Hungarian experience of attracting foreign capital to socialist enterprises
For a long time, in the conditions of an "armed-class" approach to peaceful coexistence, the ideologization of international economic relations, the complexity of implementation and the contradictory nature of reforms in Eastern European countries, joint entrepreneurship could not take its proper place in the East—West cooperation system.
The Hungarian experience demonstrates the following alternatives to attracting foreign capital (not counting direct loans) — the creation of a joint company (with various ways of financing investments in further development); partial or full sale of shares of an existing facility; lease of an enterprise built by a foreign company and at the time of commissioning is in its full or joint ownership. All of them have their advantages and disadvantages, but it seems that in each specific case, partners should be able to freely choose the form of cooperation depending on their interests and capabilities.
Proceeding from the fact that the most important tasks of the Government program of economic policy approved by the State Assembly of the Republic of Hungary in 1990 were the structural restructuring of the national economy in accordance with world economic processes and the preservation of the country's international solvency — with attention to the humanitarian sphere and active social policy — we can try to determine the role and place of the above forms of cooperation in their the solution.
The main function of foreign direct investment in the form of joint ventures is, in our opinion, to promote the modernization of the structure of the national economy, the introduction of modern equipment, technological processes and "know-how" in the field of production, the use of international management experience and business enterprise. It is significant that the import of operating capital, unlike bank lending, does not lead to a further increase in Hungary's critically large external debt, but in some cases opens up opportunities for access to new sources of borrowing with the assistance of a Western partner taking on loan obligations. At the same time, a foreign participant in a joint project, in contrast to a bank lender, is directly interested in the highest possible return on invested and borrowed funds and bears its share of risk in their use. At the same time, attracting foreign capital to new joint ventures does not directly improve the current account balance of the country, and may even have a negative impact on it if the volume of exported profits exceeds the corresponding revenues from the export of manufactured products. learn all about how to get wall hacks in fortnite right now
