INSTITUTE FOR WORLD ECONOMICS HUNGARIAN ACADEMY OF SCIENCES REPORT ON ACTIVITIES 2009

INSTITUTE FOR WORLD ECONOMICS HUNGARIAN ACADEMY OF SCIENCES REPORT ON ACTIVITIES 2009 Budapest, 2010

INSTITUTE FOR WORLD ECONOMICS of the Hungarian Academy of Sciences REPORT ON ACTIVITIES 2009 Budapest, 2010 Institute for World Economics of the Hungarian Academy of Sciences H-1014 Budapest, Országház u. 30. Hungary P.O.Box 936, H-1535 Budapest, Hungary 224-6760, 224-6765 vki@vki.hu, www.vki.hu

Contents 1. Outline of the Institute... 5 1.1. Objectives... 5 1.2. Structure... 6 1.3. Financing... 7 1.4. Research Priorities... 7 1.5. Library and Scientific Information Service... 9 1.6. Publication and Dissemination Policies... 9 1.7. International Contacts... 10 2. Principal Research Projects in 2009... 12 3. Major Research Projects Prepared for Hungarian Policy Makers... 21 4. Major Projects in Preparation Financed by Hungarian Research Funds... 23 5. Coordination of and Participation in International Projects... 24 6. Publications... 26 6.1. IWE Publications in 2009... 26 6.1.1. Working Papers... 26 6.1.2. Kihívások ( Challenges in Hungarian)... 27 6.1.3. Műhelytanulmányok ( Workshop Studies in Hungarian)... 27 6.1.4. Vélemények, Kommentárok, Információk ( Opinions, Comments, Information in Hungarian)... 27 6.1.5. Joint Publications... 29 6.1.6. Occasional Publications... 29 6.2. Publications by IWE Staff Members in 2009 (titles in the language of publications)... 33 7. Lectures Delivered Abroad or at International Conferences Held in Hungary (italicized titles in the language of the lecture)... 61 8. International Conferences Organized by IWE in 2009... 71 9. Foreign Guests at IWE in 2009... 73 Appendix... 79

Outline of the Institute 5 1. Outline of the Institute 1.1. Objectives The Institute for World Economics (IWE), as part of the Hungarian Academy of Sciences, carries out research and formulates policy recommendations on an objective, non-partisan basis, since its establishment in 1973 on the institutional background of the former Afro-Asian Research Centre founded in 1965, three years before the first wave of economic reform in Hungary. The Institute has become one of the major policy-oriented international research institutes and economic policy think tanks in Central Europe. Its main task is to study the underlying trends and factors behind global and regional economic developments and their present and future impact on the Hungarian economy. In addition, it sets out to contribute to international research through cooperation with top research institutes throughout the world. Because of its location, history and human and material resources, the IWE is particularly well placed to be a leading centre for research on the integration of Central and Eastern Europe into the global market economy. The change of political system in Hungary, the transition to a market economy as well as the coming enlargement of the European Union and new global challenges have greatly enhanced the importance of world economic research and altered the emphasis of it. The IWE sets out to give strategic support during this historic change of course: by drawing on the Institute's long experience and extensive and effective system of international connections to build up a reformulated programme of research, and by using the techniques of comparative economic analysis and interdisciplinary investigations. The Institute's research philosophy is based on the conviction that the transition to a market economy and the accession to the European Union are not an end in themselves but a means of shifting the Hungarian economy from the periphery towards the mainstream of global economic development. Central to this is the need to modernize, in view of Hungary's modest level of economic development by comparison with Western Europe. International comparisons of the path taken to modernization and the blind alleys to be avoided are being made, in order to identify the key areas in which the Hungarian economy has to catch up and the requirements and means for doing so. Moreover the transition to a market economy is taking place in an international, and particularly a European economic environment of unprecedented upheavals and a system of relations in the process of restructuring. Whereas, on the global scale, some of the other attempts to modernize in the more recent past took place within a stable, predictable system of international relations, the forecast in Hungary's case is that the international economic environment will be uncertain, or at least multidimensional. This country has to build up a system of economic relations that takes account of its comparative advantages against a background of a moving Europe itself undergoing adjustment. The criteria for choosing the IWE's research areas have been the medium-term demands of decisive importance in terms of the processes taking place in the world economy and the adjustment that Hungary must take, coupled with the comparative advantages offered by the Institute itself. This is a pioneer undertaking for the future: instead of resting on short-term, ad hoc requirements, it is built on a long-term strategic demand that must be created in part by the In-

6 Outline of the Institute stitute itself with the demand-oriented nature of its researches. This we see as the way to ensure that the IWE is a professionally respected, authoritative, influential, opinion-shaping institute. These objectives can be served by the Institute's present research staff as a whole. After the appreciable staff losses of the early nineties, the internationally reputed, competitive and highly experienced research team has been replenished with ambitious and productive young researchers. The funds, however limited, granted by the Hungarian Academy of Sciences guarantee the political independence, so providing one of the fundamental external conditions for scientific activity of a high standard. * In 2009, basic conditions for substantive research at IWE were able to rely on a consolidated financial background due in part to increasing cooperation with different government institutions. * IWE, in cooperation with other research institutes (largely belonging to the Academy of Sciences), undertook a coordinative function in developing a medium-term strategy of research priorities on European integration. * Cooperation with leading international and Western European economic institutions was further strengthened. * Demand for IWE's research output by leading Hungarian banks, companies and multinational firms located in Hungary grew substantially. * A special system of fellowships managed by the Academy of Sciences provided an opportunity to employ some young researchers and cover selected basic areas of research. * Interdisciplinary research network has strengthened as the Social Sciences Research Centre came into being in the framework of the consolidation programme of the Academy of Sciences. In the Centre IWE and several other legally and financially independent institutes cooperate concerning political, social, legal, and economic issues. 1.2. Structure The IWE had a research staff of 33 at the end of 2009, and an auxiliary, service staff of 17. As of January 1996, the executive structure was changed. Based on the experience of previous years and the accomplishment of the substantially enhanced research tasks recently, IWE has eliminated the traditional structure based on research centres. In fact, organization of the research activities has never been carried out in a rigid system. In contrast to many institutes, IWE has always stressed the importance of cross-working, and provided opportunity for its staff to become acquainted with research activities of other centres within the Institute. To a substantial extent, growing domestic and international competitiveness of the research staff can be explained by this flexibility. From the beginning of 1996, IWE's internal structure is based on teams organized for special topics and purposes. As a result a research network was created, in which practically each staff member is both the director of one or more research teams and member of other teams, simultaneously. This approach is expected to make research even more efficient, to use available capacities better and deal with priority tasks from different angles. A Research Council created in 1996 and consisting of 9 staff members, including talented young researchers, directs and supervises research activities. In selected areas of ensuring the infrastructure of efficient research, three commissions, each of which consists of three staff members, have been acting (acquisition of books, journals and documents, computerisation, publishing activities). Since early summer 1999 a managing director has also been acting who is responsible for internal and external contacts, communications and public relations.

Structure of the Institute for World Economics Mihály Simai Research Professor Treasur Head: E. General András Inotai Scientific Information Servic Head: A. Kovács Directori- Secretariat Managing Director Éva Nagy Library Commission Computer Commission Publications' Commission Financial Grou Mainten- Servic Librar Sectio Section Internationa Exchange Section Documentation Section of Publication Head: Gábor Fóti Section of International Cooperation and Marketing Head: Anikó Gyorgyovich Secretariat Head: Andrea Vincze Japan, East and Southeast Asia Research Centre Head: András Hernádi Staff Members Printing Various Research Teams Headed by Staff Mem-

Outline of the Institute 7 In order to appropriately cope with growing research commitments, to ensure the education and training of young researchers and to use financial resources more efficiently, a special external research work has been extended, as part of the long-term and deliberate strategy of IWE. 1.3. Financing The tasks laid down in its deed of foundation and the new demands made by the changes taking place in the world economic environment make it essential for the dominance of direct state funding in the Institute's finances to remain. This conclusion is also supported by the widespread international practice of financing institutions that conduct strategic research out of central funds as a way of ensuring a high standard of activity. While strategic research institutes are generally financed in 60 to 70% of their annual budget from central funds throughout the world, contrary tendencies prevailed in IWE's financial situation until 2002, as central funds were limited to basic salaries and their non-wage labour costs. In 2009, however, IWE's total income amounted to HUF 352 mn (about USD 1.6 mn), of which slightly less than 60 per cent was provided by the Hungarian Academy of Sciences and Hungarian research funds. Other major items of income included various domestic sources (15 per cent), participation in international cooperation (4 per cent) and an overhang from fiscal year 2008 (9 per cent). Total expenditure reached HUF 322 mn (about USD 1.4 mn), of which wages, income taxes and social security contributions accounted for almost 68 per cent. Additional major items of expenditure were other research supporting expenses (27 per cent) and communal services and maintenance (5 per cent). The stable and relatively favourable financial situation is the result of the high professional level of the Institute, the attractiveness and practical usefulness of its research results as well as the successful search for new resources. As a rare exception among other academic research institutes, IWE possesses a solid financial background for 2010, which enables it to carry out strategic policy-oriented research and cement longer-term development concepts during the coming years. 1.4. Research Priorities Research activities were characterised by 16 major projects during last year. Contrary to the ruling tendency of the 90s, there was a clear shift from shorter-term to longer-term research in the new decade, though it remained highly policy-oriented still. Five principal research projects were finished during the year (out of which two had a duration of less than a year), and six projects were initiated in 2009. Five research projects started earlier and spread beyond 2009. Research is fundamentally carried out on two basic levels: regional (geographic) and functional. Almost all research projects combine these two approaches, while staff members have to specialise themselves on one regional and at least on one functional topic. Priority areas of research in recent years: (a) Global economic development and transformation the analysis of the global financial and economic crisis and its impacts; the universal issue of economic security; interrelationship of knowledge, growth and globalization; science and technology as a growth factor in smaller economies; sustainable development amid a system of terms under intensive world-market impacts;

8 Outline of the Institute fundamental medium-term changes in the world economy and their impact on Hungary; interactions and human dimensions of global demographic, political, economic, technical and social transformation; globalization and regionalization, with special reference to international capital and labour markets; relevant features and development trends of the new regionalism; role of the transnational companies in the shaping of a new global economic system; current issues of international trade and the role of WTO; interrelation between globalization and economic transformation; basic trends of consumption globally and in Central and Eastern Europe. (b) Economic developments in Europe, with special attention paid to the European Union and Eastern enlargement foreign-policy strategy regarding the CIS countries; the development paths and modernization of selected European countries; relationship between community policies and different national policies; key integration processes in the European Union (common agricultural policy, economic and monetary union, experience of the Union's periphery with catching up, institutional reform, experience of ex-efta countries in the European Union, regional development, budgetary issues, developments in major EU member countries); main features of developmental integration and Eastern enlargement; interdependence between European integration and subregional cooperation. (c) Economic transformation in Central and Eastern Europe comparative analysis of the CEFTA countries; transformation and external trade relations, including the changing pattern of East West division of labour; impact of foreign direct investment on the macro- and microeconomic performance of transforming countries; chances of regional cooperation; economic and political development in Southeast Europe; the structural transformation of Hungarian manufacturing industry. (d) New economic developments in the Asia Pacific Region the elaboration of the Hungarian foreign-policy strategy towards China; the lessons drawn from the Far Eastern economic development; transformation patterns in China and Southeast Asia; the Chinese Diaspora and the chances of a Chinese Common Market ; constant and changing elements in the Japanese model of development; prospects of Korean Hungarian economic relations. (e) Other key research areas human development in Hungary; impact of socio-economic values on the pattern of development; possible scenarios of economic and social development in Latin America; micro-level adjustment and cooperation; the role of infrastructure and services in the modernization process; the role of clusters in regional development policy; the measuring of the efficiency impacts of foreign direct investment;

Outline of the Institute 9 sectoral studies. 1.5. Library and Scientific Information Service The IWE's library is a specialised scientific library with national scope. It contains one of Hungary's most important and most up-to-date collections of books, periodicals and statistics on international economic affairs. Since 2000 the library constitutes part of the United Library for Social Sciences together with the libraries of the Institute for Political Sciences, the Institute for Sociology, and the Institute for Minority Research. Through consistent and constant expansion of the IWE's international relations, about 70% of the books and periodicals, including most of the foreign books, have been acquired on exchange base. This is already the case with some publications of the World Bank, the IMF, the OECD and the EU. In addition, almost three-quarters of the annual increase in value of the stock is accounted for publications that arrive under exchanges schemes or as gifts. This remarkably high proportion by national standards ties in with the Institute's own publishing activity. The task of the Scientific Information Service is to obtain the information required for research work, examine it comprehensively, store it, make it available, and distribute the Institute's publications through the conduct of international publication exchanges. The enlarged library s stock contains more than 250,000 items (including 35,000 archives and almost six hundred kinds of periodicals). Also, the establishment of a CD ROM databank was started and will be further developed in accordance with the financial possibilities of IWE. Last year the Institute was successful in creating the availability of publication distribution via e-mail among all its exchange partners who apply for it. (This may result in substantial savings of postage.) The library's cumulative catalogue can also be searched by the aid of Internet: www.etk.mtapti.hu On the WIIW's (Wiener Institut für Internationale Wirtschaftsvergleiche The Vienna Institute for Comparative Economic Studies) request IWE has joined the WIIW s Countdown project and become its Hungarian coordinator. The project aims at collecting in a joint database the names of Central and East European experts working on the European Union, by indicating their activities and the particulars of published as well as unpublished works on the Union prepared in the Central and East European region, mainly in Hungary and available in the library of the Institute. For information about the library please contact our information service, telephone: (36-1) 224 6759. 1.6. Publication and Dissemination Policies In 2009, the publication policy of the IWE followed in the framework of substantial changes introduced in the early 90s. This publication policy was justified by IWE s growing reputation at home and abroad, its scientific and economy-policy objectives, and not least its aim of influencing public opinion. Seventeen independent volumes explain the sharp decline in the number of studies appearing in the series of the Institute. Last year the series Working Papers, Kihívások (Challenges), and Műhelytanulmányok (Workshop Studies) appeared with 7, 2 and 2 issues, respectively. The Working Papers series in English presents the best and internationally competitive products of research by IWE staff, primarily to the professional public abroad.

10 Outline of the Institute Kihívások, in Hungarian, is designed to inform Hungarian economic policy-makers, members of Parliament, political parties and the broader professional public about current worldeconomic issues, their impact on Hungary and the economic policy measures proposed to be taken. Most of the articles provide clear, readable summaries of significant research work undertaken in the Institute. Műhelytanulmányok, also in Hungarian, presents comprehensive and in-depth analyses, mostly summary reports of major research projects carried out or coordinated by IWE staff members, for the professional community and students of economics in Hungary. The first volume of East European Studies (in English) appeared last year, while volumes four and five with the same title, but in Hungarian, were also published, with different contents of course. Vélemények, Kommentárok, Információk (Opinions, Comments, Information) is a concise series launched late 200l in Hungarian, and meant for the professional public as well as a wider circle interested in domestic and global issues of the day. Fourteen of these short notices appeared in 2009. Our Newsletter (Hírfutár), available only in Hungarian so far, is designed to inform the professional public about the ongoing activities at IWE. The Institute s restructured new homepage on the Internet offers the possibility of interactive communication in addition to the regularly updated information about IWE (www.vki.hu). The publication activities were complemented by occasional volumes reproducing the proceedings of high-level international conferences or comprehending the findings of major international projects run by the Institute. Last year, as underlined before, seventeen such independent books appeared. In 2009, staff members published 55 contributions in foreign languages, including one book and 37 papers contained in books. Sixteen contributions appeared in international journals. In order to disseminate IWE's research findings to a broad interested public as well, the Institute regularly organises open conferences on relevant and topical global and European issues. Teaching represents an increasingly important activity of most staff members. Based on the basic research results and the fundamentally policy-oriented approach of IWE, we experience a rapidly growing need for dissemination on various levels. Staff members teach regularly in universities both in Hungary (Budapest and several universities in major towns) and abroad, while its director general is a visiting professor to the College of Europe, Bruges, Belgium and Natolin, Poland. 1.7. International Contacts The IWE's international relations have traditionally been very extensive, active and useful. In recent years, the Institute has taken part on average in ten to fifteen international research programmes a year, and organized about ten bilateral and international conferences annually. There is close cooperation with some 30 research institutes, scientific institutions and universities. Staff members travel abroad frequently, and the Institute receives visiting foreign researchers in considerable numbers. In the same year, IWE was a member of five reputed international scientific bodies (the EADI, the ECSA, the IFIAS, the UNU, and the Centre for Our Common Future). Close collaboration has been built up with the most influential international agencies (the IMF, the World Bank, OECD, WTO, Unctad, Unesco, UNDP, Unido, Uncitral, ELEC, CIPE, ECE, etc.). Similarly to recent years, in 2009 we were coordinators of and participants in several international projects. IWE has built up a special relationship with various

Outline of the Institute 11 EU organisations and the Friedrich Ebert Foundation in launching new projects, and assumes a leading coordinating role both in research and dissemination of the findings. In 2009, staff members delivered lectures in foreign languages well over a hundred in different parts of the world and at international seminars held in Hungary. Fourteen international conferences were organized in the past year. In addition, IWE s international network includes longer-term stays of its researchers abroad, work contracts of its staff in leading foreign institutes and international institutions. The Institute's medium-term research concept envisages further significant development of its international relations with some alterations in their nature. The initiative hitherto was usually taken by the IWE, but the change of political and economic system has greatly increased the number of foreign research institutes and international organizations proposing cooperation to the IWE. In line with the main directions of Hungary s economic relations, IWE aims particularly to expand its relations with European countries, including the EU and CEFTA, the United States, Japan and the East and Southeast Asian area. The Institute has already become the centre in Central and Eastern Europe for studies of Japan and Southeast Asia, and a regular informal platform for Latin American ambassadors on Hungarian, European and Latin American issues. Extra attention is given to developing scientific ties with neighbouring countries, particularly through joint research projects, and by inviting economists from these countries in order to promote mutual understanding and the flow of information, while also reinforcing IWE's relations with leading international and Western institutions.

12 Principal Research Projects in 2009 2. Principal Research Projects in 2009 2.1. The Breakthrough Strategy of the Hungarian Economy and Society, Challenges in the Global World of Insecurities, on the Historical Crossroad Determined by the European Integration. Project director: András Inotai Participants: Annamária Artner, György Csáki (ext.), David Ellison, Andrea Éltető, Péter Farkas, András Hernádi, Attila Hugyecz, Balázs Lengyel, Judit Kiss, István Kőrösi, Zsuzsa Ludvig, Sándor Meisel, Gábor Monori, Tamás Novák, Margit Rácz, Mihály Simai, Miklós Somai, Andrea Szalavetz, Miklós Szanyi, András Székely-Doby, Tamás Szemlér, Tamás Szigetvári, Judit Szilágyi, Gábor Túry, Krisztina Vida, Katalin Völgyi, Csaba Weiner, Anna Wisniewski Duration: 2009 Summary: For all of 2009, the global financial and economic crisis remained the key priority of theoretical and policy-oriented research for the Institute for World Economics (IWE). The IWE addressed the main changes in the international environment and framework conditions determining both Hungarian outward-oriented economic policy over the last two decades as well as the maneuvering room for policy-making in the altered and continually changing global and European setting. Key topics were (i) the dramatic shift of global economic power relations, (ii) globalization and its impacts and consequences, (iii) adaptation constraints, (iv) the role of international economic institutions and the challenges they face, (v) possible policy responses of the European Union, (vi) Hungary s maneuvering room, and (vii) the state s role in transforming the economy and the welfare state. Research activities have also focused on the role of companies and transnational corporations, including analyses of ongoing changes in the global network structure of transnational corporations. This changing environment has affected the economic strategies of both the state and companies, and has further significantly impacted previous and currently developing theoretical approaches to understanding this environment. The most important results have been summarized in 12 volumes (available on the institute s homepage: www.vki.hu).

Principal Research Projects in 2009 13 2.2. Challenges of International Development Cooperation and Opportunities for Hungary Project director: Judit Kiss Participants: Péter Farkas, Erika Fodor (ext.), Viktor Kutas (ext.), Tamás Novák, Beáta Paragi (ext.), Balázs Szent-Iványi (ext.), Gábor Túry, Sára Vári (ext.) Duration: 2007 2009 Summary: The main goal of the project is to outline Hungarian development cooperation strategy with due regard to the expectations of the donor community, the recipients, the NGOs, the Hungarian taxpayers and business circles. In the first part of the research the major tendencies in the field of international development co-operation policy are going to be revealed with special attention to the strategy and practice of the bilateral donors (DAC countries, EU, European Development Fund) and multilateral agencies. Apart from the interest of the donor community, the expectations of the recipients are also going to be studied with special reference to the Millennium Development Goals and poverty reduction. In the second phase of the research the Hungarian development cooperation policy will be examined with special focus on project implementation, aid effectiveness and cost efficiency. Finally, recommendations will be given for outlining Hungarian development co-operation strategy. The research results will be discussed at a conference and published in a textbook-type publication. Recommendations will also be formulated for the Hungarian EU presidency due in 2011. 2.3. The Possibilities of Employment Policy in the Age of Globalization Project director: Annamária Artner Duration: 2006 2009 Summary: The research project examines Hungarian labour-market developments and the possible employment and social policy in the mirror of international trends and demands, with special regard to the imperatives generated by the demand of world-market competitiveness. As a result of the project the state of affairs and the policy recommendations can help governance and can also be used in third-level education.

14 Principal Research Projects in 2009 2.4. The Reserve Army of the Third Millennium Problems and Social Effects of Labour Market in Globalization Project director: Annamária Artner Duration: 2006 2009 Summary: The three-year research is financed by the Bolyai János Research Fellowship program. It is dealing with the increasing amount of unemployed and atypically employed people. This phenomenon reflects that the need for live labour is decreasing in the production due to the information technologies. On the other hand the sharpening market competition demands longer labour time and more intensive work from those who are in employment. It leads to increasing social tensions being reflected in the activity of civil organizations and spontaneous protest movements. 2.5. EU27 Watch Project directors: Barbara Lippert (ext.), Krisztina Vida Hungarian participant: Krisztina Vida Duration: Summary: Continuous The EU27 Watch is a regularly (biannually) appearing comparative summary and analysis of national positions of the EU member states on topical issues. The issues are defined by the project director and sent out in the form of an extensive questionnaire. The outcome of the research is published every semester in electronic form. The aim of these publications is not only to present for the decision-makers, researchers and the wider public the member states' positions but also to display the underlying motivations and special interests of the countries forming the European Union. The EU27 Watch is financed by the CONSENT project of the European Union's 6 th Framework Programme.

Principal Research Projects in 2009 15 2.6. Russia and the Enlarged European Union Project director: Zsuzsa Ludvig Duration: Summary: Continuous The project aims at analysing EU Russian relations from a multidisciplinary view with special emphasis on economic aspects. Both general historical trends and some most important thematic issues (such as the common economic space, the energy dialogue and the impacts of the enlargement) have been studied through the analysis of official documents and statistics on mutual investment, trade and energy dependence. 2.7. International Experiences of the Use of EU Financial Support Project director: Tamás Szemlér Participant: Klára Fóti, Sándor Meisel, Tamás Novák, András Székely-Doby, Tamás Szigetvári, Judit Szilágyi, Gábor Túry, Krisztina Vida, Anna Wisniewski Duration: 2007 2009 Summary: The research tackles experiences in six areas: 1. the effect of support on investments; 2. the effects of support on employment; the measurement of employment effects; 3. the effects of support on the competitiveness of the SMEs; 4. changes of conditionality of the use of Structural Funds support reasons and effects; 5. changes (aiming at enhancing efficiency) in the evaluation and selection in the tendering process; 6. how to strengthen the spill-over effects of support economic policy experiences.

16 Principal Research Projects in 2009 2.8. The EU Budget Overview: A Survey of the Member-state Positions Project director: Tamás Szemlér Participants: Andrea Éltető, Miklós Somai, Tamás Szemlér, Gábor Túry, Anna Wisniewski Duration: 2007 2009 Summary: The project aims to survey likely member-state positions on the EU budget overview. It includes a survey seeking answers to a number of questions that will most probably appear in the EU budget debate. The survey is based on previous proposals that have surfaced from the European Commission, the European Parliament and the respective Member States; and the timetable and proposal that was published by the European Commission in September 2007. The volume published by SIEPS with the title The EU Budget Review: Mapping the Positions of Member States summarising the results of the project was presented to the international public in Brussels, Budapest, Sofia and Stockholm; it also served as a contribution to the consultation process on the EU budget review launched by the European Commission. 2.9. ACCESS-TR Project directors: TEPSA, Brussels, METU University, Ankara Hungarian participants: Sándor Meisel, Krisztina Vida Duration: 2009 Summary: The ACCESS-TR project aimed at mobilizing local networks within Turkey in order to raise public awareness regarding challenges and opportunities of the Turkish rapprochement to the European Union. The project involved the writing of background papers on different topics and the presentation of these to the audiences in Antalya, Gaziantep and Samsun. The project was financed by the METU University from IPA (Instrument for Pre- Accession) funds.

Principal Research Projects in 2009 17 2.10. Monitoring Report on the Performance of the New Member States in the European Union Project director: Krisztina Vida Participants: Duration: Summary: David Ellison, Sándor Meisel, Tamás Novák, Miklós Somai, Tamás Szemlér, Gábor Túry, Krisztina Vida, Anna Wisniewski Continuous The aim of the project is to compare along a set of political, legal, economic and social aspects the performances of the ten new Central and Eastern European member states in the European integration. During 2009 research continued. The next publication which will also tackle the impact of the crisis on the new member states is due in the spring of 2010. 2.11. Hungary's CIS Strategy with Special Regard to Russia, Ukraine and Kazakhstan Project director: Zsuzsa Ludvig Participants: Ilvija Bruge (ext.), Karlis Bukovskis (ext.), András György Deák (ext.), Alexander Duleba (ext.), Andrea Éltető, Heyets, Valery (ext.), Attila Hugyecz, Tatyana I. Iefymenko (ext.), Dávid Karácsonyi (ext.), Szilvia Kiss, Petr Kratochvill (ext.), Petra Kuchynkova (ext.), Ella M. Libanova (ext.), Miklós Losoncz (ext.), Sándor Meisel, Tamás Novák, Sándor Réthi (ext.), András Rácz (ext.), Mihály Simai, Tünde Simon (ext.), Miklós Somai, István Szabó (ext.), Tamás Szemlér, Tamás Szigetvári, Krisztina Tarjányi (ext.), Astrov Vasily (ext.), Csaba Weiner Duration: 2007 2009 Summary: The main goal of the project is to develop and update knowledge about the post-soviet area by launching new research schemes following up by publishing the results. During the first two years of the project special emphasis has been given to the complex issue of post-soviet integration and disintegration processes in the CIS space, and to the most important foreign realtions of Russia (and partly of Ukraine), such as the relations with the EU, the US and China. The ultimate goal of the project is to establish a kind of virtual CIS centre that can gather all professional Hungarian knowledge on the CIS region from the state, business and academic sectors. The project launched its own homepage and series of Newsletters. The Institute for Sociology of the Hungarian Academy of Sciences participates as copartner in this strategic research project. IWE s Russian and Ukrainian partner institutes are also involved in these research activities.

18 Principal Research Projects in 2009 2.12. Community Building and the Integration of Minorities as a Condition of Successful State-building in Bosnia-Herzegovina, Kosovo, Voivodina and Kraina Project director: Tamás Szemlér Participants: Zsuzsa Ludvig, Tamás Novák, Judit Szilágyi Duration: 2008 2012 Summary: The research examines the question whether (and if it is, how) the successful integration of minorities in four different parts of the former Yugoslavia (Bosnia-Herzegovina, Krajina, Vojvodina and Kosovo) is possible on the long run. We would like to examine the processes in all areas in several dimensions, trying to compare official political declarations and reports (from the part of the states concerned as well as from the international community) to the real situation and tendencies on the spot. The main value of this research could be to provide detailed information on the real situation (concerning the political, social and economic conditions or barriers) of the integration of minorities, of maintaining and strenghtening their autonomy, going far beyond (or being even in contrast with) widely known stereotypes. Taking into account the complexity of the analysed topic, the research is one of interdisciplinary character, synthesising analyses of economics, political science and sociology. Empirical research carried out on the spot (field research) plays an outstanding role in this process. 2.13. How Can and Should New Member States (NMS-10) Influence the Future of the European Integration? Project director: András Inotai Participants: Sándor Meisel, Tamás Novák, Miklós Somai, Tamás Szemlér, Tamás Szigetvári, Gábor Túry, Krisztina Vida, Anna Wisniewski Duration: 2009 2010 Summary: The aim of the project is to map and analyse the interest representation capacities/behaviour of the ten new member states at the EU level. It is also important to evaluate how and in which areas could and should these countries cooperate closer, in order to assert their common interests jointly (and thereby with greater efficiency) within the Union. The project is run and financed by the Friedrich Ebert Foundation.

Principal Research Projects in 2009 19 2.14. Establishing Hungary s China Strategy Project directors: Participants: András Inotai, Ottó Juhász (ext.) Klára Mészáros, Ágnes Szunomár (ext.), Barna Tálas (ext.) Duration: 2007 2009 Summary: The Institute for World Economics has been involved in a major China project with the Hungarian Prime Minister s Office since 2006. As a result of this strategic research, some aspects of China s internal development and international relations have been analysed. The first year of this project produced about 15 studies, two conferences and one book for the time being only in Hungarian. The project will continue in 2007 08. In this stage, we are planning to organize a regional network of experts and younger people dealing with or interested in China not only in Hungary but also in the countries of Central and Eastern Europe. The main aspects of the persistent research are the following: Internal reforms in the People s Republic of China Foreign relations China and the Commonwealth of Independent States Foreign relations China and the European Union Chinese people living in Hungary Hungarian Chinese relations 2.15. Domestic and International Trends in Consumption Project director: András Hernádi Duration: Summary: Continuous On the basis of the concept that consumption precedes and practically determines production, research was focused on whether Central East European economies and societies, and especially Hungary, can have an identity and follow a model different from that of international trends. A Spelling-book in the field appeared last year.

20 Principal Research Projects in 2009 2.16. Russia in the Global System and in Europe. Main Factors Affecting the Relations between the EU and the Russian Federation and Their Effects on the Russian Hungarian Relations Project director: Mihály Simai Participants: Sándor Almásy (ext.), Péter Farkas, Zsuzsa Ludvig, Csaba Weiner Duration: 2007 2011 Summary: The project funded by OTKA (Hungarian Scientific Research Fund) was launched in late summer 2007. It is arranged in four parts. Part 1 focuses on the role of the Russian Federation in world politics from geopolitical and security perspectives, with a view to relations with the major international actors, i.e. the United States, China and the EU as well as its large member states, etc. Part 2 is devoted to analyze the main factors having influence on the long-term development of the Russian economy, including research in the areas of human resources, demographic issues, R&D, energy policy and agricultural and industrial transformation. Part 3 evaluates Russia s position in the international economy concentrating on the trade of goods, FDI inflows and outflows and the WTO accession process. Finally, part 4 deals with the amending Hungarian Russian relations after the change of regime outlining historical patterns, bilateral trade, mutual investments and future dimensions.

Projects Prepared for Hungarian Policy Makers 21 3. Major Research Projects Prepared for Hungarian Policy Makers Prepared for the PRIME MINISTER S OFFICE in cooperation with ECOSTAT Analysing the Global Financial and Economic Crisis Project director: András Inotai Prepared for the HUNGARIAN ACADEMY OF SCIENCES and the PRIME MINISTER S OFFICE Challenges of International Development Cooperation and Opportunities for Hungary Project director: Judit Kiss Hungary's CIS Strategy with Special Regard to Russia, Ukraine and Kazakhstan Project director: Zsuzsa Ludvig Establishing Hungary s China Strategy Project directors: András Inotai, Ottó Juhász Prepared for the MINISTRY OF FOREIGN AFFAIRS Hungary's Foreign Policy Strategy Project director: András Inotai Project coordinators: Péter Farkas, Tamás Novák, Margit Rácz Strategy of International Relations. Strategical Issues of Successful EU Membership Project coordinator: Sándor Meisel The Integration (Internal) Factors of Successful EU Membership Project directors: Péter Balázs, Margit Rácz Prepared for the NATIONAL OFFICE FOR REGIONAL DEVELOPMENT Possible Role of Hungary in Central, Eastern and Southeast European Co-operation for Regional Development Project coordinator: Centre of Regional Studies for the Hungarian Academy of Sciences West Hungarian Research Institute Project participant: Csaba Weiner

22 Projects Prepared for Hungarian Policy Makers Prepared for the MINISTRY OF ECONOMY AND TRANSPORT Investment Needs of Southeast European Countries as a Result of Stabilisation and Association Process Project participant: Tamás Novák Prospects of Hungarian Capital Exports Project coordinator: Annamária Artner Environmental Assessment of the Hungarian Logistics Strategy Project coordinator: Tamás Fleischer Domestic Steps of Impact Assessment and Actions in Connection with the Climate Change (KLIMECS) Project participant: David Ellison, Tamás Fleischer and Attila Hugyecz Prepared for the NATIONAL DEVELOPMENT AGENCY International Experiences of the Use of EU Financial Support Project coordinator: Tamás Szemlér The Future of the Lisbon Strategy of the EU Project participant: Krisztina Vida

Projects Financed by Hungarian Research Funds 23 4. Major Projects in Preparation Financed by Hungarian Research Funds OTKA * Research topic Coordinator Period The Possibilities of Employment in the Age of Globalization Annamária Artner 2006 2009 The Opportunities of Employment Policy in the Age of Globalization: International Trends, Hungarian Prospects Annamária Artner 2006 2009 Russia in the Global System and in Europe Mihály Simai 2007 2010 Community-building and the Integration of Minorities as a Condition of Successful State-building in Bosnia-Herzegovina, Kosovo, Voivodina and Kraina Tamás Szemlér 2008 2012 János Bolyai Research Fellowship The Reserve Army of the Third Millennium Problems and Social Effects of Labour Market in Globalization Annamária Artner 2006 2009 NKTH ** Small Enterprise Development in Agglomerational and Dynamic Clusters International and Hungarian Experinces Miklós Szanyi 2007 2009 * OTKA = National Research Fund for Social Sciences ** NKTH = National Research and Technology Office

24 Coordination of and Participation in International Projects 5. Coordination of and Participation in International Projects The EU Budget Overview: A Survey of the Member-state Positions Coordinator: Swedish Institute for European Policy Studies (SIEPS) Hungarian coordinator: Tamás Szemlér EU27 Watch IEP TEPSA Project Coordinator: Institut für Europaische Politik, Berlin Hungarian coordinator: Krisztina Vida Ukrainian Economy in Europe Coordinator: Austrian Science and Research Liaison Office (ASO) in Budapest Hungarian participant: Zsuzsa Ludvig The Global Social Situation in the Early 21st Century Coordinator: United Nations, Social Division, New York Hungarian participant: Mihály Simai Eurointegration Challenges in Hungarian Ukrainian Economic Relations Coordinator: Institute for Economic Forecasting, Ukrainian National Academy of Sciences Hungarian participant: Zsuzsa Ludvig Multinationals and Local Resources Coordinators: Institute of Economic Research, Hitotsubashi University, Institute of Sociology, HAS, Institute for World Economics, HAS. Project participant: Miklós Szanyi ACCESS-TR TEPSA METU Project Coordinator: TEPSA, Brussels and METU, Ankara Hungarian coordinator: Krisztina Vida Relocalización productiva en la Unión Europea (UE) y convergencia en las industrias de media y alta tecnología: Un análisis comparativo entre España y los nuevos estados miembros (Productive Relocation in the EU and Convergence of the Medium and High-technology Industries: a Comparative Analysis between Spain and the New Member States) Complutense Institute for International Studies, Madrid, Spain. Hungarian coordinator: Andrea Éltető

Coordination of and Participation in International Projects 25 The Role of Outward Foreign Direct Investments in the Visegrád Countries in Strengthening Regional Integration with Special Regard to Economic Cooperation Coordinator: Visegrád Fund Hungarian coordinator: Andrea Éltető Trade and Investment Co-operation Policy between the EU and Korea since the Eastern Enlargement Seoul European Institute, Konkuk University Hungarian coordinator: Sándor Meisel Mobilizing Local Networks for a Better Informed Dialogue on Turkey s Accession to the EU Access-TR Project of TEPSA-METU Hungarian coordinator: Sándor Meisel The Effects of Phasing out the Single Payment and Single Area Payment Coordinator: EFRA and Economic Policy Institute, Sofia Hungarian coordinator: Miklós Somai The Unfinished Business of Fifth Enlargement European Policies Initiative 2009 Coordinator: Open Society Institute, Sofia Hungarian coordinator: Miklós Somai IIW IWE joint project EU-Strukturwandel, regionale Innovationsdynamik und Clusterbildungsoptionen in der Wissensgesellschaft Hungarian coordinator: Andrea Szalavetz

26 The Institute s Publications in 2009 6. Publications 6.1. IWE Publications in 2009 6.1.1. Working Papers No.187 Péter CSIZMADIA, Miklós ILLÉSY, Ichiro IWASAKI, Csaba MAKÓ, Magdolna SASS and Miklós SZANYI Clusters and the Development of Supplier Networks for Transnational Companies. 34 p. No.188 Zsuzsanna TRÓN Examining the Impact of European Regional Policy. 21 p. No.189 Mihály SIMAI The Evolution of a Post-crisis World: New Trends and Structures in a Turbulent Global System. 56 p. No.190 Andrea SZALAVETZ Transformation and Catch-up Issues in Hungary, Examined in Network Alignment Terms. 18 p. No.191 Ichiro IWASAKI Péter CSIZMADIA Miklós ILLÉSSY Csaba MAKÓ Miklós SZANYI The Concentric-Circle Model of FDI Spillover Effects. Estimation Using Hungarian Panel Data. 44 p. No.192 Tamás SZIGETVÁRI The European Neighbourhood Policy. Concept, Practice, Future and the Priorities of Hungary. 19 p. No.193 Tamás FLEISCHER Transport Policy in the European Union from an Eastern Perspective. 17 p.

The Institute s Publications in 2009 27 6.1.2. Kihívások ( Challenges in Hungarian) No.194 Miklós SZANYI Válságelemzés. 12 p. (Crisis Analysis) No.195 Péter FARKAS Új tartalékvaluta-rendszer a válság után? 8 p. (A New Reserve-currency System after the Crisis?) 6.1.3. Műhelytanulmányok ( Workshop Studies in Hungarian) No.82 Tamás FLEISCHER Klímaváltozás közlekedés és települések. 23 p. (Climate Change Transportation and Settlements) No.83 Tamás SZIGETVÁRI A posták lehetséges szerepe a digitális kormányzás megvalósításában a nyugat-európai országok példáján. 18 p. (The Possible Role of Post Offices in E-government. The Example of Western European Countries) 6.1.4. Vélemények, Kommentárok, Információk ( Opinions, Comments, Information in Hungarian) No.172 Gábor TÚRY Szlovákia. A nagy menetelés. 2 p. (Slovakia. The Big Marching) No.173 Annamária ARTNER Gödörben a Kelta Tigris? 2 p. (Is the Celtic Tiger in a Hole?)

28 The Institute s Publications in 2009 No.174 Kálmán DEZSÉRI A globális pénzügyi válság hullámai Közép- és Kelet-Európában. A kilábaláshoz vezető út egyik fő eleme ennek a régiónak a megtámogatása. 2 p. (Impacts of the Global Financial Crisis on Central and Eastern Europe. One of the Major Factors of the Way Out Is the Support to the Region) No.175 Margit RÁCZ Okosabbak lettünk a vasárnapi EU-csúcs után?! 2 p. (Are We Any Wiser after the Sunday EU Summit?) No.176 András INOTAI Használjuk ki a gyenge forint előnyeit! 3 p. (Let s Gain Advantage from the Weak Forint!) No.177 Mihály SIMAI A G20-ak londoni csúcsa és a magyar gazdaság. 2 p. (The London Summit of the G20 and the Hungarian Economy) No.178 Sándor MEISEL Keleti partnerség. Hogyan? Tovább? 2 p. (Eastern Partnership. How? Further?) No.179 Péter FARKAS A világgazdasági növekedés kilátásai a következő években. 2 p. (World Economic Growth Prospects in the Coming Years) No.180 Miklós SZANYI Válság és versenyképesség. 2 p. (Crisis and Competitiveness) No.181 Mihály SIMAI Összefoglaló a G8 2009-es aquilai tanácskozásáról. 2 p. (Summary of the G8 2009 Aquila Discussion) No.182 Mihály SIMAI A G20 Pittsburgh-ben. 2 p. (The G20 in Pittsburgh)

The Institute s Publications in 2009 29 No.183 István KŐRÖSI Pályamódosítás vagy új útkeresés. Németország a választások után. 2 p. (Course Correction or New Path Finding. Germany after the Elections) No.184 Krisztina VIDA Gondolatok az ír népszavazásról és az EU reformjáról. 2 p. (Thoughts about the Irish Plebiscite and the Reform of the EU) No.185 Kálmán DEZSÉRI Kihívások a közpénzügyek előtt. 2 p. (Challanges to Public Finances) 6.1.5. Joint Publications András INOTAI Ottó JUHÁSZ eds. Kína politikai, társadalmi fejlődésének jelene és jövője (The Present and the Future of China s Political and Social Development), A változó Kína. Stratégiai Kutatások, 1. kötet (The Changing China. Strategic Researches, Vol. 1.), Budapest: IWE Miniszterelnöki Hivatal (Prime Minister s Office), 205 p. Kína a nemzetközi politikai erőtérben (China in the International Field of Politics), A változó Kína. Stratégiai Kutatások, 2. kötet (The Changing China. Strategic Researches, Vol. 2.), Budapest: IWE Miniszterelnöki Hivatal (Prime Minister s Office), 356 p. A Magyar kínai kapcsolatok fejlesztésének néhány területe (A Few Aspects of Developing Hungarian Chinese Relations), A változó Kína. Stratégiai Kutatások, 3. kötet (The Changing China. Strategic Researches, Vol. 3.), Budapest: IWE Miniszterelnöki Hivatal (Prime Minister s Office), 183 p. Kína a nemzetközi gazdasági erőtérben (China in the International Economic Field), A változó Kína. Stratégiai Kutatások, 4. kötet (The Changing China. Strategic Researches, Vol. 4.), Budapest: IWE Miniszterelnöki Hivatal (Prime Minister s Office), 237 p. 6.1.6. Occasional Publications Péter FARKAS ed. Világgazdasági súlyponteltolódások (Shifting Focuses in the World Economy), A globális válság: hatások, gazdaságpolitikai válaszok és kilátások, 1. kötet (The Global Crisis: Impacts, Economic Policy Answers and Outlooks, Vol. 1.), Budapest: IWE, 142 p.