Hungary can replicate Singapore’s success after crisis, governor of the central bank

György Matolcsy, the governor of the National Bank of Hungary, has said Hungary should look to Singapore as an example for achieving economic success.

By setting out a new vision for the period after the crisis caused by the novel coronavirus outbreak, Hungary will have a chance to replicate Singapore’s success in Europe, Matolcsy said in an op-ed piece published on the website Novekedes.hu.

One conclusion that can already be drawn from the ongoing pandemic and national responses to it is that “East Asia has performed better than the advanced Western countries”, and the European Union’s northern and eastern member states have done a better job of managing the health, social and economic crisis than the southern ones have, Matolcsy said.

Hungary’s goal of catching up with the West can now also be furthered with the adoption of political, social and economic solutions coming from Asia, he said. Matolcsy, however, believes it would be wrong for Hungary to follow the examples set by China, Japan and South Korea, arguing that “what works on a large scale may not necessarily work on a smaller one.”

“So why couldn’t the most successful Asian Tiger, Singapore, serve as Hungary’s new vision for the future?” the governor added.

But instead of simply adopting Singapore’s societal model, Hungary would have to understand and “reconstruct” the essence of the city state’s economic success, Matolcsy said. Because of its strategic geographical location, Singapore has succeeded in establishing itself as a global logistics hub, becoming more and more attractive to investors until it became a crucial player, he said.

“The secret of secrets was that although Singapore got caught up in crises, it never changed the recipe of its model,” Matolcsy said. “It was improved, but not replaced every 4, 8 or 10 years.” Hungary should follow a European, and specifically central European version of that model, he added.

Matolcsy said

Hungary and the rest of the Visegrad Group could become “one of Europe’s most attractive capital, technology, trade, financial and quality-of-life magnets”.

But in order to fully adopt Singapore’s recipe for success, Hungary would need a new health-care model, way of life, financial system, education system, business sector and state operations, the governor said.