Job creation and high-tech industries are key to economic recovery, says Hungarian central bank chief

Hungarian Central Bank governor György Matolcsy. (MTI/Zsolt Szigetváry)
By Dénes Albert
3 Min Read

Hungary must concentrate on creating jobs and a high-tech industry, the governor of its central bank, György Matolcsy, wrote in the latest of a series of articles on the future of the economy.

Work and job creation

One of the biggest successes of economic policy after 2010 is that the state and the business sector together created nearly 1 million new jobs by the end of 2021. The two liberal shock therapies after 1990 lost nearly 1.5 million jobs, most of which have never been recovered. After 2002, another flawed left-liberal economic turnaround led to growth based on indebtedness. The financial balance was upset, first a persistent and high twin deficit, and then an internal crisis ensued. The external crisis struck in 2008, with the two cutting more than 200,000 jobs.

The turnaround in economic policy in 2010 immediately triggered job creation, and unemployment declined as labor market activity picked up.

The lesson of the past 30 years is that all liberal economic philosophies, whether national or leftist, devalue work and jobs, while all bourgeois, popular and Christian democratic economic thinking puts jobs first. There is a marked difference between the two in all areas of employment performance.

Although huge changes in the labor market are expected in the 2020s, the Hungarian experience of the last 30 years remains valid. If politics and economic policy focus on work and prioritize job retention and job creation, there will be a chance for sustainable recovery. If not, neither growth nor balance will be sustained.

Creating a military and high-tech defense industry

The 2020 decade is a decade of war, in many ways. Inflation is of a war-like nature, essentially a consequence of the new Cold War between the United States and China, and the United States and Russia. Geopolitical competition and warfare are technological in nature; whoever wins here wins everywhere. New R&D breakthroughs will first appear in the military industry and later the winner will be the first to be able to bring them into business.

The government, rightly so, has embarked on building a new military industry sector as a first step in developing traditional capabilities and industrial capabilities. As in higher education, we will win the decade here if we further develop the Hungarian military industry in a high-tech direction. Here, as everywhere in the Hungarian economy, the key to success is to jump in the gaps that match our abilities.

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