Until now relatively few critical words could be heard from economists who are considered to be closer to Fidesz than to the socialists or liberals. László Csaba, who used to be a harsh critic of MSZP-SZDSZ governments' economic policy, was the first to raise his voice. It was in February that in an interview with Heti Válasz he had a few choice words to say about the lack of a coherent economic policy. What the Hungarian government does is a series of improvisations and ad hoc decisions, he claimed. He also criticized the government's partisan politics in which everything is subordinated to the desire to fill every post with party faithfuls. When he was asked whether he would accept a position on the Monetary Council of the Hungarian National Bank, he made it clear that he wouldn't. Those who are interested in László Csaba should take a look at his tasteful English-language website.
Today Csaba went further and expressed his belief that "raising taxes seems unavoidable." This goes against the present position of Viktor Orbán, who only a few days ago made it clear that his government has no intention of abandoning the new tax system based on a 16% flat tax. After all, a reduction in taxes was practically the only promise Fidesz came up with in the election campaign.
According to Csaba there are two simple explanations for the disappointing economic data of late. One is that Hungary depends heavily on exports and thus is at the mercy of the world economy. The other reason for the bad economic news is that the necessary economic structural reforms did not take place in last four or five years. As we know, the Gyurcsány government's attempts at a structural reform of health care came to a screeching halt as a result of a Fidesz-inspired referendum. The Bajnai government didn't even try to introduce structural reforms. Its sole mission was to salvage the sinking Hungarian economy after the 2008 world financial and economic crisis. Viktor Orbán's government shirked away from any structural reforms from the beginning because when Hungarians hear the word "reform" they immediately think of austerity.
By now it is not only László Csaba who speaks up but economists who had high positions in the first Orbán government. One is Attila Chikán, a professor of economics, who was Viktor Orbán's first minister of economics (1998-99) to be replaced by György Matolcsy. Chikán had very close ties to some of the "Fidesz boys," especially those who attended Karl Marx University (today Corvinus University), because he was the founder and director of the László Rajk College where some of the top people in Fidesz and in the current government were his students. For example, Lajos Kósa and Zsolt Németh. After leaving the government, Chikán went back to teach at Corvinus and hasn't been politically active since. He rarely gave interviews, but now he decided to speak up. I guess these people feel that it is their professional and moral duty to express their concern. Perhaps Viktor Orbán will listen to them, even if he doesn't listen to economists who are closer to the opposition.
Chikán is convinced that Matolcsy's policies will fail because they go against the most basic economic principles. It will be "a textbook failure," as Chikán put it. Yet, as these conservative economists unanimously declared, no one from the government ever asked their opinion. Chikán's ideas certainly don't mesh with those of Viktor Orbán, who seems to be a believer in Matolcsy's "unusual economic solutions" as Matolcsy himself called the steps he has taken up to now.
According to Chikán it was a mistake "to promise too much." There were few promises but they were big ones. One million new jobs in ten years or an economic growth rate of at least 3% (and Matolcsy even mentioned the possibility of 6-7%). Chikán, like others, is surprised by how ill-prepared the Orbán team was although they had eight years to ready themselves for the task of governing. He also complained about ad hoc decisions and the lack of consistency. Attila Chikán's impression is that Viktor Orbán has a relatively clear vision of the Hungary he would like to see and perhaps even a final economic goal, but what is missing are the building blocks. As if "the government wouldn't consider the economy a significant part of the whole program." Moreover, "expertise has a very low prestige in this government. Political loyalty seems to be much more important." That reminds me an old bon mot of István Csurka, chairman of MIÉP, that "expertise is a communist trick."
From the interview it became apparent that Chickán offered his "expertise" but no one was interested in what he had to say about the current situation and his possible solutions to the problems. As far as he knows, there are many right-wing economists both inside and outside of the government who are very unhappy with the current state of affairs. Economists in general, from both the right and the left, feel left out.
Today the third right-wing economist spoke out. Tamás Millár worked for the office of the prime minister during the Antall and Boross governments (1992-1994). Between 1997 and 2003 he was the head of the Central Statistical Office from which the Medgyessy government removed him.
Mellár wrote an article a couple of days ago which, to his surprise, was accepted by Magyar Nemzet and published today. Mellár didn't mince words. The Orbán government's economic policies have failed. Although the government tried to shift the blame for the sorry microeconomic data to the "euro crisis," Mellár argues that the real culprits are decisions made domestically in the last year and a half. Moreover, recent economic data coming from countries of the region also disprove the government's claim. According to him, the policies of the Ministry of Economics have been wrong from day one. He especially faults the tax policy that was supposed to spur economic growth but didn't.
Mellár suggests "a reconciliation with foreign capital, increase of money spent on research and development, a reform of education" in the long run. In short term he suggest decreasing government expenses. He suggests a return to the former tax rates of 0, 16, and 32% that would help people with average incomes as opposed to the current system that enriches the top 10-20% of the population.
These three people argue the same way as their colleagues on the liberal side. The only thing I can suggest to Viktor Orbán is to listen to some of his old friends. Otherwise he will not be prime minister of Hungary for twenty years as he once predicted.