1. Miami, 10 May 2006 1 Dr. Árpád Kovács Competitiveness, Sustainable Development and Sustainable Constitutional State

2. Miami, 10 May 2006 2 Outline Adjustment challenges caused by the globalization and integration; Barriers of modernization in Hungary – and probably elsewhere in the world; Goals and methodology; Contribution of audit activities in a country’s modernization; Main tasks; INTOSAI – changes and development Strategy (2005-2010)

3. Miami, 10 May 2006 3 Factors and conditions conducive to competitiveness Cultural and traditional factors Social and political factors State institutions government (public finances) Competitiveness Technological, technical factors Corporate sector International organizations and institutions conditions of integration Global competition, perspectives of the world economy

4. Miami, 10 May 2006 4 COOPERATION PERFORMANCE REGULARITY AUDITING EFFICIENCY Participatory Consensus oriented LEGALITY Economy, effectiveness ResponsiveAccountability Transparency Equitable and inclusive Follows the rules of law

5. Miami, 10 May 2006 5 Growth rate of potential GDP (in percentage) Country1982-19911992-20012002200320042005 Belgium2,1 2,31,92,0 BRD (German Federal Republic)3,91,61,51,6 1,7 Greece1,22,63,13,33,5 Spain2,62,92,82,7 2,6 France2,02,11,92,22,1 Ireland3,67,26,65,25,34,7 Italy2,41,61,81,5 1,4 the Netherlands2,12,82,31,42,21,6 Austria2,32,22,32,1 2,0 Portugal2,8 2,61,6 1,8 Finland2,52,42,82,52,32,5 EMU2,82,12,01,92,01,9 Denmark1,62,32,2 2,1 Sweden2,02,2 2,32,2 UK2,12,62,72,5 2,4 EU-152,62,22,12,0 USA2,93,22,83,0 3,1 Note: No data for Luxemburg. 2004 and 2005 are forecasts. The potential GDP was estimated on the basis of the COBB-Douglas production function. Source: OECD Economic Outlook, 2004. No. 75., 2004/2

6. Miami, 10 May 2006 6 CountryGDP per employeeOutput per hour 1961-19901991-19951996-20002001-20041990-19951995-2003 Belgium3,21,11,40,82,31,6 BRD (German Federal Republic)2,72,11,10,93,51,9 Greece4,20,72,53,10,63,1 Spain4,21,90,70,52,3-0,3 France3,31,51,30,61,41,3 Ireland3,92,93,92,73,64,9 Italy3,52,11,10,02,30,5 Luxemburg2,51,32,8-0,12,31,1 the Netherlands2,71,31,20,61,40,6 Austria3,52,11,90,81,82,3 Portugal4,72,31,80,13,61,6 Finland3,52,92,41,42,6 EMU3,21,71,10,6n.a. Denmark2,12,01,61,52,41,7 Sweden2,22,92,51,42,02,1 UK2,12,71,61,52,91,8 EU-152,91,91,30,72,51,3 EU-10 (new members)n.a. 3,83,3n.a.4,2 EU-25n.a. 1,51,0n.a.1,7 USA1,51,32,12,21,01,9 Note: data for 2004 are forecasts. n.a.: not available Source: European Commission: Economic forecast, Spring 2004, Conference Board Annual productivity growth rate in the EU and the US (in percentage)

7. Miami, 10 May 2006 7 Source: World Competitiveness Yearbook, 2005 Ranking by international competitiveness

8. Miami, 10 May 2006 8

9. 9 USA and Japan: European Commission: Spring 2005 Economic Forecasts, ESA 95 methodology EU 15 countries and Hungary: Eurostat Italics are estimations or coming from different sources.

10. Miami, 10 May 2006 10

11. Miami, 10 May 2006 11 Trends of the major indexes of the central budget (1991-2005)

12. Miami, 10 May 2006 12 Gross sum expenditures CPI Trends of the major indexes of the central budget (1991-2005)

13. Miami, 10 May 2006 13 Expenditures of the Fund CPI Trends of the major indexes of the central budget (1991-2005)

14. Miami, 10 May 2006 14 Expenditures of the Fund CPI Trends of the major indexes of the central budget (1991-2005)

15. Miami, 10 May 2006 15 Thank you for your attention