Nemzeti
Fejlesztési Ügynökség

Elaboration of the development areas of the New Széchenyi Plan was preceded by an analytical period of almost one and a half years, in which participated several hundreds of analysts, researchers and economic experts having an excellent knowledge in their professional areas. The Government presented the discussion paper prepared as a result of this work on 28 July 2010. The several hundreds of development proposals received in connection with the discussion paper were discussed within the frames of a series of professional consultations that lasted until November. During the social consultations the development strategies received from enterprises, professional and non-governmental organisations, local governments and private individuals were incorporated into the New Széchenyi Plan.

The New Széchenyi Plan focuses on the dynamic expansion of employment, maintaining financial stability, ensuring the conditions of economic growth and improving the competitiveness of Hungary. The ten-year economic strategy identifies the break-out points and the related programmes that will ensure long-term development of Hungary.

The New Széchenyi Plan consists of the following 7 programmes:

1. Healing in Hungary – Heath Industry Programme
Health industry includes therapeutic, preventive and rehabilitation services, the supporting and background sectors, as well as the underlying researches, and the manufacturing and marketing of products related to health conscious lifestyle. This is one of the most promising sectors among the break-out points.
Its importance is determined by its connections to nearly all areas of the economy, the favourable natural conditions, the accumulated intellectual capital and the increasingly open international market. Development of medical and thermal spa tourism was already one of the most successful parts in the tourism development programme of the first Széchenyi Plan.

Health industry is in line with all national economy priorities, since it has highly innovative and research-intensive areas, significant and partly yet unutilised opportunities on foreign markets, as well as a serious workforce base that can be further expanded. Development and priority handling of the health industry can have a beneficial effect on reaching a large consensus necessary for the indispensable reform of the provisioning and financing systems of health care burdened by several problems.

The health industry will be able to serve as a break-out point if there is appropriate, effective demand for its products and services. In this regard foreign and domestic demand both have to be accounted for, as proved by former health tourism developments.

2. Green Economy Development Programme
In the 21st century the success of a country is highly dependent on how it can manage the problems caused by the utilisation structure based on fossil (non-renewable) energy sources – security of supply, increasing prices, etc. – through energy saving, increasing energy efficiency and energy security and the use of renewable energy resources.
Global warming, the globally increasing energy needs, the rapid increase in the prices of fossil energy sources urge the world, the Member States of the European Union, and also Hungary to act as soon as possible.

The basic principles of energy policy were last determined by the document „Energy Policy Theses of Hungary 2006-2030” published by MVM Zrt. in November 2006. The statements of this document are still correct to a certain extent, but there have been significant changes since then. During the past years the hectic fluctuations of world market prices of crude oil has reached an unprecedented rate. Hungary and this region were exposed to problems in the supply of natural gas in two consecutive years. The energy sector was also deeply impacted by the global financial and economic crisis in 2008, with an effect along the entire supply chain. It is imperative that our future energy policy and the related development strategy take these changed factors into consideration.

3. Housing Programme
During the past years housing policy has been out of the focus areas of the government, the nation-wide housing programme, long term housing policy objectives and a vision have been missing. This led not to solutions, but to problems and measures that were mostly subsequent and with varying success. Within the frames of crisis management the home construction sector did not receive substantive resources, and in 2009 the current annual housing aids decreased to one twentieth of the former level.

The 2010 budget appropriation for housing was HUF 147 billion (about 0.6% of GDP), with the significant part of it serving for interest subsidy provided for former housing loans.

During the former government term the adoption of Parliamentary Resolution No. 36/2009 (V.12.) and other amendments to construction administration regulations pointed towards a good direction, but their implementation mostly did not take place, and the practical value of certain elements (e.g. introduction of the system of security managers) was criticised by many. The measures aimed at helping those having foreign currency home loan, the regulation of residential housing loans and the creation of the banks' code of conduct were of a subsequent, alleviating nature. Announcement of tenders for housing supports was mostly promiscuous, the efficiency of the tender system could hardly be measured in the lack of set objectives. In 2009 the Green Investment System (ZBR) programme was announced for the utilisation of the amounts received from the sale of the CO2 quota.

The negative characteristics of the condition of the construction industry are as follows: chain debts, lack of sources for financing, unpaid invoices, crimes in the construction industry, frequently changing legal regulations, requirement for exaggerating bank guarantees, quality issues, temporary or final closing of factories, collective redundancies, winding-off of several small and medium-sized enterprises. The number of newly built residential buildings is approaching a lowest point in decades.

For a significant part of the population housing burdens are increasingly hard to pay for, and the lack of available housing loans in HUF resulted in indebtedness in foreign currencies. After food, housing expenses are the second largest expenditure items for the households, amounting to about 22 percent of the total expenses (not including loan repayments) (2008). During the past years the home maintenance costs have significantly increased, in 2008 the population spent on housing services, water, electricity, gas and other fuels more than twice as much as in 2000.

Homes for the majority of people mean their most important property, a result of a life's work, regarded by many as the foundation of a secure standard of living. Maintenance of privately owned homes is not ensured in several cases; the proportion of rented dwellings and the extent of constructing rented dwellings are extremely low.

4. Enterprise Development Programme
What is required to make Hungarian small enterprises successful? How can they create several thousands of new jobs? Will there be a Hungarian global enterprise starting from a small one? So far the state and the government have not given to the small enterprises what they need. A re-planning and a restart are needed.

Therefore, the following are the most necessary for the enterprises:
•    Vision and strategy
•    Stability and predictability
•    Reducing bureaucracy
•    Tax reduction
•    Enterprise-friendly local governments
•    Useful, fast and simple use of EU funds
•    Stable working capital financing and capital for developments
•    Expanding domestic market
•    Establishing fair relations in trade
•    Consumer protection
•    Assistance for cooperating and networking
•    One-stop-shop enterprise development agency
•    Up-to-date information
•    Effectively involving economic chambers
•    Implementing a radical change in public procurement
•    Green public procurement

5. Science – Innovation Programme
Among the sources of economic growth innovation is one of the most important factors. In accordance with its social function it is the basis of improving quality of life, and for the entrepreneurs it means a definitive competitive edge. Science, technology and innovation policy of a country is on the one hand an individual strategic programme created by elaborating a well-defined system of objectives and means, and on the other hand it is a basic social and economic policy concept interweaving all elements of planning and action. By mid-decade the implementation of an effective science, technology and innovation policy based on our capabilities, the strengthening of domestic and regional market based original products and services creating new value, and a thoughtful intellectual export may generate an additional national economy growth of 1.5-2 percent.

This is the only way to become again a crisis-resistant and increasingly knowledge-based economy from a service provisioning and „outworking” country, which, at the same time, is also the source and basis of sustainability.

The objective of the programme is to dynamize the economy through innovation, and to attain that in 4 years the economic growth in Hungary reach the highest level among EU countries, through other measures and the driving force of innovation.

As a means of the economic goal it is also an objective that R&D expenditures of Hungary reach 1.5 percent of GDP by the mid-decade, and the innovation performance on the basis of the accumulated innovation index reach the EU average and enter the top third of EU countries during the next cycle.

6. Employment Programme
The most important objective of the new Hungarian government is to increase employment. In order to achieve a higher employment level it is indispensable to create new jobs, which cannot be done from one day to another. A real change requires the transformation of the former economic and employment policy, being defective from several aspects. Substantial, comprehensive changes are needed in many areas at the same time, and, if necessary, changing the expectations and behaviour of the players of the economy and the society.
Several conditions have to be met at the same time, which – in the short term – are the following:
•    investments in Hungary should be made financially attractive for foreign capital,
•    development and growth of small and medium-sized enterprises should be assisted, encouraging their developments,
•    people should be financially motivated to work, so that they do not escape into inactivity,
•    education and training should be aligned with the new economic needs,
•    the traditional state-financed public employment should be transformed towards „meaningful” work (public employment serves for immediate job creation),
•    the bases for rural public employment should be reconsidered, since at a many places the conditions, institutions and culture for working have been lacking for 20 years,
•    the social land programme should be extended (especially by strengthening the activating effect as regards working, together with the provision of short training courses),
•    the employment opportunities supporting the self-sufficiency of local governments should be ensured by changing the legislative environment
A balance can be reached only if more people are able to make a living from traditional labour market employment, since this way payments into the fund can increase, ensuring a higher standard of benefits for those permanently excluded from the labour market.
A paradigm change is needed. Based on the principle „Value-creating work comes first” the entry into employment of those who are capable of working shall be supported by all possible means, and with the tradition financial benefits and services sourced from their payments appropriate living conditions should be ensured for those who are incapable of working. People in a better financial situation will increase their consumption, which improves development opportunities of small and micro enterprises that mainly build on domestic consumption.

7. Transport Development Programme
Transport is an integral part of the service provision background of the economy and society. Its benefits include ensuring accessibility, balancing territorial disparities, enabling the mobility of people, goods and services, its economic and regional development multiplier effect, and it contributes to GDP directly as well. At the same time it imposes several expenses on the society, present on a community level – and not or only partially being compensated. The primary objective is to maximize the benefits of transport, minimizing the social burdens at the same time.
Several European economic corridors cross Hungary, and therefore the New Széchenyi Plan handles the opportunities resulting from this transit role as a priority, in the case of both goods and passenger transport. We should develop the combined transport solutions, such as linking railway and public road transport, and should also develop an electronic toll payment system based on actual use, instead of the present flat-rate system.

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A common feature of the break-out points is that they integrate various industries, and in each case there is a serious chance of achieving that the development lead to the emergence Hungarian products, services and companies being competitive also on a European and global scale, as early as over a medium term. The break-out points embrace several sectors, indicating the directions of Hungarian economic development in such a way that they do not restrict the ideas and aspirations of entrepreneurs.

The New Széchenyi Plan retained the secret of the first Széchenyi Plan: it is based on open planning and cooperation with the enterprises. The New Széchenyi Plan is a platform, a wide foundation, to which various economic organisations, the enterprises and the local governments can connect with their ideas, proposals, tenders and developments. The New Széchenyi Plan is a framework that will be filled with real content by the economic players – starting from ideas, through development plans to implemented investments.

The New Széchenyi Plan – similarly to the first one – is based on the collective risk-taking of entrepreneurs, local governments and the state. The state contributes to the creation of the development risk community with European Union supports available to Hungary. Between 2011 and 2013 the New Széchenyi Plan envisions the utilisation of European Union support and Hungarian funds in the amount of HUF 2000 billion.

The Government of National Affairs within the frames of the New Széchenyi Plan makes steps to improve the business environment and competitiveness. In order to ensure that entrepreneurs be in the centre of economic policy also in Hungary, to improve competitiveness of enterprises and to achieve the objective of creating one million new and tax-paying jobs an alliance shall be made between the state and the entrepreneurial sector.
In its approach and objective the New Széchenyi Plan is clearly in line with the objectives of the European Union's economic policy strategy for the period until 2020. The connection of the goals of the Europe 2020 strategy and the priorities of the Hungarian economic policy is clearly reflected also in the break-out points of the New Széchenyi Plan.