MENAFN - Arab News
Saudi-Hungarian trade sees 40% jump
(MENAFN - Arab News) Though the two-way trade between Saudi Arabia and Hungary stood at a mere 140 million last year, there is potential in the growth of these bilateral relations, the president of the Hungarian Chamber of Commerce and Industry, Laszlo Parragh, told Abdul Hannan Tago of Arab News.
In an exclusive interview last week in the presence of Hungarian Ambassador Miklos Kallay at his residence here, Parragh disclosed that Prince Alwaleed bin Talal is exploring the possibility of setting up a spa hotel in Budapest.
"The matter came up during our discussion with the prince," he said.
The president also said the scope for expansion in trade and commerce can be realized from the fact that in the first six months of this year, bilateral trade increased to 214 million.
"It means that in this short period we have achieved a 40 percent increase, indicating bright prospects for further expansion of relations on this front," the chamber president observed.
Even so, it is a tiny proportion compared to Hungary's volume of trade, which stands at around 100 billion euro.
"We are a strong exporting country especially in the fields of automobiles, machinery and IT. We are handicapped by the lack of a strong commercial network here", the chamber president added.
The following is the text of the interview:
Can you tell us about the outcome of your visit and the meetings held here?
We came here with a 50-member delegation from different sectors. We had useful discussions with our counterparts, Saudi businessmen and government officials.
What's your next move, since you don't have any Saudi-Hungarian Council of Trade and Commerce?
It's a good question. We have good relations with the Council of Saudi Chambers of Trade and Commerce and also with the Riyadh Chamber and the Jeddah Chamber. We are preparing together businessmen's visit from Saudi Arabia to Hungary in the coming spring to sign an agreement for setting up a joint committee representing businessmen from both countries. We have prepared a draft accepted by both parties, but it has not been signed yet.
You said you met with Prince Alwaleed bin Talal, the top businessman here. Who else did you meet?
We had meetings in Jeddah with two major food trading companies - Bin Dawood and Azizia Panda, besides the Binladin Group in Jeddah.
How do you see the possibilities for boosting trade relations between the two countries?
To be honest, I know little about this country. However, it is my first visit here, so it's a new situation. We have to move cautiously, because we are not on a familiar ground. So we are still in the discussion stage before taking the next step.
Hungary has some limited natural resources (bauxite, coal and natural gas) as well as fertile soil and arable land. The country's main exports include electric and electronic equipment, machinery, foodstuffs and chemicals.
The private sector accounts for more than 80 percent of the Hungarian GDP. Foreign ownership and investments in Hungarian firms are widespread, with cumulative foreign direct investment worth more than 70 billion. In late 2008, Hungary's inability to service its short-term debt - brought on by the global financial crisis - led Budapest to obtain an IMF/EU/World Bank-arranged financial assistance package worth over 25 billion.
The global economic downturn, declining exports and low domestic consumption and fixed asset accumulation, dampened by government austerity measures, resulted in an economic contraction of 6.8 percent in 2009.
In 2010, the new government implemented a number of changes including lowering business and personal income taxes, but imposed crisis taxes on financial institutions, energy and telecom companies, as well as retailers. The IMF/EU bail-out program lapsed at the end of the year and was replaced by Post Program Monitoring and Article IV Consultations on overall economic and fiscal processes.
The economy began to recover in 2010 with a big boost from exports, especially to Germany, and achieved a growth rate of approximately 1.4 percent in 2011. At the end of 2011, our government turned to the IMF and the EU to obtain a new loan for foreign currency debt and bond obligations in 2012 and beyond. The EU launched an Excessive Deficit Procedure and requested that the government outline measures to gradually reduce the budget deficit to below 3 perent of the GDP. This has turned out to be so, since the Government managed to bring deficit well under 3 percent in 2011 and will likely to maintain it in 2012 and 2013 as well.
You know diplomacy always helps in cementing relations. Did you find any obstacles in this regard?
Well, we have a different culture and history, two different languages, a different legal system and religion. But both nations are open-minded to understand each other. In this case, we have a lot of experience in dealing with economic relations and way of improving them. We have seen the ups and downs in the Hungarian economy, when it was strong in the 70s before it went through various phases.
But the transition period of Hungary subsequently changed. As the Russians went out after the collapse of the Soviet Union, we had a very hard time before the situation improved. But I have a lot of businessmen in my group now who can speak a little bit of Arabic. They also know the culture in view of their business relations in the past.
How do you see the political situation in the Middle East and Saudi Arabia's stand on Syrian crisis and other issues?
I am a businessman and such questions would be hard for me to answer. But I think what is very important is that we have to understand that every nation has to mind its own responsibility for itself. There are so many historical and culture aspects which distinguish Europe from America or from China. I don't think that we can understand absolutely 100 percent of the situation in this region. So we have to be very careful if we say something about it.
What is important for us is our hope for peace. To those coming from outside, our first impression is that the Arab world is similar. On a closer look you discover major differences between countries and their religious practices, too. I have visited recently Kuwait, Oman and Abu Dhabi and noticed these differences.
We have investments in Syria and the ongoing unrest in the country is bothering us a lot. We see from the outside and notice that there are no early prospects of a change leading to peace in that country. Saudi Arabia is leading country in the region and has a big responsibility to shoulder.
Do you have any message for our readers?
We want Saudi people to visit Hungary and learn more about us and our history. Hungary is a landlocked state with many neighbors - Slovakia, Ukraine, Romania, Serbia, Croatia, Slovenia and Austria. It is mostly flat, with low mountains in the north. Lake Balaton, a popular tourist resort, is the largest lake in Central Europe.
The capital city, Budapest, was originally consisted of two separate cities: Buda and Pest. It straddles the River Danube, is rich in history and culture and famed for its curative springs. Hungary has a single-chamber parliament or national assembly whose 386 members are elected by voters every four years.
How about the education system? Since many countries are now competing with one another to attract Saudi students, do you have any plan in this regard?
Yes, we have around 300 Saudi students in Hungary. It's a small figure compared to others. But Hungary's education system is very strong. It is only through interaction that we can understand each other's strength before we can take the next step.
For example, in the educational field, we have a lot of experience in vocation training in the middle school. Students learns in the school and, at the same time, work in the textile factory. We have very high level of education. We have high calibre doctors and engineers. If you're planning to set up a nuclear power station, ours is the only country in the world which does not produce but teaches how to use the nuclear power station.
What about renewable energy? Where does Hungary stand in this field?
Of course, we have thermonuclear energy and bio-fuel derived from animal waste, which is converted into energy for use in small power plants or in farms. We have a lot of them.
Finally, what do you have to say about tourist attractions in your country?
We are the horse nation in Europe. We have a large horse population and also horse riding and training facilities.
We have a long hunting season as we are situated in Central Europe. Lots of tourists from Australia and Germany are coming to Hungary to hunt and they find the experience enjoyable. We have very good developed infrastructure for it, not only for animals. We have some of the best spas in Europe. Also Hungary is very rich in seawater. Having a cold bath is very popular in Europe. Many people come here for cold shower, which is really sweet water. It's clean water, which you can drink.
Hungary has an estimated 1,300 thermal springs, a third of which are used at spas across the country. Hungary's thermal waters and spa culture are promoted to tourists. Hungary's thermal baths have been used for 2,000 years for cleansing, relaxation and easing aches and pains. The Romans were the first to use Hungary's thermal waters in the first century, when they built baths on the banks of the Danube River. More than 30,000 cubic meters of warm to scalding (21 to 76C) mineral water gushes from 118 thermal springs and supply the city's thermal baths.
Budapest has been a popular spa destination since Roman times. Some of the baths in the city date from Turkish times while others are modern. They have steam rooms that utilize the healing properties of the springs.
The most famous of Budapest's spas were built at the turn of the 19th century. There are 200 known caves under Budapest, some of which can be visited by tourists and are a popular tourist attraction. In the Buda hills there are caves that are unique for having been formed by thermal waters rising up from below, rather than by rainwater.
Lake Balaton in western Hungary is the largest freshwater lake in Central Europe. It is the second most important tourist destination in Hungary. 2.5 million tourists visited the lake in 1994.
Hungary's other tourist attractions include spas and cultural attractions such as the villages of the Great Hungarian Plain and the art treasures found in Budapest. Hungary has more than 400 camping grounds. There are more than 2,500 kilometers of dedicated bicycle lanes in the country.
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