No, Viktor, illiberalism is not the key to economic growth

Today’s post was inspired by an article that appeared yesterday in with the intriguing title “We only wanted to open the doors to Eastern dictatorships, but they were blown away by the Curse of Turan.”

What is the Curse of Turan? It is legend according to which Hungarians of the eleventh century were cursed by their pagan shamans when they abandoned their old faith for Christianity. And what about Turan? According to Persian mythical tradition, it was the name of an area which today is known as Turkistan.

We have spent countless hours discussing Viktor Orbán’s firm belief that western civilization and its market-based economy are on the decline while the eastern illiberal, autocratic, dictatorial regimes are thriving economically. They will eventually overtake the West. Orbán projected the recent spectacular growth in some of the Asian countries into a linear trend that might last–well, forever. He kept repeating that we live in a new world which only he was astute enough to discover. And he began making pilgrimages to these thriving eastern countries, courting them, praising their dictators so shamelessly that some Hungarians were outright embarrassed. He went so far as to return an Azeri murderer to Azerbaijan, although he must have known that he would be greeted as a national hero at home for killing an innocent Armenian army officer in Budapest.

This is what happens when someone with limited knowledge of the economic and political complexities of the world acquires unlimited power and begins to implement his idées fixes. Orbán’s theory was based on wrong assumptions and a flawed model. These countries’ economic growth was not due to the illiberal nature of their regimes, as Orbán believed, but to other economic factors–in most cases, to the commodity boom. Most of the countries Orbán so admired were flush with natural resources: oil, natural gas, and important minerals. As long as gas and oil prices were high, the political leadership of these countries was satisfied and did next to nothing to diversify. This is what happens when, as a result of the preponderance of state enterprises, no truly free market economy can develop that would ensure a healthier economic mix.

Viktor Orbán put enormous effort into his “Eastern Opening” project, with few results to show for it. examined Hungarian exports to six countries east of Hungary between 2009 and 2014: Azerbaijan, Kazakhstan, Saudi Arabia, Turkey, China, and Russia. Hungarian exports to Turkey grew slightly, the others either stayed the same or actually decreased. describes trade with Azerbaijan, Kazakhstan, and Saudi Arabia as microscopic. Investments from these same countries are so insignificant that the Hungarian National Bank doesn’t even record their size. But even Russian, Chinese, and Turkish investments are minuscule, only a few billion, which is very small indeed as a share of total foreign investments in 2014, which was 2.5 trillion forints.

The percentage of the six Eastern countries in Hungarian export between 2009 and 2014. Source: KSH

Hungarian exports to the six eastern countries between 2009 and 2014 as a percentage of total exports. Source: KSH

In the past Viktor Orbán’s admiration of Azerbaijan’s economic accomplishments knew no bounds. In April 2014 he compared Hungary’s  modest 3% growth to the fabulous Azeri growth of 17% between 2003 and 2010 and, after that, 5-6% percent every year. But a little more than a year and a half later Azerbaijan is in grave economic trouble. On January 28 Bloomberg reported the start of negotiations between Azeri officials and the IMF and the World Bank for a four billion dollar loan. The discussion centered around the liberalization of the economy and the improvement of the business climate in exchange for the money. Although the Azeri finance minister insisted that they are in no immediate need of the four billion dollars, the facts don’t support his claim. “The Azeri central bank moved to a free float on December 21 after burning through more than 60% of its reserves last year to defend the national currency … the manat which nosedived by about half last year and slumped further to record lows this month.”

Orbán also sang the praises of Kazakhstan in June 2014. He found the achievements of the country in the last fifteen to twenty years absolutely spectacular. According to him, “the importance of Kazakhstan in the world economy will grow year after year.” Well, that forecast hasn’t panned out either. Because of falling oil prices Kazakhstan’s export income dropped by two-thirds after 2013. This year analysts predict a recession. The Kazakh currency, the tenge, crashed in a spectacular fashion in the middle of 2015. Bloomberg remarked that “Kazakhstan is a textbook case on why economies must diversify” and added that “powered by natural resources ranging from oil to uranium to copper, including the world’s largest proven zinc deposits, the economy has remained hamstrung by corruption and political controls.” Political control, which Orbán believed to be a necessity for economic growth, is in fact an impediment according to economic analysts.

Orbán was also very enthusiastic about the prospects of the Turkish economy. Western analysts, however, are less sanguine. Al-monitor, in an article written in August 2015, said: “Any one of the following problems would ring alarm bells for an emerging market: a slowing economy, rising inflation, distrustful citizens exchanging local currency deposits for dollars whenever possible, a rising tide of violence scaring away foreign tourists and hurting hard currency reserves, and concerned foreign investors eyeing the exit because of a bearish stock exchange and a possible hike in interest rates by the US Federal Reserve. Not content with just one, Turkey is facing all of those headaches and more.” The Turkish economy is still growing by about 3% per annum, but given the growth of the Turkish population this is considered to be a weak performance.

It was at the beginning of 2014 that Orbán visited Saudi Arabia and, as usual, lauded the greatness of the country and its leadership. Saudi Arabia has nothing but oil to export, and if the price of oil falls precipitously for a longer period of time the country is in trouble. At the moment the yearly deficit is 20% of the GDP. Foreign currency reserves are dwindling, and the Saudi princes are becoming visibly nervous. They are entertaining all sorts of measures that may or may not work. There are analysts who predict that the government of the House of Saud may collapse in the not too distant future.

Russia, which also relies heavily on its natural resources, is in trouble as well. As The Economist said a few days ago: “Russia’s economic problems move from the acute to the chronic.” Between mid-2014 and today Russia’s exports and government revenues collapsed. Its GDP shrank by nearly 4%; inflation was close to 13%. The ruble lost half its value against the dollar in 2014 and, after rebounding somewhat at the beginning of 2015, now stands at 80 rubles to the dollar. In March 2014 the exchange rate was 36 to 1. The latest is that Russia is exploring an international bond issuance, which signals that there is a shortage of funds as the economy heads for a second year of recession.

Finally, reminds its readers of Orbán’s words at the Chinese-Central-Eastern European Summit in November 2015: “In the past there were many who had doubts about China’s long-term economic future. It was then widely held that the strengthening of the Chinese economy was only a temporary phenomenon and that the financial crisis would undermine its economic growth. But today we see exactly the opposite of this prediction. China is marching along with a permanent and sustained development, and we all know that it will soon be the strongest economy in the world.” But China’s economy is slowing, and worse may come in the wake of the greatest construction boom and credit bubble in recorded history. As an analyst described that bubble: “An entire nation of 1.3 billion has gone mad building, borrowing, speculating, scheming, cheating, lying, and stealing.” He called it a “monumental Ponzi” scheme. In any case, China’s economic growth in 2015 was the slowest in 25 years, and its economic decline is probably even more serious than its questionable figures indicate.

So much for Viktor Orbán’s belief that illiberal leaders are the only ones who know the secret of sustained economic growth.

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Orbán\’s take on the economic growth of illiberal nations is just a desperate man, trying to justify his despotism.


And perhaps just trying to turn his vision of the in favor \’Eastern\’ approach into a ground floor opportunity of achieving some sort of modern age political and economic dynasty like the ancient Persian Achaemenids with Hungary today riding in the stirrups.

Kind of flows very well too in its direct opposition to the \’democratic\’ and the \’liberal\’ states. Shades of the Persian Wars with Orban as a personification of Darius. But it is in the realm of probability he could wind up like a Xerxes. That is one who bites off more than he could chew.


“This is what happens when someone with limited knowledge of the economic and political complexities of the world acquires unlimited power and begins to implement his idées fixes.” YES, YES and YES again… This is a very fitting description about Orban. And whilst western leaders every so often must take into account Putin’s whims, as he is the leader of a (declining) world power, but a pocket-dictator like Orban should be sidelined by all those EU officials who so willingly financing him from the monies paid by the German, English and other taxpayers…


Eva hit the nail on the head !

YES! and even worse

In such regimes the dictator doesn’t like to see smarter people obtain high power and the underlings don’t risk being smarter than the him, so counter selection becomes the norm, e.g. Síjjártó, Sz. Német, A.Tallai, R.Hofmann, the Miskolc dummy (“one can live on $ 150 a month”) and clones.

The only well working ideas come from the oligarchs in their own fields about how to loot the public domain and loot big, e.g. MET gaz, Simicska advertising (past), national airline (future).


All deals setup by Chinese government ensure that all the monies flow through and back to Chinese companies who only employ Chinese workers. Very few from the host country see any benefits from these inter-government arrangements aside from a few individuals. Angola is the perfect example of the ideal arrangement for China


“what about Turan? According to Persian mythical tradition, it was the name of an area which today is known as Turkistan.” [in the 19th century].

Now the area is divided between Turkmenistan and Kazakhstan, and parts of Uzbekistan.

“This political ideology originated in the work of the Finnish nationalist and linguist Matthias Alexander Castrén, who championed the ideology of Pan-Turanism — the belief in the racial unity and future greatness of the Ural-Altaic peoples. He concluded that the Finns originated in Central Asia and far from being a small, isolated people, they were part of a larger community that included such peoples as the Magyars, the Turks, and the Mongols ”


The Chinese must not learn that Uyghuria = Eastern Turkestan.


tappanch Today 2:01 am

Rasmus Rask (1787-1832) was the first linguist to define a group of Turanian languages. The German born Oxford professor Max Müller (1823-1900) defined the Turanian languages as the languages which are spoken in Europe and Asia and are not Indoeuropean or Semitic. By this definition Turan, which was originally an area East of the Caspian Sea, grew in fantasy to become parts of Europe and most of Central and North-Eastern Asia. It was assumed that all the people speaking Turanian languages thus defined were genetically and culturally related, and a Turan stretching from the Bosporus to the Bering Strait ought to be created to embrace all Turanians. The underlying idea was the same as that of pan-slavism and pan-germanism. It is still meaningful to talk about Germanic and Slavic languages. Those talking about Turanian languages talk nonsense.


@Jean P
Today 4:53 am

The Turanian mythology is long on fantasy and unsupportable assumptions, but exceedingly short on solid and verifiable fact.

It is thus not a falsifiable construct, and as such it is purely a matter of of belief, rather than any kind of hard knowledge.

Hard to understand why anyone would bother exercising themselves about it.


Today 2:01 am

To my mind this entire Turan concoction is an utterly childish early 19th century fantasy from the dawn of Finnish nationalism, a desperate attempt at creating an artificial national creation myth for the Finns, at a time when the Finnish speaking areas were a peasant backwater of the Russian Empire, after having been a peasant backwater of Sweden for hundreds of years previously.

Just like the Kingdom of Hungary was, with respect to the Habsburg Empire.

What puzzles me is why anyone would bother with this Turan nomnsense this day and age.


But hold on!

We had a proud Turan on here who – I believe he/she hailed from Australia – insisted that they themselves had physical characteristics of a Turan – which I immediately recognised were almost similar to Michael Jackson’s – almond eyes and skin colour etc.

So I had developed a theory that the Turan DNA had spread to the Americas.

Everyone declined to help me to find out the ‘configuration’ of a typical ‘turan’ nose – which as you can understand – would have been difficult to match with my case study – Michael Jackson. Configuration is/was the correct word when it came to his appendage.

So I’ve got no further with my theory. But just because I got no help doesn’t mean I’ve given up!


Good one, charliecharlie! :-))


ambalint Today 8:47 am
“Hard to understand why anyone would bother exercising themselves about it.”

ambalint Today 9:01 am
“What puzzles me is why anyone would bother with this Turan nonsense this day and age.”

Isn’t it worthwile to bother with the nonsense that Orban is putting into the heads of Hungarians? Isn’t it worthwhile to contradict him?

Turan is fairytale land but Turanism is a political reality. It is the cornerstone of Orban’s alliance with Erdogan. It is the reason why Hungary has closed its embassy in Estonia. It is the “ideologcal” underpinning of Orban’s diplomatic advances in Asia.


While the word kar < qar is of Turkic origin, the word kéz < käti is Finno-Ugric.

"…the Hungarian language is Ugric in its origin, but because the nation's later contacts and historical transformation it is equally Ugric and Turkic in character…"

Ármin Vámbéry


tappanch Today 3:11 am

After many years in Turkey and travels in Central Asia Hungarian born Hermann Bamberger (1832-1913) who changed his name to Ármin Vámbéry was appointed by emperor Franz Joseph to a professorship in Budapest. He was a spy for the British Secret Service and his opinions on the relationships between languages were opportunistic. A fascinating personality. Read his books written in superb English.


Speaking of the Curse of Turan, to all who read Hungarian I cordially recommend this article: . In brief: Whatever Wikipedia states, “Turan” as a cover term for Central Eurasian peoples north of the old cultures of Near East and east of Europe, originates from the work of the German Orientalist Max Müller, and since his times, it has been used more or less (often: less) precisely for diverse groupings of non-Indo-European peoples and languages.
And whatever the origins of the pseudo-legend about the Curse of Turan, the real Curse of Turan was materialized in the tank called Turán, originally Škoda T-21, for which the Hungarian army acquired the production licence in 1940. The first tests revealed that its armour was too thin to protect the crew, its gun was not efficient enough, and when these flaws were amended, it turned out that the engine wasn’t powerful enough. Throughout their history in the Hungarian army, the ill-omened Turán tanks suffered from various recurring technical defects and never managed to carry the proud Hungarian warriors to the plains of the original Turan.


Today 4:05 am

Lunatics. Aki hülye az hülye, nem lehet rajta segíteni.


Re: ‘Lunatics….ignorant’

And just wondering if those allegedly ‘enlightened ‘ understand that at this time Magyarorszag is arguably on the status of Orban as satrap and the country as satrapy of the EEP… The Eastern Empire of Putinistan.


Yep, you got there something wrfree.


Here is another, funny confusion:

panthera, parthena, Parthia

Jesus, vilified as the son of a Roman “panthera” (soldier < panther < πάν-θηρ)
[and the hairdresser Miriam, who cheated on her husband]
was turned around as the son of Maria "parthena" (virgin < παρθὲνα).

Now, some ridiculously ignorant Hungarians claim that he was
the prince of Parthia (first mentioned in 7th c BC, NE of contemporary Iran, not far from Turan), therefore he was Hungarian !


Today 4:05 am



Propaganda minister invited Orban’s illustrious daughter to the first meeting about the future fideszization of the tourism industry (including the Sziget festival).

Andy Vajna, the Fidesz-appointed casino & film tzar of Hungary was also present.


Propaganda minister Rogan …..


Toadying bonus points!


Viktor the Magnificent…on the consolidation and nationalization of corruption.


Hajra Magyarok


And speaking of Kazakhstan: did you notice the news about the five (!) studies which the Hungarian Ministry of Agriculture commissioned (obviously, from somebody with good connections to the Minister himself) for the price of 34.5 million forints in total? The hilarious article on ( ) provides a link to these serious studies, on topics such as oil crops or the prospects of sheep husbandry in Kazakhstan. Already the illustrations are priceless: they are of such bad quality that it is impossible to tell whether the black blotches on them are supposed to depict sunflowers or soybeans.
According to the Minister himself, it was absolutely necessary to investigate how Hungarian research and enterprises could participate in the modernization of Kazakh agriculture. For this purpose, they commissioned these studies, around 500 pages in sum, with lots of maps and diagrams copy-pasted from diverse sources (such as the website of the Catholic congregation in Kazakhstan (!) which provided a map of average temperatures). Moreover, obviously large chunks of text as well were copy-pasted from sources such as a Hungarian handbook of sheep husbandry.


Today 5:21 am

Hilarious indeed. Hungarian agronomists in Kazakhstan would be a laughable proposition, a classic case of the blind leading the sightless.

It is incomprehensible why anyone in Hungary would even daydream that Kazakhstan would ever bother asking Hungary to help modernize its agriculture, rather than countries with serious international track records in this field, such as the US, Canada, Australia, or for that matter even little Israel.

After all, if the Kazakhs were really looking for worthless help, then why, there is next door the great russki Radjeena that could supply Kazakhstan with any number of modern Michurins and Lysenkos.


Veri az Isten a magyart! God clobbers the Hungarian!

A fundamental part of the “someone else’s fault” Hungarian mentality, refusing to admit, let alone learn from the fact that they keep shooting themselves in the foot.

And here we go again.
The turn East was a dumb, dilettante economic policy, but a logical political one for a budding dictator – the Western democratic systems were too restrictive, he wanted the freedom to do as he wishes.
Coupled with his limited education and general culture he thought himself capable enough to order the economy onto the path of growth, cunning enough to talk the moneyed dictatorships into investing, lending or buying. Instead the Russians sold him Paks II.

We know the other results.

God clobbers the [dumb] Hungarian! Yet again. Maybe it’s time for some thinking.


London Calling! (Singing?)

Just pathos and pity!

Orban’s Hungary dwells on pity and victimhood.

It’s ingrained into the psyche.

Even in the national anthem:

Pity then, our people, Lord,
Shaken by disaster!
Since a sea of grief engulfs
Save the Magyar, Master!
Fate, of old, has rent him sore:
May it now bring healing!
By-gone sins are all atoned,
Even the future sealing.

The English?

We just want to sing!

Thy choicest gifts in store,
On her be pleased to pour;
Long may she reign:
May she defend our laws,
And ever give us cause,
To sing with heart and voice,
God save the Queen!




Hungary’s is in the past looking back.

UK’s is in the future looking forward.


Today 5:28 am

Not only dumb, but profoundly malevolent.


The official debt/GDP ratio will be declared as 75.8% for December 31, 2015.

So my less official number is greater than 79.2% = 25.8/24.7*0.758.

(The debt was lessened by 1.1 trillion forints between December 4 and 31 on paper, see my Feb 8 note)


Lies, damn lies, Orban.


The media situation for democracy and openness has never been worse since 1990.

The public channels broadcast only state propaganda.
ATV is basically pacified.
We are watching the effective takeover of the second commercial channel, TV2 by Orban’s extended arms.
The most popular channel, RTL went back to its pre-RTL tax mode of police, celeb & tabloid news first, second & third.


Private banking in Hungary, 2nd half of 2015 vs 2nd half of 2014.

Number of accounts: 38,641, up 4.6%

The value of an average private account is 85.71 million forints (about 276,000 euro), up 15.1%

Re: ‘The media situation for democracy and openness has never been worse since 1990’ You know I will say that Magyarorszag has to be the main poster child when it comes to the failure of guarding and developing independent media from the grasping claws of the state. At this time it is crippling the country egregiously. Certainly the guardians have been ‘asleep at the media wheel’. I think it is fact to say the media state of affairs was learned intensely and energetically through the previous work of the nearby Russian autocrat when it comes to state control of mediums. Through stealth Magyarorszag is paying a dear price for almost complete state control of media. It is killing the development of opposing opinion relative to the state on the great issues of the day. Truly autocracy in the country would probably be in a much different state without the Internet and social media. And perhaps that area, specifically new forms of media , is where at least of modicum of independence can always exist when it comes to expressing opinion. And if that is not defended well others can fill in the blanks. Prognosis then: calamitous for what passes as… Read more »
Orbán and Co? As we would say here in Oz, “arseholes incorporated.” He obviously realized soon after his parliamentary putsch that he was no way capable of engineering any kind of genuine economic flowering in Hungary, so he went all out theatrically chasing the will-o’-the-wisp of economic snake oil from out East. Within the narrow ambit of internal Hungarian politics, Orbán is of course cunning like a shithouse rat (another saying from Oz), but that does not mean that he has any mental capacity beyond populist political tactics and sloganeering, and that is scant help strategically. Yet it is well-informed strategic thinking that he would most need to steer Hungary in an economically optimal direction. Well-informed, because a strategy is only as good as the assumptions underlying it are valid. As we have seen with his Eastern opening fiasco. If he had half a brain, he would now take his licks and urgently get together with a whole bunch of key investors and economists from the West to determine what exactly would be needed to be done in order to transform Hungary into a flourishing, massive exporter of high value-added products, and what quantum of investments and structural and social… Read more »

Re: Viktor the First! Genius of Felcsut!

Hehe… No dobos torte and kave for you in the Magyar embassy ‘down under’. How are the invites going?…;-)…

Ever since I first arrived in Australia many, many years ago, I carefully avoided the company of Hungarians, whom I always viewed with profound suspicion after my experiences in communist Hungary and in the refugee camps following the uprising in 1956. In their company, I would always be worrying about that potential stab in my back and about being driven literally apopleptic by their malevolence, narrow mindedness, stupid provincialism, mindless nationalism, and ugly antisemitism, but above all by their ingrained habit of always obsessively blaming others and never themselves for largely self-created misfortunes. They are the kind of people who don’t dare to look in the mirror for fear of what they will see there, and that is very, very sad. My reticence regarding the company of Hungarians has only been matched by a similar reticence in respect of the company of Jewish people, whom I do happen to love and admire very much, though strictly from a distance only, as I dislike to be suckered into either their eternal internecine conflicts, or into their exogenous ones, or for that matter their obsessive one upmanship, which I personally find rather irritating. I find the company of Anglos a heck of… Read more »

Interesting comment on the \’company of Hungarians. Like you I have memories. Here\’s one on the great happening of \’56.

I was just a kid here and learned my aunt took in a family of two who I believe she knew from the village or area \’back home\’ into her very small apartment. Months later I got the impression things didn\’t work out. I believe something happened to the relationship that once seemed good but then apparently turned sour. But I wasn\’t sure why. I could only surmise as to what the problem was. No doubt there were stresses all over the place. America had to be strange place for them. And I do know they weren\’t the same friendly people after all that commotion. Takeaway: leave it for the Russians to start trouble and then the Magyars ramp it up between themselves….;-)…


A bit OT – or not:

It has just been reported that O promised the city of Kecskemét a lot of money for economic developments:
Of course, the real reason for this is simple:
The Mercedes factory …
It needs more qualified people, better road connections etc etc …


I just stumbled on this government propaganda site in English – it has a new factoid every day:
Funny in a way – if you know the points that are left out …
Does anyone know who manages and finances this propaganda?


According to the website (bottom part) it says:
“These materials are distributed by LEVICK on behalf of the Office of the Prime Minister of Hungary.
Additional information is available at the Department of Justice in Washigton D.C.” Levick according to the website of is a leading public relations firm that establishes and protects trust.

In short the tax payer through the Prime Minister Office is paying for the public relations website/firm in the USA.

Does this answers your question.


Thanks, Ron – should have looked myself …
Still I’m wondering about the people who produce this and how much it costs the Hungarian taxpayers.


Actually, I can answer that via

And according to Hungarianspectrum of May 2015

The answer is that via Szazadveg HUF 1.8 bliion (minus” commission”) used of tax payers money to PR Hungary via Connie Mack.