Discussion Papers 2002.
Regional Challenges of the Transition in Bulgaria and Hungary 129-135. p.
THE PERSPECTIVES OF HUNGARIAN REGIONAL
DEVELOPMENT
Gyula Horvcith
European trends
The territorial structuring of Europe in the new Millennium and the possible ways
of its spatial integration are influenced by the territorial forces that have gained
ground in the last third of the 20 th century.
The processes of demography, which are the basis of any regional development
strategy, show unfavourable trends. The population of Europe is expected to start
decreasing at around 2010. The other demographic trend is the unfavourable age
structure of the population. The decreasing proportion of the young age groups
brings about decreased pressure in the labour market. The third development trend
has to do with strengthened migration: both in the size of the population and in its
territorial structure, migration is becoming a crucial factor. Since the major target
areas of migration are the urban spaces, this factor has to be given particular con-
sideration in the regulation of urban structures.
In the general trends of population, however, significant territorial differences
are anticipated to emerge (Europe 2000+). In each EU member states the major
poles of population growth are the southern areas. The second characteristic demo-
graphic process is the continuous expansion of urban spaces accompanied by a
slow decrease of population in the core settlements. The third axis of change is the
growing population of settlements located along the development corridors con-
necting major cities.
The second major group of factors affecting the integration of European regions
are the structures and organisation systems of the economy. The large-scale re-
structuring of the economy has already taken place in most European countries ex-
cept East-Central Europe. In the Mediterranean regions, where the traditional
weight of the agricultural sector is strong, there is growing expansion of the second
and third sectors; elsewhere, the internal restructuring of the industry is anticipated,
involving the parallel development of manufacturing services. The flexible man-
agement of manufacturing operations, increasingly relying on outsourced inputs,
and technological restructuring may turn highly developed services (business con-
sultancy, research and development) into the most rapidly developing fields of the
economy. The territorial distribution of highly developed manufacturing services is
Horváth, Gyula: The Perspectives of Hungarian Regional Development.
In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 129–135. p. Discussion Papers. Special
still rather concentrated; yet in several countries, owing to well-planned regional
policies, there are signs of deconcentration. At the same time, the process of spe-
cialisation emerging across Europe in this sector indicates that core regions are re-
luctant to give up their positions. The forces of decentralisation, however, seem
more effective, since the prerequisite of the long-term competitiveness of regional
specialisation and regional clustering is the availability of high quality services ca-
pable of ensuring continuous economic revival.
The territorial structure of modern European economy is characteristically or-
ganised into spatial networks. In these networks major cities are the decision nodes
of regional development. Through horizontal co-operation, a strongly coherent re-
gional texture is evolving among these nodes. The development potential of each
geographical area depends on the density of the network there, the presence of in-
stitutions, and the number of decision centres it contains.
The organisation system of the economy is also expected to be shaped by the
present processes. Small and medium enterprises (SME) will retain their two-thirds
weight in the economy, while in the processing industry, depending on the success
of the strategies of the multi-national companies, SME's may slowly increase their
weight. This type of enterprise is an important factor in a country's economic and
social cohesion; owing to their lower capital need, SME's may continue to be an
important actor in the employment of less developed areas, although the qualitative
transformation of the economy and the increased role of regional competitiveness
facilitate the development and networking of medium enterprises and increase the
role of large company contacts.
The third spatial force to be considered in the growth, competitiveness and em-
ployment patterns of Europe is the development of the trans-European networks.
The networked infrastructure of the European peripheries is still a significant bar-
rier in accessing European markets and in the quick circulation of information. A
decisive condition for the peripheries to catch up is the reduction of transactional
costs. The trans-European network development plans of the European Union ad-
dress better accessibility of isolated regions.
The impacts of the long-term processes of territorial development vary in the
different regions and in the different types of settlements. The following trends are
forecasted in the development of urban systems:
-
The global metropolises will continuously strengthen their role as organisers
of the market;
-
The systems of cities will continue to polarise along the high-velocity trans-
port infrastructure;
-
The decreasing role of country borders will transform the hierarchy of cities
and towns;
-
The decline of the industrial cities will continue;
-
The rural belts around major cities and along communication corridors will
become more valuable.
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Horváth, Gyula: The Perspectives of Hungarian Regional Development.
In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 129–135. p. Discussion Papers. Special
The development of rural areas is fundamentally shaped by the agricultural
support system of the European Union. The agricultural reform will have an impact
on the development of rural areas: the diversification of the economic structure and
the slow decrease of population is expected to continue.
The document outlining the long-term development of the European economic
space (the European Spatial Development Perspective) defines the three funda-
mental objectives of development policy as follows:
-
To facilitate the more even territorial distribution of production activities;
-
To support sustainable development;
-
To give increased consideration to particular regional needs.
The integrated European regional development policy aims to achieve these
goals by implementing the following tasks: a) to create a balanced city and town
system with several centres, to establish a new kind of relationship between the
cities and the rural areas; b) to ensure equal access to infrastructure and knowledge;
and c) to protect and develop the natural and cultural heritage.
The future of the Hungarian spatial structure
The transformation towards market economy has brought about significant differ-
entiation in Hungary's spatial structure. Already in the early phase, the advantages
of certain regions were reflected in their higher level of infrastructure, better geo-
graphical location, higher education level of the population and in their eagerness
for modern civilian development. For these reasons, the elements of economic re-
vival have emerged in a territorially rather concentrated manner: the traditional
divide between east and west has become more marked. The agglomeration of Bu-
dapest has strengthened its dominance, and the previous southwest-northeast in-
dustrial development axis was replaced with one along the Gyor-Budapest-Kec-
skemet-Szeged line. The paradigm of networking, however, has also had an effect
in the Hungarian spatial structure; owing to this, the quality of the factors exerting
long-term impact on territorial disparities has effected types different from those
defined by the traditional east-west (or the earlier northeast-southwest) develop-
ment slope. Global economy has a marked presence in the above development zone
(and especially in Budapest). The great number of international joint ventures have
connected this area into international networks. The other, less developed, type of
network consists of less expansive regional economic zones (development islands)
organised around cities or medium towns, sometimes even across country borders.
To the third type belong the backward rural areas excluded from the above net-
works.
Hungary today belongs to the territorially strongly differentiated countries of
Europe. The GDP gap between the most and less developed regions is more than
twofold, 220 percent. Territorial differentiation in Hungary is rather high compared
to EU member states (Figure 1).
131
Horváth, Gyula: The Perspectives of Hungarian Regional Development.
In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 129–135. p. Discussion Papers. Special
Figure 1
Changes in territorial disparities in European countries, 1977-1996
1,() —
0,9 —
0.8 —
0,7 —
0,6 —
0,5 —
0.4 —
0.3-
0,2 —
0.!-
-to
a
-0
ds
in
a
C
tl
-to
c
a
C
-0.l-
-0.1-
lan
ita
as
u.
6
cYD
t
her
L
t
Br
-0,2-
-0,2 -
Ne
Grea
a
-0,3-
-0,3—
-0.4-
-0,5 —
MI Federal system
0.6 —
M Regionalized system
do
M Decentralised system
Es
C)
a.
Unitary system
Note: The difference between the GDP's of the most and less developed regions.
The processes of regional development depend on the general trends of eco-
nomic growth and social transformation. Those elements of the economic and so-
cial structure which have a strong impact on the long-term trajectory of economic
growth and of spatial structure are the following: economic growth, the structural
transformation of the economy, population and employment, the spatial organisa-
tion of the company system, infrastructure development, accession to the EU, the
state of the environment and the system of goals, tools and institutions of regional
policy. From the different realisations of the above factors three scenarios can be
envisioned (Enyedi 1993, 1996). The polarised scenario, certain elements of which
are relevant even today, anticipates the further strengthening of territorial dispari-
ties; favourable changes facilitate the modernisation of the already developing ar-
eas. However, the straight continuation of the development trajectory of the 90's
132
Horváth, Gyula: The Perspectives of Hungarian Regional Development.
In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 129–135. p. Discussion Papers. Special
can hardly be conceived today. Changes of great importance have taken place in
the real processes of the economy and in the system of regional political goals, in-
stitutions and partly in its tools (e.g. the Regional Development Act, The National
Regional Development Concept, PHARE support, the Szechenyi Plan, etc.), which
may shape the spatial structure of the country along the so-called semi-
concentrated scenario.
This scenario is based on the assumption that further polarisation can be halted;
at the same time the scenario does not anticipate radical changes or significant
steps towards decentralisation.
-
The transformation of the economic structure is accompanied by technologi-
cal revival. Knowledge-based sectors become stronger and new groups of
professions appear, with a synergic effect. Hungary starts on the road to-
wards re-industrialisation;
-
In the agriculture, a low-volume, but economically significant, export of
valuable product structure is maintained;
-
High level tertiary and quaternary functions appear in the regional centres,
scientific-technological parks and applied research units emerge linked to the
university centres of provincial cities; they attract industry and become the
dominant scene of re-industrialisation;
-
Migration inside the country remains on the small scale, increasingly moti-
vated by professional mobility;
-
In the traditional transport network, inter-regional lines appear. The transit
potential of the country improves, domestic aviation is established. The role
of provincial cities in international communication becomes stronger;
-
The environmental sensitivity of the society becomes stronger. Owing to en-
vironmental investments, new groups of professions gain ground;
-
This scenario also considers significant territorial inequalities, but expects
remarkable headway towards civil society and does not anticipate the emer-
gence of mass poverty.
In this version of development, the geographical concentration of economic dy-
namism is somewhat reduced; the qualitative elements of growth are still con-
nected to the capital, but the functional expansion of the regional centres and of the
leading medium towns begins.
The deconcentrated scenario anticipates that the present territorial disparities
and tensions in Hungary's settlement network may significantly decrease. This is
based on the assumption that the country, through its steady economic growth, will
gradually catch up with Western Europe. This requires particularly favourable cir-
cumstances: constant European economic boom, accession to the EU and, conse-
quently, significant support for regional development, growing global capital in-
vestments and expanding markets.
-
The restructuring of the economy does not lead to the complete decline of
entire industries; instead, the emphasis is placed on technological revival and
133
Horváth, Gyula: The Perspectives of Hungarian Regional Development.
In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 129–135. p. Discussion Papers. Special
the introduction of new products. Knowledge-intensive and "green" indus-
tries provide the main drive of development, but some areas of heavy indus-
try and the manufacturing of traditional consumer goods also grow;
-
Agriculture, because of its access to two different markets becomes strongly
export oriented: it will offer highly processed products of special quality on
the EU market, while to the markets of East-Central Europe it exports seeds,
breeding stock, know-how and expanded production systems;
-
In the tertiary sector, beside top level business services, public services also
develop, creating new job opportunities;
-
Migration, apart from professional mobility and the tendency of elderly peo-
ple to settle down in rural areas, remains within the confines of small areas.
The population of the major cities decreases, and their agglomeration grow.
The urban zones converge and migration begins towards them;
-
In the development of the infrastructure, apart from the general development
anticipated by the previous scenario, two new elements are expected. One is
the development of inter-regional communication, which would markedly
transform the Budapest-centred nature of Hungary's transport infrastructure,
and its integration into the major European communication systems; the
other is a significant boom in the construction of new homes in most of the
settlement network;
-
With regards to the development of international integration, economic ties
and integration become even stronger than anticipated by the previous sce-
nario. There is a chance to create effective integrating contacts with Eastern
Europe;
-
It is possible to enforce the elements of sustainable development, the im-
provement of the environment becomes important to the society. The rapid
economic growth may severely increase the environmental burdens, and it is
not impossible that environmentally damaging technologies will be used;
-
According to the deconcentrated scenario, territorial disparities in the living
conditions, social structure and income level of the population are reduced.
The society is differentiated, it does have its poor layers, but these people are
not concentrated in certain areas. Instead, they represent everywhere a mi-
nority, which local policy can handle and support properly. Less and less
people belong to marginalized, heavily declining areas, few people suffer
from unfavourable living conditions.
Conclusion
On the basis of the factors that influence regional development we can design the
country's optimal spatial structure to be achieved during the first fifteen years of
the new century, and we can define the tasks required for this goal. When outlining
the future, it is worth considering, beside the processes described above, the ex-
134
Horváth, Gyula: The Perspectives of Hungarian Regional Development.
In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 129–135. p. Discussion Papers. Special
pected effects of European integration: on one hand the impacts of the programmes
aimed at strengthening the cohesion of the European space; on the other hand sig-
nificant additional financial resources coming from the structural funds after the
accession. To make proper use of these factors we can define, on the basis of the
National Regional Development Concept, the desirable texture of the country's
spatial structure and the points through which its elements can connect to the Cen-
tral European regions and to the different units of the European territorial division
of labour.
The future of Hungary's spatial structure fundamentally depends on what de-
centralising strategy the country will follow in the utilisation of new resources after
accession to the EU. For Hungary, the most efficient solution would be complete
decentralisation. This shift of paradigm requires that a new, decentralised scenario
should be prepared. The different scenarios, of course, require different types of
regional policy, different goals and tools, and can be implemented through differ-
ent institutions. In the deconcentrated scenario the state no longer has a dominant
role in regional policy; instead, it allocates substantial resources to the regions. In
the decentralised scenario it is the regional autonomies that utilise the majority of
internal and European Union development resources.
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