The Hungarian socialists’ program

As I reported earlier, the programs of Magyar Demokrata Fórum and Jobbik have already appeared. I outlined these programs at the time of their appearance. Both are available online. MDF's program, Munka és méltóság (Work and Dignity), can be found on the MDF website and Jobbik's lengthy program, "Radikális változás" (Radical change), is also available. I spent quite a bit of time on Jobbik's program and someone, most likely a Jobbik sympathizer, predicted that I wouldn't dwell much on the MSZP program. Another person couldn't understand why I kept complaining about the lack of a Fidesz program when there was no MSZP program either.

However, I knew that there was going to be an MSZP program. First of all, they always had one and, second, the socialists complained so much about the lack of a Fidesz program that it would have been impossible not to come forward with one. But I also knew that it wouldn't be available before the end of February. I think that they should have come up with the program earlier. Moreover, I think that from their own vantage point it was not a very good idea to start the actual campaigning so late. I suspect that the program wasn't ready. The economic and political advisors were most likely still madly trying to put together a viable and believable program. There might also have been quite a bit of wrangling about the details among the party leaders.

Because the program is over fifty pages with rather small print I will not be able to summarize it all. In fact, I managed to read only about a fifth of it so far. My initial impression is that the economic predictions on which the possibilities for the next four years are based are perhaps a tad too optimistic. But before we go into these economic predictions let's talk briefly about the title of the program: "Nemzeti modernizáció, összetartó közösség" (National modernization, cohesive community). Even earlier I noticed that  Attila Mesterházy Mesterhazy was talking about "national modernization" instead of simply "modernization" as Ferenc Gyurcsány or Gordon Bajnai did. I thought that it was a silly attempt to look terribly patriotic. If everything is "national" with Fidesz and if the right claims that MSZP is not patriotic, here is the remedy. Let's make that modernization "national modernization." However, those who are convinced that the socialists are traitors to the national cause will not think differently just because "national" is put in front of modernization.

The program begins with a brief outline of accomplishments between 2001 and 2008. They leave out 2009 with good reason. It was in October 2008 that the international financial crisis hit Hungary and from there on the government could only try to keep its head above water and save the country from total collapse.

That the socialists would emphasize their accomplishments was expected months ago because after all if one listened only to Fidesz one would be convinced that Hungary is in shambles. There were Fidesz politicians who actually compared today's situation to what Hungary faced in 1945 after a lost war when half the country was in ruin. As a result of all this negative propaganda Hungarians themselves began to believe that they are poorer today than during the Rákosi regime.

So, what do the socialists see as their accomplishments? First and foremost, Hungary's GDP grew by 25 percent between 2001 and 2008. Even after the international financial crisis the GDP is 16 percent higher than in the last year of the Orbán government.

In comparison to 2002 the value of Hungary's exports doubled. In 2008 it amounted to more than 73 billion euros. Foreign investment at the end of 2008 was 61 billion euros. Between 2002 and 2008 new foreign investment averaged more than 4 billion euros a year. During this period Hungarian companies aggressively moved into foreign markets: yearly Hungarian companies invested about 2 billion euros. By the end of 2008, 11 billion euros worth of Hungarian capital investment occurred outside of the borders. The budget deficit that was very high at the end of the Orbán government and even higher in the Medgyessy period is now under 4 percent.

In 2001 the average gross income of a wage earner was 104,000 Ft out of which the take home pay was 65,000 Ft. The current average gross income is 205,000 Ft. and the take home pay is 141,000 Ft. As of this year because of the tax reform employers will save 700-800 billion Ft. The personal income tax was also lowered, and thus the average wage earner will save about 36,000 Ft a year.

Having pointed out their accomplishments, the socialists move on to their plan for national modernization. The program rightly points out that Hungary's economic situation in the future will depend in large measure on the state of the global economy. For them the most important task is job creation. However, they admit that the rate of employment, at the moment very low in comparison to other European countries, will grow only slowly. They figure about 1 percent a year. That is, if I figure correctly, about 30-35,000 jobs a year as opposed to Fidesz's magic 100,000 or 1 million in ten years which, according to practically all responsible economists, is well nigh impossible.

They hope that gross incomes "may be about 20 percent higher in four years" than now. If taxes are lowered that figure may even climb to 25 percent. Real wages, assuming a rate of inflation of between 2.5 and 3 percent per year, are expected to climb by about 12 percent in four years.

The other day I heard a conversation with a liberal economist who was very much down on some of the points of this program. The whole program was not available yet, but word got out that "the government wants to introduce the Tobin tax." The Tobin tax would be a 0.05 percent tax on all financial transactions. Our liberal economist found the idea ridiculous because, as he said, no country can unilaterally introduce such a thing. The program, however, says only that "the government would support the introduction of the Tobin tax suggested by international forums." Well, that's a different kettle of fish.

Péter Róna, whose name I just mentioned in connection with Viktor Orbán's plagiarism case, has been very hard on the government's support of multinational companies. He claims that they actually don't help the Hungarian economy. The view of the party program is different. According to the program, multinational companies employ about 250,000 people, and therefore if they manage to form a government they will continue to give as many financial breaks to these companies as the European Union allows.

And finally, at least for today, the program outlines strategic economic activities in which Hungary can be competitive: the pharmaceutical industry, biotech, logistics, the automobile industry, energy in the sense of building pipelines (Nabucco and Southern Stream) and gas storage facilities that in turn would stimulate the construction industry. There are many service centers of foreign companies already in the country and further development of such facilities should be encouraged. Hungary might also be competitive in information and communication technology, as well as agriculture and the food industry.

On the whole I find the program well constructed, although perhaps too optimistic. At least the socialists outlined a program that can be argued with or criticized. We still know nothing about what Fidesz is planning to do. Moreover, just yesterday Viktor Orbán pretty well admitted that they don't have an economic program yet. They will work it out after the elections.

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Mark
Guest
Yes, but what are the MSZP going to do to make all this happen? I have actually read the full programme … and in my professional capacity I’ve also read a lot of five-year plans from the state socialist era. And, guess what? They’re similar. They talk about which industries the government will develop, and how much real wages will rise over the plan period, in the belief that somehow either the government will do this (or in the MSZP’s case, assume this will automatically happen). Of course they are silent about 2009, because they’ve spent most of it supporting a government whose economic policy is based on the premise that Hungary’s economic problems are a product of the irresponsible policies they themselves pursued (and that if they only correct these, magically confidence and those investors will return). This leaves them with a political problem, because (1) either Bajnai is right, in which case many of their claims about the 2002-8 period would have been better not made, or (2) they were managing just fine, in which case it wasn’t necessary to support Bajnai (I believe in neither position). But that aside one ought to really know from a programme… Read more »
Eva S. Balogh
Guest

Mark: “Really, they should have followed FIDESZ and not issued a programme – at least that was more honest, because let’s face it, the MSZP don’t really have one either. They’re just pretending they do.”
Because I haven’t read the whole thing I can’t really pass judgment. However, Tamás Mészáros in today’s Újságíró Klub gave a glowing description of it. I just have to wait until tomorrow and decide whether you or Mészáros is right.

Thrasymachus
Guest

Not that accuracy’s ever been a feature of this blog. But Jobbik’s manifesto for the European Elections of 2009 was the one called “Magyarország a Magaroké,” or ‘Hungary belongs to the Hungarians.’
Their manifestio for the 2010 General election is called “Radikális Változás,” or ‘Radical Change.’
Details details… shows how much you’ve been paying attention, doesn’t it? Well I suppose we can forgive you, the appearance of the szoci manifesto must have you skipping about like a giddy schoolgirl. So you’ll forgive me if I don’t linger for the appearance of any form of critical analysis.

Sandor
Guest

I for one, my dear Thrasymachus, not only forgive, but outright thank you for not lingering. What tender mercy!

Thrasymachus
Guest

@Sanyi
I live only to serve.
But I can understand your trepidation, Jobbik is after all the party that “abuses freedom and democracy,” which is what Bajnai tells us.
And given that this is the man who had, on the same day, coordinated the dismantling of two decades of Hungarian free speech, and made thought-crime a reality in Hungary once again. Punishable by three years in prison, no less. Well…
He should know, shouldn’t he?

Paul Hellyer
Guest

@Thrasymachus
In the interests of increasing the amount of accuracy on this blog, can you substantiate the claim that Bajnai “dismantl[ed] … two decades of Hungarian free speech, and made thought-crime a reality in Hungary once again”?

Vándorló
Guest
@ESBalogh: When you look at cause and effect one would normally start by making it clear which things happen ‘as a result of’ (clear causal relationship) and those which happen ‘despite’ (no causal link). In the latter case there is clearly no relationship between the actions and outcomes. So is the case when looking at the results of government actions. GDP, earnings etc… would these have grown anyway and should they have grown more? What were the costs of such growth (bad debt, increased social division etc…)? And can we expect anything to have been learnt by MSZP under Bajnai’s leadership, mopping up the slops Gyurcsány left? Seems not ‘Bajnai and the MSZP’s clearly visible divisions’ (“Bajnai és az MSZP látványos szakítása”) http://hvg.hu/itthon/20100223_bajnai_gordon_mesterhazy_attila_mszp : ‘In socialist circles there was the dilemma as to what extent they should support the achievements of Bajnai’s government and how big a part the PM should play in the campaign. Well, ultimately Bajnai has a passive role, while the socialists prefer to go back to their 2002 campaigning based on promises and handouts. – according to Péter Krekó political analyst for HVG’ (“A szocialisták körében volt egyfajta dilemma, hogy milyen mértékben támaszkodjanak kampányukban a Bajnai-kormány… Read more »
Eva S. Balogh
Guest

Paul Hellyer: “In the interests of increasing the amount of accuracy on this blog, can you substantiate the claim that Bajnai “dismantl[ed] … two decades of Hungarian free speech, and made thought-crime a reality in Hungary once again”?
I guess our T is referring here to parliament’s passing a law yesterday that makes holocaust denial a punishable crime. The vote was 197 yeahs, 1 nay, and 142 abstentions. Fidesz members abstained.

Vándorló
Guest

@ESBalogh: I just thought I’d help you in answering my first point about cause and effect, on whether GDP growth was due to the government or despite government actions and on whether this could have been better etc…
HVG again publishes some advice coming from the OECD data which clearly shows that in real terms what is called the average purchasing power parity (PPP) has been stagnant in Hungary since, you guessed it, 2004. All through Gyurcsány’s reign of torpor.
As they make clear: ‘Hungary’s market competitiveness was in tatters well before the economic crisis…’ (“Magyarország versenyképessége már a válság előtt is romlott…”) ‘OECD advice for Hungary’ (“OECD-ajánlások Magyarországnak”) ref: http://hvg.hu/hvgfriss/2010.07/201007_oecdajanlasok_magyarorszagnak
It has the usual advice about tax, size of government (local and national), transparency of public contracts etc…

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