On the Hungarian National Trading House: Let’s Dare To Be Big

It seems that the motto of the melancholy opposition in these past years has been “Let’s Dare To Be Small!” It doesn’t matter how they view Hungary’s performance, they always manage to find fault. They then hurry to shine the spotlight on it. The list of the problems discovered by the opposition is long (though most are quite polarized) and are only suitable for grabbing the media’s attention for a minute or two. However, it is worth examining their latest criticism, directed at the 2015 results of the Hungarian National Trading House (MNKH). Before we discuss the (biased) evaluation of the performance of the MNKH, I would like to provide some information on Hungary’s exports, which the institution aims to improve. Historical data prove that until 2012, Hungary’s foreign trade balance remained positive primarily through the consistent decrease in the amount of imports. In addition, the low rate of consumption was one of the by-products of the incorrect management of the recession. However, the situation showed a dramatic change after this time: thanks to the increase of the export market share and advantageous trade figures, Hungary’s foreign trade balance was almost 10 % of the GDP. Market share decreased significantly (by 23 %) between 2008 and 2012, after which it grew by almost 8 % almost every year. The volume of Hungary’s exports has increased by 30 % since 2010 and exceeded EUR 100 bn last year. The fact that Hungary is performing better is (also) attributable to Hungary’s carefully chosen foreign trade policy. The Government correctly identified the fact that besides an export market that is based on more secure foundations, new markets also have to be discovered. One of the elements of this policy is opening up towards the east and the south. The MNKH, established three years ago, is one of the tools for doing so. And, contrary to the opinions of some experts from the opposition, it was not conceived by the devil. Similar institutions operate successfully in the USA and in many European Union Member States (such as Germany, Austria, Sweden, Denmark, etc.). It should be noted that the success of institutions such as the MNKH can be measured not only according to the results of their balance sheets, but also in the successfulness of the partner companies that utilize their services.

The amount of HUF 6 bn of losses, which was touted by the press and was presented in a biased manner, can seem like a large sum. But if we also take into consideration that the partner companies of MNKH, which are now present in 60 countries, realized export revenues of HUF 895 bn in 2015 (with an annual increase of HUF 135 bn), the distorted negative result is dwarfed. In addition, it should also be noted that the trading house network, which almost doubled in size, was one of the elements that caused the greatest increase in last year’s costs. These houses and offices help create a platform for successful business that would like to export their goods or services. Simply put, the cost was incurred by the Trading House while the increase in revenue and profits was realized by small and medium-sized enterprises, which indirectly strengthens Hungary’s economy. In summary, it can be established that any approach used by the opposition to stay afloat, no matter how derisive and malevolent, fades into nothing as soon as we see the full picture. It would be naive to assume that any players involved in foreign trade that open up to a new market would see positive results from one day to the next. The index we should be looking at is the one that shows that Hungary’s exports are continuously breaking records, and we are all reaping the benefits. Let’s Dare To Be Big!

CÖF-CÖKA Legal Cabinet



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