There is a financier of Hungarian origin who left with his mother for the United States in 1956. He was fourteen years old at the time. He finished high school in Washington and went on to get a degree in economics at the University of Pennsylvania. That was in 1964. He then continued his studies at Oxford University, earning a law degree. Subsequently he spent most of his time in England. First he worked at the Bank of England, and later he became head of an investment bank. He has been living in Hungary since 1992 and, since he is financially secure, seems to be doing what he enjoys: he teaches at a university, writes interesting articles about economics and finance, and gives interviews. His name is Péter Róna.
I have always been impressed by Róna’s analyses. He talks about the low employment figures, about the fact that 2,8 million people support 10 million citizens. Or, as he put it, while in Hungary one employed person maintains himself and two and half other persons, in the United States one employed person takes care of himself plus one and a quarter others. In France, these figures are even lower. He points out that two hundred thousand people live on assistance which on the average amounts to 55,000 Ft per person. That comes to 200 billion forints a year. Most of these people work on the side (and, of course, below the radar of the tax and assistance offices). It is perhaps not surprising that according to the latest study by the statistical office, 90 percent would be unwilling to work on the books if given the opportunity. The number of people employed in the public sector is very high. Something like 800,000. The local governments are also too big and therefore too expensive.
Róna’s remedy is to my mind less incisive. Basically what he is saying is that Hungary should face the fact that it doesn’t have the population with which to catch up to the more developed west. So rather than imitate the west, Hungary should be more modest and try to find some way to build an economy that does not require a well educated, sophisticated populace. Róna proposes that Hungary should be satisfied with the status of an agricultural country. There is a great opportunity here, he believes. With global warming there is a water shortage almost everywhere, but in the Carpathian basin water pours in from everywhere. Every spring and fall the government makes great efforts to get rid of all the water. Instead, they should build huge reservoirs that could be used for irrigation. Hungary could be a paradise with wonderful vegetables. And the uneducated masses could find employment. According to him at least 500,000 people could be employed in this agricultural industry.
Well, I don’t believe that this is the way forward, though Hungary could certainly do a better job with agriculture than it does now. But Róna is an astute analyst who understands Hungary’s economic woes. And so I’m passing on his comments on the economic results of the referendum. Yesterday he phoned György Bolgár (Megbeszéljük!/Klubrádió) and gave the following assessment of the situation. The Hungarian people voted down co-payment, hospital fees, and tuition. So Hungarians who use these services "saved" about 80 billion forints. But on the other side of the ledger Standard & Poor’s announced a downgrade of its economic outlook for Hungary. That will mean that Hungary will have to pay higher interest rates on government bonds in order to make them more attractive to foreign buyers. According to Róna, Hungary will lose about 100 billion forints as a result of this downgrade. Thus, someone ought to explain to those Fidesz voters who voted with "yes" on the three questions of the referendum that what they took away from their doctors and institutes of higher education they gave to foreign speculators. They ought to love this: they hate foreigners, they hate speculators, and they especially hate foreign speculators.