Aid

Aid remains an important source of foreign finance for many countries. The CDI takes account of both aid quantity through their share of national income given as ODA; and of aid quality through their scores in the Quality of Official Development Assistance – QuODA exercise.

Hungary’s aid performance

• Rank: 23

Strengths

• Support to global public goods facilities

Weaknesses

• Small share of aid to poor countries
• Not a member of the International Aid Transparency Initiative
• Low commitment to evaluation and learning
• Low aid volume as a share of the economy

Trade

International trade has been a force for economic development for centuries. The CDI measures trade barriers in rich countries against imports from developing countries. It also penalizes costly importation processes and restrictions against purchasing services from foreigners.

Hungary’s trade performance

• Rank: 15

Strengths

• As a member state of the European Union, Hungary imposes low tariffs on agricultural products including wheat, dairy, some meats, textiles and apparel
• Few limitations on the importation of services

Weaknesses

• As a member state of the European Union, Hungary imposes high tariffs on rice, sugar, vegetables, fruits, nuts and beef
• Many documents required for importation

Finance

Rich-country investment in poorer countries can promote economic growth, help spread technologies, skills, and create jobs. Conversely, policies that permit secrecy can facilitate illicit activities and financial flows abroad. The CDI rewards policies that support healthy investment in developing countries and promote transparency in financial transactions at home as well as globally.

Hungary’s finance performance

• Rank: 18

Strengths

• Provides assistance to companies looking for investment opportunities in developing countries
• Scores above average in the Financial Secrecy Index for regulations in place to promote transparent financial transactions within its jurisdiction

• Weak leadership in extractive industry transparency initiatives
• Negligence in identifying bribery and corrupt practices

Migration

Allowing people to move from poor to rich countries provides unskilled immigrants with jobs, income and knowledge. It also increases the flow of money migrants send home and the transfer of skills when the migrants return. The CDI also rewards countries for enabling students from developing countries to study at their universities, and for sharing the burden of refugees and asylum seekers.

Hungary’s migration performance

• Rank: 25

Weaknesses

• Small number of immigrants from developing countries entering Hungary
• Small share of foreign students from developing countries
• Bears small share of the burden of refugees during humanitarian crises

Environment

Rich countries use a disproportionate amount of scarce resources while poor countries are most vulnerable to global warming and ecological deterioration. The CDI measures the impact of policies on the global climate, fisheries, and biodiversity, all of which affect the lives of those far beyond one country’s borders.

Hungary’s environment performance

• Rank: 3

Strengths

• Low fossil fuel production
• High gas taxes
• Low greenhouse gas emissions rate per capita
• Good compliance with mandatory reporting requirements under multilateral environmental agreements relating to biodiversity

Security

Since security is a prerequisite for development, the CDI rewards contributions to internationally sanctioned peacekeeping operations and forcible humanitarian interventions, military protection of global sea lanes, and participation in international security treaties. It penalizes arms exports to poor and undemocratic governments.

Hungary’s security performance

• Rank: 15

Strengths

• Participates in major international security treaties and regimes

• Relatively small contribution to internationally-sanctioned peacekeeping and humanitarian interventions

Technology

Rich countries contribute to development through the creation and dissemination of new technologies. The CDI accounts for this by rewarding government support for research and development (R&D), and penalizing strong intellectual property rights regimes that limit the dissemination of new technologies to poor countries.

Hungary’s technology performance

• Rank: 24

Strengths

• Provides patent exceptions for research purposes
• Does not impose strict limitations on anti-circumvention technologies that can defeat encryption of copyrighted digital materials

• Low government expenditure on R&D
• Allows patents on plant and animal varieties
• Allows patents on software innovations
• Pushes to extend intellectual property rights in bilateral trade treaties (“TRIPS Plus” measures) that restrict the flow of innovations to developing countries