Hungarian Chamber of Commerce.

I am so busy all the time from one place to the next that it is hard to blog consistently at night but I will continue to do my best. I think I am finally over the jet lag it's just that the mornings have been a little rough seeing that when I wake up at 8:00am it is really 2:00 am for me.

Yesterday we went to the Hungarian chamber of commerce and had or presentation done by Andras Brio who is the area manager. This chamber of commerce has a history spanning over 150 years. When we went to the chamber of commerce we got to go to the sixth floor where the President's office was on the exec floor which is amazing that we got such incredible exposure to the heart of the facility. The main point of us being there was to get an overview of the economic characteristics and business environment of Hungary. The first part of his presentation went over the eastern and central European countries and how they are all related to each other geographically. The CEE (central and eastern Europe) consist of Albania, Bosnia and Herzegovina, Bolgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Poland, Romania, Slovakia, Slovenia, and Yugoslavia. The broad term is narrowed as the Balkan states or central Europe. Poland is the biggest country with 45-50 million people following Romania then Hungary with 10 million people.

The historical overview of Hungary starts with how the region became an organized entity since the time of the Romans in the Pannonia Province. This was the border line of Prussia/Germany, Mongol/Slavic and Byzantine/Ottoman Empires. In the XV century Sigmund unified a large entity from the seperate states in the German-Roman Empire. The Hapsburg monarchy and the European wars represented a blossoming of the regions. The breaking of the monarchy created a number of the independent states that we see today. He later when on to describe the post war era and the Cold-war era up until today.

In the recent history of Hungary in 1989 Hungary went away from communist rule and broke soviet ties which led to a quick and devastating drop in economic output. Hungary recovered with the European Union and an admissions treaty which allowed them to join NATO in the mid 90's. 5 of the 10 countries in the EU are from the CEE.

In the mid 1990's is when Hungary finally started to have economic and political harmonization and a new style of economic regulations. They had a continuous flow of EU support money where 60-70% of total trade is made with EU money. This led to the creation of the CEFTA, V4 and the Central European Initiative. All three of these organizations helped to create a free trade zone, encourage integration and help regional economic, scientific and cultural cooperation.

We finally started to see the countries coming together so they could have enough economic power as spain similar to the European countries coming together to form the Euro to have as much economic weight as the U.S. and Japan in 1999. There countries were working together in how the were taking advatage of their trade routes and centralized infrastructure with roads, bridges, ports and cities. One of the biggest effects was the melting pot effect where there were many nationalities that brought their craft and skills to the area and where many developments in Europe originated from this region.

Hungary had many strengths and weaknesses as an emerging free capital market economy. Some of their strengths included how they had faster growth than the EU as a whole, increasing consumption in many product categories and a relative advantage in the costs of living and company operations. Some of their weaknesses were that they had excessive capital costs, language barriers, and lower purchasing power. Many opportunites and threats also emerged. There opportunites that arose were how easy they could transfer products, qualified scientist for research and development and a qualified labor force in time for economic crisis. The threats that arouse were that they had continued economic problems that might cause mass bankruptcy, Asian competitors that might stunt growth, enviornmental deterioration, lack of global approach and a dependence of EU funding and exterior finance that consisted of 20% of their operations.

We later went on to discuss the business environment in the CEE mainly discussing the change of the economic system from communist to capitalist that had an increasing influence in their everyday economic operations. This led to state ownership decreasing from 90-100% down to 15-35% where there was no shortage or limitation on product accessibility. We later went on to discuss that an Entrepreneur in Hungary is different from businessman and still has negative connotations. An Entrepreneur in Hungarain terms is someone who tries to make lots of money and avoid taxes which would help the country to have more money to himself. This term does not seem to be negative at all to me but in Hungary they are characterized as being against nationalism in the sense that they don't want to pay taxes to help the country out.

We later went on to discuss the different business models of different enterprises their banking system, Infrastructure, Transportation, Contracting, manpower and administration. What I found most interesting was the difference between the Us and CEE. He went over how U.S. citizens are more entrepreneurial, tolerant and mobile. CEE citizens rely more on contacts with the government and maximize tax payments. U.S. companies have easier access to capital and are more willing to take risks. The CEE companies rely more on innovations and Unique services with a more pragmatic apprach to clients and market acquisition.

I am about to go to the famous Budapest water pools and spa but when I get back I will write out about my exciting journeys after the Chamber of commerce and describe about the Budapest stock exchange I went to this morning and my experience with the baths of heaven.