Tag Archives: Azerbaijan

Hungary quits the Open Government Partnership in a huff

Yesterday the Associated Press reported the Hungarian government’s decision to quit the Open Government Partnership (OGP), “a multilateral initiative that aims to secure concrete commitments from governments to promote transparency, empower citizens, fight corruption, and harness new technologies to strengthen governance.”

OGP was formally launched on September 20, 2011, when the eight founding governments (Brazil, Norway, the Philippines, South Africa, the United Kingdom, and the United States) endorsed OGP’s Declaration and announced their countries’ action plans. Since 2011, 62 other countries joined, including Hungary, which signed its letter of intent on July 10, 2012. In this letter of intent the Orbán government declared that “it attached the utmost importance to cooperation with civil organizations.” It was the Ministry of Public Administration and Justice under Tibor Navracsics that represented the Hungarian government in this particular undertaking, which claimed at the time that “it supports the effective implementation of the OGP commitments.” It also promised “in person consultations with the civil organizations and experts regularly on a monthly basis.”

These were the promises, but according to the recollections of the participants, after the initial good working relations “the process started to slow down as the document reached the political level.” The final commitments were vague and greatly weakened. By 2014 it was clear that the Hungarian government’s “sole purpose with its membership was the opportunity to communicate its devotion to open government” to the international community.

Hungary is the second country whose government is not ready to abide by guidelines set by the Steering Committee of OGP and endorsed by them. The first country to leave OGP was Putin’s Russia, which had joined the organization in April 2012. A year later, on May 17, 2013, the Russian government informed the group of its decision to leave. Russia’s participation in this group was dubious from the very beginning, but there were other countries whose commitments to the ideals of OGP were also questionable. OGP acknowledged in February 2014 that Lithuania, Malta, and Turkey had failed to meet their commitments as members of the Open Government Partnership. Warnings were issued to these three states. In addition, the Steering Committee redefined standards for suspending members. “Two warnings in a row would trigger a discussion about continued membership of OGP countries” that create hostile environments for civil society.

By October 2014 new rules were in place that made suspension of membership practically automatic if any country limits the freedom of information; limits the activities of civic groups; favors civic groups attached in some way to the government; limits the freedom of expression and freedom of assembly; limits freedom of the press, independence of the media, or engages in the intimidation of media owners. 444.hu’s eagle-eyed reporters noted the OGP’s tightened rules for suspension, adding that they are tailor-made for Viktor Orbán’s Hungary.

The first victim of the new suspension rules was Azerbaijan. In March 2016 the Criteria and Standards Subcommittee recommended the move because “such constraints are evident in the laws on grants, non-governmental organizations, incarceration of NGO activists and journalists” that would precipitate “OGP’s response policy.” At that time, it was noted, “similar NGO complaints that the Hungarian government is restricting civil society remain under consideration.” In addition, Turkey was suspended in September 2016 because it had failed to deliver a National Action Plan since 2014.

Prior to this time the Orbán government had begun a war against Hungarian nongovernmental groups, financed mostly by the Norway Grants but also by the Soros Foundation. The government accused these NGOs of representing foreign interests and proceeded to raid their offices. At that point four leaders of NGOs decided to follow their colleagues in Azerbaijan and launch a formal complaint against the Orbán government. Fanny Hidvégi of the Hungarian Civil Liberties Union, Sándor Léderer of K-Monitor Watchdog for Public Funds, Miklós Ligeti of Transparency International Hungary, and Júlia Keserű of the Sunlight Foundation wrote a letter to the members of the OGP Steering Committee. The letter is available on the internet.

After considering the complaints submitted by Hungarian NGO leaders, OGP proposed several remedies that the Orbán government should adopt. It suggested the establishment of a Permanent Dialogues Mechanism (PDM) within sixty days that would ensure the participation of the relevant government agencies and interested civil society organizations. What must have especially irritated the Orbán government was that “all members of the public will be kept informed about all core aspects of the national OGP process—and especially know well in advance … about the key moments to provide inputs and discuss priorities.” OGP demanded five so-called Smart Recommendations that the Orbán government would never accept: monitoring of public disclosure practices of local government and state-owned enterprises; reviewing party and campaign financing regulations; revising the freedom of information regulations; revising regulations on classified information; and launching e-procurement. For easy access to this document, I am attaching it in full at the end of this post.

After reading these “recommendations” I’m not at all surprised that the Orbán government accepted the odium of withdrawal. A semi-autocratic, illiberal government of the kind that exists in Hungary today would never agree to such demands.

So, let’s see how the official government media explained the decision. Magyar Idők justified the Hungarian decision by citing OGP’s “one-sided criticism” of the Orbán government based on the unfair accusations of “civilians financed by George Soros.” These NGOs serve foreign interests and have been spreading false stories about the Hungarian government. Transparency International and TASZ, the Hungarian equivalent of the Civil Liberties Union, had complained to the organization about the Orbán government already in October 2012, shortly after Hungary joined OGP. In January 2013 K-Monitor allied with TASZ and TI in a new attack. And here was the latest one. It was high time to quit this unfair organization.

In the opinion of Szilárd Németh, deputy chairman of Fidesz, Hungary’s abandonment of the organization “actually sheds a very positive light on us because we do not want to participate in an organization where members carry on a conversation among themselves after which they single out somebody whom they are trying to keep at bay with one-sided reports, distortions of facts, with documents prepared by phony civil organizations mostly financed by George Soros.” It was a good decision, “a lovely gift for the time when they can get together again and they can nod against Hungary.” Németh is referring to the Open Government Global Summit, which is being held at this very moment in Paris.

The opposition’s interpretation of the move was predictable. They pointed out that the Orbán government no longer cares what the world thinks of it because surely, following in Russia’s footsteps, they are practically admitting that they are corrupt to the core. Zsolt Gréczy, DK’s spokesman, said that Hungary’s eventual suspension from the organization was inevitable. But the country’s withdrawal from the organization a day before the beginning of the Global Summit was unnecessary in that Hungary was not facing suspension at this time. The demands the organization made on the Orbán government, however, were more than the “proud Magyar” could stomach.

♦ ♦ ♦

December 8, 2016

Viktor Orbán and his entourage in Baku

Not so long ago I wrote about Viktor Orbán’s fallacious theories regarding the direct connection between economic growth and authoritarian regimes. He looked at some of the countries that had plenty of gas, oil, and in some cases minerals and attributed their economic success in recent years to the nature of their regimes instead of to their natural resources. Ever since he became prime minister in 2010 he has been shamelessly courting the dictators or autocrats of these countries, only to discover that some of them are currently in deep economic trouble. One of these countries is Azerbaijan. I will not go into the details of the shocking deal Orbán made with President Ilham Aliyev concerning the fate of an Azeri murderer who was serving his sentence in a Hungarian jail. Anyone who’s interested in the particulars can find plenty of information on this blog.

At one point Orbán was even hoping that Hungary would issue bonds in Azeri currency, the manat, but the idea died a quiet death. And a good thing it did since the manat, which was worth 350 forints in January 2015, today trades at only 182 forints. Azerbaijan is in a deep recession (3.3%) with a 12% deficit and an inflation of 14%. I read somewhere that it is unable to pay for military equipment it ordered from Russia and the Russians are getting antsy.

Hungary, however, remains a steadfast ally of Azerbaijan. Not only did Viktor Orbán, his wife, and practically half of the Hungarian cabinet visit Aliyev in Baku, but it was announced during the trip by Foreign Minister Péter Szijjártó that the Hungarian Export-Import Bank has opened a $200 million line of credit to Azerbaijan to expand bilateral economic cooperation with Hungary. Aside from this announcement, the Hungarian media couldn’t discover any earth shattering reasons for the trip, certainly nothing concrete regarding “bilateral economic cooperation.” Although Viktor Orbán tried to give the impression that Azeri-Hungarian trade has soared since the Orbán government decided to treat Azerbaijan as a “stable partner, ally, and friend” of Hungary, the truth is that Hungarian exports to Azerbaijan today are only slightly above where they were in 2009. In fact, between 2010 and 2012 they decreased dramatically. Azeri exports to Hungary during the same period were flat.

Members of the cabinet nonetheless keep insisting that Azeri-Hungarian bilateral economic cooperation will be important to Hungary’s economy. Mihály Varga, minister of economy, spoke fleetingly about cooperation in the energy field, pharmaceuticals, and healthcare. Varga went on to emphasize Azerbaijan’s fantastic development in the past few years and stressed that the country is “the most important partner” in the South-Caucasian region. Which is not to say much. Hungarian exports to Azerbaijan amounted to a mere $65 million. Sándor Fazekas, minister of agriculture, chimed in, claiming that “Azerbaijan is the most promising agricultural partner of Hungary” because “since 2012 our exports to the country have quadrupled,” but, again, given the low level of trade volume that doesn’t mean much.

The Hungarian politicians felt obliged to say something about the changed circumstances of the Azeri economy. As Szijjártó cryptically put it, “we must place Azeri-Hungarian economic cooperation in a different dimension.” A Mandiner opinion piece sarcastically remarked that the “new dimension is the $200 million line of credit extended to Azerbaijan.”

Every time Orbán visits a country that is not exactly a democratic paradise the Hungarian media, with the exception of sycophantic publications like Magyar Idők, Magyar Hírlap, and Pesti Srácok, point out Orbán’s servile gestures toward his hosts. This trip was no exception. Csaba Káncz, formerly an advisor to the European Union, wrote that Orbán’s trip to Azerbaijan will not produce any tangible results,“it will [only] bring shame to the country.” One of the reasons for this shame is that Orbán and his wife lay a wreath on the grave of Heidar Aliyev, father of the current president of Azerbaijan, and his wife, Zarifa Aliyeva. The elder Aliyev’s political career was infamous. As first secretary of the Azeri communist party he ruled the country uninterrupted between 1969 and 2003 when he appointed his son to be his successor. Since 1995 there has been not one free election in the country. The last election, in 2014, was so free and fair that the results were announced the day before the actual election. Currently there are more than 100 political prisoners in Azerbaijan.

Led by Viktor and Anikó Orbán the Hungarian delegation is visiting the grave site of Heidar Aliyev and his wife

Led by Viktor and Anikó Orbán, the Hungarian delegation visits the grave site of Heidar Aliyev and his wife

In light of Azerbaijan’s dictatorship (in force ever since 1920) it was jarring that the Hungarian prime minister praised “the leaders of the country who have made Azerbaijan one of the most respected and often envied countries in the world.” People rarely appreciate the success of others, but sooner or later hard work brings triumph, and of late Azerbaijan’s “weight and prestige have grown.” Looking at it from the vantage point of Europe, Azerbaijan is successful and “committed to cooperation between East and West.” Surely, Orbán didn’t want to say much about Azerbaijan’s current economic and financial woes. He merely suggested diversification, in which “Hungary can be a useful partner” and which will make Azerbaijan even more successful and stronger.

A pilgrimage to the grave of the elder Aliyevs wasn’t enough groveling before the Azeri dictator. Viktor Orbán decided to honor the wife of the president, Mehriban Aliyeva, who serves as chairperson of the Aliyev Foundation named after Heidar Aliyev, by conferring on her the Commander’s Cross of the Order of Merit. And then the Hungarian entourage packed up and left. Another pretty useless and very expensive trip.

March 7, 2016

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

Today’s post was inspired by an article that appeared yesterday in 444.hu 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. 444.hu 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. 444.hu 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, 444.hu 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.

Another “strategic partnership”: This time with Azerbaijan, a model to follow

While we have been preoccupied with American-Hungarian and Russian-Hungarian relations, the dictator of Azerbaijan, Ilham Aliyev, arrived in Hungary for a visit, his third in four and a half years. Not too many high-level western visitors can be seen in Budapest lately, so Orbán must be satisfied with Azeri dictators and the like. Orbán himself is not welcome in western capitals, and therefore his official trips usually take him outside of the European Union and North America. He visited Baku twice, and I understand he will be going again to strengthen the “strategic partnership” he forged between Hungary and Azerbaijan, two countries that have a lot in common: both are extremely corrupt and both are led by autocratic leaders whom outsiders describe as mafia dons.

In September 2012 I wrote three posts (September 1, 2, and 3) on the Orbán government’s decision to release Ramil Safarov, an Azeri army officer, from the Hungarian jail where he was serving a life sentence for the brutal murder of an Armenian officer in 2004. The crime was perpetrated in Budapest, where both men spent a couple of months in a training program organized by NATO’s Partnership for Peace Program. The Azeri government made several attempts to convince the Hungarian authorities to release him into their custody. But because Safarov was considered to be a national hero the Gyurcsány and Bajnai governments, fearing that once Safarov stepped onto Azeri soil he would not spend a minute in jail, denied the requests. Not so the second Orbán government, which in the hope of Azeri goodwill and economic support decided to strike a deal with Aliyev, the Azeri dictator. To this day we don’t know what the Hungarian government got in return for the release of the “ax murderer,” as he is called in Hungary. According to rumors at the time, Viktor Orbán made the decision to extradite Safarov in exchange for the Azeri purchase of Hungarian bonds. The deal was struck under the watchful eye of Péter Szijjártó, and final approval came from Tibor Navracsics, the minister of justice who currently serves as one of the EU commissioners in Brussels. This dirty deal was the beginning of a great friendship between Aliyev’s Azerbaijan and Orbán’s Hungary.

Since then, the Hungarian government has manifested its commitment to closer economic and political ties between the two countries on several occasions. In November 2012 Hungary organized an “international conference” in Budapest to commemorate the 20th anniversary of the establishment of diplomatic relations between Hungary and Azerbaijan. In 2013 Hungary opened a Hungarian Trading House in Baku, and yesterday Viktor Orbán and Ilham Aliyev signed a “strategic partnership” agreement. Apparently this agreement encompasses the following areas of cooperation: energy, education, commercial air transport, tourism, veterinary medicine, and youth and sport. Currently trade between the two countries is insignificant and has actually been falling since 2010. Szijjártó himself talks about Azerbaijan only as a “potential economic partner” of Hungary, a partnership that will be realized once Azeri gas reaches Europe. For the time being, one hears only about the hundreds of scholarships offered by Hungary as a goodwill gesture toward these Central Asian countries. Azerbaijan just gratefully acknowledged 200 scholarships.

As usual, in the joint press conference after the meeting and signing ceremony, Viktor Orbán went overboard, praising Azerbaijan as an “example to follow” (mintaállam). By the way, when Orbán is confronted with foreign dignitaries, he is often visibly servile. He bows just a little too low, which in Aliyev’s case was accentuated by the Azeri president’s height and Orbán’s small stature. He did the same thing when the Chinese prime minister, Wen Jiabao, visited Budapest in 2011.

In his unbridled enthusiasm for the Azeri model, he even praised Aliyev’s father, Heydar Aliyev, the former KGB agent who became president of Azerbaijan after a military coup that overthrew the democratically elected president of the country in 1993. His and his family’s corruption was legendary. After his death in 2003, his son, the current president Ilham Aliyev, took over after a fraudulent election. Since then he has been reelected three times, and he can be assured that he will remain president of the country as long as he is alive: the law was changed that barred repeated reelection of the same person to the post. Wikileaks documents have revealed that American observers compared  the Azeri president to a mafia crime boss. Well, perhaps this is what Orbán had in mind when he spoke of Azerbaijan as an example to follow.

President Ilham Alyev and Prime Minister Viktor Orbán

President Ilham Aliyev and Prime Minister Viktor Orbán

In the afternoon there was an economic forum where Orbán made a speech in which he announced that “countries that have political systems that offer clear and unambiguous leadership to a given community are lucky,” indicating that he considers both Azerbaijan and Hungary among the lucky ones. Aliyev immediately picked up on Orbán’s remarks, adding that “both countries are led along a clear strategy. Hungary is defending its national interests, its independence, and its sovereignty.” How should one interpret Orbán’s reference to “clear and unambiguous leadership”?  I, for one, think that he means that in such a regime no opposition forces could possibly alter the strategy of an autocratic leader. This is certainly true of Aliyev as well as Orbán.

Today HVG posted a short note online teasing an article in its print edition tomorrow, according to which there might be “a thread that connects Baku and Budapest” in the U.S. banning of the six Hungarian officials and businessmen. According to the paper, the case involves corruption surrounding Hungarian government bonds offered for sale to Azerbaijan in 2012. My recollection is that the deal eventually fell through. The Hungarians were apparently hoping that Azerbaijan would pay Hungary back for its release of Ramil Safarov by buying Hungarian bonds through ARDNF, the Azerbaijan State Oil Fund. However,  ARDNF announced on October 9 that it had no intention of buying Hungarian bonds and that it did not plan to invest in Hungary. I still remember all the jokes on ATV about “manat,” the Azeri currency. However, there is always the possibility that some secret deal was struck over the Hungarian government bonds and that perhaps some of the money received disappeared either into Fidesz coffers or into individual pockets. The official announcement of ARDNF might have been intended simply to disavow any connection between the Safarov case and payments received by Hungary. We’ll have to see what HVG came up with.

And here is the latest. According to an unnamed Fidesz source, Viktor Orbán realized that he went too far in embracing Russia, ratcheting up his anti-EU rhetoric, and attacking the United States. According to this highly placed individual, Orbán is planning a change of orientation. From here on he will be a model of cooperation with his western allies. Well, his latest moves don’t support this reorientation. First, he just raised RTL Klub’s 40% levy to 50%, presumably to punish them for reporting negative news about the government on their very popular 6 o’clock news. This huge levy is a serious financial blow to RTL Klub, one that its German parent company, Bertelsmann, will have to absorb. Second, he wouldn’t call Azerbaijan “an example to follow” if he is preparing the ground for a change in his foreign policy objectives. And third, if he were trying to show the U.S. that he is serious about ridding Hungary of corruption, he would tell his minions to relieve Ildikó Vida and her co-workers of their duties. I believe that this piece of news is no more than Fidesz disinformation. At best, it is a new round in his usual “peacock dance.”

Hungary’s new friend: Turkmenistan’s dictator

The Hungarian media is full of stories about the visit of the bloody dictator of Turkmenistan, Gurbanguly Berdymuhamedov, to Budapest. The trip has been in the making for a long time. It was Hungary that initiated talks between the two countries when in November 2011 President Pál Schmitt was dispatched to Asgabat, the capital of Turkmenistan. In January of this year Péter Szijjártó announced that the two countries had signed an agreement on economic cooperation. It was at that time that it was revealed that the Turkmen dictator himself will visit Hungary sometime in June.

As for the economic ties, Szijjártó claimed that there are hopeful signs that the relatively low level of trade between the two countries will grow substantially in the near future. He revealed that there are already Hungarian “success stories” in the food processing industry and in agriculture. A Hungarian firm is involved with the construction of a large brewery. He also indicated that Turkmenistan intends to modernize its oil and gas sector and would welcome Hungarian participation.

Trade between the two countries is indeed very small: until 2010 it amounted to only 10-15 million dollars a year, but by last year it had reached 110 million dollars. Just to give you an idea of the relative size of this trade relationship, Turkmenistan is not among the top 50 trading partners of Hungary.

Szijjártó also mentioned the possible construction of a gas pipeline, which is currently under discussion between the European Commission and Turkmenistan. Clearly, Hungary’s interest lies primarily in Turkmenistan’s gas reserves, which are the fourth largest in the world.

The opposition loudly protests this cozy relationship between Asgabat and Budapest, pointing out that Turkmenistan is second only to North Korea in having the darkest dictatorship and that the only significant difference is that North Korea is very poor while Turkmenistan is flush with cash from the sale of natural gas to Russia and China. One can read more about the situation in Turkmenistan in the U.S. Human Rights Report of 2013.

Pro-government commentators point out that, after all, Ferenc Gyurcsány also visited Turkmenistan in the summer of 2008. Indeed, he did and apparently had a six-hour talk with Berdimuhamedov. He went there to show the United States that, despite rumors that he was against the Nabucco pipeline, the pet project of the EU and the United States, he was serious about finding a way of getting gas from outside of Russia. Apparently he came back convinced that the Nabucco project would not materialize. He turned out to be right.

The Trans-Caspian project was first conceived in the late 1990s.  Talks between the European Union and two of the five countries surrounding the Caspian Sea, Azerbaijan and Turkmenistan, officially began on September 7, 2011, but there was not much follow-through. In the wake of the protests in Kiev and the ensuing Russian-Ukrainian conflict, however, the Trans-Caspian pipeline gained new urgency. In December 2013 it was announced that negotiations between Turkmenistan and the European Union would begin in early 2014. The Russian response was swift. Sergei Lavrov, Russian foreign minister, indicated that “external interference in the Caspian region will strain the situation in the region and can have a negative impact on the five-party negotiations,” that is, among Turkmenistan, Azerbaijan, Kazakhstan, Iran, and, naturally, Russia.

In earlier Hungarian reports on Szijjártó’s trade negotiations, no mention was made of Turkmen natural gas, but on June 14 Trend, an Azeri site, said that “Hungary is interested in receiving Turkmen gas under transnational projects.” The next piece of information, from MTI, stated that Baymyrat Hojamuhammedov, deputy prime minister for oil and gas, told the newly appointed minister in charge of national economic development Miklós Seszták that Turkmenistan in the next two decades plans to more than triple its production of natural gas and wants to lay pipelines toward Europe, Pakistan, and India.

While Hojamuhammedov was visiting Miklós Seszták, Turkmen Foreign Minister Raşit Meredow was talking with Péter Szijjártó. Note that, flouting diplomatic protocol, the Turkmen foreign minister met only with Péter Szijjártó and not his Hungarian counterpart, Tibor Navracsics.

As for Gurbanguly Berdymukhamedov, he first met President János Áder in the Sándor Palace. Áder talked about the modernization of Turkmenistan and possible Hungarian participation in the Turkmen economy. It was no more than generalities. Berdymukhamedov’s announcement was, on the other hand, more interesting. He pointed out that “in a political sense the two countries’ points of view resemble each other in many ways. Both find stability and security important.” Turkmenistan is “grateful to Hungary for representing her in the United Nations.” He added that “the foreign ministers of the two countries continue their consultations concerning foreign policy.” He hopes that “Hungarian experts” will help Turkmenistan in its economic and social programs. Finally, he invited János Áder to Asgabat. It looks as if the two got along splendidly. The Hungarian media watched every move of the two men and even noted that their handshake lasted eight seconds!

Source: AFP. Photo Igor Sasin

Source: AFP/ Photo by Igor Sasin

Berdymukhamedov’s official program included a meeting with House Speaker László Kövér. Nothing has been said so far about a possible meeting between Berdymukhamedov and Prime Minister Viktor Orbán, although it is hard to imagine that such a meeting would not take place.

Let me add a funny note. Hungary was just admitted to the Parliamentary Assembly of Turkic Speaking Countries, joining Azerbaijan, Kazakhstan, Kirghistan, and Turkey. The request came from former deputy-speaker of the parliament Sándor Lezsák, who started his career in MDF but who now can be placed somewhere between Fidesz and Jobbik. He is among those who refuse to accept the Finno-Ugric origin of the Hungarian language and overemphasize the importance of  Turkic loan-words in the vocabulary. Anyone who’s interested in Turanism, which is closely linked to the idea of Hungarian being a Turkic language, can read a fairly good summary of the movement here or, in Hungarian, here.

I also thought that you would appreciate a picture of Berdymukhamedov on horseback. He even participates in horse races. In one of them, he was thrown off his horse but, never fear, just as a good dictator should, he won the race anyway.

Viktor Orbán feels at home in Iran, Azerbaijan, and China

It’s time to move on, although the saga of the Holocaust Memorial is far from over. Let’s look outside of Hungary to see what Hungarian foreign policy is up to. The first news item is from yesterday; I discovered it on the Iranian news agency’s website. The highest Hungarian dignitaries–János Áder, president; Viktor Orbán, prime minister; László Kövér, speaker of the house; and János Martonyi, foreign minister–tried to outdo each other in sending separate congratulatory messages on the occasion of “the anniversary of victory of the Islamic Revolution.” The news agency naturally mentioned that “Hungary has been a member of the European Union” ever since 2004. It also reported that in addition to the Hungarians, dignitaries of Kyrgyzstan, Azerbaijan, and Tajikistan also sent greetings to the Iranian leaders.

Today another piece of news arrived from which we learned that a delegation of Hungarian journalists and film makers from MTV arrived in Azerbaijan. They are looking for a proper setting for a film about the “atrocities committed by Armenian troops” in the Nagomo Karabakh region. According to the Azerbaijan news agency, the Hungarian television crew will make a documentary about the town of Khojaly that was attacked by Armenian forces and where several hundred Azerbaijani were killed. The Azerbaijanis are certain that “the film will tell the truth to the world about Karabakh.” So, as you can see, the Orbán government finds kindred souls in Iran, Azerbaijan, and yes, China.

Because Viktor Orbán is in China right now where he keeps boasting about the Asiatic origin of the Hungarians. Not long ago he called his people “half Asiatic,” but by now it seems they have become completely Asiatic. He added that “Hungarians were ridiculed many times for their Asiatic origins” but by now that origin has become an asset because it is clear that “the center of gravity of the world economy has shifted from west to east.” I just hope that Orbán didn’t mention anything about the alleged relationship between the Huns and the Hungarians because the Chinese built the Great Wall in order to save themselves from the ferocious Hun invaders.

In Beijing, similar to other foreign visits/trade missions, the program started with a speech by Orbán before an audience of business people that included about 100 Hungarian business men who accompanied him. As usual, the speech was full of falsehoods about Hungary’s economic performance. It is hard to believe that Chinese businessmen who are known for their acumen are so ignorant that they believe that “whoever makes a business deal with the Hungarians will have a direct relationship with the economic engine of the European Union.” Or, “Hungary is Europe’s most competitive economy where a considerable production center came into being in addition to an important research-and-development network.” Furthermore, he outlined the future economic prospects of Hungary as outright rosy: a 4% economic growth year after year and 3-4 % unemployment, which is considered to be full employment.

In addition to the country’s economic prospects, he stressed “the political stability” in Hungary which is such an advantage when it comes to economic growth. In this respect the Hungarian situation is very similar to that of China, he said, adding that he very much hoped that “the Hungarian people will vote for political stability” in the coming election. This particular claim made quite a splash in Hungary where a blog writer pointed out that “Chinese political stability in other words means communist dictatorship” and that Orbán actually gave himself away by in effect admitting that Hungary is no longer a democracy.

The Chinese news agency was less effusive than the Hungarian prime minister, although Premier Li Kequiang and Viktor Orbán remembered fondly the 65th anniversary of Chinese-Hungarian diplomatic ties. Again, one just hopes that neither man remembered Mao Zedong’s less than friendly attitude toward Hungary at the time of the Hungarian October Revolution of 1956 when he urged Khrushchev to put down the revolt and show no mercy.

China-Orban

The Chinese seem to be interested primarily in building roads and railways. We heard about the Budapest-Belgrade railway line earlier, but now it seems to have become a reality. China also expressed an interest in expanding investment and local currency swap agreements. China will provide assistance to Hungarian companies to invest in China while Hungary will help Chinese businessmen acquire visas and working licenses and will provide them with health insurance. In addition, representatives of Huawei Technologies Hungary and the Hungarian government signed an agreement to establish an innovation center in addition to two Huawei Europe supply centers, one in Pécs and another in Komárom. What is really new is that Li called for Chinese-Hungarian cooperation on nuclear energy and hinted that it  could be accomplished jointly with a third party.

This last item sounds rather intriguing. Is it possible that Viktor Orbán realized in the last month or so that the Russian loan might not be quite enough to build the new nuclear power plant and that he is also soliciting Chinese money and know-how? What will Russia think of such an arrangement?

Another item of note is the establishment of a regional center of the Bank of China. While the Orbán government does everything in its power to get rid of western banks, the prime minister welcomes the Bank of China with open arms. I am curious what kinds of guarantees he offered the Chinese to prompt them to establish the Bank of China’s European regional headquarters in Hungary. Without some guarantees I can’t imagine that any banker in his right mind would choose Hungary.

The rest of the agreements are less exciting: the usual cultural centers, more bilingual Chinese schools, and additional scholarships for Chinese students to study in Hungary. It seems there is money for foreign students even as the government sharply reduced the money available for Hungarian higher education in general and introduced very high tuition fees for Hungarian students.

The question of a direct flight between Budapest and Beijing came up again. When there were such flights they operated at a loss. Of course, if Chinese business is substantial enough in Hungary, such flights might be feasible. At first glance, however, it is hard to tell how extensive Chinese economic penetration will be as a result of these agreements.