Hungarian opposition newspapers have an annoying habit. If someone just once says something critical of Viktor Orbán or the policies of the current government, the liberal newspapermen practically elevate him to sainthood. All his past sins are forgotten. This is what is happening now with Sándor Demján, the managing director of VOSZ (Vállalkozók és Munkáltatók Országos Szövetsége = National Association of Entrepreneurs and Employers).
Demján is apparently the richest man in Hungary. He is a real estate developer and his company, Tri-Gránit Fejlesztési Zrt., builds shopping centers throughout the region, including Poland and Ukraine. The man might be a good businessman, but his ideas about the world are often reprehensible. In the past he frequently accompanied Viktor Orbán on his foreign trips, especially to China and Central Asia. Demján was very impressed with the Chinese way of doing business and expounded on the secret of Chinese success: using huge numbers of poor Chinese as a labor force. Poverty ensures progress. He added that the Chinese practice would be a good example for Hungary to emulate. At one point he suggested lengthening the work week to six or even seven days. After all, the country is in economic trouble. He also talked about “financial dependence being worse than tanks invading the country because in the latter case at least the picture is clear.” Almost as if he had heard István Csurka of MIÉP.
So, this man who before the 2010 elections said that “it is in the interest of every Hungarian that the Fidesz team wins the election because if they don’t that is bad for everybody” now seems to be dissatisfied. The opposition papers are enthusiastic about Demján’s criticism of Orbán, and very few of them actually sat down and analyzed Demján’s suggestions for economic recovery, some of which at first blush seem unrealistic.
When Viktor Orbán suggested to the leadership of VOSZ that he meet with them he was undoubtedly expecting the usual adulation. But this is not what happened. Demján delivered an hour-long speech that was highly critical of the “unorthodox” economic policies of Viktor Orbán as delivered by György Matolcsy. That rattled Viktor Orbán so much that he asked for a ten-minute break, saying that in the wake of Demján’s speech he had to rethink his own. What resulted was largely nonsensical mumbo-jumbo; what was comprehensible was outright frightening.
Let’s see what kind of wisdom Demján entertained his audience with. “It is growth that creates wealth” and “one needs wealth because a country that is poor gets assimilated by globalization.” Whatever that means. Other comments, although not revolutionary, were at least on target: without investment there can be no growth. Foreign investment in Hungary has practically come to a halt. Bloomberg just published an article entitled “Orban’s Tax Binge Repels Investors.” Not surprisingly, Demján is not terribly worried about foreign investment. He wants Hungarian-owned companies to grow. But there is not enough domestic capital accumulation to help finance them. Therefore he suggests setting up a large investment fund for the sole purpose of assisting small- and medium-size Hungarian-owned companies.
I’m not going to go into the details of Demján’s plan for constructing such a fund because according to experts it is not realistic. But another idea of his might be more practical (at least if default or a government grab is off the table): to introduce something Demján called a “solidarity bond issuance” that would be “a kind of compulsory savings plan.” Otherwise, Demján is all in favor of an agreement with the IMF-EU. I think that Demján is far too optimistic on the subject, at least from what Orbán had to say on the subject in the last couple of days.
So, let’s see what Orbán managed to put together in a great hurry after Demján’s speech. As I said, some of it was outright frightening, especially this sentence: In Central Europe a new economic system must be built “and let us hope that God will help us and we will not have to invent a new type of political system instead of democracy that would need to be introduced for the sake of economic survival.” A stunning admission that Orbán has been thinking of the possibility of governing by decree. As his political opponents said, this is one of the few honest words he has spoken of late.
He again repeated what we can hear constantly: that Western Europe is in decline while Central and Eastern Europe is on the rise. The latest economic data don’t support Orbán’s contention, but figures never bother the Hungarian prime minister too much.
He did admit that 90% of the current investments come from European Union subsidies: “There is no Hungarian money for development.” But if that is the case, why is he waging a war of independence against the European Union?
As for the negotiations with the IMF-EU delegation, “one needs cold logic, patience and calmness.” He is glad that “the IMF was not here in the last two years because then the government couldn’t have introduced certain elements of its economic policy.” According to him, if there had been an agreement with the IMF in 2010 the country would have saved 100 billion forints on its sovereign debt but the government couldn’t have received 200 billion forints yearly from extra levies on certain sectors of the economy. Moreover, they couldn’t have taken away the savings of the private pension funds. That’s why critics of the Orbán government claim that it is the IMF and the European Union that will safeguard the interests of the Hungarian people against their own government.
Orbán repeated that foreign banks that do business in Hungary are reluctant to extend credit because they remain in dire financial straits. The truth is not so simple. The “mother banks” had to allocate extra capital to their affiliates in Hungary because of the enormous taxes the Orbán government levied on them. The Hungarian affiliates are not profitable.
It is practically impossible to have an Orbán speech without the mention of the necessity to build a society “based on work.” Orbán and some of his supporters often intimate that Hungarians are lazy slobs who just don’t want to work. Of course, this is not the case. The majority of the people would love to work if there were an opportunity to do so. But there isn’t. There is a segment of society that is dreadfully undereducated. This is especially true of the Roma population. Others, although qualified, can’t find jobs because companies in a no-growth economy simply aren’t hiring.
Viktor Orbán seems to think that public works projects paid for by the government are the remedy for unemployment. A few hours of mostly useless public work is also dole, but I guess it looks better when the employment statistics come out. In a year or two there will be no welfare payments without enrollment in a public works project. That would seem to include child support, to be administered through a “system of work” (munka rendszere). What on earth is this? Is it possible that Orbán is alluding to a child support system that is available only to families where one or both of the parents are gainfully employed?
Work seems to be the remedy for everything, including the unity of the country. Demján suggested consulting with the opposition, an idea that is far from Orbán’s thinking. According to the prime minister, “there is no need to shake hands [parolázás] with the opposition.” Instead, the unity of the country can be achieved by “giving work instead of government assistance to the people.”
And I left the best to last. “Cooperation is a question of force, not of intention. Perhaps there are countries where things don’t work that way, for example in the Scandinavian countries, but such a half-Asiatic rag-tag people as we are can unite only if there is force.”
Well, well, well. Do you remember what happened to Ákos Kertész, the Kossuth Prize winning author, when said something about Hungarians being genetically servile? He was chased all the way to Canada, where he asked for political asylum. Surely nothing like that will happen to Viktor Orbán, but the best answer to this unspeakable statement came from Gergely Karácsony of LMP: “The prime minister should know very well that Hungary in the last one thousand years, ever since the reign of Saint Stephen, has been part of Europe.” Admittedly, like every other nation, Hungarians also made mistakes. For example, when “they gave political power to an Asiatic-style despot.”