trillion dollars in goods and and job creation for all our citizens.” last fall, Audi is to acquire a stake biggest investor in the country, French is empty, thus the decision was taken to relationship – the United States and the services trade, and supporting millions EU already maintain a total of nearly in the airport’s operator, Győr-Pér ambassador Roland Galharague said on construct a building with 6,200sqm of of jobs on both sides of the Atlantic,” the President of BUSINESSEUROPE Jürgen R. $4 trillion in investment in each other’s Repülőtér, through a HUF 187 January 21. A recent study shows French- rentable space, said Futureal program statement acknowledged. Thumann was equally positive. “The world’s economies, supporting nearly seven mln capital raise, as well as contribute owned companies in Hungary employ about director János Berki. Construction of the two largest trading partners are ready to million jobs; €4.9 mln directly to the cost of the 52,000 people, Galharague said. Five French building will start in the spring of 2013 and “We are committed to making this relation- launch negotiations for an unprecedented developments. The airport is extending companies – Groupama, EDF, Sanofi, last one year, he added. ship an even stronger driver of our prosper- trade deal that will benefit us all,” he • Enhance cooperation on the development its runway from 1,450 meters to 2,030 Auchan and GDF Suez – are among the of rules and principles on issues of global ity. In that regard, we welcome the High said. “An EU-U.S. agreement presents an meters and building 100-meter runway top 25 investors in Hungary, he added. Danish pump maker Grundfos will concern, including on market-based Level Working Group’s recommendations unmatchable opportunity to boost competi- disciplines for state-owned enterprises, end safety areas. Taxiways are being The study compiles data of 323 of the 336 complete a HUF 17 bln ($76.4 mln) on how we can expand further our trans- tiveness, jobs and growth that are needed in combating discriminatory localization widened and stands built to accommodate French-owned companies in Hungary. factory in the city of Székesfehérvár atlantic trade and investment partnership, our economies. This report is a first big step barriers to trade, and promoting the global Boeing 737 and Airbus 320 aircraft. The (central Hungary) by June of this year, promoting greater growth and supporting by the EU and U.S. authorities to bring our competitiveness of SMEs. airport will shut down for several weeks Hungarian developer Futureal is CEO László Török of Grundfos Hungary more jobs,” it continued. “A high-standard economies closer together.” in May while the project is completed. The constructing a €16 mln (HUF 4.6 bln) Manufacturing announced at the topping- VOICE american chamber of commerce in hungary News & Analysis 11

out ceremony for the plant on January 21. Knorr-Bremse Fékrendszerek, A consortium of Austria-based Török said the company would employ the Hungarian unit of German braking Swietelsky and Hungarian-owned WHB 300-350 workers at the plant (its second systems maker Knorr-Bremse, started signed a contract worth almost HUF 9 bln in Székesfehérvár and fourth in Hungary building an almost HUF 5 bln ($22.5 ($40.5 mln), net, on the reconstruction of a overall) by 2015. mln) production hall and development landmark bazaar at the foot of Castle Hill in laboratory in Kecskemét in mid-December. Budapest on January 31. The contract was Chicago-based Heitman has invested Knorr-Bremse Fékrendszerek took a signed with Várgondoksag Nonprofit almost HUF 1 bln ($4.5 mln) to renovate decision in 2010 to make the greenfield and the District I local council. In addition

Strategic partnership agreements factories in five cities around the country, three regional business centers and Hungary has continued its policy of signing strategic partnership agreements two R&D units. GE Lighting has its EMEA headquarters in Budapest, and the U.S. automotive industry supplier Racemark International will start product ion at a plant i n Hungary in the fi rst with leading businesses in Hungary. The latest was just before we went to capital also hosts a global R&D center. quarter of 2013, the Hungarian Investment and Trade Agency (HITA) told MTI. Racemark International is moving press, on February 26 with local unit of German carmaker Audi, signed production from Switzerland, its only manufacturing base in Europe. It picked Hungary from four countries vying by Prime Minister Viktor Orbán and Audi board member for production Two days later, on December 12, a strategic agreement was signed with the for the relocation, HITA said. The company’s €1.8 mln (HUF 527 mln) investment in Komárom will create 51 jobs by the end Frank Dreves. Orbán said the agreement touches on investments, education local unit of software giant Microsoft. Péter Szijjártó, state secretary for foreign of 2013, but headcount could rise if orders increase. Racemark International supplies BMW, VW, Bentley and other big affairs and external economy, noted that the government is establishing its carmakers with floor mats, trunk mats, seat covers and seat vests for their top-category vehicles. commitments and infrastructure developments that allow Audi to expand further at its base in Győr. He added that the value of Audi Hungária’s national digital education portal as well as the digital home program with the orders from Hungarian suppliers comes to HUF 450 bln. Dreves said the cooperation of Microsoft. The national digital education portal aims to make agreement contains new horizons for the long-standing cooperation between digital instructional materials available to all Hungarian students. The goal the Alkotás Point office building investments, rather than expand its to renovating the bazaar, Swietelsky-WHB Audi and the Hungarian government. Audi Hungaria’s 9,000th hire – a 25 of the digital home program is to make more institutional services available in Budapest, the real estate company’s existing plant in Kecskemét, which will build an underground garage at the site, year old development engineer – also spoke at the signing. Audi Hungária online. Microsoft has 3,000 partners in Hungary and indirectly provides is Hungary’s second-biggest company, according to rankings based on 2011 work for some 50,000 people, Szijjártó said. More than 60% of these partners PR firm told state news agency MTI. started operating 40 years ago, said a tram stop and an escalator to take people revenue. It is currently putting the finishing touches on a big expansion at its are Hungarian-owned, he added. Heitman bought the building, competed managing director István Lepsényi. The to the Buda Castle. The project could be base in Győr. The €900 mln expansion is to raise output at the base to 125,000 in 2002, last year. investment will create 100 jobs at the plant completed by the spring of 2014. cars a year from 2013, up from more than 33,500 in 2012. On January 11, it was the turn of IBM, with state secretary Zoltán Cséfalvay and 31 research jobs at the development of the National Economy Ministry and IBM Magyarország’s managing American contract electronics laboratory, he added. U.S. computer-hardware company Other recent signees have included representatives of three American icons. director Zsolt Veres putting pen to paper. IBM Magyarország will try to The agreement with GE was inked on December 10. General manager for GE expand its production activity, depending on market conditions, as well as manufacturer Jabil is expanding its after Systemax will open a service center in Lighting Europe, Middle East and Africa Ivan Hutter said the cooperation broaden its business services in Hungary. The company has also expressed market service center in the Hungarian Italian elevator component maker Budapest this spring, officials from the created the possibility to put ties between GE and Hungary on a new footing. its readiness to involve Hungarian universities and research centers in city of Szombathely with an 8,000sqm Sematic is undertaking a HUF 2.5 company and the Hungarian Investment National Economy Minister György Matolcsy noted GE has already been its R&D activities, while the government said it was prepared to provide hall, Jabil Magyarország After Market bln ($11.2 mln) expansion at its base in and Trade Agency (HITA) announced “our partner for more than two decades”. He said that the government had incentives for such cooperation with available resources. IBM employs Service managing director Attila Pajor Nyíregyháza, the local council said on on January 22. The center will conduct raised the number of university students in engineering, the natural sciences about 5,000 people in Hungary. and computer science from 21,000 in 2012 to 30,000 in 2013, and predicted said at a press conference on December 6. its website. Sematic Hungária will sales and marketing activities as well as the number would reach 40,000 in two to three years. Hutter said that almost Since last summer, the Government has also signed strategic partnership Jabil set up the center in Szombathely in boost headcount by 50 as a result of the back-office and administrative operations half of the people GE employs in the region work in Hungary. It entered the agreements with the Hungarian subsidiaries of Coca-Cola, Alcoa, Daimler, 2005. The company also has a production investment, up from the present 130. aimed at promoting Systemax’s European country at the end of 1989 with the acquisition of a majority stake in light bulb Suzuki, Hankook, National Instruments, Nokia, Siemens, Stadler Rail, Tata base in Tiszaújváros, and it opened an Production at the expansion could start as expansion objectives. Systemax is expected maker Tungsram, and now employs more than 12,500 people here, making it Consultancy Services and Tesco, as well as with Hungarian pharmaceutical after market service center in Pécs in soon as August. The new hires will be made to employ 200 workers at the service center the largest American-owned employer and investor in Hungary. GE has six giant Gedeon Richter. (See also page 27 for more on the agreements.) 2012, Pajor said. in the 12 months following the launch. by the end of this year. VOICE american chamber of commerce in hungary News & Analysis 13

macroeconomics

According to the statement, “expanding into consideration during any potential Easing cycle continues the range of unconventional policy restructuring of the monetary policy goals In cutting the central bank’s base rate Hungary moves tools may provide effective support only and instruments, as these determine the by another 25 basis points to 5.5% at the during times of acute financial market MNB’s room for maneuver. Trippon warns end of January, the MNB continued an stress”. CIB Bank chief analyst Mariann that attempts by a small, open, developing easing cycle it started in August 2012. Trippon stresses that, “In the long run, country with high external debt such as This was the sixth 25 basis-point cut in a deeper into recession Hungary’s monetary and economic Hungary to copy the actions of developed row. According to analysts, the base rate by Gabriella Lovas policies do not depend on who the MNB central banks and to use measures that could drop to as low as 4.5%. head is, but what he will do.” That will have worked elsewhere could easily only become clear a few months after backfire. She stressed that this could lead The Monetary Council said that it Last year Hungary’s GDP decreased by 1.7%, his appointment. CIB analysts believe to a loss of confidence, a drastic weakening would only consider a further reduction that harmonizing economic policies and of the local currency and capital outflows in the policy rate if the medium- according to preliminary figures; in 2013, the using unconventional measures can be from the country. CIB analysts also point term outlook for inflation remained advisable in crisis management. However, out that the monetary policy is not a cure- consistent with the MNB’s 3% target economy is expected to shrink even further. the characteristics of Hungary’s economy all; it alone cannot solve the fundamental and improvement in financial market and financial market must be taken problems of the economy. sentiment is sustained.

ungary’s GDP shrank by government could try to boost lending 2.7% in the fourth quarter or increase spending. Raiffeisen analysts of 2012 compared to the foresee a pre-election spending spree in the GDP volume indices 2012 (unadjusted data) H corresponding period of the second half of this year with the possible previous year, according to preliminary re-introduction of the 13-month pension, 2012 GDP figures from the country’s Central Statistical or a pay rise in the public sphere. However, Office (KSH). With the performance of the analysts warn that there will be a high 99.3 the information and communication, price to pay for this in the form of high future accommodation and food service sectors all interest payments. 98.5 improving, KSH said that the decrease was due to declines in agriculture and industry. An attempt to boost private investments 97.3 The National Economy Ministry blames could be hampered by Hungary’s gloomy 98.5 Mother Nature, in the form of a severe economic outlook and uncertainties in the drought, and decreasing external demand. business environment, says Török. The government could try to spur the growth Q1 Q2 Q3 Q4 Hungary is in a prolonged, deep crisis, says of investments by providing cheap loans Source: KSH Raiffeisen chief analyst Zoltán Török. The through business development programs. country lags behind its regional peers and As to improving net exports, maintaining a most EU member countries; macroeconomic weak forint rate could be an option, he added. indicators, such as GDP, retail sales, and investments are only slightly better than Only time will tell those of the southern European countries. The most important economic event of He noted that it must be hard to prepare for a the first quarter of 2013 will undoubtedly general election (scheduled for the spring of be the appointment of the central bank’s 2014) with an underperforming economy. new leadership team. There are concerns that the government’s unconventional Raiffeisen analysts are predicting a change economic policies could spill over to the of direction in Hungarian economic Hungarian National Bank (MNB) after policy away from fiscal austerity and a new governor and deputy-governor are toward economic growth. Growth can be elected in March. Market players’ main generated from increased consumption, worry is that the government might want through investments or net export. Due to appropriate FX reserves and use them to the 16% flat personal income tax rate for external debt repayments. and the 5.2% increase in pensions, real wages could rise by 1.5% in 2013, which, In its January statement, the MNB’s in turn, could boost consumption by only Monetary Council addressed these a slight 0.5%. Thus, concludes Török, the concerns saying that its monetary policy government will probably try to increase instruments “allow enough room for consumption through other means. In the maneuver to maintain a monetary policy absence of growing external demand and stance consistent with the current outlook a major improvement in employment, the for inflation and the real economy”. VOICE american chamber of commerce in hungary Cover story 15

Stock markets

BSE saw a drastic drop Hungary has many challenges to overcome in turnover in 2012 Capital vs. to achieve long-term by Gabriella Lovas and sustainable prosperity. AmCham’s Equitas chief analyst András Somi. Due to a Countrysideby Robin Marshall Weak growth and high inflation coupled with low mission is to tackle one consecutive decrease in provisions, this could domestic consumption and falling investments have significantly improve bottom line on the of these, increasing hampered Hungarian stock market activity. bank’s income statement. Although foreign competitiveness. Another units account for roughly half of consolidated potential threat lies in the profits, the bank, as the top Hungarian n 2012, the Budapest Stock after its re-launch in 1990. There was only “macro share”, cannot free itself from the country’s demographics, Exchange saw a 42.4% drop in one technical listing last year, that of Business impact of the current unfavorable domestic explored here on pages its spot market turnover on the Telecom in the ‘B’ category. In addition, macroeconomic developments. According 20-21. But for the country I previous year, to €8.69 million, building materials company Masterplast to an OTP management forecast, foreign as a whole to develop, according to the bourse’s summary of the made a secondary public offering in May. subsidiaries will either be profitable, or at least main developments in 2012. The decrease break-even in 2013-2014. the capital vs. countryside is in line with international trends and Efforts to increase The exploration projects in Kurdistan could conundrum must also compares to a respective 24.9% and 34.4% liquidity be one of the most important drivers of MOL’s drop in equity market activity in Europe The Xetra trading system, which is operated long-term growth, says Somi, adding that be solved. and in the region, respectively. Daily average by Deutsche Börse AG and has already been the sale of a 1.6% MOL share by Dana Gas turnover was €35.5 mln on the spot market launched in Vienna, Ljubljana and Prague, in February somewhat stirred markets. The transaction left UAE-based Dana Gas with But as Katalin Németh, the head of the Average daily turnover in equities (€ m) Source: BSE a remaining 1.4% interest in MOL, however, Investment Promotion Directorate at the there is a three-month moratorium on the Hungarian Investment and Trade Agency, sale of the package. The sale was due to the points out somewhat ruefully, “It is true that financial troubles of Dana Gas. we try to encourage investments away from Budapest, in the less developed areas, but Richter has products in the pipeline that unfortunately we do not have any influence could significantly boost future profits, but on the decisions of the investors.” and €34.3 mln on the equity market. The is due to be introduced on the Hungarian right now all they boost are costs. In 2012, good news is that in 2012 the BSE remained market in H2 2013. In order to further R&D spending jumped 35.1% to HUF 38.8 “We can offer them sites from our database one of the region’s most liquid markets, with improve liquidity, the bourse plans to bln and sales and marketing costs were up which we think would be suitable for them, the highest share turnover velocity, at 52.7%. introduce a new market maker system, too. 17.2% to HUF 92.7 bln as Richter expanded we supply all the requested information This means that more than half of the equity its sales network in Western Europe and regarding available labor, but the decision market capitalization was traded throughout The BSE further expanded its product promoted the launch of Esmya, a new is theirs. Very often the investors name the the year. As in previous years, 98% of the range last year with another 13 foreign medicine to treat uterine fibroids. Richter’s area they want to put an investment and equity market turnover was concentrated in securities and futures contracts on foreign net income rose 3% to HUF 50.8 bln on peak to anyone with experience Curtain and the political changes that investigate only that. The available incentives the five blue chips: MOL, OTP Bank, Richter, shares on the BETa Market. The number of revenues of HUF 326.7 bln last year. of Hungary, and they will tell followed. In any case, Hungarian business, that a project can receive differ from area Egis and Magyar Telekom. Besides these, certificates also increased, and additional you it is really two countries: by and large – and with the obvious to area, the less developed ones receiving certificates and BETa market products were underlying products were added to the Somi thinks that Magyar Telekom operates S Budapest and the rest. Indeed, exceptions of MÁV (railways), MOL (gas a higher percentage, but this is set by the the most liquid instruments, according to the selection. At the end of 2012, 56 certificates in a sector where the Hungarian government the Hungarian word for countryside, vidék, and oil) and Magyar Posta (postal service) European Union,” Németh tells Voice. report. Of the 23 shares traded on the BETa were available on the BSE. could try to find further extra revenues for is used (and understood) to mean everything – are not big enough to make much market, investors were most interested in the budget should it feel its deficit target is outside the borders of the capital. Perhaps the difference. What the government can do So why locate away from Budapest, and Commerzbank and Nokia, which accounted Macro remains biggest threatened. The company is still waiting nearest English word would be provincial, is to make “countryside” investments what are the challenges? Well, the further for 37.9% of the total €22.9 mln turnover, the risk for blue chips for a European Commission decision though it’s not a perfect fit. Budapest has more attractive to FDI. It was exactly east you go, the one problem you won’t bourse said. While the short- and mid-term outlook for regarding a “crisis tax” that has been levied become a self-sustaining magnet, attracting this model that helped lead to Daimler face is finding a ready work force, at least in blue chips remains gloomy primarily due on telecommunications companies since ever more power, people, money and jobs. building its Mercedes-Benz factory terms of quantity. Unemployment is much Three companies left the stock exchange last to the deteriorating business environment 2010. Somi points out that the Commission, at Kecskemét, some 87 km southeast higher in the east, as a consequence of which year: frozen foods company Székesfehérvári in Hungary, long-term prospects are more in a 2010 decision, requested that France and It is, of course, something the government of Budapest in the Southern Great government incentives to locate there are Hűtőipari Plc (Fevita), Luxembourg-based promising, especially if institutional investors Spain abolish specific charges on turnover as is aware of. But there is little it can do Plain, a region with the fourth highest much greater. According to a December asset management company Fotex Holding, return to the country’s capital market. There it considers these incompatible with EU rules, to force the issue; the days of a control unemployment rate in Hungary. The €800 18, 2012 post on the ElectroSites Blog, an and telecom service provider TvNetWork Plc. is a chance that the deterioration of OTP which require specific charges on telecom economy operating at the whim of a million ($1.24 billion) investment was information source for CEE corporate Fotex, established in 1984, was the second Bank’s loan portfolio will slow down in the operators to be specifically and directly related central government were, thankfully, opened on March 29, 2012 and is expected site selection teams, “The number of stock introduced on the Budapest bourse second half of this year or in 2014, says KBC to covering the costs of regulating the sector. buried for good with the fall of the Iron to create 2,500 new jobs in the region. unemployed people in Eastern Hungary is VOICE american chamber of commerce in hungary Cover story 17

300,000, which is equal to entire Slovakia.” prove that science is interesting, and have greater competition for suitable employees rather difficult to bring them to Debrecen; eastern Hungary we could invest HUF 3 main international airport, but everyone else, The blog also estimates that the area is teachers giving exiting lessons in elementary nearer Budapest (a fact experienced at I have to put a much bigger package on billion and qualify for a 10 year tax holiday. more than 1,200 employees, is in Debrecen. “among the most intensively (potentially and secondary schools.” In the middle of the TEVA’s latest $110 million facility in the table to attract them. So far I haven’t In Budapest or the west of the country Ábrahám says the total investment now 50%) subsidized regions of the EU”. country there is just one school for chemical Gödöllő, just 30 km from the capital). had a position I couldn’t fill, though we would have had to invest HUF 10 bln. tops HUF 10 bln, with the latest phase only announced as we were preparing this article. Hungary’s second city, Debrecen, is A third 6,000 sqm building will house important to this story. And so it should offices, server rooms and labs, and employ a be: some 226 km east of Budapest, it has Unemployment by region further 300 people, many supporting R&D a motorway connection with the capital activities. In yet another example of an MNC Hungary’s unemployment rate in Q4 2012 was 10.4%, a slight decrease and an international airport; the mayor, supporting the local community, part of compared with the previous quarter (10.9%). Lajos Kósa, is an extremely well connected the lab space will be made available to the politician (sometimes touted as a possible Northern university and local SMEs. hungary successor as leader of the ruling Fidesz party 16.4% to the current PM Viktor Orbán); and its Budapest BT had been operating its traditional university has an international reputation. 8.4% ICT business in Hungary since 1999 The city itself had a population of 208,016 Northern when, in 2007, it decided to also base its in 2011 (it is an indication of how capital- Great Plain 13.1% EMEA Regional Operations Center in the centric Hungary has become that Budapest’s country. The existing business had been Central in Budapest but the company also wanted population, according to the 2011 census, Hungary was 1.74 million), and is the regional center 8.6% another site to meet its business continuity of the Northern Great Plain, an area with planning standard of having separate the second highest unemployment in the locations to ensure service at all times. country at 13.1%. “We have one center, but two locations of equal weight. Debrecen isn’t a secondary Quantity vs. quality office,” explains Andor Faragó, the general manager of the ROC. For Mária Major, head of the Debrecen- based Hungarian HR SSC for TEVA, Debrecen had obvious advantages, not an Israeli multinational pharmaceutical least those government subsidies, but it was company with sites in Budapest, Debrecen, also the best overall fit for BT’s shopping Gödöllő and Sajóbábony near Miskolc, list. Given the small size of all of Hungary’s the problem in the east is not quantity but provincial cities, BT targeted a region rather quality. “We have no problems recruiting than just a town. Relatively close at hand are enough employees, it is the education type Nyíregyháza (50 km away) and Miskolc (113 and level that has proven challenging. In the Southern km), as are Romania, Slovakia and Ukraine, past the content of the relevant education Transdanubia all promising an educated, skilled workforce for pharmacy has left us with additional 11.4% Southern just across the border. “The model works: work during on-the-job training when we Great Plain we have colleagues from both Miskolc and hired career starters.” So much so that TEVA 10.4% Nyíregyháza working at Debrecen,” Faragó has established two external departments says. He estimates that costs are 15-20% at Debrecen University, the first for Central lower than in Budapest. And, once again, chemists and chemical engineers in 2007, Transdanubia 9.4% the university and the supportive local the other one concentrating on industrial government were a key draw. pharmaceuticals (as opposed to sales or general pharmacy work) in 2011. “Our Language skills are key, with a general colleagues are teaching about what it is really technicians, she says, which prompted Within the wider company the skills, occasionally the lead times may have been With such a capital intensive investment requirement for people to be fluent in two like to work in pharmaceuticals, and we also TEVA to strike up a cooperation with a experience and loyalty of the Hungarian a little longer than I would have liked.” as a technology manufacturing plant, that foreign languages, coupled with some offer practical experience from authentic vocational school in Debrecen; the project staff is also much valued, she adds. difference is very important in making a technical knowledge and perhaps a couple resources. Prof. István Fábián, the Dean of has proved so successful that is now being space and cost project viable.” There were other attractions: of years of professional experience. “In some the University, has been very open and very repeated in Gödöllő. Studying at the very László Ábrahám, the general manager the infrastructure was OK, but there were cases it can be difficult to fill a vacancy: it’s helpful, but then he sees that this is good for highest level is also problematic. “East of for U.S.-based technology company NI Ábrahám says National Instruments never clear plans to improve it (since delivered on, not easy in Budapest, either, but it can be the university as well.” the Danube there is no MSc education for Hungary, says he has not experienced considered basing themselves in Budapest. though not always to time), and there were done quicker than in Debrecen.” There is a chemical engineers. If you have a BSc and any problems finding staff since the firm They did look at Hungary’s fourth city all those graduates. “Even today, most of pay-off, though: loyalty. “Our churn factor But TEVA is not just interested in want to study further you will have to go opened what was National Instruments Miskolc (183 km northeast of Budapest, it our employees come from the university,” in Budapest is 12-15%, which given the improving teaching at the tertiary level. The to Budapest or Veszprém. Human nature first overseas facility in Debrecen in 2001, is the regional center of Northern Hungary, Ábrahám says. average in our industry is pretty good, but in whole current system is skewed to the arts, being what it is, once these talented young although he admits some posts are more which has the highest unemployment Debrecen it is only 5-8%.” Major complains. “We would like to see people have left the region, the chances are challenging than others. “If we are talking at 16.4%), but at the time there was no NI Hungary’s CEE sales team is based more emphasis on science subjects; this is they won’t come back.” Challenging though about elite engineers or scientists, they industrial park available. Ultimately, the in Budapest for ease of access to better The key challenge remains language, the future of the country. We would like to the situation is, Major says there is much want to work in the capital, so it can be decision was based on space and cost. “In European connections via the country’s though, and Faragó says the company VOICE american chamber of commerce in hungary Cover story 19 spends much time talking to government To attract the best candidates, the company crucial situation arrangement with the University of Miskolc themselves an “employer of choice”. BT, for and educationalists about the need for has been increasing its ‘Delphi awareness’ Hungary’s Internal through which the company actually helps example, was awarded the Family-Friendly improvements at both secondary and activities aimed at students in the key Migration The company is happy with its choices in develop curriculums at the Mechanical Workplace 2012 title in January. tertiary levels. One thing the company has technical schools and universities in the Hungary, but Jabil is yet another to point Engineering and Informatics Faculties. And Ironically for a people who arrived in pioneered is visiting schools to promote region. “The intent has been not only to out that education has become a potential that is not all, Somogyi says. “The company All the companies are engaged in the Carpathian basin in the last wave of SSCs as an option for school leavers instead introduce Delphi products and technologies the Great Migration, probably originally bottleneck in finding staff, and remains a set up a training program for electrical and supporting pregnant women or mothers of going to university. “If they have the and attract potential internship students from a homeland that was thousands concern going forward. “As we see into the mechanical engineering students, provides returning to work, and exploring part-time language skills, and are mature enough for and employees, but also to show the special of kilometers away in the central Urals, future, the lack of professionals will be a appliances and laboratory space for practice- and home working solutions. “It seems to the workplace, rather than taking a student skills required in development and testing their modern day descendents have huge problem in the electronics industry oriented study, and also holds professional be working: we don’t feel the population loan, they could go to work and study via departments.” Delphi has also signed proved remarkably unwilling to move in Hungary,” Somogyi warns. “We have competitions for the students. Moreover Jabil decline at all inside TEVA,” joked Mária distance learning or on part time courses. cooperation agreements with technical about the country in search of work. already emphasized several times that supports several high schools in the region.” Major. “We seem to have colleagues taking It is certainly something we as employers universities to work on common projects. companies, universities and government maternity leave or returning from it all the According to Zsolt Spéder, director of the support. And by the time they qualify, they Demographic Research Institute of the need to cooperate and reform Hungarian All of the companies we spoke to were time, which is absolutely good, of course.” will already have built the basis of a very Delphi enjoys “very good cooperation” with Hungarian Central Statistical Office, higher education, especially engineering aware of the demographic time bomb of good career,” says Faragó. its local authorities and is building important and his colleague Péter Őri, editors of education, because it cannot be changed Hungary’s shrinking, aging population, For all the companies, investing in regions links with surrounding communities to the Demographic Portrait Of Hungary from one day to the next. The longer we but all made the point that it was a and looking across national borders for a education shortfall be perceived as valuable partner and a 2012: Report On The Conditions Of wait for a solution, the bigger the problem phenomenon beyond the control on an worker pool, interacting with communities, good citizen. Company representatives say The Hungarian Population, internal we need to face. This is one of today’s most individual business to influence. getting involved with education from migration was in continual declined Automotive component supplier Delphi that, through cooperation with the local crucial situations as the future of Hungary elementary school level right through to in the first half of the 1990s, reaching has been operating in Hungary for community, Delphi would like to show that its nadir in 1994 with just 360,000 depends on it.” “As a multinational company Jabil has no university, pushing the learning of languages 20 years, investing more than €220 it is an attractive employer and high-tech movements. “From the second half of the direct power the stop this process. The and making science exciting, as well as mln and employing 3,000 people at its company, and also develop ways of ‘giving 1990s it stagnated at around 400,000, Which is not to say Jabil is waiting for others governments have to find the solution,” supporting pregnant women and young three plants in Szombathely (Western back’ to local society and to invest in the then suddenly increased in 2006 and to take the first steps. “In the fall of 2012 we says Richárd Somogyi. mothers, these are the ways they can at least Transdanubia, near the border with expertise of future generations. This includes 2007 although this did not prove to be invited the mayors of the region to discuss try and safeguard their own workforce. Austria), Balassagyarmat (in Northern activities such as its support of local education long-lasting. Due to the crisis beginning how we can support each other regarding “Frankly, we have more immediate in 2008, the number of migrations fell Hungary, near the border with Slovakia), institutions, charity organizations, direct creating new workplaces. We also agreed problems to focus on right now,” agrees Beyond that, it is up to governments and back to the level of the mid-1990s.” and Tatabánya (Central Transdanubia). involvement in environmental activities that once a year we meet and discuss all the Andor Faragó of BT. What they can do is demographic experts to solve a problem as well as collaboration agreements and Those most likely to migrate are aged relevant regional issues.” Jabil has a three-year concentrate on their current staff and make that grips much of Europe. José C. Gonçalves, Delphi’s Thermal common projects with technical universities. 20–29. Those under 19 are more mobile Hungary Managing Director, says the as regards temporary migration, while investment criteria for Hungary, as for Jabil Circuit Magyarország, the local in the case of permanent migration all regions, were to follow the group’s affiliate of the Florida-based supply chain this applies to those aged 30–39. automaker customers; obtain a skilled management and electronic manufacturing The intensity of migration tends to decrease considerably among people workforce; use existing infrastructure and company, has three sites in Hungary, above 40. But whatever the age of the obtain local government support. “Hungary providing services and logistics in migrant, or the reason for moving, offers a good business environment for Szombathely and Pécs (opened in June there is little doubt as to where manufacturing high-tech components for 2012 in Hungary’s fifth largest city, in they are likely to head. “The capital the automotive industry,” Gonçalves says. Southern Transdanubia, near the border Budapest is more attractive than with Croatia), and manufacturing in villages and towns. It is primarily the As with many of the companies we spoke Tiszaújváros (Northern Hungary). The capital and the sub-regions belonging to its commuter belt that profited most with, Delphi says it has more problems combined workforce is 8,000. Investment from migration.” To a lesser extent, a with quality of staff than quantity, and and development in Hungary in the last 12 similar story is played out elsewhere blames shortfalls in the education system. years totals $370 mln. in the country: an age-old tale of Balázs Sebestyén, Plant Manager, Delphi the draw of the bright lights. “The Connection Systems Hungary, explains In choosing new production facilities 13 majority of highly urbanized regions that, “While operators are currently easy years ago, Jabil was looking for good logistics, (cities with county status) are similarly to find, skilled labor, such as technicians skilled workers, and government subsidies. characterized by a positive migration balance,” say Spéder and Őri. trained to operate complex machinery or Richárd Somogyi, Assistant Operation injection-molding technicians, is more Manager, says the company found all three at If Budapest has always acted as a challenging. We see a gap between what Tiszaújváros, 173 km northeast of Budapest. magnate, the crisis has only intensified the current education system provides “There was no highway to Tiszaújváros the power of its pull. “Data on net and what industry requires,” Sebestyén in 2000, but there was a promise from the migration shows that Budapest extremely continues. “Currently the training for these government that a modern highway would centralizes the movement of the skills needs to be provided in-house, which be built for 2001,” he recalls. Technical high population. The economic crises directed migration towards this central region, makes recruitment more demanding. We schools and a “strong university” nearby enjoying more favorable conditions in are working on establishing closer ties with were important in ensuring a suitable the labor market. At the same time, the local schools to improve on education of workforce. “The company also examined the role of regional centers seems to be more skilled people and hence to enable Delphi tax benefits provided by the government; it moderate, just like migration from the to find the right resources for its growing is important because the opening of a new east to the west.” operation,” he adds. plant is a huge investment.” VOICE american chamber of commerce in hungary Cover story 21

demographics

Tby Robinhe Marshall demographic time bomb

For years, the It is, arguably, the future projections for a shrinking, aging population that are most population of sobering. Hungary’s population has been  By 2060 the number in decline for more than three decades. of the population will Hungary has been Between 1981 and 2012 it fell by nearly decrease by 1.5 million, in gradual decline, 750,000, and by about 70,000 in the past the rate of the old three years. In their review conclusions, people (60+) will approach like that of much Spéder and Őri summarize that, “According 40%, and the number of to the latest population projections, a further old people will be more of Europe. But the decrease and an ever stronger ageing process than double than the worrying news for can be expected. By 2060 the number of number of those under 20. the population will decrease by one and a Hungary is that the half million, the rate of the old people (60+) will approach 40%, and the number of old process seems to be people will be more than double than the accelerating. number of those under 20.” The quickest, most obvious way of halting that trend, although only in the t is compounded by the fact that short-term, is via large-scale migration the country’s fertility rate is not into Hungary, something many people just the lowest in Europe but, assume is happening. But the figures tell I according to the Demographic a different story: having grown gradually Research Institute (DRI) of the Hungarian since Hungary joined the EU in 2004, Central Statistical Office (KSH), is the and peaking at 35,000 in 2008 when lowest in the world, and the decline is not restrictions across the EU were lifted, it Hungarian citizens residing in various European outlier. But all that really means One reason for there not being more people being offset by immigration. But here’s has since fallen back. “The rate of people European countries in 2011 was about is the whole Continent will have to face under the age of 20 is clearly the world’s the really scary figure: based on current arriving from the neighboring countries – 148,000 (nearly 60,000 more than in 2001),” a similar problem. And the survey also lowest fertility rate. The Report On The predictions, by 2060, the population of especially Romania – has decreased lately. the survey notes. “Two thirds of them lived points to a somewhat morbid reason for Conditions Of The Hungarian Population Hungary could be just 8.4 million. The rate of immigration from Romania either in Germany (50%) or Austria (15%).” the country not being further up in the mentions more time spent in education, was 50-57% in the early 2000s, then it fell old age vanguard; the main reason, it says, the uneasy transition from school-to-work, The figures are among the data mining below 30% after 2007 [the year Romania But the decreasing size of the population, “is the unfavorable mortality rates among the difficulty of reconciling family and highlights to be found in Demographic joined the EU],” the summary of the and therefore the size of the country’s the middle-aged and the elderly”. In other job, and other background factors, though Portrait Of Hungary 2012: Report On The report says. Interestingly, the percentage workforce, is not the only thing that ought words, if Hungarians lived as long as in none of these are unique to Hungary. Conditions Of The Hungarian Population, share from the EU15, the pre-expansion to concern future employers in Hungary. some other parts of Europe, the problem of Spéder also assumes that the long-lasting recently published by the KSH research older members of the bloc, has grown, The population isn’t just shrinking; it’s also the growing age gap would be much worse. stagnation of the economy (since 2006) and institute. Edited by institute director as has that from Asia. But these are not getting markedly older. “The age structure the uncertain present and future outlook Zsolt Spéder and senior researcher Péter figures that, given the current trends, will is characterized by the decreasing rate of If you are a pensioner in Hungary, must be further contributing factors. As a Őri, the report is produced every three reverse Hungary’s population decline. young people. Between 2009 and 2012 there is some good news. “In the past consequence, people postpone the decision years. It doesn’t draw on the 2011 census, “Immigration into Hungary can be called these processes continued, so today nearly two decades, the life expectancy of to have a family and “A significant portion the results of which were not available modest in European comparison as one quarter of the population is above 60 old people has considerably improved. of planned children are not born.” Indeed, when the survey was finalized, but it is regards both the number and the rate of and every sixth person is aged 65 or more, Between 1990 and 2010, the life “Only one third of couples are able to based on the figures regularly produced immigrants per 1,000 inhabitants.” whereas the rate of those under 20 is merely expectancy of men and women at age 65 fulfill their childbearing intentions in the by the KSH, the DRI’s own Turning one fifth.” It is an imbalance that is steadily grew from 12 to 13.8 years and from 15.3 short run (within three years). This rate is Points Of The Life Course survey (which Immigration, of course, is not a one-way rising. “The number of persons aged 60 to 17.6 years, respectively.” Even this, much lower in Hungary, and in Eastern follows a group of people and maps street. For all that there are people moving or more has been higher since 2007 than though, carriers a somewhat depressing Europe, than in Western Europe.” One tiny changes in their living conditions and into Hungary, there are also people moving the number of young people under 20. At caveat. “The present level of old age optimistic note is that Hungarians would values every three or four years, and is out, and often the youngest, brightest present, the difference is 12%.” life expectancy is, however, far below at least like to have more than two children part of the international Generations talents; it is a figure that has been rising the levels in Western and East Central on average, which is above the European And Gender Program), and other sources since EU accession in 2004, but has The report does note that, in terms of Europe. The processes of the recent years mean. Of course, wanting children and such as the European Social Survey. accelerated since 2007. “The number of its aging population, Hungary isn’t a do not show signs of a catch-up.” having them are two very different things. VOICE american chamber of commerce in hungary Lifestyle 23

András Török’s Budapest

Before the end of the 19th century there were very few public statues in Budapest. The real proliferation of them (in the negative sense of the term) started in the Seven Recent Statues Communist period. The openly totalitarian pieces were relocated to Memento Park, in District XXII – worth visiting for serious public artwork lovers, or those in search of a (some may be new even for Aboriginal Budapesters) spot of what the Germans call Ostalgie, nostalgia for the old Eastern Bloc.

owadays there is a small specialist agency (the country’s borders prior to the end of WWI). You Sztehlo 2009 Ronald Reagan 2011 that assists anyone who would like to erect a can browse it on a map, according to artist or title. Gabor Sztehlo was a Lutheran pastor who saved This is the second statue of the American president in new public artwork anywhere in Budapest. There are several photos attached to each entry. You thousands of persecuted Jewish kids during the Budapest. The first (a bust) was erected in City Park. N Holocaust, and later cared for the orphans among them. This one is of bronze, and 2.2 meters high, so larger It’s called Budapest Gallery, and organizes design can add photos, and even initiate a new entry. 3. 4. contests or issues expert opinions for Budapest City He was not exactly a favorite of the Communists, which than life, like the man himself. He is shown walking Council – the body that gives or denies permissions. The following statues were all erected in the last five is why this statue was erected so late. It represents a chef d’oeuvre of towards the American Embassy. (By István Máté, in District V, years. All are well made pieces, fit for a public space. the great sculptor Tamás Vigh, and somehow manages to look very Szabadság tér, at Vécsey utca.) For those who are interested, there is a wonderful Most even belong to that obscure category called different from every angle. Take your time if you see it… (District V, Deák tér, near the church.) corpus of data at your disposal, a portal edited “contemporary art”. That term vaguely means that a by unpaid volunteers. It started some years ago statue reflects its own age, and makes us think every as szoborlap.hu (statue sheet), but last year was time we look at it. Some are simply nice – and stop renamed kozterkep.hu (“public space map”), and tourists and induce them to take funny pictures with covers not just Budapest, but all Greater Hungary their partner included.

Scooter boy 2008 “Uncle Charlie” 2008 This is a lovely statue, near the Pest end of Elisabeth Already a tourist favorite, it was modeled after the bridge, by an artist called Boldi (full name: Boldizsár grandfather of the artist, András Illyés, who was indeed 1. Szmrecsányi). At closer inspection one realizes that the 2. a policeman, and used to look like this, though he could boy is scrutinizing the sky, not the road ahead. And the only wear this particular helmet on public holidays. vehicle is also an impossible construction… A statue ideally fit for That’s a small liberty few people would mind, if they had known. outdoors placement. (District V, corner of Duna utca and Váci utca.) (District V, corner of Október 6 utca and Zrínyi utca.)

The Very First Statue of Steve Jobs, Ever 2011 Graphisoft is a highly successful Hungarian IT 5. company, which Steve Jobs had helped in its very early steps. That’s why founder Gábor Bojár was especially sad to hear the news of Jobs’ death. Within weeks a tender was organized, and the winning design, by Ernő Tóth was realized in two Prayer months. The text reads, “The only way to do great work is to love what for the you do...” It is in Graphisoft Park, a large group of high tech buildings, Rebirth and a symbol of New Hungary. (District III, Záhony utca 7.) 6. of Painting 2011 This exceptionally subtle work of contemporary art was erected by Historica 2012 donations from the Circle of Lovers This is the work of the Slovenian sculptor Andrej of Painting and the Hungarian Gabrovec Gaberi, behind the Salt House building Jewish Association, on the site of 7. of Corvinus University. An almost totally identical what had been the National Salon. artwork has been erected in several universities in the It commemorates a great showroom region. It is a poetic rendering of the contrast between masculine war erected in 1907, pulled down in 1960. efforts and feminine caring and love. (In District IX, Csarnok tér, a (By János Kalmár, in District V, newly revamped square.) Erzsébet tér, near Harmincad utca.) VOICE american chamber of commerce in hungary Focus 25

Q&A CURRICULUM VITAE (HIGH LIGHTS)

Born on Ózd, Hungary, 7 January 1958. Married with five children. Proficient in German, fluent in Education that English, knowledge of Ancient Greek (with an official certification from the German State.) No party membership. Before continuing his theological studies, he was an assistant turner at the engineering works of serves society DIGÉP, in Miskolc. by Robin Marshall EDUCATION 1976 Graduated from the Calvinist Secondary School in Debrecen. 1978-1983 Theology studies in Debrecen the main priority is an operable system of and Budapest. The cover story of the December 2012 issue of Voice 1980 Studies in theology in East Berlin as a guest professional control and a development student of the United Protestant Church. looked at Hungarian education and the attempts of scheme for pedagogues. 1981-1983 Spent four semesters at the Faculty of Theology of the Martin Luther University, Halle. organizations such as AmCham to help enhance it. In higher education, the primary aim In these years he actively participated in the peace is to form an educational system of a high actions of the Evangelical Church of the German On the back of this we spoke to Minister of Human Democratic Republic. He acted as a contact between standard, which is economically operable the East German “peace process” and the Dialogue- Resources Zoltán Balog about how he sees the group of Budapest. in the long-term, providing competitive 1983 Graduate theologian, Budapest. development of the educational system in the country. knowledge for students, and that can be 1987-1989 Post-graduate studies at the Ecumenical Council of Churches in Tübingen (West Germany). accessed by all who want to study, also How would you characterize been undergoing serious enrichment. In providing the opportunity to find a place in

PROFESSIONAL EXPERIENCE kormany.hu Pelsőczy, Csaba Photo: the state of Hungarian those years, due to the end of centralization the frontline of international scientific life. 1983-1987 Calvinist minister 1989 Theological advisor at the Conference of education right now? and the reduced role of the state in European Churches. their whole career. The economy The initiatives and achievements of Although Hungary’s educational system education, control over it has focused Hungary long had an September 1989 Assigned by the Ecumenical demands instant productive knowledge AmCham are well known. It urges Council of the Hungarian Churches, he operated had a great past, in the last several decades on the interests and possibilities (and enviable reputation for the as the pastor of refugees from East Germany at the from the professional in the interest of cooperation in the fields of electronics the quality of education and its efficiency ultimately the inability to operate) of 3,200 quality of its education, Refugee Camp of Csillebérc. more effective production, and this is and IT. Foreign corporations represented 1989-1991 Lecturer at the Faculty of New has been significantly reduced in the public, local governments. This has resulted in a but for a number of years Testament of Reformed Theological Academy, also a legitimate reason for the labor by it are also present in higher education, Budapest. and also in higher, education. The ministry segmentation of the system from school employers, particularly 1991-1994 Advisor on church politics, FIDESZ (Young market providing employment. for example, with the help of Bosch in responsible for education has substantiated to school. What we need today is to MNCs have been complaining Democrats) in the Hungarian Parliament. But no interest may prevail exclusively; Miskolc, and in helping corporations in 1993-1996 Research Fellow at the Ecumenical a system that can be operated effectively, redress the balance: besides professional that the system turns out Institute at Bonn University. a balance must be found mutually. By the electronic industry with laboratories providing competitive knowledge of a high opportunities we need a state guaranteed good theoretical students 1996-2006 Appointed Calvinist minister of the including vocational practice in the developed for students in Budapest German Reformed Church Community of Budapest. standard, with the construction of new basic education service for all citizens. who take a long time to As the leader of the Protestant Forum operating in course structure, higher education also University of Technology and Economics. the frames of the Church Community he pursued acts on public- and higher education. One In the field of higher education, in the past develop into useful and public life- and caritas activities. (Consultancy for past includes the developing laboratories of AmCham has helped a lot in improving of the important aims of this reform is two decades there have been significant usable practical employees. drug addicts, supporting church- and human rights the production sector, of which Audi dialogue between the corporate sector initiations in Transylvania. that education should play a key role in the changes concerning financing, the Some of the larger employers 1996-1997 Scientific associate at the Faculty of in Győr and Mercedes in Kecskemét and the universities, in the mediation, inclusion of disadvantaged groups, in letting application system, course structure, and have begun to develop their Mental Hygiene at the Sport University of Budapest. are perfect examples. The corporate coordination, and comprehension of the 1998-2002 Advisor to the Prime Minister of the talent manifest itself and, not least, in the the network of institutions. Some areas of own educational programs Hungarian Republic sector also helps institutions by urging claims of large corporations operating promotion of lifelong learning. these fast-realized transformations need to and even schools. What is 2002-2003 Head of Department, Department of them to get acquainted with the newest in Hungary. It has raised attention to the The deterioration of the economic situation be corrected. Besides quality improvements, being done to bridge the Social Politics, Office of the President of Hungary technologies, and with the support of fact that it is very important in education 2006 At the parliamentary elections he obtained and the deepening of the worldwide crisis measured according to international gap between the workforce a mandate via the national list. Since then he vocational training. to put great emphasis on good command have held back the spreading of lifelong standards, the main aim of the Hungarian produced by the system, and announced the intermission of his pastoral service of foreign languages, the development of in accordance with the regulations of the Hungarian learning practices. The number of those Government’s renewal of higher education that employers say they need. Reformed Church for the duration of his being an MP. AmCham runs a number the culture of entrepreneurship, and the He still maintains his “pastoral character”, meaning studying while at work has reduced, and is that it continuously produces the types of The government wishes to solve this the provision of service of preaching and other means of programs aimed at importance of teamwork and up-to-date this can be traced back partly to financial professionals needed for the development problem with a two-sided approach. of pastoral work on assignment. helping right across the management practices. AmCham, beyond From May 30, 2006 Chairman of the problems, and partly to changes of behavior of society, a competitive economy, and First we have to reform the structure Parliamentary Committee on Human Rights, educational cycle, from the raising attention, urges the instigation in the competitive field. technological development. of the vocational training system, and Minorities, Civic and Religious Affairs. Language Ambassadors in of harmony between the economy and From February 26, 2007 Deputy parliamentary We would like to reverse this tendency secondly introduce practical elements leader of the FIDESZ faction, leader of the many schools, to the Start education by demonstrating best practices, FIDESZ Cultural Cabinet. in higher education with vocational There are always areas of into the public education curriculum 2009 As Chairman of the Parliamentary Committee Your Business road show an example to be followed by all means. postgraduate courses building on basic concern in the education focusing on everyday life, such as financial on Human Rights, Minorities, Civic and Religious in the universities, to the Without overstatement, we can say that Affairs, he supported aid for the families of victims of degrees, launched on demand in the system, ranging from class and consumer protection, family life, serial murders against the Roma. board simulations aimed at in the innovations applied in Hungary, labor market. sizes and teacher moral, to environmental protection and so on. From August 29, 2009 Chairman of the teaching better corporate AmCham has left its traces, and created Hungarian Civic Cooperation. school/university funding, Within the framework of higher education, At the 2010 elections he obtained a parliamentary governance. How helpful something permanent. mandate as an MP from the Borsod-Abaúj-Zemplén Education always seems to be to salaries and even ensuring a healthy mix of theory and county list. are such initiatives? What, going through a period of teacher training. What is practice would create harmony between From June 1, 2010 Minister of State for Social if anything, are you looking Related links Inclusion, Ministry of Public Administration and Bridging the academic-business divide, upheaval. What is needed now, the minister’s number one the labor market and workforce supply. Justice. for partners such as AmCham cover story, p16-20, December 2012 issue of Voice May 19, 2011 major reform or gradual priority for education? Higher education prepares the student Through his personal contribution to provide: advice, practical Innovation and entrepreneurism: the European Commission accepted the Hungary’s route map to success, evolution? The things listed here are, of course, in the long run in order to be able European Roma Strategy during the course help, a combination of of the Hungarian Presidency. cover story, p16-20. September 2012 issue of Voice Since the democratic change in 1989, the all very important, for they regard key to orientate to the changes of the May 1, 2012 Minister of Human Resources both, or something else Managing recovery, Hungarian public education sector has elements of the system. In public education, environment and the economy during altogether? p30-31, September 2012 issue of Voice VOICE american chamber of commerce in hungary AmCham news 27

Forum forum Hungary ‘not an island’ Shifting toward growth by robin marshall by Robin Marshall, MBE Hungary needs to break a Bajnai believes. Firstly, it is typified by cycle of “bad governance” putting politics and policy ahead of good The government – in the party, believing “we would be helpful”, economics, he claimed. Secondly, under guise of one of its most Havas suggested. that was not introduced Fidesz, it had been compounded by “a by the current Fidesz lack of knowledge, by amateurism”. He prominent spokespersons Szijjártó seemed happy to embrace the idea. government, but has been justified that charge by questioning the – has declared itself “very “We are very open to consultations with you government’s own figures. “They just open” to an offer from as an organization as well as companies,” continued by it, former cannot calculate the consequences of their he said, adding that both sides should Prime Minister Gordon measures,” he insisted. The difference AmCham to join an investigate how to make it work. “If you Bajnai told an AmCham between the projections the government advisory working group offer this, we would make use of it.” originally made in its EU convergence comprised of companies Business Forum. plan and those most recently was 18% of The title of the state secretary’s talk was GDP. “That means we have potentially lost with whom the cabinet A Shift Towards Growth. He sketched out 18% of GDP. That is why we need austerity has signed strategic the government’s 2010 inheritance of high ajnai was Prime Minister from measures month after month in Hungary.” debt, an ailing economy and the general 2009-10 as what AmCham cooperation agreements. crisis in Europe. Using a sporting analogy President Willy Benkő The third reason he gave was his soccer-loving boss, Prime Minister B called the “head of the crisis perhaps the most sinister. “Around Viktor Orbán, would surely have enjoyed, he management government”. The former government there is a very small circle he promise came at the end said the old pre-crisis tools of government premier left politics after the 2010 election, of oligarchic entrepreneurs who have of the Q&A session that were no longer appropriate to the job. but announced a return in the late fall of been transforming political influence Secondly, growth, and how to achieve it, followed the February 25 2012, since when opposition hopes (and into money, and money into political has to become a priority. “The engine of T business forum with Péter The government had been forced to realize Some steps have already been taken, parties) have begun to coalesce around him. influence and political influence growth should be investment. Without future Szijjártó, State Secretary for Foreign that, “After the crisis, nothing would be the he said, such as alleviating families of back into money again. This has been investment, we will not have anything to sell.” Affairs and External Economic Relations. same as it was before,” he said. “After the their foreign currency loan debts. Then Bajnai told AmCham members that, going on over the last two decades. By Szijjártó had just answered a question crisis we would play new sports, on new there were those strategic alliances, “Hungary is not an island, even if it is today, this circle has gained a decisive Thirdly, entrepreneurs must be given about whether a series of strategic fields, with new rules and whistles [blown] with companies, of course, but also with fashionable to think so these days”. Rather, influence in Hungary.” flexibility not just to invest, but also to create agreements might undermine basic law by new referees.” states, as part of the Opening Towards the country had to engage with Europe and jobs. “Hungary cannot sustain today’s and just confuse matters. “The strategic The East policy, which saw Hungary end the “guerilla war Hungary is fighting In 2010 the country had demanded employment rate of 60-65%. That means agreements have no legal consequences,” Szijjártó insisted there had been economic targeting the Far East, and especially against the world”. something new, he said. “The public voted every third person does not work.” he said, “they are about communications successes in the first two years of the China. Other areas deemed of strategic for change because what it wanted was and continuous consultations between Fidesz government. The debt to GDP importance to Hungary include the Perhaps more than anything, though, the strong government. What it got was violent The fourth point was the most important, companies and government.” To that end, ratio (which had been 53% back in 2002) Caucasus (where “their demand almost country has to fix its own broken political government, acting against its own citizens he said: education. “The current Hungarian a working party was being set up with one had been lowered from 84% to around 100% meets our supply”), the Arab system. “Hungary is lagging behind its own and participants in the market.” That violence government is seriously mistaken when representative from each of the companies 77%. “It should be lower, so we need to world, the west Balkans, and Africa, possibilities, its own potential. This is not was “only camouflaging incompetence. What it thinks that education is an economic that have signed an agreement (14 thus far, work on this.” The budget deficit had also which Szijjártó said had been neglected, something that started recently. Since 2001 Hungary needs is a government that is strong problem. No, it is a national strategic with the final total likely to be around 40). been kept below the threshold the EU with much work needed to restore this process has been amplified.” not against, but for its citizens.” issue…. The only way of keeping up “I think this will be favorable for those demanded of member states. There has “barely existing connections”. a growth path for the coming years is we have not signed an agreement with as been some speculation (including, among He painted a grim portrait of the second Government shouldn’t be involved in education, education, education.” well, as this helps us make more favorable others, from the European Commission) The state secretary pointed out that 75% most open economy in the EU, where jobs everything; it needed to be efficient and also decisions for businesses.” (For more on that Hungary will find it very hard to of those in employment worked for SMEs, aren’t being created, investment has fallen “…wise enough to know where government The way ahead would be difficult, he this see page 11.) maintain that in 2014, and possibly this but the sector contributed only 20% to back to 1990s levels (today they do not even influence and interference is needed, and warned. “Between 2014 and 2020 the year too. The state secretary refused to exports. One of the targets of the strategic cover amortization; he made the point that where to leave alone.” country will have mountains to climb, but That in turn prompted an intervention accept that. “The budget deficit will stay agreements with MNCs was to boost the decision to build the Mercedes plant at least we will be heading upwards.” But the from István Havas, the erstwhile President well below 3%, so that is why we think the involvement of Hungarian SMEs in at Kecskemét, which opened in March According to the former PM, four things basics that had made Hungary one of the of AmCham. He pointed out that the Hungary should be abrogated from their supply chain. State lenders such as 2012, had been taken way back in 2008), will help Hungary begin to recover economic stars in the period immediately government had signed a strategic the [EU’s] excessive-deficit procedure.” the Magyar Export-Import Bank Zrt. where long-term potential growth is mired after the 2014 election. Perhaps most after the collapse of communism were still agreement with AmCham back in There are now 160,000 more people in were being instructed to be “much more around 0%, and where the country is paying fundamental is a rebalancing of rights there he insisted. “This country suffers February 2011, the first such with a civic work, he said, and Hungary has a foreign active and much more brave in supporting crippling amounts of interest on its debts. and powers between state and citizen, from one thing: bad governance, which did organization, and while it is impossible for trade balance of €700 million. Economic exports”. In 2014 the new seven year cycle and a restoration of trust, something not start in 2010. The good news is that the the government to conclude a treaty with growth, however, has proved lacking (the of EU funding would begin, at least 60% Nobody wants poor governance, of course, currently missing; “The government desire to change and good governance can each and every business, AmCham has country ended 2012 still in recession), of which will be targeted at economic and no government sets out on that path, doesn’t trust the citizens, and the citizens put Hungary back on track. That is what we more than 400 members. AmCham would and this year the focus would shift development, Szijjártó said, with allocation but there are three reasons why it persists, do not trust the government.” are going to work on.” be happy to be involved with the working to fixing that. “much quicker and more flexible”. VOICE american chamber of commerce in hungary AmCham news 29

Conference

A cooperativeby Robin Marshall a pproach to tax

The annual Regional Tax Conference was held are immense and ever changing. “We won’t said OECD Secretary General Angel Gurria “...We reiterate the need to prevent base know if he can actually attend until we see in presenting the report. “As governments erosion and profit shifting and we will follow for the eighth time on March 5, with AmCham him appear in the doorway on the way in, and their citizens are struggling to make with attention the ongoing work of the OECD Slovakia acting as hosts. Just how relevant it remains but we are extremely pleased to have received ends meet, it is critical that all tax payers in this area.” was proven in mid-February by an OECD report confirmation of his intent,” Slegers said, – private and corporate – pay their fair G20 Leaders Declaration of 19 June 2012, Los Cabos addressing a process known as base erosion and profit speaking to Voice before the event. amount of taxes and trust the international tax system is transparent.” It has become an “We thought it was a good idea to try and get shifting (BEPS). The report was debated by a G20 There were three main panels during the area of increasing tension, particularly in the the Visegrád governments together to talk to meeting of finance ministers in Moscow. It was also day, looking at tax collection and tax evasion UK in the past fall, where there was public across the region from the perspective of incredulity at how much, or rather how little, business about a number of issues including VAT. discussed at the tax conference. government, business and technology. tax was being paid into the British exchequer The governments were not talking to business by successful multinationals such as Google much at the time, and they certainly weren’t The conference series was initially the and Starbucks. talking to each other.” ake Slegers, Executive Director That is a theme echoed in the publicity for brainchild of GE, who saw a clear need for Will Morris, Director, Global Tax Policy for GE, on the creation of the of AmCham Slovakia, is in no the conference. “Tax fraud and tax evasion a region-wide approach to tax. One of those Morris says he believes a Rubicon may have regional tax conference series. doubt of the on-going need for are limiting the capacity of EU member involved from the outset is Will Morris, been crossed in terms of public acceptance J the conference series. “There states to raise revenues and to carry out Director of Global Tax Policy for GE. He says of tax avoidance, not least at a time where “I was really impressed by some of the stuff they are two certainties in life: taxes and their economic policies,” it said. “In times the issues covered may have changed over the much of Europe faces austerity. That in turn are doing in Poland, introducing electronic tax death,” he jokes. “There are always issues of fiscal consolidation, when many member years, but the need for the conference has not. has focused the attention of governments, payment and administration that is really in to do with taxes, with revenues, always states need to cut expenditures and increase something brought into even sharper clarity advance of where they were, and where many of new legislation being introduced.” revenues, effective fiscal policy is significantly transforming by their own need for reliable revenue challenged by tax fraud and tax evasion.” streams. “There is huge public interest in the countries in the region are. We are somewhat This year took as its main theme The The EU’s shadow economy is estimated to “Eight years ago the region’s countries were what corporations do. It is really catching envious, in fact.” Future Of Tax Collection In Central And represent nearly one fifth of total GDP, an still transforming from their pre-EU status up with globalization; national taxation Weston Stacey, Executive Director of the American Chamber of Eastern Europe. “We have hit on quite indication of the extent of the problem. to becoming full members. Those pre-EU rules need to keep pace.” But the tax expert Commerce in the Czech Republic, commenting on the seventh regional an interesting topic; tax evasion and tax incentives are now long gone, and the low cost also believes illegal activity (tax evasion) tax conference, held in Prague in 2012. fraud have become increasingly big issues The conference is clearly important to advantages for the economies have largely has become conflated with perfectly for all governments, but especially in governments too. Back in September 2012 gone too; there are now newer members acceptable cost reduction (tax avoidance) Central and Eastern Europe.” It is also the Slovak Prime Minister Robert Fico raised further east. The post-communist tax systems in the public consciousness. “There is a big at the end of the process. The UK and the lawmakers, including incentive regimes of no little importance to businesses, the issue of tax efficiency with the CAm ham have reached a state of maturity, but all the difference between evasion and avoidance, Netherlands have found it successful, so there designed to boost inward investment. “With says Slegers. If governments can generate Slovakia board as an area where he would like governments will look at different areas of the between not paying what you should, is evidence out there that it works. If one of really successful tax planning all over the greater revenues from more efficient tax the chamber’s help. He has also confirmed tax system in order to move to the next stage,” and legitimately taking advantage of tax our tax authorities has tried it and found it world, what you are seeing is the completely collection, they are less likely to seek to his intention to attend the conference, though Morris says. In other words, taxation remains incentives, say around R&D or depreciation, to be successful, that could be the standout legitimate use of incentive regimes. To my create new taxes to plug budget gaps. the pressures on a Prime Minister’s calendar a national government competence, meaning to mitigate costs. In the public mind all that moment of this conference,” Morris says. way of thinking, we should ask whether these different countries will approach the same has been mixed up.” are producing appropriate results, and if they problem from different perspectives, based on He accepts there need to be robust are not, then governments need to change the Regional Tax Conference History the given needs of their own country. complicated structures procedures in place, but says that is why rules. In the end if do not like the rules, don’t countries like the UK welcome OECD just complain about them, change them.” The daylong regional tax conference was launched in 2006 and brings together tax That doesn’t mean that a broad policy The truth is that MNCs have such involvement with cooperative compliance experts from government and business communities throughout Central and Eastern framework can’t be worked out, however, complicated structures that the traditional and BEPS. Britain and Sweden have not For more on the event, see Europe to review best practice, highlight problems and outline solutions. Thus the conference aims to help create the best possible business climate for the region and and Morris is scheduled to talk about the taxation tools may no longer be appropriate. joined the new Financial Transaction Tax http://www.amcham.sk/events/1843_8th- increase its competitiveness. newly released BEPS report. Essentially, as He refers to another OECD proposal that or Tobin Tax for example (from the region, regional-tax-conference the OECD says, it looks at “whether, and if so was called “enhanced relationships”, though Austria, Slovakia and Slovenia have all signed The conference is hosted in turn by the local AmCham in each of the capitals of the why, the current rules allow for the allocation that sounded too cozy, and is now known up) precisely because they say there is no Related Stories Visegrád Four countries, with the running order being Poland, Hungary, Czech of taxable profits to locations different from as “cooperative compliance”. The genius point in parts of Europe going it alone. Looking for a predictable and simple Republic and Slovakia. Bratislava this year thus completes the second four-year cycle. those where the actual business activity breakthrough idea that lies at its heart? Tax tax system, takes place”. It also underscores the negative authorities and companies sitting down and Companies and governments both need Voice, June 2012 “The conferences provide very good access for local companies to meet together with businesses from other parts of the region, as well as those from Western Europe and consequences of leaving tax loopholes open. talking to each other. “This doesn’t mean to explain themselves better to the public, Taxing solutions, Voice, the United States. I think they are incredibly worthwhile, though a lot of work to put “Though technically legal, [loopholes] erode giving in or sweetheart deals, but talking Morris says, to change public perception, March 2011 on,” says Will Morris, Director, Global Tax Policy for GE. the tax base of many countries and threaten early in the process can be vastly more but in the final analysis, businesses pay Lower, simpler, more transparent, the stability of the international tax system,” productive than doing audit after audit taxes based on the rules passed by national Voice, March 2011 VOICE american chamber of commerce in hungary AmCham news 31

Election conference AmCham elected well- New board, known entrepreneur Hungarian tax system: Willy Benkő as its next president, albeit in an ‘Swedish taxes with new president uncontested election, at by Robin Marshall the chamber’s Annual Ethiopian wages’by Gabriella Lovas General Assembly at The Hungarian tax the Corinthia Hotel system does not create Budapest on December incentives to work or to 6. Four board members- invest; this was one of at-large were also elected, the main messages of a again uncontested. recent AmCham-KPMG Havas himself said he had been asked seminar on the 2013 tax on a number of occasions how it felt, law changes. knowing that he was standing down after two years as a board member-at-large, followed by two years as president. He during the past two years. He attributed drew on the words of the late Republican this to high social security contributions President of the United States, Ronald and to the fact that while the flat tax rate Reagan, for his answer. Leaving office means a tax reduction for high-earners, it was “a sweet sorrow”, he said, before has resulted in a tax increase for those on illy Benkő, vice president officio member of the chamber who serves as quickly adding that he wasn’t comparing hen discussing a country’s well in a number of other fields, such as a lower income. of business development chair of its election committee, admitted to a himself to a U.S. President. competitiveness, the government budget balance and the quality and member of the board certain level of “disappointment” that there tax system is always one of scientific research. “During the last two years we have W at the DBH Group, as well had not been more candidates. “It is not what “For me personally this has been a W of the hottest topics, experienced unorthodox economic changes as principal of Rózsakert Medical Center, is we want or need in an organization of the rewarding period. It was also much more because it is much easier to change it than However, Hungary is ranked 114th and in Hungary, and also some unorthodox and perhaps best known as part of the team that caliber of AmCham.” work than I was anticipating.” He was other factors – for better or for worse, said 134th of the 144 countries surveyed in the unexpected changes in the tax environment,” built up the bank-independent ATM business proud that membership numbers had KPMG senior tax partner Csaba László in respective categories of total tax rates and said KPMG tax partner Gábor Beer. Euronet Administration Services Kft, and He was quick to praise those who were been maintained in such economically his opening remarks. He pointed out that it the extent and effect of taxation. Total tax Consequently, in his presentation, he used as a professional motivational speaker. He standing, saying the chamber was lucky to challenging circumstances, and of the could take several years to implement serious rates, the combination of profit tax, labor an unorthodox approach to assess the main is also helping develop the U.S. market for a have such leaders and that his comments way AmCham had fought to make changes to most factors of competitiveness, tax and contribution and other taxes as changes to the 2013 tax law by describing the Hungarian software product at RankMiner were no reflection on them and their sure its voice, and the views of its such as bureaucracy, infrastructure, business a percentage of profits, reflect the size of symptoms, the treatment and the side effects USA. In his election address, Benkő vowed to undoubted qualities. He also acknowledged membership, were heard by government, sophistication or the public education the tax burden. The ranking indicates that of the main tax issues. inspire, include and innovate, looking both that “the business environment can only making particular mention of the system. But how much time does it take to “Hungary is implementing the Swedish tax to boost membership overall, and increase politely be called ‘difficult’,” but he added strategic partnership agreement signed reform the tax system? You do not need years system with Ethiopian wages,” said László. In the case of value added tax, for instance, participation of members in events. “I don’t that it was still disappointing for a chamber with the Ministry of Justice and Public for that. When a decision is made, normally he added that Hungary’s main regional the symptoms are the significant size of the care who you are, as far as I’m concerned, if of more than 400 members to have an Administration. two months are enough to implement the competitors – Czech Republic, Poland, black economy, lower than expected VAT you have a pulse, you are a candidate to join uncontested poll, and he issued a “call to changes to the tax law in Hungary. “Recently, Slovakia and Slovenia – are all rated better revenues, the highest VAT rate in the EU as AmCham,” he said. action”, challenging more candidates to Looking back on his period of leadership, because our parliament is quite flexible, than Hungary in this category. well as the sad truth that avoiding VAT is a come forward for the next elections. he applied another quote from Reagan: sometimes a week or even a weekend is “national sport” in Hungary. He explained Two new members were taken onto the “All in all, not bad, not bad at all.” He enough to introduce or eliminate a tax.” Hungary’s ranking in the extent and that the government aims to treat the board: Edina Heal, country manager Peaslee had earlier praised the leadership recalled that in the President’s farewell effect of taxation, which indicates what symptoms by linking all cash registers to the of Google Hungary, and Andrea Juhos, of outgoing president István Havas, the address, the ‘Great Communicator’ László cited a survey by the World Economic incentives the tax system provides for tax authority and by introducing a reporting managing partner of Lee Hecht Harrison country managing partner of Ernst & had referred to the American people Forum, which concludes that tax rates and working and investing in a country, is obligation on all invoices with a VAT value Hungary. Márk Hetényi, VP of finance Young. “I would like to express very heartfelt as “Reagan’s regiments” and had tax regulations are among the top five most even more worrying. The message is that higher than HUF 2 million. Furthermore, EMEA for Flextronics, and Eszter Szabó, thanks on behalf of the Ambassador and asked them to support his successor as problematic issues for doing business in the Hungarian tax system does not create in the case of certain agricultural products, corporate communications and public everyone at the embassy to István, who President, “to become Bush brigades”. Hungary, following policy instability and incentives to work or to invest in the reverse VAT has been implemented. The affairs leader CEE for GE, were re-elected has led AmCham during some very trying Havas’ final words were to thank the access to financing. To the amusement of his country. According to László, the main side effects include a fear of a “Big Brother” for their second term. times in Hungary. We have appreciated AmCham members for their trust and audience, László was happy to announce that reason for the low ranking is that even effect – that the tax authority knows his open and democratic approach, and support, and to ask that they “become Hungary is the number one in the world with with a relatively low flat tax rate, the tax everything about Hungarian taxpayers and Robert Peaslee, Commercial Counselor at the outstanding professionalism of his Willy Benkő’s brigade”. the lowest malaria incidence and associated wedge, the difference between before-tax that somebody, somewhere could misuse the U.S. Embassy in Hungary, and also an ex leadership,” he said. business impact. The country is doing quite and after-tax wages, has actually risen businesses’ sensitive information. VOICE american chamber of commerce in hungary AmCham news 33

Roundtable chamber corner Innovation – you can’t do it alone Financing, long-term collaboration and a strategy transparency in the tender application Providing a system, predictability in the political and adapted to global trends are needed to strengthen the economic environments, and an education role of Hungary and Central & Eastern Europe in system that provides a competitive workforce. global innovation. The foundations have been laid, but positive reasoned voice and constructive discussions similar to those of today are needed to get positive n line with the Hungarian The roundtable, which is planned as the first processes going. This is the only way for “In general terms, AmCham has increasingly Government’s innovation in a series, sought to improve regional and Hungary to get to the forefront of global provided a reasoned voice for internationally strategy and using key national competitiveness through presenting innovation and create the ‘Budapest Silicon oriented companies in Norway,” says Jason I findings from the GE Global best practices and developing new ones Valley’ represented by increasingly stronger Turflinger, CEO of the American Chamber Innovation Barometer, AmCham and while reinforcing stakeholder collaboration. Hungarian start-ups.” of Commerce in Norway. “Rather than GE organized a roundtable discussion Concurrent with the Hungarian event, GE focusing our limited resources on mass media on February 14, at the Hungarian and the Innovation Committee of Warsaw GE’s Global Innovation Barometer, a outreach, AmCham Norway’s team works Academy of Sciences. Attended by were discussing potential breakout and survey of 3,000 business leaders in 25 to coordinate groups of member companies representatives from the European development opportunities for Poland in countries, found that while business – who are otherwise fierce competitors – to Parliament, the Ministry for National the Polish capital. executives continue to value innovation provide officials with valued and concise Economy of Hungary, Szent István as a strategic priority, a general input. What’s perhaps most notable are not University of Gödöllő and the GE Speaking at the event AmCham President uncertainty is seen in today’s challenging AmCham’s various market access successes Foundation Scholar-Leaders Program, Willy Benkő said, “AmCham’s mission is economic environment. You can find over the past 16 years, but rather our now the event looked at collaborative ways to improve Hungary’s competitiveness. out more about the survey and the tried and true, tailored method of issue to increase the role Hungary and the To achieve this goal, Hungary needs to be roundtable at the regional GE blog at identification, winnability assessment, region play in global innovation. made more investor-friendly, which requires http://geforcee.geblogs.com/ stakeholder impact and tireless pursuit.”

Norway has large numbers of public servants who do not always have an understanding of the needs of business because they have no experience of it. Understanding that has been important in developing an effective approach, says Turflinger. Jason Turflinger

“Collaborative education is key,” he explains. Historically speaking, Norway’s position as Pending legislation further limiting “Though access to decision makers is not a a geographical outlier has always presented the advertising of food and beverages significant challenge in Norway, affecting particular problems for business. “Norway in Norway is fair, balanced and in real change is. This is due in large part to the is to Europe as Alaska is to the United collaboration with industry’s own vast Norwegian public sector. We find that States. We are fairly removed from the strengthening efforts; explaining corporate perspectives to those Continent up here and labor costs – and within government who would otherwise associated margins on (non-petroleum) Norway continues to be recognized as a not be aware of the realities facing executives exports – continue to be a significant champion of intellectual property rights is vital. The more bureaucrat-to-executive challenge.” And the number one challenge and not a straggler within the media and contact, the better; the fewer (mutual) facing business today? “A shortage of pharmaceutical arenas; and sweeping statements, the better.” talented professionals.” If collaboration works, it is equally clear what Multinationals – with the associated does not: “Confrontational approaches do Advocacy and lobbying jobs, innovation and investment not typically provide long-term successes in Turflinger says the chamber is currently that they contribute – continue to be Norway – both within government chambers working with partners and members in a an increasingly valued partner for and beyond,” says the CEO. number of areas to ensure that: Norwegian government.

Contact details Vital statistics CEO: Jason Turflinger Name of Chamber: American Chamber of Commerce in Norway E-mail: [email protected] When founded: 1997 Postal address: Number of members (at foundation and currently): 15 / 225 Lille Grensen 5, 0159 Oslo, Norway Mission statement: Developing Norwegian-American business relations Telephone: +47 22 41 50 10 Website: www.amcham.no VOICE american chamber of commerce in hungary Amcham News 35

patron profile patron profile Microsoft Magyarország Ltd. GDF SUEZ Energia Company name: Microsoft Magyarország Ltd. Holding Hungary Zrt. Field of business: Marketing activities and software production When established: Microsoft Corp founded in 1975, Microsoft Magyarország in 1983 AmCham member SInce: 1993 AmCham Patron since: 2012 Company name: GDF SUEZ Energia Holding Hungary Zrt. Biographical details of interviewee: István Papp (40), general manager, with the company for 1.5 years Field of business: electricity generation, gas distribution, gas supply When established (Parent company): GDF SUEZ formed in 2008 by the merger of Gaz de France and SUEZ. The roots of the company goes back to 1858. in hungary: The group active in Hungary since 1995. financial planning will regain its business in Hungary nowadays needs a clear vision of the future, Workforce for all Hungarian subsidiaries: 1,250 Workforce for GDF SUEZ Energia Holding Hungary: 164 legitimacy. The series of strategic is to balance out two parallel and which requires a conscious AmCham member since: 2011 partnership agreements signed by accumulating trends: the one investment in innovation, a AmCham Patron since: 2011 the government with multinational characterized by the constantly decrease in digital illiteracy, and companies, including Microsoft shrinking prices of services and the improvement of the English Hungary, shows a promising sign the other caused by the liquidity speaking skills of Hungarians too. of this change of phase/pace. problems of our existing and How would you What one thing potential customers. In a financial Why is it important describe the current would you like to see How has doing business and – partially psychological – to belong to an business environment changed above all in Hungary changed situation like this you cannot organization such in Hungary? others to improve the How would you describe since the company was ‘allow’ yourself to just provide as AmCham? PE: The recovery of the business environment? the current business set up here? products and services: you have to The American Chamber of Hungarian economy seems PCs: We think transparency environment in There were significant milestones provide solutions and competitive Commerce in Hungary is the to be delayed and businesses and predictability goes hand- Hungary? in our history in Hungary, among advantages. Our cloud-based on most efficient NGO to represent continue to limit their in-hand, therefore we consider There’s a heated political discussion them the country joining the demand solutions are meeting our interests in Hungary, but it is investments due to the lack them indispensable for an in Hungary over the question EU, which of course changed these criteria, so I think Microsoft mutually beneficial for Hungary of economic growth, difficult investment-friendly business of why the country’s economy the financial, and especially the Hungary is adapting efficiently as well: the knowledge base financing conditions and environment. It is easy to lose was struck harder by the global tax, environment for us too. To even to the more challenging we represent is an important unpredictable regulatory domestic and foreign investors’ financial crisis than those of others summarize the nature of the series business environment. and precious tool in helping environment. Furthermore, confidence, but it is extremely in Europe, especially neighboring of changes since the Hungarian Hungary’s economy get closer companies in some specific difficult to gain it back. ones with very similar historical branch was established, I’d say: the What one thing would to the business environment of sectors have a bigger and economic backgrounds. competition has become fierce. you like to see changed more developed countries. burden to carry because of Why is it important One thing is certain: the crisis On the other hand, the conditions above all others to government measures aiming to belong to an found Hungary with a weakened of our participation in this race – improve the business What are the additional at a more equitable share of name: Patrick Eeckelers name: Péter Csiba organization such immune system and has caused meaning the development of the environment? benefits of being the public burden. Age: 52 Age: 48 as AmCham? more severe symptoms. The suppliers, the quality and focus of The Hungarian economy needs a Patron? Title: CEO and Chairman Title: Deputy CEO PCs: What we are currently unprecedented difficulties were the education system in Hungary, growth and all that comes Every successful corporation has How has doing business length of time with length of time with missing is continuous reflected in the unprecedented etc. – has got better and better with it: a greater abundance of a responsibility to use its resources in Hungary changed company: 2 (22 in SUEZ) company: 5 dialogue between the – unorthodox – measures taken over time, so our relationship money – money to invest, money and influence to make a positive since the company was Government and market to weather the financial storm. with Hungary has transformed to buy products and services. impact on the world and its set up here? players. Therefore GDF SUEZ This complex situation led to a into some kind of symbiotic So, as a short-term strategy, the people. Being a patron member PE: GDF SUEZ has been What are the greatest energy sector, we consider a fair appreciates especially the temporarily uncertain economic partnership. local business environment we can create opportunities present in Hungary for challenges in doing profit (comparable to other EU networking opportunities climate which is the other most We all know that ‘ecosystem’ needs stimulation, starting to fulfill our commitment to more than 17 years, since business in Hungary countries) and the acceptance and the valuable information characteristic attribute beside the has become a key phrase of the from government co-financed serving the public good through when the group has invested right now? of justified costs are crucial. on certain governmental recession: trust should be rebuilt global economy, especially in our projects through SMB credit innovative technologies. Through up to €1 billion in the PE: The most important However, austerity measures decisions given by AmCham. in every area of the Hungarian industry; well, we have been doing programs to the smarter usage of our partnerships we support Hungarian natural gas and obstacle in the Hungarian entered into force in 2013, Furthermore, AmCham business environment – Hungary’s it – operating as an ecosystem – for EU-funds; planning of the 2014- numerous projects and expand electricity market. However, business environment is most the increase of taxes and the offers great networking trust in the market and market’s ‘ages’ in Hungary: years before the 2020 financial perspective and opportunities, and help improve we consider that the recent probably the high regulatory reduction of household gas and opportunities to exchange trust in Hungary too. expression became trendy. compilation of the new national digital inclusion, through regulatory measures instability in regulation. Due to electricity prices by 10% made views among the market Economic growth needs development plan provides a great technology access and training. deteriorate the sustainable increasing regulatory burdens, the operation of the regulated players and stakeholders of predictability, security. I think What are the greatest opportunity to the government operation of energy the Hungarian business part of the energy business different sectors. most stakeholders in the economy challenges in doing to involve the representatives of companies and consequently environment has significantly unsustainable and might lead hope that the first phase of the new business in Hungary “future industries”, like ICT, more work contrary to the deteriorated and the confidence to a decline in the quality of the economic governance is about to right now? efficiently. As for the long-term competitiveness and growth of investors has decreased. services and to supply problems conclude, and in the next phase The greatest challenge in doing strategy, the Hungarian economy of the Hungarian economy. Regarding regulations in the in Hungary. VOICE american chamber of commerce in hungary New members 37 New memb ers on board

PATRON

Cargill AIG Europe Limited PATTON Komjáthy Magyarország Zrt. Magyarországi Hungary Zrt. Ügyvédi Iroda Fióktelep

CEO: Mr. Zsolt Kócza Address: 1134 Budapest, Váci út 37. General Manager: Mr. Barna Sugár CEO: Mr. Martin Svozil CEO: dr. Miklós Komjáthy Address: 1133 Budapest, Váci út 76. Capital Square Phone: +36 1 236-1400 Address: 1117 Budapest, Gábor Dénes u. 4. Address: 1111 Budapest, Kende u. 13-17. Fax: +36 1 236-1401 Phone: +36 1 801-0801 Phone: +36 1 466-5372 Fax: +36 1 801-0899 Phone: +36 1 439-4848 E-mail: [email protected] E-mail: [email protected] Fax: +36 1 466-5372 Web: www.cargill.com E-mail: [email protected] Web: www.aig.hu Web: www.patton.com Web: [email protected] Cargill collaborates with farmers, food makers and industrial customers to bring fresh ideas to the table and nourish people around the world. Patton Electronics Co. is a leader in production of Networking and Komjáthy Law Firm is a client oriented law office that provides AIG is a world leading property-casualty and general insurance Connectivity products including SmartNode™ Voice over IP (VoIP) legal help to local and international clients since 1992. Our office With 142,000 people in 65 countries, we are leveraging our depth of organisation serving more than 70 million clients around the world. knowledge to help our customers succeed and communities thrive. gateways, routers, and integrated access devices, Visuality™ and BODi is specialized for all aspects of commercial law, but in cooperation With one of the industry’s most extensive ranges of products and rS Security & Wireless, CopperLink™ Ethernet Extenders, ForeFront™ with other law firms we are always able to provide the best legal Cargill has been active in Hungary since 1995 when we acquired a services, deep claims expertise and excellent financial strength, AIG minority stake in Agrograin, a leading Hungarian grain, oilseeds, and and OnSite™ Multiplexers, DSLAMs, broadband transmission, and solution for any kind of occurring legal problem. enables its commercial and personal insurance clients alike to manage products for industrial communication. protein trading company. Soon after, our animal nutrition business risk with confidence. AIG has been providing insurance cover to its started operations in Hungary and is now a leading provider of animal Having its headquarters in Maryland, USA Patton has sales and support clients in Hungary since 1990. operations in Western Europe, Central/Eastern Europe, Middle East, feed and customized animal productivity solutions. For additional information, please visit our website at www.aig.hu Today our activities in Hungary include: Asia/Pacific, and Latin America. Patton Hungary ZRt. as a branch · grains, oilseeds origination and proteins, crop inputs distribution office of Patton Electronics Co. represents the company in regions of Non-Profit · animal feed formulation, production and distribution Central and Eastern Europe. · sales of starch and starch derivatives for food and industrial applications Patton Hungary ZRt. is building on its expertise to provide a wide range · sales of texturizers and emulsifiers for food applications of services including local support, consultancy, and integration to regional channels, partners and end users. Honvéd Együttes Művészeti Nonprofit Corporate Bunge Zrt. business Kft. AbbVie Gyógyszerkereskedelmi Kft. ALEAS Simulations, Inc. CEO: Dr. Gábor Bolvári-Takács Address: 1087 Budapest, Kerepesi út 29/b. CEO: Mr. Andrzej Rozycki Phone: +36 1 210-0000 Address: 1134 Budapest, Váci út 33. Fax: +36 1 299-8300 Phone: +36 1 237-6484 E-mail: [email protected] Fax: +36 1 239-9647 Web: www.honvedart.hu CEO: Dr. Zoltán Jakab E-mail: [email protected] Address: 1095 Budapest, Lechner Ödön fasor 7. Web: www.bunge.hu CEO: Mr. Zsadány Vécsey Phone: +36 1 455-8600 Address: 1124 Budapest, Meredek u. 27. Established in 1949, the Honvéd Ensemble is Hungary’s only long- Fax: +36 1 465-2199 standing ensemble, which is comprised of the Honvéd Dance Theater, Bunge is a leading agribusiness and food company with integrated Phone: +36 1 909-1164 the Honvéd Male Choir and the Hegedős Folk Music Band. This unique E-mail: [email protected] operations that circle the globe, stretching from the farm field Fax: +36 1 909-1165 Web: www.abbvie.hu artistic community offers spectacular performances to national and to the retail shelf. Bunge is headquartered in White Plains, NY, E-mail: [email protected] international audiences in a wide variety of genres. and listed on the NYSE, ticker BG. In Hungary, Bunge is active Web: www.aleasgroup.com AbbVie (NYSE:ABBV) is a global, research-based biopharmaceutical in oilseed processing, grain trading and the production and company formed in 2013 following separation from Abbott. AbbVie marketing of edible oils and margarine. Bunge in Hungary has ALEAS is an innovative e-learning and serious-gaming solution provider combines the focus and passion of a leading-edge biotech with the production facilities in Martfu and Tatabanya and employees based in California and Central Europe. Computer games are the most expertise and capabilities of a long-established pharmaceutical app. 700 people. empowering activities in the virtual world. They are meant to be fun. leader to develop and market advanced therapies addressing some That’s why edutainment is the most effective learning today. A direct link of the world’s most complex and serious diseases. In 2013, AbbVie between learning efforts and results. ALEAS’s mission is to help clients will employ approximately 21,000 people worldwide and markets achieve a competitive advantage in this new field. medicines in more than 170 countries. For further information on the company and its people, portfolio and commitments, please visit www.abbvie.com. VOICE american chamber of commerce in hungary AmChamxxxxx news 39 AmCham events – photo coverage

AmCham Business Forum with Gordon Bajnai, Former Prime Minister; Founder of Patriotism and Progress Public Policy Foundation

January 29, 2013 Location: Budapest Marriott Hotel

New Labour Code Essentials - Employers’ Guide for Everyday Use II.

Wednesday, January 23, 2013 Location: Budapest Marriott Hotel

Dr. Hédi Bozsonyik, Dr. László Pók, Szecskay Attorneys At Law; Dr. Rita Párkányi, Dr. Dániel Gera, Dr. Levente Csengery, Gide Loyrette Nouel - D’Ornano Iroda

AmCham-T.G.I. Friday’s Super Bowl XLVII Party

February 3, 2013 Location: T.G.I. Friday’s Fashion Street VOICE american chamber of commerce in hungary AmChamxxxxx news 41

Viral Change, “Next Practice” in change management with AmCham Leandro Herrero, the developer Communications of Viral Change concept School with William Seminar sponsored by GROW Benko, President of Organization Development Group AmCham February 13, 2013 February 4, 2013 Location: InterContinental Budapest Hotel Location: AmCham Conference Room

AmCham Career School with Iryna Ivaschenko, Resident Representative in Hungary, International Monetary Fund

February 5, 2013 Location: AmCham Conference Room

AmCham-GE Roundtable Press Conference on Innovation

February 14, 2013 Service Quality Location: Hungarian Workshop: The Path Academy of Sciences To Competitive György Szilágyi and Advantage with István Lám, Tresorit Kft.; Professor Emeritus Edit Herczog, European H. Kirk Downey, Texas Parliament; Christian University William Benkő, AmCham; Dr. Zoltán Cséfalvay, Ministry February 6, 2013 for National Economy; Location: PwC Offices Dr. Lajos Reich, GE Healthcare; Dr. László Solti, Szent István University AmCham Staff

Chief Executive Officer VOICE american chamber of commerce in hungary Péter Dávid

CEO’S note [email protected] Phone: +36 1 266-9880 Chief Operating Officer, Committee Coordinator László Walking the Metzing

talk, the [email protected] Phone: +36 1 266-9880/316 Membership Manager

Csilla AmCham way Pál

Every year, AmCham Hungary holds a meeting, a public servant (who also hap- [email protected] major conference where issues of diver- pened to be a member of the Roma minor- Phone: +36 1 266-9880/319 sity are placed front and center on the ity) explained to me that as long as there is Events Manager Anita agenda; people with disabilities, minority discrimination as such in society, anything Árvai groups, gender differences, age groups – intended to counterbalance it, even posi- traditionally, the panel discussions focus tive discrimination, must be correct and on these topics. deserves social support. [email protected] Phone: +36 1 266-9880/325 Given the great success of Financial Issues, Charity the award, AmCham now Erika plans to further expand Bosnyák the program and do something to keep it on

the radar screen through- [email protected] out the year. Would you Phone: +36 1 266-9880/312 Marketing and Communications be interested in joining Manager our efforts to ensure that Zsófia the gender diversity issue Juhász is addressed in a contin- uous way? Would you

become part of our task [email protected] force? Regardless of your Phone: +36 1 266-9880/360 professional occupation, Project Manager Ildikó if you feel like working on Bryják this project, please let us know (send me an e-mail or give me a ring, you’ll [email protected] find my contact details in Phone: +36 1 266-9880/310 the column to the right). Events & Project Manager Ildikó By the way, it just so hap- Takács- pens, believe it or not, Berka that the newly elected

AmCham Board can take [email protected] pride in doubling the Phone: +36 1 266-9880/329 number of women mem- Project Manager bers. Edina Heal from Judit SZILÁGYI On top of that, three years ago we estab- Google and Andrea Juhos from Lee Hecht lished a new award for women recogniz- Harrison ran for Member-at-Large posi- ing outstanding achievement and reaching tions and both made it, and thus with Esz- a work-life balance. Personally, I initially ter Szabó from GE and Andrea Jádi Németh [email protected] Phone: +36 1 266-9880/332 opposed the creation of the AmCham from bpv Jádi Németh Attorneys at Law, we Award for Women of Excellence: I thought have four women sitting on board. So, now, AmCham office contact info it was unfair to recognize superb women we are doing what we have been promot- H-1051 Budapest, Szent István tér 11. Phone: +36 1 266 9880 Fax: +36 1 266 9888 without doing the same for outstand- ing for many years; in other words, now we Email: [email protected] ing men. However, at one point during a really do walk the talk. website: www.amcham.hu