With the predominantly Budapest-centric policy of the last 150 years, it is no longer possible for Hungary to catch up economically with Western Europe or the successful countries of East Asia and the Middle East. Moreover, without a change of spatial direction, we cannot keep pace with the economic development of our region. The decisive reason for this is that due to Budapest’s internal, inaccessible constraints and decades of megatrends, the Hungarian capital has shrunk globally, possibly remained too large locally, so the world is small and too big for us – explained the Governor of the Magyar Nemzeti Bank appeared opinion.

According to György Matolcsy, between 1873 and 1918, Budapest successfully replaced the capital-deficient Hungarian spatial structure of hundreds of years and accelerated the industrialization, infrastructure development, civilization and modernization of the Hungarian part of the Monarchy as an engine. It achieved this with a radial, railway-based spatial structure, where all the settlements of the Carpathian Basin, directly or indirectly, were strung on the Budapest core. Centralization was well complemented by the decentralized network of large cities in the Carpathian Basin.

Over the next 70 years, Budapest maintained or even increased its central role, but this was no longer able to be offset by the new metropolitan network strengthened in the border lanes, and despite the development of large rural cities, they did not replace the previous system of the Carpathian Basin.

In the two decades of transition between 1990 and 2010, in addition to the Budapest-centric nature, several compensatory changes were launched. György Matolcsy listed here that the local governments received their own property, the foreign greenfield industrial investments came next to the highways, the economic significance of the large universities operating outside Budapest and several large rural cities increased.

The central bank governor sees that in addition to economic policy mistakes

the “unbalanced spatial structure is crucial, but it is hidden that we have approached the average level of development of the EU from only 20 years (from 57 per cent to 66 per cent).

As he wrote, in 2010 Hungary opened a new development phase, which is expected to last until 2030. Restoring financial balances and a turnaround in growth Between 2010 and 2019, we reached 73 percent of the EU average, the best decade in 100 years after Trianon.

We would have achieved a better result if we had added a full turnaround to the growth cycle after rebalancing (in our view, it could be around 86% of the EU average), which has another reason for the lag, namely the spatial stalemate.

Perhaps the last remnant of the dictatorship and planned economy between 1949 and 1989 was the capital burden on the country, he said.

As a positive process, he mentions that

• the vast majority of foreign manufacturing investments come to the economic space outside Budapest.
• The second central city, Debrecen, is rising, and there are dynamic central cities (Győr, Kecskemét, Gödöllő, Veszprém, Székesfehérvár, Nyíregyháza, Zalaegerszeg).

Budapest, on the other hand, is not able to act as an economic engine of catching up.

• The city has not developed an innovative, attractive start-up ecosystem,
• has not made a turn towards quality tourism,
• has not become a European health city,
• with the exception of a few universities in the capital (Semmelweis, Eötvös Loránd University, Technical University), it has not become a European knowledge center, n
• em built a smart city and
• nor was it able to renew its property stock worthy of a European capital.

He also listed strengths about the capital:

• It is an attractive cultural center, so everything that culture can develop.
• Its tourist attraction is strong, so it is also worth developing quality tourism. It is a center for higher education and secondary schools, so strengthening its universities and secondary schools can be a breaking point for catching up.
• It can also be partly European, regional health center and
• you can even build a smart city.

According to György Matolcsy, the lesson is that

• the development of border cities, which became stronger after 1920,
• the construction of the unified Carpathian Basin Economic Space,
• the accelerated development of Hungarian central cities,
• strengthening and connecting the “horseshoe” or “bearing” cities surrounding Budapest (following Norbert Csizmadia), and
• the construction of “circular” transport infrastructure should be placed at the center of the change of spatial structure.

Opening picture: MTI / Szigetváry Zsolt