A few days ago Hungarians heard from several politicians that their country is witnessing the best economic growth in living memory. Unfortunately, at about the same time the European Union released its regional competitiveness statistics, published every three years. There is a jarring dissonance between the empty words uttered by Prime Minister Viktor Orbán, National Bank Chairman György Matolcsy, and Economic Minister Mihály Varga and reality. The EU’s statistics reveal the true state of the Hungarian economy and the living standards of its inhabitants.
Hungary’s standing in comparison to other countries dropped between 2013 and 2016, and the overall economic well-being of the country is depressingly sub-par. The very first thing that struck me when I took a look at the “European Regional Competitive Index” was that all the talk about the poor quality of Hungarian healthcare and basic education is right on target. Government propaganda can try to make excuses for the dismal results of the PISA test, but those figures are now supported by the statistics of the competitive index. I’m sure that we will hear government sources doubting the validity of this survey, but evidence is piling up that there is something very wrong with the Hungarian educational system and healthcare.
As a first step I used the handy “region benchmarker” and compared Hungary to the three other V4 countries and Slovenia in eleven categories–institutions, macroeconomic stability, infrastructure, health, basic education, higher education and lifelong learning, labor market efficiency, market size, technological readiness, business sophistication, and innovation–all measured on a scale of 0 to 100. Overall, Slovakia and Hungary got the same score: 33. They ranked lowest of the five countries, trailing Poland (55), Slovenia (54), and the Czech Republic (49). When it comes to health, the situation is indescribably bad: Hungary (38), Poland (76), Slovenia (84), Czech Republic (67), and Slovakia (55). As far as basic education is concerned, Hungary fares better than Slovakia (44 as compared to 33), but if we compare its score to those of Poland (64), Slovenia (83), and the Czech Republic (62), Hungary should hang its head in shame. The situation is even worse in higher education and lifelong learning. In the latter case even Slovakia beats Hungary.
Let’s move on to the regional comparisons. There are 263 regions in the European Union and seven in Hungary: Central Hungary, Central Transdanubia, Western Transdanubia, South Transdanubia, Northern Hungary, Northern Great Plains, and Southern Great Plains. Since 2013 the standing of all seven regions has worsened. Index published a handy table showing the decline throughout the country.
Northern Hungary, which was one of the poorest regions of the Union already in 2013, has declined further. Just to give an idea of the situation in that northeastern corner of the country, here are some figures. As far as GDP per capita is concerned, the region ranks 256th out of the 263 regions. Or, put another way, if the EU-28 average is 100, Northern Hungary’s score is 40. (Luxembourg clocks in at 269.) Even more shocking is the state of health in the region. It ended up being 262nd out of 263.
Northern Hungary might be the worst off region in the country overall, but it is not all that much worse than the Northern Great Plains region, Southern Transdanubia, and the Southern Great Plains. The Northern Great Plains region, which is adjacent to Northern Hungary, is also extremely poor. Overall, it ended up being in 232nd place with an extremely low GDP per capita: 42% of the European average (or 256/263). The Southern Great Plains region is a tad better off. Its GDP per capita is 46% of the EU average (252/263), its overall rank 224/263. And let’s not forget about the Southern Transdanubia region where the GDP per capita is 44% of the EU average (253/263). Thus, large parts of the country are exceedingly poor.
But let’s move on to the “rich” areas of the country. The best off is Central Hungary, an area that includes Budapest. As far as its GDP per capita is concerned, the region is reasonably well off (84/263). However, when it comes to competitiveness, the region is only in 152nd place, which foreshadows slower growth in the future.
Since Viktor Orbán only a few days ago talked about the “complicated ethnic relations” of Hungary, I should point out that in both the Northern Hungarian and the Southern Transdanubian regions large Roma communities live in extreme poverty. So far very little has been done to improve the lot of these Gypsy communities.
Three sociologists put together an excellent study examining the situation in the Sellye-Siklós region of Baranya County and the sub-region around Encs in Borsod-Abaúj-Zemplén County. The country desperately needs a program that might help these regions offer a half decent existence to their inhabitants. And the country must revive Hungarian education and reform healthcare nationwide. Instead, Viktor Orbán had dreams of hosting the Olympic Games and builds one football stadium after the other. All this while “the country is rotting,” as one headline announced the publication of the European Regional Competitive Index.