We cannot be at ease about the future of the Hungarian economy; we need a comprehensive restructuring and reforms for success, Prime Minister Viktor Orbán told a conference organised by the European Bank of Reconstruction and Development (EBRD) in Budapest on Thursday.
He has hinted at new measures, including the enhancement of benefits aimed at incentivising families to have children, and increasing the quality of higher education. As regards the stunning victory of Donald Trump in the US presidential election, Orbán remarked that the western civilisation has freed itself from the clutches of an ideology; this is the end of the era of liberal democracy and the end of the era of political correctness.
An era of economic policy development, based on cheap labour and foreign capital, has closed in Hungary. This is not the direction where competitiveness will arrive from in the future. New developments and innovations need to be sawn into the fabric of the economy, Orbán said in his keynote speech at the EBRD conference.
He said Hungary needs to face the phenomenon of wage pressure, adding that the development of the economy demands higher wages.
Development can be ensured by firm wake hikes, but not at the expense of competitiveness. Only competitive businesses can afford to pay higher wages.
The state can contribute to this by taking less out of the economy. The simplification of the corporate income tax, the reduction of employers' contributions and the lowering of the personal income tax are necessary just like the increase of research and development aids.
Besides the need to boost the state's competitiveness success also demands smaller bureaucracy, Orbán added.
We are ailed by the demography problem, which the Hungarian government wants to solve not through migration, rather than via family policy and incentives to have children, to which we want to provide additional benefits.
The quality of labour also needs to improve. Both the existing and the future labour force needs higher competency levels, better skillsets, greater flexibility and creativity.
For that to have we primarily need to improve the quality of education, particularly of higher education.
To achieve success, we need a competitive banking system and a competitive sector of financial mediators, as well.
The PM said Hungary is also lagging behind not only developed countries but also some CEE economies in terms of efficiency and the application of new technologies.
Orbán's remarks chime together with what central bank (MNB) Governor György Matolcsy proposed, namely a vigorous and relentless continuation of the Széll Kálmán Plans.
The PM repeatedly said we are on the second day, referring to the stunner Donald Trump pulled off by winning the US presidential election on Tuesday.
The western civilisation has liberated itself from the confines of an ideology. The period of liberal non-democracy is over. I'm convinced it always benefits a culture and the West when it [...] returns to the grounds of reality. From the paralysis of political correctness, we can come back to straightforward, frank words, and we can call a spade a spade. We are going through great times.
He said Hungary views Brexit also in this context, adding this is not a tragedy, or a failure, rather than a chance for a nation to prove their worth in a different way from the conventional approaches. We should see that as an opportunity rather than a problem, Orbán added.
"Brexit is not a tragedy, even remotely. It is not a defeat, but an attempt by a great nation to make itself successful in other ways than what everyone else had considered the path to success."
Last Updated on Friday, 11 November 2016 07:54