Hungary for Swedish business

Swedish big business is investing increasingly in Eastern Europe, particularly Hungary. Astra Zeneca and Electrolux are among the companies which have operations there. The most recent development is Electrolux's decision to close a vacuum cleaner factory in Västervik, Småland and move production to Jászberény, an hour from Budapest, in the Autumn. 500 Swedes will lose their jobs.

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There are a number of reasons why Hungary is proving to be so attractive. The workforce is skilled and adaptable, as Electrolux chief, János Takács, proudly pointed out to Sunday's GP: "We've demonstrated our capacity. We have high productivity and competence. Our workforce is available and ready for change. We've shown what we can do and that's given us confidence."

Another factor in Hungary's favour is its location in central Europe and its improving infrastructure in the form of motorways and railways.

But of course, the biggest reason is money. Or rather, the saving of it. Ándras Zsótér, the head of the metal workers' union at Electrolux, is under no illusions: "In my experience, the most important driver in the world is money. Bearing that in mind, I don't think it's surprising that they've moved production here. Production is cheaper here than in Västervik." Indeed it is. One of his members earns 3,000 crowns a month, compared to his Swedish counterpart, who earns 20,000. Business tax is also lower and Hungary has a number of other financial enticements to attract inward investment.

There's also a movement in the opposite direction. However, it's individuals moving rather than companies. Monday's GP spoke to Maria Lontai, a psychiatrist from Budapest. She's one of many medical professionals quitting Eastern Europe for Sweden, Örebro in her case. Not surprisingly, the reasons are very much the same: a well-educated workforce at a fraction of the cost. "Doctors' salaries in Hungary are far too low," she said. She's set to earn ten times as much in her new job.

Ms Lontai and the imminently ex-Electrolux staff in Västervik may have differing views on a survey conducted by the American 'Newsweek' magazine, which Sunday's DN reported. It declared Sweden to be the best country to live in due to its average income, health, functioning democracy, economy, environmental awareness and honesty.

'Newsweek' went on to say that the world's major powers had much to learn from 'small countries in northern Europe' and praised Sweden further for its education system, welfare provision and enterprise.

Another survey heralded more mutual back-slapping for 'Sweden AB', when somebody (actually an employee at news agency TT) decided to calculate which country had most companies in the world's top 1000 per inhabitant. The result was a respectable third place for Sweden, behind Switzerland and Hong Kong, with 1.7 top 1000 companies per million inhabitants. Industrial giants such as USA, Great Britain and Japan were left trailing in their wake in 4th, 5th and 9th places respectively.

It wasn't all good news, though, as Thursday's GP pointed out, the number of Swedish companies in the top 1000 has gone down from 20 in 1997 to 15. Some that featured seven years ago, such as Sydkraft and Astra Zeneca, are now foreign-owned.

The workers of Västervik probably don't need any lectures in the effects of globalisation. Neither does Ándras Zsótér in his Jászberény factory: "We have a saying in Hungary: 'the devil never sleeps'. That means you can never relax. Right now, I think Electrolux have long term plans for their operation here, but obviously, if we lose competetiveness, the capital will go elsewhere."