The Orbán government’s ideas about job creation

When on April 9, 2009 I wrote a post entitled “Raising chickens in times of trouble” we on Hungarian Spectrum were laughing our heads off. It was about a bizarre conversation between Gábor Náray-Szabó, a professor of chemistry and member of the Hungarian Academy of Sciences, and József Orosz, a journalist who had a program on politics at Klubrádió in those days. If you want to have a good laugh, read the summary of that conversation. It is worth it.

At the time I thought that the professor of chemistry was simply ignorant of economic realities when he suggested getting rid of foreign investors or at least forbidding them from taking their profits out of the country. I also thought that it was some kind of aberration on the part of the good old professor that he recommended solving the problem of poverty in Hungarian villages by having folks raise chickens and grow some vegetables. However, I now think that these ideas must have been floating around in Fidesz circles for a long time as a solution to the economic woes of the Hungarian countryside.

A few months ago the Ministry of Agriculture, nowadays known as Vidékfejlesztési Minisztérium (Development of the Countryside), announced a new program called “Egy porta, egy koca” or “One sow, one household.” If the program takes hold between 600,000 and 800,000 pigs could be added to the current numbers. Did anybody think that a pig needs housing (a pigsty), food, and reasonably informed nurturing? Moreover, one needs an expert butcher. The method illustrated below might not be the ideal way to kill a pig.

One cannot just give a piglet to some poor village folks and rest assured that they will be able to raise that piglet to maturity.

Then there is an “adviser” to Viktor Orbán who hands out chicks and seeds to poor families in the hope of better nutrition for children and adults alike. Nice idea, but those chicks are delicate little creatures. The mortality rate among them is high, especially when the new owners don’t have any idea about how to raise them.

Case in point: my own family’s sad experience. In the spring of 1944, the very same day that the Germans occupied Hungary, my mother and her sister took me and my younger cousin to the family’s fairly new vacation home in the Mecsek mountains. There was a large garden and vineyard. Given the uncertainties of the food supply my mother and aunt–both city folk with no book “for dummies” to guide them–decided to raise chickens. The result? My cousin and I buried one dead chick after the other with all due reverence, marking their graves with crosses made out of twigs. I don’t think we had one live chicken by the end.

Chickens

Naturally, the chickens also need feed and some kind of enclosure such as a chicken coop and a fenced-in area, and the adviser (a sociologist who lived in Paris for many years, not exactly a farm hand) is giving chicks to people who don’t have enough to eat themselves.

Lately there has been a lot of discussion about whether a family of four can live on 47,000 forints a month (about $200.00), the amount the government will offer those who do manual work on state projects. Of course, they can’t, but György Matolcsy remarked that it is still better than the 23,000 forints these people received on government assistance. He insisted that receiving this meager monthly salary will help these people move into the middle class. Of those Fidesz members of parliament who were asked whether 47,000 forints was enough to live on, only one, János Lázár, dared to say that “of course, it wasn’t.” The others followed the lead of the “important person.” They either refused to answer or, in the case of one young man, insisted that the amount was enough to survive on.

In a discussion with a Jobbik politician at Corvinus University Sándor Pintér cautiously proposed that perhaps the amount was enough if the family also had a goat. He added that “apparently families would like to have a goat that would at least supply milk.” But naturally goats have to eat too. Hay, for example. Or at least have a large pasture to graze on. What will happen during the winter? And, oh yes, they have to be fenced. But they can be milked. That is, if you know how to.

Goats

Women milking goats in Mongolia

The newest idea for finding work for the unemployed comes from László Parragh, head of the Hungarian Chamber of Commerce and Industry. For years he has been such an ardent supporter of Fidesz that Olga Kálmán of “Egyenes beszéd” (ATV) asked him point blank a couple of days ago whether he represents the interests of his constituents or those of the government.

Parragh was unable to answer Kálmán’s question. Instead, he came out with something that is now the latest topic of conversation in Budapest. The reporter kept telling Parragh that there are no jobs available. Most people want to work but they cannot find a job. According to Parragh, one can always find a job. For example? Picking mushrooms! Picking mushrooms?

Mushrooms
Yes, he himself often goes with his family to pick mushrooms. They love mushrooms. There are times when their meals are comprised exclusively of mushrooms. And he went on and on with all seriousness, sticking with his asinine idea. Once the person picks a lot of mushrooms he can freeze them and sell them. Even that is not so simple as I found out. It needs money, equipment, and know-how.

Such suggestions show the intellectual poverty of this lot. It is really pitiful. Moreover, the more they talk the more obvious their cynicism becomes. All these ridiculous ideas float around while Viktor Orbán is now talking not about 1 million but about 1.7 million jobs. The job opportunities, as we can see, are vast.

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Kingfisher
Guest
It highlights one of my pet frustrations about Hungary, which few people in Hungary seem to appreciate. Imagine there is someone industrious enough to harvest a surplus of mushrooms. There is no simple way of becoming self-employed in Hungary, so you can’t sell them legally! To be self-employed, you really have to set up a company which is an immense and totally unnecessary expense. You can obtain an “entrereneur’s license” but for that, you’d probably have to have “mushroom qualifications”. For a country that desperately needs people to be able to set up their own little businesses and activities, it is totally inexplicable why no one understands that there needs to be an easy way to be self-employed. In the UK, you just tell the tax office “I’m self-employed”. And if it doesn’t work, you ring up and say “I’m giving up.” You keep accounts but you are not saddled with company papers and a raft of other commitments. So why can’t Hungary implement similar structures? There is certainly a good argument that Hungarian farming should play a bigger role in the economy. Péter Róna has made some persuasive arguments along these lines. But you can’t expect it to just… Read more »
Living with it in Hungary
Guest
Living with it in Hungary
One of the comments at the Portfolio.hu debt conference from one analyst was that Polish people were much more entrepreneurial than Hungarians were. He tried to justify his statements with a number of points about how good Hungary was so much better of in the 90s and that everything was taken care of for them and so on. But I completely disagree. I find Hungarians to be perfectly wanting to be entrepreneurial but I find the environment in which they must work to be completely stagnating with regulations that make things such as hobby businesses almost impossible to engage in legally. As I mentioned in a previous posting, I’ve tried to have Hungarians subcontract for me legally with little success. And so, the work went else where. More to the point, I know of a number of very successful Hungarians but all but a few had to leave the country in order to peruse their goals. All said they couldn’t have done it in the country. So instead of suggesting we all raise pigs ‘cos god knows, there are already enough pigs in my neighbourhood, why don’t they stop micro-managing everything to the point that it’s so difficult to do… Read more »
Ivan
Guest

I concur with both of the above. Running a modest small business (what would be ‘freelance’ or self-employed’ in any reasonable country) is almost impossible here – certainly taking up the fabled ‘47000HUF’ a month in sheer nonsense … make it two of those just to set the small-scale thing up legally!
There’s something every week … this week’s new reg is that our accountant now has to handle our landlord’s tax affairs, desling with his contributions etc BEFORE we pay him. He’ll surely either up-the-rent to cover this or go and find someone in the black economy instead (where it’s all so much easier). And I wouldn’t blame him if he does.
It’s all the rubbish of the old ‘full employment’ still in place – but, ahem, without any of the full employment.
And, yes, most folk don’t see the problem – as they have nothing to compare it to. “Isn’t it like this everywhere?” they always ask. And they don’t really believe me when I tell them that it’s not.

Kirsten
Guest

Reading Eva’s post and the three comments I wonder whether the following comment, which was included in the last thread and where I wondered what to think about it, is not too generous:
“when you drill down it’s difficult to identify precisely what Hungary’s problem is. It is precisely because of the cloudy nature of the problem that it’s difficult to formulate a plan.”
I see that even those people who are critical of OV have difficulties to establish themselves but for an outside observer the problem does not look as “cloudy”. It appears more difficult to imagine that suggestions such as one pig in every household can be accepted as a serious contribution to the debate on how to improve Hungary’s living standards. What appears “cloudy” is how such sentences are capable of clouding people’s minds.

Ivan
Guest

Absolutely, Kirsten. In fact, life here is permanent frustration at the lack of shared reference points, and lack of value for outsiders’ input. I have lived in a number of countries – and I have to say that this state of affairs is pretty unique.
This, then, is the ‘cloudiness’. And this is why people can be so docilely led into such madness – I don’t really think most of next week’s ‘Peace March’ marchers will have the slightest idea why they’re there. For some, they’ve been told that some outsiders want to colonise them (and presumably prevent them having pigs courtesy of nice Father Victor) and that very telling is enough. Never mind that they’ve less money in their pockets than ever before. And no pension. Never mind tha … considerations like that are treasonous talk.

Ms KKA
Guest

The guy with the pig…looks more like he’s attempting to increase the pig population than kill it. If “One sow, one household.” is gonna need between 600,000 and 800,00 new pigs, maybe this is one of the new jobs that OV has created!

Petofi
Guest
So much empty talk about what the ‘problem’ is…Nothing will change until the political culture changes. Both parties are involved in the long-term plundering of the public purse. Here’s one way it works: let’s say a huge food chain wants to establish in Hungary. The government establishes the groundwork which begins with a monster payoff, say 15-20 million euros. As incentive, the government gives soft tax details and preferential treatment. All this as “incentive”, so the government explains to the people. As part of the deal, the company has to stand for government criticism down the road about wanting to pay only minimum wage, or taking their profits out of the country. Noone has told the sucker electorate that the incoming company has an unusual debt of 20 million that it had to pay off. Thus, much of that ‘profit’ leaving the country was not profit at all. But the company has to sit still while the government boots it around for political purposes. One variation on this is the government attack on foreign utility companies ‘ who got too good of a deal ‘. So the government finds some way to break the existing deal, even if it costs… Read more »
Member
Most of the guys who suggested that people can live on 47k HUF a month make 47k HUF a day, like Marcell Zsiga, the 20 something young fideszoid mentioned by Eva. They must have misunderstood the question. “Sure, you can live on 47k. That’s what I make!” “Sir! 47k a month, not a day …” ” … ummm, you’re taking this out of context ….” Zsuzsa Hegedus is the sociologist who’s giving out free chicks and seed. Here is a funny interview with her in Hungarian: http://fn.hir24.hu/nagyinterju/2012/03/05/hegedus-zsuzsa-ertheto-vagyok/ The article calls her a “chief adviser” (főtanácsadó). Is she really the top brain in the Orban government? The interview is funny because the journalist keeps asking about the women who sold the chicks a half an hour after she got them, and the rats who ate the chicks and the seed … her waffling is hilarious. In this interview this one person think tank also suggests that women from Hungary should go to the western countries to clean houses. This chick is full of ideas: she also “advised” that families collect blackberries and make preserves and sell it to supermarkets. But this isn’t all. Another idea is sewing. Unemployed women assembling garments… Read more »
Penny Sue Oswalt
Guest

Surely everyone could come up with alternative analagies other than “chicks, pigs, and seed!

cheshire cat
Guest
I have been told by people in the know that this pig keeping idea is a bigger nonsense than it seems. Raising a pig needs investing. You buy the piglet for, say, 40,000 forints and at the end you’ll end up having 60,000 forints worth of meat. For those 20,000 you have to build and maintain a sty, you have to buy pig food, you have to pay vets’ costs and pay the butcher for killing it. You have to invest in machines to make sausages, to keep and store the meat in etc. You have to get up an hour earlier every day for 9 months to feed the pig, clean the sty, and that includes weekends and holidays, so you can’t leave the village unless someone will look after your pig. It’s not worth it because you will probably spend more on expenses than what you earn with the meat. Definitely not worth it if you have only one pig. If you raise 5, you need to sell 4, but your price is not going to be competitive on the market where you have to compete with REAL farmers who use modern technology (and maybe foreign meat as… Read more »
Penny Sue Oswalt
Guest

Poor farm animals…..sad analagies! What about the analagy of the “gambler” or “casino players”? Sounds more interesting!

Paul
Guest
Once again, my post is apparently being accepted, but not appearing!!!!! I’ll try splitting into two to see if that works… ———————————— I’m a bit puzzled by some of the posts on this thread. First pigs and chickens. I am not for one minute supporting any idea of OV’s, particularly not this one, but raising both chickens and pigs isn’t as difficult or as costly as portrayed. Indeed it has been the principle nutritional mainstay of village life for centuries – and in many areas, still is. I personally know of several households where both chickens and pigs are kept. They may not be housed or raised to modern European standards, but raised they certainly are – and keep the households well supplied with in chicken soup, eggs and kolbász. And all at a fairly limited cost. The chickens are fed on home-grown corn and the pigs on whatever is available. And this isn’t just in the poorer villages, deep in the Eastern countryside. The village my in-laws live in still has its fair share of pigs, goats, sheep and chickens being kept, kukorica being grown, etc. And that’s just a short bus ride from Debrecen. My in-laws themselves raise… Read more »
Paul
Guest
part 2: And secondly – small business. One of the main impressions I had on first visiting Hungary 11 years ago was the number of small businesses there were everywhere. This was a huge surprise to me, as the country was only 10 years out of a communist regime that I had assumed hadn’t allowed private businesses at all (I now know this was a false assumption). At the bottom of every block of flats there were always a half dozen or so small shops – mini-ABCs, bread shops, hairdressers, clothes shops, greengrocers, even bicycle shops. And in my in-law’s village there were houses down every road where the front room or basement had been turned into a mini-ABC or greengrocers. There was even a stationery shop and a gym. We had always been told that Britain was a ‘nation of shopkeepers’, but I had never seen anything on this scale. For instance, the road next to our flat in suburban Debrecen contains a greengrocers, a bread shop, a mini-ABC, an underwear shop, a bicycle sales and repair business, a drink shop and a hairdressers and manicurists. All despite the fact that there is a medium sized Coop just round… Read more »
Paul
Guest

What wonderful software this Typepad is….

GDF
Guest

cheshire cat:”It’s not worth it because you will probably spend more on expenses than what you earn with the meat. Definitely not worth it if you have only one pig.”
And just imagine if the pig dies a day before you sell it. Maybe of some analagy.

Member

When I first heard about the genius suggestion of people going out and picking mushrooms, I remembered the news we herd so often as children, the families that suffered from mushroom poisoning. I recall that many farmers’ market had an inspector on site (or was it just at Moscow square?), and you could sell mushrooms if the inspector checked your mushrooms. Maybe I have a morbid sense of humor bit it made me laugh hard the idea of some poor man picking mushroom and he creates a ghost town from his little village where he slowly but surely kills everyone with his freshly picked Amanitas and Jack-O-Lanterns.

Törpefejű
Guest

Picture no. 1 perfectly illustrates this “deliverance” of Hungary, or in other words Orban’s address to the nation: “Can you squeal like a pig? Come on! Squeal! Squeal!”

Hank
Guest

Paul: “raising both chickens and pigs isn’t as (…) costly as portrayed.”
My neighbours’ experience is certainly different. They are an old couple in a village and they are raising two pigs every year. And every year they complain that in fact they could buy pig meat at one of the hypermarkets a lot cheaper than what they have to put in (buying the piglet, watering the corn if it is a hot summer, extra food, the buthcer, the vet etc. There are only two reasons they keep doing it: the taste of the meat is much better and it is so nice to have the whole family together once a year helping with the disznó vága. But financially? No way.

Odin's Lost Eye
Guest
Raising ‘Porkus Gruntus’ is not a job for the armature. Dad belonged to the local Pig Club (6d in real money a week) and a discount on the mash. The Pig Club was an insurance association. They with the help of the local U.K. Min of Ag’ man helped all to raise their pigs to maturity. Converting the pig into meat cost £1 at the local abattoir. Getting it there it there and back Dad charged 2/6d (real money) for hire of his trailer. Or 5/- (per pig) plus a 1 gallon petrol coupon if he drove it there. When I first came here I investigated a ‘retirement business’. I found that to get a licence or whatever I would need Hungarian Expert Consultants. These would have cost me over 600% of the probable Gross Income. So I built up my workshop and (when I can) indulge in my hobby. Most of my time I seem to spend repairing the household breakages. Hungarians are very clumsy. Last week it was a door ripped of its hinges, the letter box, and a bicycle (twice). This week, the kitchen tap ripped off the pipe, the clothes washing machine and the front gate… Read more »
Guest

@Paul:
Here near Héviz pigs in the village are explicitly forbidden by the local government – because of the stink !
And we have a Fidesz mayor …
Chicken are ok and we always buy eggs and the old hens (for a wonderful soup!) from our neighbours. But it’s true, raising animals is a hard job and you can’t go on holiday even for a day, so only the old people still do it …
Re small shops and businesses: We see them closing down almost every day, even larger ones can’t compete against the well organised chains – unless they provide some kind of special service.
So all considered I’m no longer wondering how Orbán will provide a million new jobs – I’m sure that he won’t, so I’m only wondering about the long term consequences for Hungary.
It’ really a sad, sad story …

Living with it in Hungary
Guest
Living with it in Hungary
@Paul, 11 years ago everyone was interested in starting a business and they started out on ventures that in my opinion, we’re ill conceived. Doomed to failure and indeed a lot of them did fail. But behind that there should have been yet another wave of more sophisticated attempts but that didn’t happen. I was reminiscing with my wife this morning about the level of economic activity just before MSzP came to power and the almost complete reversal of that as soon as they came to power. The value of our property dropped by 20% with in a very short period of time. I really felt sorry for those that has “over paid” for their houses because now they were stuck. I think everyone believe that OV was going to kick out the thieves and restore things back to the good old days. I’m Unfortunately the macro-economics are so different and OV has taken his advantage to unthinkable levels. Also, everyone was fixated at the penny-any corruption while the real corruption, the 19 million for the fighter aircraft, and all the other large sums that don’t even show up anywhere. There is one at least one bright spot and that… Read more »
Living with it in Hungary
Guest
Living with it in Hungary

darn, I meant to end with OV’s disappointed and it’s well recognized that he’s brought irritable harm to the country and he’ll be the next politician to be ripped from office so badly that yet another extreme will rule.

Kirsten
Guest
Paul, I think the question is: what is the objective of the ‘pig and chicken’ idea. The only answer I can come up with is that Fidesz wishes to actually REDUCE income in Hungary, as they apparently think in subsistence terms. True, if nothing else is left, I would also suggest that people try to produce as much food as they can on their own. But why should they do that when Hungary cannot claim that nothing else is left? It is a country that already had a reasonable level of living standards – which it is deliberately or not steadily weakening. I could direct you to numerous texts celebrating Hungary as the model transition country in the 1990s. The ideas propagated by Fidesz have nothing in common with the main sources of growth currently, which require concentration on technology and knowledge. People teaching economics in Hungary know that. This pig and chicken idea, even if perhaps comprehensible from the point of view of individuals, is simply no strategy to get Hungary out of the current problems. Not economically, and not socially. It is pathetic that so many people participate in this odd performance, in particular those who just repeat… Read more »
Odin's Lost Eye
Guest
There is another huge problem the Hungarians have. It is they do not know the basics of a ‘joint stock’ company. My wife had a friend who lent a large sum of money to the company she worked for. All went well for two years until last year when the company boss was made an offer ‘he could not refuse’. The company was sold and she was given the boot. She got nothing. By my crude calculation she owned 35 to 40% of the company –the boss probably owned 45 to 55%- The company has ‘folded’, it’s stock, equipment, furniture etc, went in the first few days the buildings seemed to have sold and later leased to others for a song. Those who took over the company do not seem to exist. My wife’s friend owned 35-40% of the company and had 35 to 40% say in how it was run and a similar proportion of its profits and liabilities. The whole of their company laws need changing. There are western models they could pick up for free but they do not. Why? It is this form of swindling and cheating when combined with lower levels of plain cheating like… Read more »
Kirsten
Guest

Paul, just to give you an idea of why economies in a modern state cannot be based on subsistence farming. So far, Fidesz has not yet indicated that the government would like to stop taxation. That is easiest managed with a monetised economy (not needed when subsistence farming is the main livelihood) and an economy where some taxable income is created (unlikely with subsistence farming). So these are in fact cynical propositions as Fidesz certainly would like to see people live on subsistence farming while the inner circle will make money in all those areas where subsistence farmers simply cannot interfere. It may sound so reasonable, but in fact it is derision.

enuff
Guest

After being forced to pay for a compulsory membership to the Chamber of commerce (MKIK), this is what they came up with?
I have nothing against people wanting to keep pigs , chickens or any livestock to make a living, but surely the “big brains” at MKIK could come up with programme(s) more suited to 21st century…
How do they plan to collect tax from jobs created from this programme?

Eva S. Balogh
Guest

This kind of zombies sit in the Hungarian parliament. Especially watch Tessely Zoltán’s words. How wonderful! There is no need to question or think. Just believe.
http://hvg.hu/video/20120306_adobevallas_soralatet

Guest
London Calling! We were in freezing Hungary in February and I ordered some wood for the tile stove (Tile stove? An amazingly idiosyncratic method of burning fuel to an Englishman! – They don’t exist in England – except I suppose they can be compared with the middle class aspirational ‘Aga’ – a sort of solid cast iron oven and room heater.) The VAT was 27%! – 27% ON FUEL? I couldn’t believe it! MORE THAN A QUARTER WAS VAT! In England it’s 5% on domestic fuel NOT 27%!!!! Sorry for the rant! – But how can start-up businesses cope with this rate? Are they first and foremost tax collecting vehicles for the government? What is the VAT Threshold? In England businesses don’t pay VAT until they have a turnover of £73,000 (That’s 24,820,000Ft!) No wonder everything is ‘on the black’. And domestic consumption is on its knees. VAT is a more progressive tax and operates on discretionary spending. In the boom years in England there was a plethora of single item shops, for example ties (The Tie Rack) and knickers (KnickerBox) – small entrepreneurial outlets started on a shoe-string. But for these micro-businesses to succeed there had to be plenty… Read more »
Guest

CharlieH, maybe because people look at you as a foreigner …
When I get some services, whether on the car or the central heating, the lawn mower or the chainsaw or …, the first thing after the work is finished and I ask for the price is the question:
Do you need a receipt ?
And when I say “no” (of course only with people I can trust and who trust me)…
Last summer we paid the local sawmill 60 000 HUF for a pile of wood (4 cubic meters, sawed in 30 cm pieces, mainly akacia) put directly in front of our garage where we wanted to store it.

Paul
Guest

Charlie – VAT is NOT a progressive tax, it is the exact opposite.
In the UK it has been significantly modified to be as ‘progressive’ as possible by not applying it to essentials, and applying low rates in other areas. But in countries like Hungary where it is pretty universally applied, it is totally regressive – it proportionally hits the poor much harder than the rich.

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