Russia-Hungary Bilateral Trade Growing At 30% Per Annum
Strategic Alliances Away From EU & Sanctions Influences Fuel Trade Growth
Russian-Hungarian trade turnover increased by 30% in 2018, Russian President Vladimir Putin told reporters after talks with Hungarian Prime Minister Viktor Orban on Wednesday. “Last year, we registered a significant increase in trade turnover, which was almost 30%. This, according to our statistics, is about US$7 billion.” Putin said.
The Russian president added that issues of further increase in bilateral trade are handled by an intergovernmental commission on economic cooperation. According to him, opportunities for further growth were discussed in detail during the commission’s latest session, held in Moscow two weeks ago.
Putin said the two nations are seeking to diversify bilateral trade without placing emphasis on the energy sector alone. Budapest has been critical of EU sanctions against Russia, saying that it has cost Hungary about US$8 billion of Hungarian potential exports to Russia. As a consequence, the two countries have been working together to offset that loss in bilateral trade areas not affected by the sanctions, such as expanding the reach of Hungarian pharmaceutical companies with a manufacturing base in Russia.
While discussing joint industrial projects, Russia and Hungary have also addressed the possibility of manufacturing and modernizing vessels for Hungary’s river fleet. Moreover, Russian companies suggested cooperating in modernizing trains for the Budapest Metro.
Moscow and Budapest have recently and successfully partnered on winning a Joint Tender to supply Egyptian Railways with US$1 billion worth of carriages and equipment.
The fact that Budapest has agreed this joint venture with Russia to service demand in Africa will alarm Brussels. Hungary, an EU member, and Serbia, which was a potential EU candidate member, were highly upset with Brussels over sovereignty and interference issues concerning Brussels insistence it alone was responsible for monitoring the tender process for a proposed high speed rail link that Budapest and Belgrade had put up for tender. The project did not call on EU funding, and a Chinese contractor won. However, Brussels stepped in and asserted authority, demanding the tender be re-issued under EU guidance. This held up the project for three years until it was eventually awarded – to a Chinese contractor.
With such behavior, Brussels managed to upset a full member state, a prospective member state, and China simultaneously. There has been fallout. Serbia has ditched prospective EU membership and signed a Free Trade deal with the Moscow backed Eurasian Economic Union instead. As is now apparent, an EU member state in the form of Hungary is now opting to look for investment and trade opportunities outside the EU and becoming closer to Moscow now than Brussels. It is unlikely that countries such as Hungary would ever leave the European Union, although increases trade ties with Moscow is certainly part of Budapest’s diplomatic remit.
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