Overture to a New World, or the Coronavirus Crisis and Economy Protection in Hungary

  • György Matolcsy

Quo vadis Hungaria? – Facing a New World

Quo vadis Hungaria? – Facing a New World

Over the past decade, the Hungarian economy has achieved unique successes building on the fiscal and monetary policy turnaround implemented in the early 2010’s. The targeted measures of the government and the central bank have helped to put the Hungarian economy on a sustainable convergence path, and at the same time, they have strengthened the immune system of the economy. As a result, the Hungarian economy has been properly prepared to face the crisis caused by the coronavirus pandemic recently. However, in addition to addressing the short-term consequences, a longer-term perspective must be continously kept in mind as well. Only countries that are rapidly adapting to the norms of the new – post-Covid-19 pandemic – world, will be able to win the next decade. The norms of the 21st century are just taking shape, so every country has a chance to become a frontrunner. To continue the economic catch-up process, Hungary’s growth model needs to be further developed and adjusted to these new megatrends, and monetary policy must play an active role in this change.

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  • László Domokos

Assisting the Sustainability of a Well-managed State in Times of Pandemic Crisis

Assisting the Sustainability of a Well-managed State in Times of Pandemic Crisis

As a consequence of the epidemiological situation a number of unfavorable economic and social effects has emerged already that need to be mitigated. The State Audit Office of Hungary seeks to address this precarious and difficult situation by continuing to ensure the sustainability of a well-managed state when carrying out its activities; nevertheless tackling it from a slightly different approach. The virus claimed a set of new methods, and other activities became more important, such as advisory activities, monitoring audits, which could not have been done without change and crisis management, as well as the relevant digitization tools. The article presents the work and performance of the State Audit Office of Hungary, which aims to improve the harmful economic and social repercussions of the current virus.

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  • Gyula Pulay, József Simon

The Resilient Adaptation of Budgets to Small and Shock-like Changes

The Resilient Adaptation of Budgets to Small and Shock-like Changes

After the 2008–2009 global financial crisis it became even more important that the countries observed the budgetary rules, while also being flexible in adapting to the changes occurring during the year. This is called fiscal resilience. This article presents the possible means to create fiscal resilience. Taking into consideration the recommendations of international organisations, it emphasises that the measures ensuring the flexibility of the budget shall be realised in a transparent manner. Based on the relevant European Union legislation and the Hungarian regulation and practice the authors argue that the content of resilience changes in the event of external shocks. In that case the resilience of the budget shall be subordinated to the recovery of the entirety of the economy, i.e. its resilience. The primary goal is not to maintain the deficit target but to avoid a severe and permanent economic downturn and then to encourage the recovery.

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  • István Posgay, Gábor Regős, Diána Horváth, Dániel Molnár

On the Economic Impacts of the Coronavirus

On the Economic Impacts of the Coronavirus

The year 2020 saw a new economic crisis shake the world more deeply than the 2008 one. This downturn differs from the previous ones: instead of the internal patterns of the individual economies, the predominant factors to determine the pace of fall are the constraints related to the pandemic. Although most of the currently used anti-crisis tools had already developed as a result of the 2008 crisis, new elements include increased harmonisation between the monetary and fiscal policies and the speed of their application. The various economies will recover from the economic low point fundamentally by economic factors, supported by fiscal and monetary policy instruments, but pandemic obstacles may emerge and compel them to halt. Another problem is that it may take several years to achieve pre-crisis output levels. This is due to population ageing, the cascaded deployment of the anti-crisis tools, the future compulsion to reduce indebtedness, the side-effects of the applied anti-crisis remedies, the time required by the reorganisation of global supply chains, slowdown in China’s growth, the expected slow recovery of the US economy and the too high propensity to save on behalf of the consumers of certain European countries.

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  • Tamás Várhelyi, László Árva

Toward Complex and Sustainable Tourism in Hungary

Toward Complex and Sustainable Tourism in Hungary

In the late 20th and early 21st century, social and economic sustainability and the mitigation of environmental destruction have been issues of key concern. Tourism is intensely affected, as this sector is among the most polluting and least sustainable activities. Repeated pandemics, including the Ebola, AIDS, SARS, MERS, and then COVID-19, have been destroying the economy all over the world and, not surprisingly, they hit tourism the hardest of all sectors, as mass travels accelerate the spread of contagious diseases. But tourism already encountered problems long before the pandemic. As excessive tourism and the resultant pollution had already increased in the past few decades, anti-tourism attitudes spread rapidly. The current health hazards could be used to transform the unsustainable, polluting tourism into an ecologically and socially sustainable activity. This article analyzes the options we have.

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  • Attila Szinay, Attila Zöldréti, Szabolcs Zöldréti

The Effects of the COVID-19 Pandemic on the Paradigm Change in Agriculture

The Effects of the COVID-19 Pandemic on the Paradigm Change in Agriculture

There have been successes and failures in combatting COVID-19 worldwide. News of the emergence of vaccines and the start of their widespread use give a ray of hope, but the battle is not over yet. Agriculture has a special role to play in this, as food should be maintained in all circumstances all over the world. There can be no question of a temporary shutdown in this sector. This study points out that the pandemic has caused labour shortages in seasonal work in both EU and US agriculture, which not only highlights, but also forces the acceleration of innovation-driven efficiency gains and generational change. Innovation in this case is aimed at reducing the need for human resources, and generational change is aimed at involving young women and men in agricultural production. The preservation and continuation of agricultural production is the basis for maintaining agricultural trade and the supply chain. The study sheds light on the short- and long-term effects and changes that the COVID-19 has caused in these areas. Success requires not only the development of the quantitative, but also the professional, qualitative preparation of the workforce, for which the authors recommend the wide application of talent management in agriculture and point out the most important elements of conscious preparation.

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  • Csaba Lentner

Variations on Crisis Management – Through Examples from Hungary after the Change of Regime

Variations on Crisis Management – Through Examples from Hungary after the Change of Regime

The samplings included in this study provide insight into the major crisis management measures applied during the more than three-decades of market economy construction that replaced the socialist planned economy system, eroded from the late 1980’s. Due to space constraints, the author merely tackles the 1995 economic policy adjustment package, the 2006 autumn adjustment of the convergence trajectory, and the main elements of the comprehensive public finance reform after 2010, and makes reference to the methodology of dealing with the pandemic crisis “unfolding” from the spring of 2020. In addition to public finance measures, the paper also seeks to account for social impacts. This study basically compares the restraint on solvent demand, favoured by the International Monetary Fund and by the World Bank, with the Keynesian economy boosting measures, through the evaluation of the Hungarian practice, which has followed these patterns, and concludes that in times of crisis the expansion of solvent demand by instruments available for the government and for the central bank is the more efficient solution, especially in an emerging Central European market economy.

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  • Éva Bruckner

Countrywide Epidemics as “Visits of the Horseman of Death” in Hungary

Countrywide Epidemics as “Visits of the Horseman of Death” in Hungary

For thousands of years Hungary has, for the most part, been a transit zone for other nations’ armies or a target of conquest. As a result, the Four Horsemen of the Apocalypse: Conquest, War, Famine and Death were ravaging mostly at the same time. Among them, Death is “the deputy of hell”, which can destroy everything by diseases and epidemics. This study is a brief review of the infectious diseases which ravaged various regions in Hungary during the past centuries, followed by a more elaborate description of those that targeted the whole country: plague, cholera and Spanish flu. With the help of documents which have not been revealed so far, the study sheds light on interesting stories, like the way the plague helped the city of Pest to become the capital city, or how Hungarian doctors could successfully cure tuberculosis in the unique climate of the Tatra Mountains. At the turn of the 19th and 20th centuries, cholera triggered a development in public healthcare and hygiene that still has its impacts felt to date. The coronavirus, which has hit us in the 21st century, is studied with a focus on its effects on our current society.

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  • Csaba András Dézsi, Dávid Fekete, Veronika Szentes, Tímea Laczkovits-Takács

Impact of the Coronavirus Epidemic on Local Social and Healthcare Services through the Example of a Hungarian City

Impact of the Coronavirus Epidemic on Local Social and Healthcare Services through the Example of a Hungarian City

This paper analyses the impacts of the globally disruptive COVID-19 pandemic, and local responses to the above challenges, more specifically, the operation of services under the state of emergency through the example of Győr. With the outbreak of the pandemic, state and municipal stakeholders responsible for public service provision became the focus of public attention. Their capacity to provide quick, efficient and firm action in response to novel situations and challenges was constrained by the internal operational deficiencies of large care systems, notably, undersupply in human and financial resources and the absence of flexibility and speed in various domains of state and municipal administration. Experience shows that full compliance with government measures and regulations was indispensable for the elaboration of local responses and good practices. In Győr, despite the municipality’s reputation for the high standard operation of health and social care services in the framework of its mandatory and voluntary functions and the presence of advanced care systems, tremendous human resources were required to tackle the emergency situation. This paper provides a detailed discussion of the relevant locally implemented practices and measures.

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