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Oct 19, 2018

The Hungarian work-based society is the direction to follow, says leading economist

Marcin Piasecki highlighted that Hungary was the first Central European country to experiment with its own independent economic policy and he believes that the model of the Hungarian workfare society is the way forward

A leading Polish economist has said that the model of the Hungarian work-based society is the direction to follow.

Marcin Piasecki, Vice President of the Polish National Development Fund, made the remarks after pointing out the disadvantages of the Visegrád countries allowing foreign capital into their countries in the hope of increasing their economic position.

Piasecki said the last three decades have been the best economic period for the Visegrád countries. GDP per capita was only a third of the German level thirty years ago, but today it is more than fifty percent on average.

However, a wide range of statistics show that the rapid growth rate has started to slow. The long-term growth has been sacrificed for the short-term growth of the past 25 years.

Polish PM, Mateusz Morawiecki explained that the reason behind the slowing growth is that Central European countries are dependent economies and half of their industrial production now comes from foreign-owned companies.

Piasecki believes that the competitive advantage of the Visegrád countries is its people. In his view, the inhabitants of the Visegrad countries are more motivated than the West, and they really want to succeed in what they are doing. Many Eastern Europeans that currently work abroad are expected to return to their country of origin, because wages in the Visegrád countries have increased by 8-10 percent in the last few years.

Unfortunately, there is still a tendency for foreign companies to keep their R&D department in their home country, and only bring assembly plants to the region where only manual work is needed, these jobs are not of such a great value.

The Polish Prime Minister recognized this tendency and has now decided to let in only investment and capital that creates more complex research and development workplaces in Poland.

Piasecki highlighted that Hungary was the first Central European country to experiment with its own independent economic policy and he believes that the model of the Hungarian working-based society is the way forward.

The workforce shortage might be another problem of future economic growth but the combination of migration, family policy and robotization could be the solution to it.

Prior to his role as Vice President of the Polish National Development Fund, Piasecki worked as a Citigroup analyst in London and director of the Venture Capital Fund of Kulczyk Investments, and in Abu Dhabi at the Mubadala investment company. He believes that higher wages will lead to higher productivity.