Friday, May 04, 2012

Hungary looks eastward for markets

Flag of China
Flag of Kazakhstan

The Hungarian government has been busy in the last week securing new business agreements and new markets for Hungary. Rather than looking westward towards the EU, which they are a member of, Hungary is looking eastward. Hungary has been used by the EU as a dumping ground for expensive western European goods. Many Hungarians can't afford these expensive goods as they have small salaries compared to their western European counterparts. The EU also demanded that Hungary remove the "made in Hungary" labels on Hungarian goods in Hungary, as they fear Hungarians will buy their own goods rather than EU goods exported to Hungary. Apparently, there is a big demand for Hungarian goods in the east outside of the EU. The Hungarian government is now taking advantage of this.

With recent meetings with officials from China and Kazakhstan, Hungary has secured new business agreements with these two countries. Last Tuesday, Prime Minister Orbán Viktor met with Chinese Deputy Prime Minister Li Keqiang in the Hungarian Parliament. Seven large economic and trade agreements were signed in the presence of these two officials. As a result, Hungary also receives a one billion Euro line of credit from the Chinese through the China Development Bank. Both China and Hungary also committed  to having more economic cooperation as well. It had been more than 20 years that a Chinese prime minister visited Hungary.

On Thursday, a large Hungarian delegation arrived in Kazakhstan. The delegation accompanied Prime Minister Orbán Viktor, who was seeking to become strategic partners with Kazakhstan. During the two day visit, both Prime Minister Orbán Viktor and Kazakh Prime Minister Karim Massimov will sign several agreements on future economic cooperation. Kazakhstan is a rich country due to its oil reserves and produces a lot of crude oil daily. Hungarian and Kazakh trade is currently very high.

It is no surprise that the Hungarian government is looking eastward for new economic agreements and markets. Since their options are very limited in the EU, they are looking outside of the EU to expand economic activity and secure their economic future. Existing solely in the EU will kill Hungary and make it an economic colony. Hungary must look outside of Europe if she wishes to prosper. This is something the Orbán government knows and is acting upon.