Tag Archives: Eastern Opening

A quick look at three recent events in Hungary

Medián’s latest opinion poll on parties and politicians

Today I will again cover several topics, all of which, I believe, deserve attention. I will start with Medián’s latest opinion poll, which shows a slight uptick in Fidesz support while the opposition parties’ positions remain fairly constant. I will not burden you with too many details and will provide figures only for those voters who claim they will certainly vote at the next election. In this group Fidesz leads with 53%, followed by Jobbik at 21%, while MSZP, which looks upon itself as the leading party on the left, currently garners only 12%. DK stands at 6% and LMP at 3%, which means that it wouldn’t meet the 5% threshold for representation in parliament. The smaller parties like Momentum, Együtt, Two-tailed Dog, and MoMa each have a 1% share of the active voters while the Hungarian Liberal Party and Párbeszéd have even less support. As it stands, about 10% of votes would be absolutely wasted if all these parties decided to run on their own. Given the fractured state of the left-of-center opposition, it is not at all surprising that 33% of the likely voters have no idea at the moment for which party they will vote at next year’s election.

Medián also asked people’s opinion of politicians. Hungarians have a very low opinion of politicians in general. Usually, János Áder heads the list, but his rank is due only to his office. People feel they must respect the president of the country. But even Áder’s “popularity” is only 49%. Viktor Orbán trails at 44%. The most popular opposition politician is Gergely Karácsony, mayor of Zugló (District XIV), with 39%. Currently he is Párbeszéd’s candidate for the premiership, which might be responsible for an 8% jump in his popularity in the last two months. On the other hand, MSZP’s László Botka hasn’t captured the imagination of the electorate. On the contrary, between April and June he has lost 8%. His current standing is a mere 26%. There are only two politicians who are less popular than Botka: Lajos Bokros and Ferenc Gyurcsány. Given Botka’s lack of popularity and the stagnating low support for MSZP, the socialist party’s prospects don’t seem too bright. I must say that I’m not surprised.

Egypt and Hungary are political neighbors

At least this is what Viktor Orbán claimed yesterday when Abdel Fattah el-Sisi visited Hungary to confer with the prime ministers of the Visegrád 4 and to have bilateral talks with Viktor Orbán.

El-Sisi arrived in Budapest in secrecy late Sunday night. MTI reported his presence in the Hungarian capital only after his meeting with Viktor Orbán yesterday. The Egyptian press was much more forthcoming. They announced the impending visit to Budapest already on July 1. As 168 Óra said of the strange circumstances of el-Sisi’s arrival, “the Orbán government first wanted to hide the dictator but at the end he was greeted with open arms.” Indeed, just as in the case of Erdoğan, Orbán went out of his way to flatter the dictator. He again came forth with some strange comments. Orbán, who likes to speak in the name of all Hungarians, claimed that when Hungarians look at other countries their first inquiry is “how much they are in love with their own independence.” I’m sure that this odd comment comes as a surprise to most Hungarians. But, the most incredible sentence was: “Egypt is not only a country close by but also politically speaking a neighbor.”

In addition to political matters there was again a lot of talk about the great economic opportunities and the prospects of more intensive trade relations in the future. All the talk about trade with Turkey a couple of days ago and now with Egypt prompted Bálint Ablonczy of Válasz to write an opinion piece titled “Wouldn’t it be time for a western opening?” He rightly pointed out that seven years after the announcement of the Eastern Opening the diversification of Hungarian trade relations hasn’t changed at all. In fact, in 2010 77% percent of Hungarian exports went to the countries of the European Union. Today that figure is 80%. This is so despite bilateral talks with leaders of countries east of Hungary. Meanwhile, Orbán meets European politicians only at EU summits. Perhaps, says Ablonczy, it would be time to turn toward the west. What Ablonczy doesn’t say but I’m sure he knows is that at present there are not too many European politicians who would like to be chummy with Viktor Orbán, friend of Vladimir Putin, Recep Tayyip Erdoğan, Abel Fattah el-Sisi, Nursultan Nazarbayev, Ilham Aliyev, and other unsavory leaders.

Trade schools versus gymnasiums

I once wrote a post with the title “Hungarian politicians and learning: Not a good mix,” in which I listed a few truly harmful people in and around Hungarian education, starting with Rózsa Hoffmann, KDNP undersecretary of education between 2010 and 2014, László Palkovics, her successor, and László Parragh, president of the Hungarian Chamber of Commerce and Industry. The fact that a businessman might have such an outsize influence on public education might surprise most people, but the fact is that for one reason or another Parragh managed to convince Orbán that his ideas reflect the way Hungarian education should be structured for maximum economic benefit. Unfortunately, his ideas are totally misguided. He sees Hungary as a huge factory floor where blue-color workers toil on assembly lines. In his opinion, these workers don’t need a broad liberal arts education before embarking on a trade or profession. After eight years of general public education, they should be sent to trade schools. Orbán’s educational establishment has begun to promote trade schools over traditional high school education.

But there is one serious problem. Hungarian parents are smarter than László Parragh and want to have their children go through 12 years of academic learning. Interest in gymnasiums is still as high as ever. A furious Parragh blamed the municipalities for not shuttering gymnasiums. So, if the people don’t do something he and his fellow politicians want, the only way to remedy the situation is to force people to obey. A few days ago Magyar Nemzet received a copy of a background study on the subject which advocates “the introduction of an entrance exam to be taken in grade eight” that would determine the future of 14-year-olds. In addition, the authors of the study suggest “a gradual restriction on the number of gymnasiums.” Let’s kill children’s opportunities after a single test. Because once children are forced into these trade schools there is no way they will ever end up in college or university.

Let me include here a couple of recent photos taken in these “szakközépiskolák.”

My favorite is the one below that accompanies Magyar Nemzet’s article on the so-called educators’ plan for ruining a whole generation.

What in the world will these two guys do with what they are allegedly learning here?

July 4, 2017

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.

The moral health of Hungarian society

More and more thoughtful Hungarians are raising their voices, calling attention to a moral and social crisis in their country. The deplorable state of Hungarian society has been a phenomenon of long standing. It wasn’t Viktor Orbán who created a society that is oblivious to the fact that the country in which they live is heading toward a tipping point when the entire edifice might collapse, burying the country’s citizens beneath the ruins. Though it is Viktor Orbán who is speeding up the process.

While an overwhelming majority of the population can be mobilized against non-existent immigrants, most people pay not the slightest attention to the demographic crisis in their own country. They blithely accept the fact that far too many young, well-educated people are leaving the country because they see no future in their homeland.

Hungarian education is in serious crisis. The new centralized system created by the second Orbán government barely functions, and student performance is deteriorating. Segregation of schools has become a reality and, with it, social mobility has been further stifled. The autonomy of the universities is long gone. Healthcare is inadequate because, among other things, there are not enough doctors and nurses. Hungarian bureaucracy has always been cumbersome and expensive, but by now it is close to collapsing because political loyalty is more important to Fidesz and its leader than professional competence.

Corruption has been growing steadily, and I’m not talking only about financial corruption but about the corruption of the soul, the contempt for others, racism, a lack of solidarity, the widespread vulgarity, the churches’ total indifference to the sufferings of the asylum seekers, the cowardice of individuals who don’t speak up against blatantly illegal acts of the government.

Hungary, a country that was the model in the region, has become a laggard in economic growth. The rate of investment is very low, poverty is growing, too little money is being spent on education. Should I continue?

These problems can be summed up in a single word: Hungarian society is ill. László Lengyel, an economist and public commentator, went so far as to to say that “Hungary is dying.” Not so much in the material sense as in the sense of spiritual wellness. He was referring to the culture of callousness (szívtelenség) that is widespread among Hungarians.

Let me share a story that was widely reported in the media. It is hard to believe, but an old, sick man sat for four solid days on a bench on II. János Pál pápa tér surrounded by a swarm of wasps who were drawn to him by the sores on his legs. He was waiting there to die. No one paid the slightest attention to him, although a lot of passersby must have seen him. On that very square a few weeks earlier hundreds of asylum seekers had camped out, waiting for the trains to take them to Austria. The locals immediately reported them to the far-right Fidesz mayor of the district and demanded their removal. Yet a couple of weeks later no one cared one whit about that sick man. Their hatred of and callousness toward strangers seems to be stronger than their sense of solidarity, even with their own. Gusztáv Megyesi, the talented ÉS journalist, wrote a brilliant essay on this story in today’s Népszabadság.

Others express their amazement at the gullibility of the Hungarian people, which may well be linked to a school system that emphasizes rote learning instead of independent thinking. For a good five years Viktor Orbán’s foreign policy consisted of what he called the “Eastern Opening.” The West, he argued, was in decline but the illiberal states in the East are successful. Democracy is a cumbersome system of governance that doesn’t allow for a speedy reaction to a fast-changing world. But then comes the refugee crisis in which Orbán, knowing his people only too well, sees great opportunities to gain popular support, and he switches his line. The East is abandoned, and now all he talks about is defending European civilization from the East. Hungary, he now says, has been part of the West for 1,100 years. Earlier, he proudly announced that Hungarians are products of the East and that, in fact, he feels more at home in Kazakhstan than in Brussels. Yet an overwhelming number of Hungarians are ready to join him now in defense of the West just as they were willing to follow him to the East. The government’s manipulation machinery seems to work faultlessly because there is a large audience that all too easily succumbs to Viktor Orbán’s siren songs.

solidarity2

Orbán’s anti-immigration propaganda has only strengthened the lack of solidarity prevalent in Hungarian society. And solidarity is a significant component of what makes societies successful. Studies have shown that societies in which different social groups feel solidarity toward one another are more successful than those where such solidarity is either nonexistent or weak. But the Orbán government has effectively abandoned certain segments of society. For example, those who live in poverty. The government is interested only in people who are better off economically and has made it clear that with the low flat tax they will be even better off. As a Népszabadság journalist points out in an op/ed piece titled Keleti (Eastern), even Greece and Portugal have developed more robust social networks to look after society’s neediest than Hungary has. Viktor Orbán lacks empathy and thus solidarity with others. László Lengyel repeats the words of Viktor Orbán who in one of his speeches blamed Aljan Kurdi’s parents for the little boy’s death. It was irresponsible of his parents to start the journey at all. After all, he said, their lives were not in danger in Turkey. But if we applied that kind of thinking to other life situations, the end result would be a placid acceptance of the inevitable and the suppression of any desire for change. Wasn’t it irresponsible to fight against the Kádár regime in the 1980s? After all, the lives of those people were not in danger. Surely, there are times when one has to act even if his life is not in imminent danger. Every move entails unforeseen dangers, but without initiative life is empty.

Orbán created a country where no one wants to settle and many have already left or want to leave. It is a country where far too few people are interested in the world around them or seem to care that their freedom is being taken away from them bit by bit. When will they wake up, if at all?

Interview with Kim Scheppele, Part II: From the Tavares Report to the Electoral System

Members of the Orbán government and its defenders never miss an opportunity to remind critics that it was the Hungarian people who democratically elected Viktor Orbán and his party to govern their land. Not once, they add, but three times just this year–and each time with an overwhelming majority. What they neglect to say is that “Fidesz got its two-thirds using every trick in the book, and it needed every trick in the book to do that,” as Kim Scheppele tells Benjamin Novak in the second part of the interview The Budapest Beacon conducted with her at Princeton University. The first part of the interview can be seen on Hungarian Spectrum (November 13). Kim Scheppele is an expert on the Hungarian constitution, but as you can see here she is thoroughly conversant with Fidesz’s electoral law as well.

Thanks to The Budapest Beacon, I can republish the video and the transcript of the interview. I’m sure that you will all find it most enlightening.


Let’s talk about the Tavares Report. George Schöpflin tells me that it’s not worth the paper it’s written on.

In what sense? Does he thinks it’s false or does he think it’s meaningless?

He thinks it’s the left-liberal way of complaining about this unacceptable situation in which a center-right conservative party gets a two-thirds parliamentary majority.

So let me start with what I take to be the vote on the report, and then maybe we can get into what the report actually says. The report actually came to the floor of the European Parliament. As I understand it, the European People’s Party, which is the party that Fidesz is affiliated with, had a number of members who wanted to be able to vote for the report but were afraid to do so because their party leadership told them to object to the bill. So there was an agreement that there would be a “voice vote”, which is to say just a count of the actual numbers and not a roll call vote. So that said, when you look at the actual numbers for the Tavares Report, the number of people who voted against it was less than half of the total number of European People’s Party representatives, which means that the EPP was divided. Now, it was true that almost all those who opposed the report were on the conservative side. But it was also the case that conservatives had a majority in the European Parliament at the time that that report was voted on. Actually, two-thirds of the members of the European Parliament either voted for it or abstained and let it go through. So, you can’t any longer make this argument that it was just the left against Hungary, because at least half of the conservatives in the European Parliament had to support the report in one way or another. So it’s just wrong that this was something that the left pushed through and the right opposed.  In fact, what was so striking was that that was the first vote in which you could see that the European People’s Party was already splitting on Hungary.

And now they’re splitting again. Just the other day MTI actually reported on the European Parliament’s debate on Hungary and there were a number of people who participated in the debate who afterward gave interviews to MTI.  There was one guy who was described in the Hungarian news service as “Frank Engel, MEP from Luxembourg” because they didn’t want to say “Frank Engel, MEP from the European People’s Party”. He’s in the leadership of the European People’s Party and he came out and said Hungary is really on the edge of being kicked out of the family of democratic states.  I’m seeing this from an outside perspective, but if you look at the comments being made by EPP leaders, you look at the votes on issues having to do with Hungary, I don’t think that the Hungarian government should presume that it’s got the support of the European People’s Party, or that it’s divided the European Parliament left-right.  It just hasn’t done that.

Also every time the European Commission brings sanctions against the Hungarian government, or brings an infringement procedure against the Hungarian government, or makes a criticism of the Hungarian government, it’s very often EPP commissioners who are doing it. The commissioner that the Hungarian government loved to hate most was Viviane Reding, who was an EPP representative from Luxembourg, that was her party. So I think it’s a mistake to think of this as left-right in the European Union. It clearly isn’t. It’s true that the supporters of the Hungarian government in the European Parliament are EPP people. But the EPP is very divided.  And I would be very surprised if the whole party stood up on mass to defend the Orbán government. I just don’t see that happening.

What does the Hungarian government have in store for itself in the upcoming years? Are there going to be sanctions? Obviously, you don’t know if there will be but if there were, what would these look like?

Several of the commissioners during their hearing before the European Parliament, both Juncker who is the President of the European Commission, and now also Timmermans, who is kind of the right-hand man of Mr. Juncker – they’ve all said that when countries violate basic European principles that something must be done. They’ve never mentioned the Hungarian government by name, but they’ve actually made some quite tough statements going into their new terms that something I think is going to happen.

Also, the European Parliament has already started to schedule these hearings on Hungary. So far it has been the left who have initiated these hearings. But the Tavares Report is still there as the statement of the European Parliament.  And the Tavares Report laid out a series of programs for both monitoring what was happening inside Hungary and also checking on whether what the Hungarian government said it was doing actually fixed the problems that the European Parliament identified, and set up a potential road to sanctions. Last Spring the European Commission came out with something it called its Rule of Law Initiative which provided a kind of glide path for how to use Article 7 of the Treaty of the European Union, which is the harshest punishment available now in the European system. So they’re all inching toward actually using the mechanisms that European law makes available to sanction Hungary.

So then the question is what kind of sanctions?  What people don’t realize is that in the European Union there is no way to throw a state out. There now is a way for a state to quit. If Orbán really believes that the EU is being a really repressive actor . . .

. . . then he can pack up and leave.

That’s what Britain’s talking about doing. But if Orbán thinks that, then he can leave. But I really suspect that Orbán will not do it because Hungary really needs the money. You know, the vast majority of funds coming in for economic development to Hungary are coming from the EU. The EU is holding up the Hungarian economy in ways that Orbán can’t afford to walk away from. But if he wants to complain that much, then he has that exit strategy.

Do you think this “eastward opening” is a bluff?

No, I think the “eastward opening” is really important to Orbán because I think what he realizes is that the Hungarian economy rests on a very shaky foundation. And it rests on a shakier foundation now that he’s disrupted all of the legal certainty that foreign investors came to Hungary in reliance on. So, as you’ve seen, foreign investment has been drying up. That’s why the dominant money coming into the country right now is coming in from EU funds. So Orbán has to find some way to kickstart the economy.

Now he’s clearly indicated that he wants no constraints on his own sphere of action. So, any money coming from the Troika – which is the IMF, the ECB and the Commission – or any EU sources is going to come with strings attached about changing the domestic landscape so that Orbán is no longer an autocratic monopolist as it were. Obviously, he doesn’t want that, so he has to find money elsewhere.

Frankly, I think the “eastward opening” is Orbán’s trick of how to find money elsewhere because what he’s discovered, and all the attention right now on Hungary is because of Russia, that he’s also (seeking) investments from China, he’s been going hat in hand to Azerbaijan, to Turkmenistan, Kazakhstan, the Saudis –

To the ideal illiberal democracies.

Well. they’re not even democracies in many cases. Turkmenistan is definitely nowhere close to a democracy.  I was just there this summer.  But these are countries that are rich and Orbán goes to them and says “give us some money”.  And in a number of cases these countries are giving Orbán money. So then the question is, why are those countries giving Orbán money? Now, we’ve had the most focus on Russia and think that Russia is Orbán’s model. Although, these autocracies, these non-constitutional, non-rule of law, non-democracies, will never ask Orbán to become a constitutional democrat.

Of course not.

So what do they want from Orbán? I think what they want from Orbán is Orbán’s position within the EU. They want somebody on the inside of the EU advocating for their interests.

It wouldn’t be unheard of.

In fact, here at Princeton University we had an undergraduate student who did a very fabulous senior thesis a few years ago. He wanted to know how do tiny, tiny little countries, like little islands in the South Pacific that have only 10,000 people but they’re members of the United Nations… they have nothing to sell, no natural resources… how do they support themselves? He went off and he interviewed members of those parliaments, people in the governments, and what he discovered is that these little countries joined every single international organization that they can.  And then they sell their votes in these international organizations to the states that will pay to keep their governments going.

I read this thesis and thought what an interesting model for government finance! I can’t prove that this is what Hungary is doing, but then what does Hungary have that it can sell? I mean, pálinka is great, Tokaji is divine, I mean there are a number of things that Hungary has that it can sell, but not enough to hold up the whole government.

In Hungary’s case, it wouldn’t be unheard of.  There was this case regarding Béla Kovács, this Jobbik MEP, who allegedly was spying for Russia.

The relationship between Jobbik and Fidesz is not nothing, but they don’t have exactly the same interests. It’s clear that Russia has been sneaking around and looking for ways to get its perspective into European countries and EU institutions.  Because I think that Russia sees the EU as a competitor and a threat. You look at all the signals and it would make sense for Russia to try and make allies inside the EU.

So what does Hungary have to sell? It has its position within the EU. Again, I cannot prove this because I don’t yet have all the evidence, but one of the things that Orbán could be doing with the opening to east, is to get investment into Hungary. Then you have to ask what’s he giving back in return? I don’t think we have a good answer yet to that question.

Only time will tell.  What do you see happening with regards to the United States relationship with Hungary at this point?

Well, I think the United States has been saying for some time that “Hungary is an ally,”  “We’re a little concerned,”  “We’re a little more concerned”.  “Hungary is a friend,” “Friends criticize friends”.   The U.S. was making all those kinds of noises.

But then last month things changed. So first, there was that kind of off-hand remark by Bill Clinton, who is so clever that off-hand remarks like that are not anything he does. Then President Obama repeated these words at a speech in which he was critical of Hungary. Nothing the President says is casual, especially not when he mentions a foreign country. Then we have Victoria Nuland’s speech where she almost threatens Hungary’s position in NATO where she said that we fought for democracies in that part of world, now countries have become democracies, if they start to think that they can pull away from that, then they will not be able to “comfortably sleep at night under their Article 5 blanket”. Now, Article 5 is a piece of the NATO treaty that says that if any country is attacked that all the others will come to its defense. It’s the core of the collective self-defense provision. She put that on the table as contingent on being a member of the club of democracies. And then suddenly we have these sanctions against unnamed Hungarians, probably state officials. That’s a very rapid downhill slide of US-Hungary relations. And then we had the comment by Deputy Chief of Mission Goodfriend that says we are essentially wondering whether Hungary can still be an ally. Those are sharp words. In diplomatic language, that’s huge.  And its concerted, it’s coming from multiple players, and it’s not an accident. This is something that really represents, I think, looking from the outside, a breach in US-Hungary diplomatic relations.

Do you think US-Hungary relations will play a role in helping things at the EU level move forward with respect to Hungary?

This is interesting. When we think of what European Union sanctions are, they have this possibility of excluding Hungary from voting in European affairs. If you think about what I said a minute ago about Hungary’s eastward opening, if I’m right (and it’s a hypothesis), if Hungary is selling its influence in the EU to dodgy states, then losing its vote in the EU would matter a lot because then it could no longer vote on matters in the European Council, its position will be marginalized in European institutions, it can no longer have any influence in the European Union. That’s what that Article 7 is all about. That’s why sanctions could be serious if this is what Hungary is really doing.  Again, this is speculation, but it really is something that one has to wonder. Why are dodgy countries supporting Hungary? What is Hungary selling in exchange? That’s one kind of theory about this.

In terms of US sanctions, the US has relatively few ways it can directly sanction Hungary, except in the way that it’s been sanctioning Russia by issuing individually targeted sanctions on individuals. Those are very powerful. If you’ve been in Moscow recently you’ve seen that high-flying society there is basically closed down. Restaurants are empty. The high-value stores are empty. It hasn’t affected the average Russian very much, which is the good thing about those kinds of targeted sanctions. The US is a friend to the Hungarian people, as I hope it’s clear that I’m also a friend of the Hungarian people.  It’s the government we’re having trouble. Ideally, if the diplomatic community wants to have an effect on the government, they need to figure out a way to do that without also having it affect the people of that country.

Article 7 sanctions in the European Union would just affect Hungary’s vote. It will not be noticed by the average Hungarian. These denial of entry sanctions that the U.S. State Department has now issued against a number of Hungarians. Even financial sanctions which the U.S. has done in the case of Russian individuals and businesses, if the U.S. moves that way, are really designed to influence exactly the circle around the government and not the average people. I think that looks to me like that may be where the EU is going.  It may be where the U.S. is going.  But I think it’s very important for Hungarians to understand that, as I see it from the outside, it looks to me like both the EU and the U.S. are teeing up this possibility of having sanctions that will just be confined to the Hungarian government and the officials in the inner circle.

Let’s talk a bit about the Hungarian elections. In 2010 Fidesz wins with an unprecedented landslide two-thirds majority, a supermajority. Why can’t the West just accept that two-thirds of Hungarians want this?

Well, first of all, two-thirds of Hungarians didn’t want this.  If you look at the low turnout, so more than a third of Hungarians didn’t vote at all. Of those who voted, the opposition was divided. Fidesz only got 54 percent of the vote. This time, however, they got 45 percent. That’s pretty significant. If you look at the numbers, they’ve lost a big fraction of their voters and they managed to win this recent election by reducing the overall vote. Something like 500,000 Hungarians have left the country under the Fidesz watch since 2010, at least as far as we can tell. Many of them were voters affiliated with the opposition and Fidesz made it very difficult for them to vote in the election.

So they exiled the opposition. They then made it harder for them to vote. Then they give new citizenship to all these people in neighboring countries. That vote, by the way, went 97-98 percent for Fidesz. That’s like North Korea voting. There’s no election in which you get that percentage of the vote for the governing party. All the polls that were being taken in Romania, in the community of Hungarian citizens there, showed that Jobbik would probably get 20 percent of the vote, and Jobbik got nothing.   Which makes me wonder what happened to the Jobbik vote.  I’m not a fan of Jobbik but it really makes me wonder what happened to the Jobbik vote in this last election.

It was an election that was very carefully staged to make it appear that Fidesz got this two-thirds vote.  And often times what you’ll hear Fidesz leaders saying that, “We won with two-thirds support!” Well, certainly that’s just wrong in terms of just the numbers. It’s definitely wrong when you look at the way the election was micromanaged from the way they redrew the electoral districts.

Some serious gerrymandering happened.

Also, they put in all these new rules like this winner compensation vote. That was six seats in the parliament.

How would you explain the compensation vote to an American. It took me two months to understand what that is all about!

This is a really complex system. In many European parliamentary systems, voters get two votes when they go to the polls. One vote is like the American election where you vote for your representative. The second vote is where you vote for a party and the seats in the parliament are divided between single member seats and then these party list seats where the party makes a list of who will get in. If they get such and such a percentage of the vote then their top ten people get in and so forth.

So what happens is that single member districts are wildly disproportionate. Somebody can win with one vote and then they get the whole seat, even those where  one less than half voted for somebody else. So it means that these systems are always disproportionate, the American system, the British system, all the ones that use this “first past the post” system are highly disproportionate. What parliamentary systems that have this double vote do is they say maybe we can make it somewhat more proportional by taking the losing votes, the votes cast for losing candidates, and let’s give those votes to the parties when you count the party list votes. So either all of those votes, or a fraction of those votes, or some mathematical function of those votes get added to the other column where people voted for the party lists.

So this was for the original compensation list so that the winner doesn’t take all.

The German system works like that, they have a very disproportionate first past the post system for individual districts. Then by adding the lost votes, the votes cast for losing candidates, to the list votes. They then kind of balance the parliament so that overall the seats kind of represent the underlying votes across parties. It’s a very sane system. Now, that was the system that Hungary had before. It wasn’t perfect, it was still quite disproportionate in all kinds of ways, but that was the prior system.

So Fidesz comes in and says, “Let’s define what is a lost vote”, and they say, “A lost vote is any vote that was not absolutely necessary to a candidate winning the seat.” So suppose you’ve got three candidates in a district and the winner wins by 300 votes and the other candidates get 200 and 100. Under the old system, the 200 votes for that candidate would be added to that candidate’s party list votes, the other 100 votes would be added to that candidate’s party list votes, and the winner who got the seat would get nothing because the winner got the seat. They won.

Now, under winner compensation Fidesz says, “Okay, it turns out that we could have won that seat with 201 votes. The other 99 were just gravy, like that was just extra. So, as a result, those other 99 votes were lost because we didn’t need them to win the seat. So we’re going to add those 99 votes to our compensation list on the party list side.”

What that does just mathematically is it completely tips the balance because it makes it completely disproportionate, especially since Fidesz drew the electoral districts and could maximize its own votes in a lot of these places by dividing the opposition. This is why every time the opposition divided, either between Jobbik and the democratic opposition – and I’m not saying they should get together – or between LMP, the Socialists and the Unity ticket, every time you split the vote you not only split the vote and make it less likely that any opposition party will win the seat, you give Fidesz a bigger advantage over the second-place party because the more you divide, the more they conquer.

So it just compounds the problem.

So the new parliament has 199 seats. Those of us who have looked at the numbers and run the numbers have now realized that they got 6 of those seats just because of this trick. Now, look at how many seats they need for their two-thirds. They needed every vote they got for that two-thirds.  If they didn’t have winner compensation, if they did the election like any normal parliamentary system, they would not have their two-thirds and then they would not have bragging rights.

The foreign vote is another problem. There, they clearly were depressing the voter turnout for the emigré Hungarians – people who had lived in the country, still have permanent residence in the country, but were registered to vote elsewhere. Those people had to register to vote outside and their registration had to exact match what was back in the office in Budapest. So, first of all, a bunch people are rejected because they spelled their mother’s maiden name the wrong way, or if the information they provided didn’t exact match the data at home they were automatically rejected. And there were lots of people who were rejected for that reason. Then, people had to physically go to a consulate or to an embassy to vote. In the UK where there are somewhere between 200,000 and 300,000 Hungarians, everyone had to go to London. There was no other place to vote except London.  So if someone was relatively far away from London, they’d have to physically travel to London. Then, the National Election Office sent a letter to everyone telling them what address to go to vote. Then it turned out that the address was wrong. They sent out the wrong instructions for the British vote.

Wow!

They also sent out the wrong instructions for what day the Americans had to vote. “Oops a mistake!” But all the mistakes went to suppress the external vote. So then, everyone has to go to the consulate to vote or go to the embassy to vote. Or in London they had to rent a bigger hall because they were expecting so many people. Then suddenly people show up and they are told “you need your foreign passport to be able to vote.” A lot of people showed up to vote with the identification they’d use to vote with in Budapest, their address card. So people show up with their address card and they’re told, “No, you need your foreign passport.” And so people who had travelled all that distance, people who could not go home to pick up their foreign passport and come back, they were then denied the right to vote in the designated polling station. Not surprisingly, there was a relatively small turnout among émigré Hungarians.  Because you really had to be determined and because Fidesz really had to let you vote and there were all these places where they could turn you down, in the registration, in giving you the proper instructions to vote, in going there and checking your ID. There were certainly members of the opposition who voted abroad.  But there were lots of people who were turned down too. In opposition circles the understanding is that it was not random who was turned down. You can’t prove it without better numbers but that was certainly the impression that a lot of people had.

But was that also the case with votes coming from neighboring countries inside the Carpathian Basin?

No. “Near abroad voters” as Fidesz calls them, had a completely separate set of rules. They would register to vote. The could sign up anywhere. Actually, their information didn’t even have to match. In the statute it actually says if their registration doesn’t match all the information we have on file for them, the election officials should ignore the discrepancy. It says that in the law.

So if you have the wrong birthplace, or if you picked the wrong district in Budapest where your family was last registered, or whatever else they needed, and you didn’t match the registration information in the official records, then you were still permitted to register. There was almost no basis on which the electoral officials could deny the registration. Then, how did they get to vote? They could vote by mail. So, you didn’t have to travel, moreover you could vote by mail and you could hand your ballot to anyone who would turn your ballot in for you. You didn’t even have to vote by mail. So there would be people who were of unclear political affiliation, but shall we say were given the vote were probably not affiliated with the democratic opposition, would go through these Hungarian villages and pick up all the ballots and take them to all these new consulates that were opened for example in Romania. Also, there was never a live human who showed up to check anything.

So there were no controls?

There were no controls, there were no checks. Somebody could register in the name of a voter with partial information because, again, the information didn’t have to match.  There was no check that the person who was registered was the one who cast the ballot.  There was no check that the bundler who handled all these hundreds or thousands of ballots hadn’t changed them.  There were no election officials where those ballots were opened in the consulates abroad. So there were no checks on that system at all. So far as we can tell, there were 2 or 3 seats in the Parliament that were determined with those foreign votes.

Again, you add those votes to the winner compensation scheme, I mean, Fidesz got its two-thirds using every trick in the book and it needed every trick in the book to do that. Any one trick, you didn’t have that way of doing foreign votes, you didn’t have that way of doing winner compensation, you didn’t have that way of redrawing districts, etc, etc., any one of those things meant that they certainly wouldn’t have their two-thirds. They probably would have gotten the majority anyway given the turnout. It’s like in Russia where if Vladimir Putin steals elections he’s going to win anyway. But in this case, that two-thirds was crucial because if you don’t have the two-thirds in Parliament, then Fidesz can’t just change any law at will, even the Constitution.

Orbán’s Hungary and Lukashenko’s Belarus

On May 15 Péter Szijjártó, undersecretary in charge of foreign policy and foreign economic relations, received three new jobs from Viktor Orbán. He will be the chairman of the Hungarian-Belarussian, Hungarian-Turkman, and Hungarian-Uzbek bilateral economic councils. Following the announcement, Szijjártó’s spokeswoman emphasized that “economic cooperation with the former Soviet member states are the foundation pillars of the government’s strategy of the Eastern Opening and therefore the government will pay special attention to bilateral relations with Belarus, Turkmenistan, and Uzbekistan.'”

Uzbekistan is described by Amnesty International, Human Rights Watch, and the U.S. Department of State as “an authoritarian state with limited civil rights” in which there is “wide-scale violation of virtually all basic human rights.” Turkmenistan’s record is no better. Its government operates as a single party state. The country has been widely criticized for human rights abuses and has imposed severe restrictions on foreign travel for its citizens. According to Reporters Without Borders 2012, Turkmenistan had the second worst press freedom conditions in the world, just behind North Korea. Belarus is described as a dictatorship and has been barred from the Council of Europe since 1997.

So, these countries are the pillars of Viktor Orbán’s “Eastern Opening.” Nice company Hungary is keeping. Clearly, the Orbán government is ready to cooperate with countries with natural resources. Both Turkmenistan and Uzbekistan have extensive natural gas reserves and phenomenal economic growth. Belarus, on the other hand, seems to be in constant economic crisis; occasionally Putin’s Russia helps the country out with large loans.

Not much appeared in the Hungarian press about Belarus before November 2012 when HVG reported that Alexandr Lukashenko, the country’s president, announced that “the Hungarians seemed to have had enough of democracy and market economy. They sobered up.” He recalled that in the good old Soviet days the two countries were friends, and he expressed his belief that the two countries will strengthen their ties in the near future. “We cannot lose Hungary.”

That exchange between the Belarus president and the new Hungarian ambassador to Minsk made quite a splash in Budapest. Árpád W. Tóta, a commentator known for his verbal virtuosity and keen sense of politics, had a grand time with Lukashenko’s description of Hungary’s undemocratic ways, adding that Hungary is nowhere close to Lukashenko’s Belarus but “we are coming along nicely.” According to András Giró-Szász, government spokesman, Lukashenko “was only joking.”

Interestingly, at the time the Hungarian government was not eager to inform the public of closer Belarussian-Hungarian relations. Hungarian papers learned about the details from the Belarussian Telegraph Agency. For example, already in October 2012 “Minsk was playing host to the third meeting of the intergovernmental Belarussian-Hungarian commission for economic cooperation and the Belarussian-Hungarian business forum.”  The Belarussian Ministry of Sport and Tourism and the Ministry of National Economy of Hungary signed an agreement on cooperation in the field of tourism.  Working groups were set up for the study of cooperation in the fields of agriculture, industry, and tourism, as well as science and technology. In mid-December 2012 Aleksandr Khainovsky, Belarussian ambassador to Budapest, met with Sándor Lezsák, deputy-speaker of the Hungarian parliament and head of the parliamentary friendship group Belarus-Hungary. “The parties discussed the prospects of Belarussian-Hungarian inter-parliamentary relations and agreed on expanding cooperation in these areas…. The sides also specified projects to promote Belarus-Hungary contacts in culture, education and youth exchanges.”

By February 2013 the Hungarian media learned, again through the Belarussian Telegraph Agency, that Belorussian officials carried on negotiations at the time when the Agro Mash Expo 2013 was being held in Budapest about Hungary’s importing more Belarussian agricultural machinery, especially tractors. Already in 2011 Hungary purchased 973 tractors from Belarus for $16.6 million.

It seems the tractors are exported / www.bbc.co.uk

Belarus agriculture: it seems that the tractors are being exported  www.bbc.co.uk

On May 1, 2013, Fidesz’s official website announced that Péter Szijjártó met Alena Kupchina, Belarus deputy foreign minister, in Budapest. They discussed setting up direct flights (Minsk-Budapest-Belgrade) that would “encourage economic and cultural relations between the two countries.” The two agreed that, as of the coming academic year, Hungarian will be taught at the University of Minsk. Further plans call for close cooperation in pharmaceutical research and development.

I was somewhat baffled that the same Alina Kupchina who met Szijjártó on May 1 was again in Budapest on May 6 when she met with two senior officials of the Hungarian Foreign Ministry, Zsolt Németh and Péter Sztáray. She came specifically for a “foreign policy consultation.” Németh at least brought up Hungarian concerns over the Belarussian human and political rights situation. He asked for the release of political prisoners because “this would assist Belarus’s more active participation in the work of the Eastern Partnership.”

Tomorrow I will continue with the other two “pillars” of Hungary’s Eastern Opening: Uzbekistan and Turkmenistan.