Country Support Team in Europe & CIS

Country Programmes - Hungary

Background

As a result of reforms introduced in the 1990s, Hungary is now considered to be a stable liberal democracy with a functioning market economy. During its EU transition period, the country recorded strong GDP growth and falling inflation, particularly from 1997 to 2001.

By 2007, Hungary had attracted substantial foreign direct investment (EUR 13.6 million according to Creditanstalt Bank Austria), thanks to ambitious privatisation and liberalisation policies. Hungary's foreign policy has focused on Euro-Atlantic integration, and reconciliation with its neighbours. The country became a member of NATO in 1999, and joined the European Union in 2004.

The Hungarian government is currently facing a number of challenges in the areas of public finance, unemployment, minority rights, and regional development. Though unemployment rates fell sharply after the mid-1990s, unemployment is still a recognized problem. With regard to minorities, the Roma represent the most marginalised and poorly educated group in Hungary. Accounting for 4 percent of the population, they live mostly in rural areas, which have extremely high rates of unemployment. Bringing living standards up to EU averages, especially in the north-eastern part of Hungary, is another long-term challenge for the government.

UNDP assistance to the Hungarian government focuses on three areas. First, UNDP is building Hungary"s capacity to deliver official development assistance (ODA) in line with the government’s geographical and policy priorities. Second, it is working to ensure that local development programmes help marginalized groups find jobs and take part in the political process. Third, UNDP is aiding the integration of sustainable development principles into national programmes. For example, it is working to reduce greenhouse gas emissions through efficient energy management in municipalities.

Promotion of Development Cooperation

As a new EU member, Hungary needs to further strengthen its ability to provide ODA. UNDP is helping the Hungarian Ministry of Foreign Affairs formulate a development assistance programme and build capacity in this area. In November 2003, the government established closer cooperation with UNDP when the two sides signed a $1 million Cost-Sharing Agreement regulating the delivery of Hungarian ODA.

Roma Integration into Hungarian Society

The Roma, many of whom live in isolated and underdeveloped parts of the country, are the most disadvantaged group in Hungarian society. Integration has been insufficient despite several government programs designed to address the issue. UNDP seeks to help the integration of the Roma by supporting regional development programmes, and access to energy services and micro-credits. In cooperation with the Ministry of Youth, Family, Social Affairs and Equal Opportunities, UNDP helps develop and implement the Cserehát Regional Development Programme, which addresses development disparities in the north-eastern Cserehát region (districts of Encs, Edelény and Szikszó). In cooperation with Hungary’s Autonomia Foundation, UNDP has developed a project that focuses on providing micro-credits to foster entrepreneurship among disadvantaged groups.

This complex development programme is aimed at improving the social integration of the region. Through joint, coordinated, and targeted action, the programme hopes to improve human resources development; to enhance social capital, self-help initiatives, community support, public services, and local community initiatives; to create and mobilize the internal resources of the local economy; and to improve accessibility to public services. With a view to economic development and social cohesion, the programme will improve the quality of life of the population living in disadvantaged areas, and reduce regional inequalities and social exclusion. More efficient support and concentration of resources will lead to more successful development. The project is implemented in cooperation with the Ministry of Social Affairs and Labour of Hungary.

Micro-Credit Programme for Disadvantaged Groups in Hungary—with a Special Focus on the Roma Population

The overall objective of the project is to establish and maintain a micro-finance program (and institution) in Hungary. The target group of the program is disadvantaged people in Hungary (mainly Roma) who are working in the informal sector. With specific financial and professional help they can start micro-enterprises that would provide legal jobs for themselves and help improve living conditions for their families. The program is linked to the Hungarian government supported Business Development Foundation and its services. The program includes vocational and business skills training courses, as well as micro-lending activities.  

Cross-Border (Eastern Slovakia/Northern Hungary) Human Development Report

The aim of this report is to analyze current issues of sustainable human development, and to address the key economic, entrepreneurial, and social issues in cross-border regions of eastern Slovakia and northern Hungary. It is expected that the report’s recommendations will inform the country’s political and business agenda, and shall be widely discussed between policy makers, the business community, and the public. The report, published in Slovak, Hungarian, and English, will be broadly publicized and distributed to the business community, regional and central governments, regional development agencies, academic institutions, NGOs, and other stakeholders, to promote cross-border cooperation and dialogue about the key development issues.

Public Sector Energy Efficiency Programme

The project funded by the Global Environment Facility (GEF) helps the Hungarian government streamline and target its environmental-management efforts (especially in the area of improving the energy efficiency of the public sector by reducing greenhouse gas emissions). It seeks to remove barriers to a sustainable market for energy efficiency services, and promote the implementation of energy efficiency projects in municipalities, hospitals, and other public institutions. Beyond reducing carbon emissions, the project seeks to strengthen the capacity of the Energy Centre (www.energiakozpont.hu), an institution established by the EU that manages Hungarian energy efficiency programmes, improves local energy efficiency, and monitors national energy-efficiency projects.

Conservation of the Globally Significant Biodiversity of the Tisza River Floodplain

Lake Balaton Vulnerability Assessments, and Early Warning and Adaptation Strategies

The overall purpose of the project is to contribute to a better understanding of Lake Balaton’s ecological and socio-economic vulnerability and resilience arising from multiple forces of global and local change, including land use, demographics, economic and climate change, and build capacity. It is hoped that improved understanding will result in more effective policy-making and adaptation measures. The project is complementing ongoing policy initiatives and scientific research, and has a clear niche by taking an integrated perspective. Climate change is seen as one of the emerging important determinants of the lake’s vulnerability, but its impacts are considered in the broader context of sustainable development. Through its training component, the project will lead to measurable improvements in vulnerability assessment and adaptation capacity. On-the-ground results will be achieved through initiatives financed by a small grants programme using innovative financing mechanisms, such as public-private partnerships. Longer-term impact will be ensured by integrating criteria related to adaptation to global change into the regular grant-making activities of the Lake Balaton Development Council. Due to Lake Balaton’s high profile, and a focused engagement and influencing strategy, the project will significantly increase national and international awareness of the impacts of climate change. The project is funded by the Global Environment Facility (GEF) and implemented by the Balaton Region Development Agency (www.balatonregion.hu)

Total Sector Methyl Bromide Phase Out in Countries with Economies in Transition

The overall objective of the project, funded by the Global Environment Facility (GEF) and implemented by UNEP (www.unep.org) and UNDP, is to rapidly phase-out all non-exempted uses of methyl bromide (MB) in five central eastern in-transition countries (Bulgaria, Hungary, Latvia, Lithuania, Poland), and provide support to two other countries (Azerbaijan and Uzbekistan). By eliminating about 167 metric tonnes of MB annually, these countries were able to comply with the Montreal Protocol requirement to phase-out MB imports in 2005 (excluding quarantine and other exempted uses). The project addressed the key barriers that prevent the adoption of MB alternatives; these include training for MB users, resources to assist the procurement and installation of alternatives, policy development, and capacity building. Specifically for Hungary, the project transferred and installed fumigation equipment for metham sodium and dazomet as an MB alternative for the production of horticultural crops. In Hungary, the project also supported the development of crop cultivation technologies, making soil fumigation unnecessary, or applying methods that are non-polluting not harmful to human health.

Global Compact Hungary Network

Hungarian business leaders and UNDP launched the Global Compact Network for good corporate citizenship in December 2005, with three priorities: the fight against corruption, improving the situation of the Roma, and sustainable development. The founding members include Central Europe's leading oil concern, MOL, the Budapest Stock Exchange, Holcim, Adecco, Radio C, Ernst & Young, Hungarian Business Leaders Forum, ABB Hungary, MAM Hungaria KFT, Elektrotemperatura Development Services, Szakály Kft., Autonómia Alapítvány, and Clean Air Action Group/Levegő Munkacsoport. Partners to the Global Compact in Hungary include the World Bank, ILO, Hungarian Business Leaders Forum, Joint Venture Association, OTP Fund Management, and the Central European University Business School. Today, Global Compact Networks in Central and Eastern Europe have enrolled more than 300 companies since the first network was launched in Poland in March 2001. In addition to pursuing socially responsible policies, member companies have so far sponsored business incubators, initiated university courses in business ethics, and supported education for young leaders.

To Accelerate Implementation of Corporate Social Responsibility in Hungary

The main objective of this project is to accelerate the implementation of CSR practices in new EU member states. CSR practices are seen as a vehicle for EU harmonization, improving competitiveness, and social cohesion. The project, started in January 2007, addresses the practices of companies (both local and foreign enterprises), but also intermediaries like business and professional associations, local and national governments, trade unions, academia, non-governmental organizations, and the media in the project countries. The project funded by the European Commission is implemented by UNDP Offices in project countries (Bulgaria, Croatia, Hungary, Lithuania, Macedonia, Poland, Slovak Republic, and Turkey) in cooperation with national and regional partners. Business networks in Spain, the UK, and Germany will contribute by exchanging their experiences and good CSR practices. Project duration is 18 months. The total budget is $1.36 million (EUR 775,636). The contribution from the European Commission stands at EUR 620,199, while UNDP is contributing an additional EUR 155,437. The first comprehensive baseline analysis on corporate social responsibility practices in Hungary (both in English and Hungarian) can be downloaded  by visiting: www.acceleratingcsr.eu