SPEECH BY PRESIDENT OF THE
REPUBLIC MARTTI AHTISAARI
TO REPRESENTATIVES OF INDUSTRY AND BUSINESS
IN PÉCS, HUNGARY ON 28.9.1998
I am pleased that this visit to Hungary gives
me the opportunity to make the acquaintance of the city of Pécs
and its economic sector. Pécs is nowadays well known in Finland.
In addition to a long-standing inter-city twinning arrangement
and lively contacts between civic organisations, several large
Finnish companies have located here. Your city is also making a
valuable contribution to international cooperation by providing
accommodation for the quartermaster corps of the Nordic-Polish
peacekeeping company in Bosnia-Herzegovina. The people of Pécs
have every reason to be proud of their rapidly internationalising
city with its wealth of tradition.
The positive development that has taken place in Hungary is very
impressive. We in Finland have always known that Hungary has been
a pioneer among the transitional economies. Your reforms have
been successful and, what matters most, they have continued
despite political and economic difficulties. The results are
appreciated abroad. A clear indication of this is the high level
of foreign investment in Hungary: according to UN figures,
foreign direct investment in your country has exceeded $15
billion. No other Central European country can point to such a
statistic.
The dynamism of your economy and its high growth figures - over
5% again this year - promise continuing rapid development. We are
very aware of Hungarys importance as a market. Thanks to
your central geographical location, you can also serve companies
locating here as an important centre for business operations in
various parts of our continent.
Hungary was the first Central European country to apply for
membership of the European Union. For several reasons, including
your consistently good economic prospects, you were among the six
countries which were last spring given the go-ahead to begin
pre-accession negotiations. Besides economic growth, you have
also made good progress in legislative convergence or EU
harmonisation.
Thanks to the general development of your economic policy, the
structural measures that you have implemented and your adoption
of EU legislation, Hungary will meet the criteria for membership
set at the Copenhagen summit in 1993. We Finns greet the progress
that Hungary has made, because it will mean that we are both
operating in a single market, with all of the new opportunities
for trade between us that this implies.
The ongoing process of enlargement of the European Union differs
in many ways from earlier ones. What makes it especially
challenging is that it is taking place parallel to internal
reform of the Union. Besides that, the number of candidate
countries is greater than ever before and their starting points
have been further from the EU average than in earlier rounds. All
of this will take time and require a lot on the part of both
candidates and existing members. But ultimately it lies in the
interests of all for the enlarged Union to have an ever greater
capacity to act effectively than it has had up to now. We in
Finland consider the enlargement process with its negotiations,
partnership programmes and subsidies very important in itself. We
shall do everything we can to ensure that it remains dynamic and
enhances our prospects of success in building a shared European
home, where no new dividing lines will be created.
Bilateral relations between Finland and Hungary in the economic
and trade sectors have always been good. Despite geographical
distance and the differences that earlier existed between our
systems, companies in our countries have always found each other.
Our visible trade with Hungary has been around a half of one per
cent of our grand foreign trade total, which is no mean
achievement. Yet I am convinced that both parties would like our
trade to develop to a much higher level.
The structure of Fenno-Hungarian trade is becoming increasingly
diversified. No longer do we merely exchange timber and paper for
wine. Markets are being found for products of many other sectors
as well. High-technology products associated with
telecommunications, the energy sector and construction are
representative of Finnish industrys new export palette.
Similarly, the Finnish market, open as it is to stiff
international competition, offers Hungarian companies excellent
opportunities to develop their exports and diversify their range.
Finland has participated in many ways in supporting the Hungarian
reform process. In the early 1990s we participated in several
multilateral programmes, such as the balance-of-payments
arrangements worked out by the IMF and the G-24 countries as well
as in maintaining the environment centre in Budapest. Now, as EU
members, we are contributing through the PHARE programme. On the
bilateral level, Finland was the first Western country to grant
Hungary a structural adjustment credit. Worth $100 million, it
was used to finance Finnish exports of capital goods and services
to this country. Technical cooperation between us has included
numerous training, consultancy, technology-transfer and research
projects. The purpose of all of these measures has been to build
a foundation for both economic cooperation more generally and
concrete trade more specifically.
Finnish companies interest in establishing a more permanent
presence in Hungary has been increasing. There are more than
fifty joint-ventures, in many different sectors and with capital
inputs of varying sizes. There is about the same number of
entirely Hungarian-owned companies working in cooperation with
Finnish partners. The total invested in Hungary by Finnish
companies has reached $150 million. To this figure we can add
$60-100 million worth of new investments now in the pipeline. I
am convinced that this positive trend will continue - after all,
Hungary has become Central Europes most enticing country
for foreign investors. Finlands own experience dating back
to as early as the 1980s demonstrates that liberalisation of
capital flows and relaxation of restrictions on foreign ownership
help diversify an economy and spur economic growth.
Here in Pécs we are witnessing considerable investment by
Finnish advanced-technology companies, and even clustering. Our
national pride Nokia, which already employs nearly 2,000 people
in Hungary, began making computer monitors in the industrial park
here in Pécs a few years ago. Since then, several other Finnish
companies like Elcoteq and Saloplast have discovered Pécs and
built factories here. Nokia and Tammerneon are among those that
have established in Budapest this year. Positive experience of
investing in Hungary is adding to interest on the part of our
companies in doing so.
One of the important tasks that governments must perform is to
provide the conditions that the main actors in the economy, i.e.
companies, need in order to be able to operate successfully.
Decision-makers must see to it that legislation and the
agreements and arrangements that regulate international
cooperation and trade meet the needs of companies. When that is
done, we can expect our companies to succeed in the numerous
functions of international trade.
The pace of internationalisation continues to quicken. Countries
and their economies are becoming increasingly interdependent.
Organisations and companies are linking together in networks. In
this development, we must come closer together and have a better
knowledge of each others cultures and ways of thinking in
order to be able to respond to new challenges. Between Hungary
and Finland this is not difficult. We have known each other well
for a long time. Opportunities for us to cooperate with each
other are even better in an integrating Europe. The city of Pécs
provides a good example of this.
The discussions and exchanges of views that have been conducted
during this visit as well as any new modes of contact that may
have been agreed on will certainly lead in time to more business
between our companies, and all of us will benefit from that.
I want to express my heartfelt thanks to the representatives of
the city of Pécs and surrounding region, to the businesspeople
present here and to all of the others around this table for
having given me the opportunity to make your acquaintance and
take part in useful discussions with you.