There are days that I am in a quandary. There are too many topics that should be covered. Every time I find something interesting I jot it down and at the moment I already have five items on my plate. There are, for example, the proceedings of a dreadfully dangerous parliamentary sub-committee that is hard at work falsifying history. Or the allegation that Viktor Orbán was responsible for the disturbances that occurred in September-October 2006. I read a fascinating article about the return of corporal punishment sanctioned by the Hungarian parliament in 1920. Or a comparison of Kazakh and Hungarian media laws. After all, Jobbik is in love with Kazakhstan and the Kazakhs, the closest relatives of Hungarians. According to them.
However, I settled for a more mundane topic, a critique of the New Széchenyi Plan by an economic research institute called GKI Gazdaságkutató Zrt. The economists of GKI didn't find too many positive items in the document György Matolcsy and Viktor Orbán released at the end of July.
The first Orbán government made hay out of the original Széchenyi Plan when in fact it was a modest government attempt at stimulating the economy way back in 2000. Fidesz politicians and government spokesmen talked about the Plan as if it were the ultimate solution to all the economic ills of the country. In reality, relatively little money was allocated to the project–120 billion forints, which as we hear often enough nowadays from MSZP politicians was about the same amount the town of Debrecen received over the last four years from the Gyurcsány-Bajnai governments. However, if one believed all the propaganda surrounding this relatively modest amount of money that was dispersed mostly among Fidesz supporters, one would have thought that it was the most important attempt ever to transform Hungary's economy.
It seems to me that a repeat performance is under way at the moment with the New Széchenyi Plan (Új Széchenyi Terv/ÚSzT). The economists at GKI try to find a few nice things to say about the Plan to sweeten the bitter pills that follow. They consider it a positive that its authors think about the long run, 10-20 years. Perhaps, but as I mentioned a couple of days ago György Matolcsy talks about goals that will be achieved in twenty years without the slightest attempt to point the way toward those goals.
GKI finds something else praiseworthy in the Plan. It is allegedly not the final product but a preparatory document. According to Matolcsy, the government is expecting expert advice, a discussion of the text which they will take into consideration. If you ask me, they will not. They will not because they are unable to put together a coherent plan. Or, perhaps they don't even want to produce a plan that would please GKI's economists because that would require a total reorganization of Hungarian administrative, professional, and economic life from health care to education and public administration. And such reorganization–reforms if you wish–would hurt certain groups' interests. And somehow Viktor Orbán thinks that one can govern in such a way that "no one will be hurt," as he himself said not long ago during one of his television interviews. I have to disappoint Viktor Orbán: one cannot.
After this faint praise GKI comes to the heart of the matter: "This study … in its current form is neither methodologically verifiable or convincing." Desires, wishes, goals are often linked to verbs like "should be" or "must."
I'm not going to go into the fallacies of building a "curative Hungary" here because we've talked about this a lot. Hungarian medical know-how might be excellent (and I even doubt that), but the Hungarian mortality rate and the poor health of the population serve as counter-propaganda to marketing efforts in this direction. There is no discussion of health-care reform in the Plan. But without it–which again cannot be achieved overnight–there is no chance of inducing foreign visitors to seek medical help in Hungary.
The New Széchenyi Plan also spends quite a bit of time on house construction. There is no question that house construction is one of the important indicators of a country's economic well being, but in Hungary there are some fundamental problems with the whole industry. First, there is a severe shortage of capital and, as a result, a whole chain of contractors and subcontractors don't get paid for months on end. Or ever. GKI's critique of the Plan mentions that 60% of owners of newly established companies have already failed once, leaving unpaid bills behind. There are also problems with expertise; there are too many people who simply don't know what they are doing or are doing a substandard job by, for example, using inferior materials. The poor homeowner rarely has the knowledge to supervise the work. I personally visited a luxurious home of some friends where there was a substantial crack, at least an inch wide, on one of the supporting walls. He sued. I don't know how the story ended. Most likely not well.
If I lived in the country I certainly would not buy an apartment in a co-op. Laws governing such dwellings are so poorly written and so toothless that it is practically impossible to make any repairs to the building outside of own's own apartment. Thus, a simple repainting of the stairwell can be stopped by a single owner's refusal to give his consent.
GKI Zrt also has some harsh words to say about ÚSzT's handling of the concept of "employment." According to their verdict, the authors lack an in-depth understanding of the problem that is by now twenty years old. They seem to be unaware of earlier attemps to remedy the situation and the causes of their failure. Often they suggest solutions that have been tried earlier without any results. Our economists concentrate on a chapter called "Lagging behind in employment" which brings up Czech, Polish and Slovak examples. Behind rapid growth there is greater employment. Of course, this is true but only if the people are engaged in work that allows for high productivity. In the countries mentioned it meant foreign investment by large multinational companies. But the New Széchenyi Plan is concentrated on domestic small- or medium-size companies with relatively low productivity.
These are the most important observations. The document is available in Hungarian on GKI's website.