It is of interest to Slovak businesses that Hungary is one of the few countries with which our trade balance has reached some USD 200 m. Peter Kováč, Delegate of the Foreign Trade Support Fund (FPZO) speaks of further perspective of the situation.

What brought such a result?

The membership of both countries in CEFTA has played a positive role. In eliminated customs tariffs for most commodities. Trade turnover shows that it is small and medium size enterprise that carry out nearly a half of the trade. They are those who need help in their operations on foreign markets. That includes contract financing, marketing information, news on customs fees and taxes, registration conditions, quotas and limits on goods, information on firms, and search for potential partners. Whoever wants to operate on a foreign market needs such information.

That seems to be your task.

Yes, indeed. The role of the FPZO delegates is unique in this context. The FPZO office in Budapest opened last August. It has become an active part of the Commercial Department of the Slovak Embassy. Search for contacts for the Slovak partners and vice versa is one of my top priorities. FPZO activities gave us an opportunity at a fair Cash Cows of the Slovak Economy in Budapest and at a regional Slovak-Hungarian fair IPEL in Magyarnandor. The scope of our activities will keep on increasing once the delegation becomes more known to the Slovaks and the Hungarians.

What is the local political and economic environment?

Like Slovakia, Hungary had its national elections in 1998 with the latter held in Spring. So some of the results are already attributed to the new cabinet. It carries on the macroeconomic results of the previous administration. It is important to the Slovak businesses that in spite of its promises, the new cabinet has retained continuous devaluation of the forint to reach 0.6% monthly since 1 January. The measure was introduced in March 1995 at 2.5% with gradual decrease. In spite of the inflation pressure, it has proved very supportive to export with an anti-import effect. Still the foreign trade deficit has remained over USD 2m for several years.

That's similar to Slovakia. Yet Hungary enjoys greater foreign investment than Slovakia. Why?

The high level of foreign investment is often achieved through property sales to foreign investors. There is a recent trend of investment in new technologies, although not always the most modern. The investment is not balanced. Some of the Western regions and Budapest are the top priority. The South and particularly northeast and East have unemployment ver 20%. Those are predominantly agricultural areas. Hungarian economy works hard towards the EU membership in 2002. The Hungarians however see themselves that the step would prove difficult in such sectors as agriculture. The Hungarian government has already made it public that the sector will not be able to fulfil the criteria to the date.

Which are the areas where the countries might help each other?

Hungary will remain t be an instrumental partner to our businesses in export and as a consumer and processor of Slovak goods. The same applies to import of a broad assortment of goods on our market. In order to increase our export, we have to change the commodity structure. Currently the most balanced commodities include those with limited degree of processing, such as row wood, motor and heating fuel, row iron and metallurgy material with lowest value added. From Hungary we import high volumes of special PVC types and medications. Still, the Hungarian market lacks special construction and road vehicles and equipment, processing engines and tools, high quality packaging glass. Production of a number of those items stagnates in Slovakia. The FZO office should be of help to the businesses by providing information on marketing of selected commodities in Hungary and through cooperation in marketing plans for the region.

Slovak Trade FORUM