Tag Archives: living standards

Growing dissatisfaction with the Orbán government

A fascinating study was released today, “Dissatisfied voters in Hungary,” the joint work of Policy Solutions and Závecz Research with the assistance of the Friedrich Ebert Stiftung, Budapest. It is a 35-page report jam-packed with information and data to which I can’t possibly give justice here. Those who know Hungarian can read a summary of it in an HVG article with the catchy title “At last we know who the dissatisfied Fidesz voters are.”

We can learn a lot about the present mood of the country from this poll, conducted during the months of October and November and based on personal interviews with 2,000 respondents. Perhaps the most important conclusion is that although the monthly polls on the relative strength of the parties still show Fidesz way ahead, the Orbán government cannot rest on its laurels. I’m sure that Századvég and Nézőpont Intézet, the two polling companies that provide the government with vital data on the mood of the country, have already presented Fidesz with most of the information we can glean from the study under review.

The message is that 61% of the electorate are unhappy with the performance of the government. This level of dissatisfaction may be behind the sudden decision of the Orbán government to raise the minimum wage. In addition, after some hesitation the government announced that as of January 1, 2017 it will raise old-age pensions by 1.6% as opposed to the planned 0.9%. Moreover, as a “Christmas gift” each pensioner will receive a 10,000 Ft “Erzsébet card,” which is a kind of government gift card.

The public response to these measures was that the sudden “generosity” of the government has something to do with the coming election. I’m not convinced. The announcement is far too early. The 2018 election, if the government follows past practice, is more than a year and four months away. People’s memories are very short, so one would have to question the wisdom of making this kind of an announcement so early in the game. It is enough to recall what happened in 2002 when Prime Minister Péter Medgyessy’s government raised all teachers’ and doctors’ salaries by 50%. They were not grateful for long.

The gloomy picture that emerges from the pages of the Political Solution-Závecz report leads me to believe that Fidesz’s primary consideration in raising the lowest wages and pensions was not so much preparation for the next election as a recognition that dissatisfaction is growing now. This dissatisfaction poses a threat to Fidesz, especially if the opposition manages to show some strength in the coming months.

In the past, polls consistently showed that villages and very small towns were Fidesz strongholds. We were also told that Fidesz voters, by and large, come from the less educated strata of society. Yet this poll shows that people who live in small villages are the most dissatisfied with their lot. A great deal more so than people in Budapest. In the capital only 55% of the inhabitants think that “Hungary is heading in the wrong direction” while in the villages this figure is 63%. This is even truer of pensioners, 68% of whom are pessimistic about the future and only 25% of whom are happy with the present government.

Commentators complain, rightly so, about the hasty manner in which the Orbán government makes decisions, but I’m certain that panic set in when the Fidesz high command realized how widespread the dissatisfaction is, especially in the countryside. It was bad enough that in the past they had to worry about Budapest and the large cities, now they seem to be losing the village folks. In fact, dissatisfaction in Budapest is lower than the national average of 61%.

green = satisfaction; salmon: = dissatisfaction; blue = doesn't know

green = satisfaction; red = dissatisfaction; blue = doesn’t know

Another significant piece of information from the study is that the least-educated people are the most dissatisfied and that university graduates are the least dissatisfied: 83% versus 50%. Clearly, the growing impoverishment and the ever larger gap between rich and poor is taking a political toll. The Orbán government’s conscious decision to enrich the better-off strata of society while exacting a 16% flat tax from even those on minimum wage created a serious social problem, with the number of people living under the poverty line continuing to grow. Whether the latest measures will remedy the situation we of course don’t know, but I personally doubt that the large number of pensioners will be appeased by a 1.6% raise and a 10,000 Ft. gift card.

In addition, the poll produced a political profile of the electorate which I hope the opposition parties will study and try to learn from. Many politicians and commentators are convinced that the opposition can get new voters “only from the center.” Some, like Szabolcs Kerék-Bárczy, formerly of MDF and DK, are trying to find this center among disenchanted Fidesz voters. Others, however, point out that inveterate Fidesz voters are unlikely to vote for the liberal parties. They may remain at home as they did at the by-elections, which deprived Fidesz of its two-thirds majority almost two years ago. In any case, the number of disappointed Fidesz supporters is relatively small, at 5%.

The answer can be found elsewhere. The data show that the largest group among the disenchanted are the undecided voters (22%). The opposition should target this group instead of trying to court the nonexistent “middle.” I may add that the socialist-liberal camp makes up 17% and Jobbik voters 12% of this large group of people.

Finally, given the dissatisfaction in the countryside and in the agricultural sector in general, the opposition parties should ramp up their efforts in small towns and villages. These people are hard to reach by the media or the internet. It is not enough to give innumerable interviews on ATV. The largest party on the left, MSZP, has completely neglected the countryside. They no longer have activists there, without whom there is no way to establish contact with the most disappointed, poorest strata of society.

Thus, in my opinion, the strategy should be two-pronged. On the one hand, the opposition should try to awaken the apathetic undecided voters and, on the other, they should build a network of activists with whose help they could build support on the local level. Without such hard work they will never be successful.

November 30, 2016

Labor shortage, emigration, and the economy

A couple of weeks ago Hungary’s National Association of Employers and Manufacturers (Munkaadók és Gyáriparosok Országos Szövetsége/MGYOSZ) sounded the alarm about the acute labor shortage in the country. If the government, which is currently busy turning the population against “economic migrants,” does nothing, the country’s economy will be in big trouble. Even now, it is almost impossible to find skilled blue-collar workers and qualified white-collar employees.

The Orbán government’s response was indicative of the total confusion that must reign within Fidesz and the administration in general. It seems that politicians like János Lázár, head of the prime minister’s office, are restrained by the ideological straitjacket imposed by the all-powerful prime minister. The official line is that Hungary doesn’t need immigrants, that the devastating demographic figures can be improved by a higher birthrate. But, as is becoming patently obvious, Hungarian men and women are not in the mood to have larger families. And even if they were, it would not make any difference for another two decades. This attitude of “we are going to deal with the problem ourselves” is now coupled with a vicious anti-refugee campaign. It was inevitable that Lázár would have to toe the party line even though he undoubtedly understands that without immigration the situation will only worsen. Mihály Varga, minister of economics, who is less of a party politician, reacted to MGYOSZ’s cry for help with some sympathy. The result was the confused message typical of this government.

The labor shortage, caused by the low birthrate, is aggravated by the massive exodus of Hungarians, which has been going on for years. According to the latest figures, only last year close to 50,000 people left to find a better life elsewhere.

A recent study by the staff of the International Monetary Fund addresses the economic impact of this emigration. Although the IMF study is titled “Emigration and its Economic Impact on Eastern Europe,” the paper covers Central, Eastern, and Southeastern Europe (CESEE ). The numbers are staggering. In the last 25 years approximately 20 million people left this region and moved to better-off areas of the European Union. Many of the emigrants are well educated and young, and their exodus accelerates the adverse demographic trends. East Europeans moving westward “benefited the receiving countries in the European Union and, therefore, the EU as a whole.” The study views this “migration … as an indicator of success of the EU project, which sees freedom of movement as necessary for achieving greater economic integration, and ultimately, higher incomes.” But migration had a negative impact on the “sending countries” where it “slowed per capita convergence, reduced competitiveness and increased the size of government.” Apparently, the situation is worst in the Baltic countries and in Southeastern Europe, i.e. the Balkans.

So, Hungary is not in the worst shape, but in comparison to earlier years the current situation is different in two important ways. First of all, the number of people who get on a plane to seek their fortune elsewhere has been growing rapidly. Here are a few numbers. Just in one year, during 2015, the number of Hungarians living in other EU countries grew by 15%. Since 2010 the number of Hungarians living in Norway has tripled, in Germany it has doubled. Unfortunately, the United Kingdom, where the number of Hungarians is very high, didn’t report its statistics to Eurostat. According to Eurostat, in 2015 563,00 Hungarian citizens lived outside of Hungary as opposed to 108,000 in 2010. Add to that the estimated 200-300,000 Hungarians in the U.K. and those in Austria, a country that still hasn’t reported, and the picture is even grimmer.

Another difference between those who are now looking for jobs abroad and those who left a few years ago is that the earlier emigrants, at least initially, were not planning to live outside of Hungary permanently. They were thinking of a temporary stay, just long enough to save some money to start a business, buy an apartment in Hungary, or pay off their Swiss-franc loan or perhaps long enough to perfect their German or English. All that has changed. People today who are seeking jobs abroad plan to become permanent residents.

Several employment agencies in Hungary cater to those looking for jobs abroad. One of them, Euwork, specializes in healthcare but has job opportunities for unskilled workers as well. The agency told HVG back in April that a member of Euwork’s staff will ask applicants at their interview why they want to leave. Nowadays, the most frequent answer is that the Hungarian situation is “hopeless.” It is hopeless not just because their own career seems to be going nowhere but also because they think the country itself is going to the dogs. They don’t believe there will be any change for the better in the near future. These applicants increasingly complain about the general state of affairs and politics. They don’t necessarily limit their complaints to the government or Fidesz but talk about the political situation in general. These people, even if they don’t speak the language well and know relatively little about the country where they are heading, plan to stay there permanently. Apparently western companies welcome these determined immigrants because they are more eager to fit in and will more readily integrate.

Randstad, an American employment agency with an office in Hungary, conducted a survey recently on Hungarian young men’s willingness to go abroad for a good job. The findings were astounding. Eight out of ten men under the age of 34 would pack up and leave for employment opportunities abroad. Instrum Justitia, an organization studying the state of the consumer industry, reported that most young parents (between the ages of 20 and 25) are in serious financial trouble. Only 25% of these families can pay their bills on time. So it is not surprising that 44% of them have already contemplated emigration, which is much higher than the average of 35%.

The trend will continue and the gaping differences in living standards between East and West will not be narrowed any time soon. Unfortunately, in the last 25 years Hungary’s economy has stagnated. Or, to be more precise, after a few years of economic growth, bad government policies caused a relapse, followed by some improvement, which was soon enough killed by the next administration. The latest such setback occurred after 2010 when the new Fidesz government’s policies tossed the country into recession, wiping out the heroic efforts of the Gyurcsány and Bajnai governments, which had succeeded in putting the country’s economic house in order, surviving a worldwide recession, reducing the deficit, and achieving modest economic growth by 2010.

Propaganda is not enough

Current government propaganda may laud its great achievements, but the numbers don’t lie. Under the present circumstances more and more people will pack up and leave for places with greater opportunities. The country where they settle will benefit from their presence and so will the immigrants themselves, who make double or triple what they could in Hungary.

As for Hungary’s labor shortage, for the time being the Hungarian government isn’t worrying about it. But let’s assume the Orbán government changes its mind and recruits workers from, let’s say, the Balkan countries. Will these people stay in Hungary? I’m afraid the future is bleak in this respect.

 July 21, 2016

Mária Vásárhelyi: “Self-appraisal”–The failure of the regime change

Now that for almost two weeks political life in Hungary has pretty well come to a standstill, I have time to read some analyses of topics of current interest. That’s why I decided to summarize the article of János Széky on the parallels and dissimilarities between the Polish and the Hungarian regimes the other day. Another article that appeared in the December 18 issue of Élet és Irodalom that piqued my interest was Mária Vásárhelyi’s probing look at Hungarian society’s seeming indifference to the destruction of democratic institutions by Viktor Orbán’s government. The article bears the title “Szembenézés–önmagunkkal,” which perhaps can best be rendered as “Self-Appraisal.” She is seeking answers for the failure of the 1989 regime change and assesses the role of intellectuals in the years that led to 2010 and after.

Hungarian society displays deep and widespread despondency in the face of changes introduced by Viktor Orbán’s government. Many people know that these changes, both in the short and in the long run, are injurious to the country. Yet they seem unable to take a stand against them, most likely because they no longer have any hope for a better life. Some people talk about the Hungarian psyche, which is inclined toward melancholy and pessimism; others bring up national tradition as an obstacle to an energetic response in the face of adversity. What Hungarian intellectuals don’t want to realize is that the democratic accomplishments they view as great achievements of the regime change are not considered as such by the public. “However painful it is, we must face the fact that for the majority the regime change is not a success story but a failure.” Achievements are dwarfed by losses. The values inherent in democracy and personal freedom cannot be measured against the shock of lost security and existential perspectives.

Vásárhelyi, a sociologist who already during the Kádár period was part of a team that conducted opinion polls, recalls that in the 1980s the great majority of the people considered a secure job, material advance, and free and widely available healthcare more important than such moral values as freedom, democracy, equal opportunity, and justice. The Kádár regime, with the help of foreign loans, ensured these material benefits. Exchanging these material pluses for abstract moral values was not what these people expected. But this is what more or less happened between 1989 and 2015. Between 1990 and 1994 one million people lost their jobs, Hungary’s industrial production decreased by 40% and its agricultural production by 30%. Hungarians never fully recovered from the shock of those years. Moreover, since 2010 the situation has grown worse.

During the four years of the second Orbán government the gap between rich and poor grew enormously. Consumer spending today barely reaches the 1988 level. In 1987 51% of the people reported that they had no serious financial problems, another 44% were able to make ends meet, and only 5% didn’t have enough money to make it through the month. Today one-third of households struggle to put food on the table and the remaining two-thirds barely manage. In the Kádár regime two-thirds of families could afford a summer vacation, today only one-third can. The middle class, instead of expanding, is shrinking.

I'm remaining a democrat and I am staying in Hungary

Mária Vásárhelyi: I’m remaining a democrat and I’m staying in Hungary

Not surprisingly, 80% of people with leftist leanings and 42% of Fidesz voters think that Hungary’s situation was better under socialism than it is now. Among the East European countries, Hungarians feel the most dejected and disappointed, which can partly be explained by the relative well-being of the population during the second half of the Kádár era. Another reason for the greater disappointment in Hungary might stem from Hungarian wariness of capitalism and private ownership of large businesses and factories. Already in 1990 half of the population opposed privatization, but today almost two-thirds are against private property on a large scale. Not only do Orbán’s nationalization efforts meet no resistance, they are most likely welcomed.

The situation is no better when people are asked their opinion of political institutions. At the beginning of the 1990s trust in the new institutions was quite high: on a scale of 0 to 100 the average was around 65 and none was under 50. Today not a single democratic institution reaches 50. Two-thirds of the people have no trust whatsoever in parliament and in politicians. Only 25% have any trust in politicians, parliament, government, or the opposition. Only 20% of them think that politicians want the best for the country and for the people. They don’t trust the media and the financial institutions. They have even lost faith in the judiciary, the police, the churches, and the scientific institutions. More than half of the population believe that the leaders of the country don’t care about their fate. Two-thirds are convinced that one cannot succeed by being honest. Almost 75% think that the laws serve only the interests of those in power and that they have nothing to do with justice.

“Thus it is not at all surprising that not only the democratic institutions but democracy itself has lost its importance.” According to a 2009 poll, three people out of four agree with the statement that the change of regime caused more harm than good to the country. Only every fifth person is convinced that regime change will bear fruit in the long run.

It was on this general disappointment with capitalism and democracy that Viktor Orbán built his electoral strategy in 2010 and managed to acquire a two-thirds majority in parliament. In Vásárhelyi’s opinion

It was not the right-wing values, the restoration of the Horthy regime, not even the anti-communist slogans that attracted the majority of the voters to Orbán but the violent anti-regime rhetoric studded with overwrought nationalism. He convinced his voters that he would redress the injustices and the wrongs of the regime change. … It was the promise of a new change of regime, the restoration of the state’s dominance in the economy, the compensation for losses suffered, calling to account those who illegally benefited from the privatization of public property that the people voted for when they cast their votes for Fidesz.

And because for the majority of people the democratic institutions held no great attraction the systematic  destruction of these institutions didn’t meet with any resistance. The rule of law, freedom, equal opportunity were popular points of reference in the first few years [after 1990], but when the promises of the regime change didn’t materialize they lost their appeal. What followed was mass impoverishment, closing of channels of social mobility, dramatic differences between rich and poor, segregation, the narrowing of opportunities in the small villages, and the hopelessness of breaking out from disadvantageous positions, all of which started well before 2010.

Therefore, I consider those ideas that look for a solution to the crisis of Hungarian democracy in the revival of the traditions of the regime change and the reconstruction of the democratic institutions mistaken. Those political and cultural values that the non-right-wing elite considers important clearly don’t speak to the majority of Hungarians…. They don’t even attract those who are victims of all that has happened since 2010 and who are greatly disappointed in the Orbán regime. These people are actually in the majority. According to the 2014 European Values Survey, almost half of the population believe that the country is moving in the wrong direction. Only 25% of the electorate are satisfied. Twice as many people look toward the future with trepidation than with hope. The former group are those who will have to get rid of Orbán’s autocratic regime, but it is obvious that they can only be inspired by a more attractive alternative than the elite democracy that developed after 1989.

Is there an alternative to the fundamentals of the democratic changes or the introduction of a market economy, which were the promise of 1989-1990? I don’t believe there is. What has to be changed are not the fundamentals but their implementation, so that a growing prosperity will be shared by all the people of Hungary, not just the upper crust with political connections, which is the strategy of the Orbán government. Any other economic policy is doomed to failure.

The shadow of János Kádár’s happiest barrack

In November 2009 the Pew Research Center conducted a survey in nine former communist countries. Twenty years had passed since the fall of the Berlin Wall, and researchers wanted to know how public sentiment had changed in the intervening years.

The countries selected were East Germany, Hungary, the Czech Republic, Slovakia, Poland, Lithuania, Russia, Bulgaria, and Ukraine. The results can be found on the Internet. A quick look at the interactive public opinion poll on some of the more important political questions reveals a lot about the mood of the people in these countries in 2009. The most startling finding was that Hungarians were the most dissatisfied and most disappointed people in the area. I believe that if a similar survey were conducted today, the divergence between the Hungarian figures and those of the other countries would be even greater than it was five years ago. Since then the lot of most of the neighbors has improved, while the Hungarian economic and political situation has worsened.

Here are some selected data from 2009. While in 1999 80% of Hungarians were looking forward to the coming of the market economy, by 2009 only 46% had any trust in the capitalist system. The only other country with similar results was Ukraine. Hungarian’s satisfaction with democracy was the lowest (21%), compared to Poland’s 53%, the Czech Republic’s 49%, and Slovakia’s 50%. But perhaps the most interesting finding was that it was in Hungary where most people (72%) thought they were better off during the communist period than in 2009. Compare that to 35% of the Poles, 39% of the Czechs, and 48% of the Slovaks.

Pew Research Center's Global Attitudes Project / November 2009

Pew Research Center’s Global Attitudes Project / November 2009

Political analysts have been trying to find an explanation for this discrepancy between Hungary and her closest neighbors (the Czech Republic, Poland, and Slovakia) in attitudes toward the regime change and what followed. Clearly, there were heightened expectations everywhere, but while, for example, in Poland, Slovakia, and the Czech Republic there was only a slight drop in the population’s positive attitude toward the market economy, in Hungary the drop was huge–from 80% to 46%.

What makes the Hungarian situation so different from that of the other countries? From repeated surveys we know that there is something in Hungarian culture that makes Hungarians consistently dissatisfied with their lot. That by itself, however, is not enough to account for the incredible disappointment reflected in these numbers. It is also unlikely that Hungarian politicians who were responsible for the introduction of democracy and a market economy in Hungary were totally unfit for their jobs. Or that they were significantly worse than their colleagues in the neighboring countries. All countries had their own political upheavals, and they also made bigger or smaller political mistakes. So, I don’t think that the key to the puzzle of Hungarians’ dissatisfaction with their political and economic situation can be found in either the national psyche or the political leadership.

There has to be some other fundamental difference between Hungary and the other countries that accounts for the huge divergence in attitudes and outlook. The answer, I believe, lies in the unique nature of the Hungarian version of the socialist system. Ironically, Hungary’s troubles today most likely stem from the fact that the Hungarian people had it too good under János Kádár. If they had had to live in the kind of dictatorship that existed in Czechoslovakia under Gustáv Husák or in Romania under Nicolae Ceaușescu, today they would have a much greater appreciation of democracy. If Hungarians had had to face empty shelves in the stores as the Poles did or to suffer as much economic hardship as the Romanians, they would have a much more positive view of the market economy.

But the Kádár regime, especially in its last ten years, was a benign one-party system, what Hungarians call a “soft dictatorship.” The great majority of people wouldn’t have had any reason to complain about their limited freedom since their demands were modest in the first place. Most people were satisfied with their lot because they noticed a steady growth in their living standards year after year, almost to the very end. It’s no wonder that with the exception of a very small group of “dissidents,” really a handful of people, there was no serious opposition to the regime.

The lives of Hungarians in economic terms have not changed for the better since 1990. Yes, there are people who have become very rich, but in Hungary in 2009 77% of the people believed that “the rich just get richer while the poor get poorer,” as opposed to around 50% in the neighboring countries. I’d bet that if we had a similar poll today, even more Hungarians would think that in the last five or six years the situation has deteriorated further. Today poverty is widespread. All in all, there are very good reasons for economic dissatisfaction, which cannot be counterbalanced by positive feelings about the introduction of democracy, especially since Viktor Orbán’s system is a far cry from democracy as most people understand it.

The relatively good economic situation of the population during the Kádár regime, the fact that slowly but surely people became satisfied with their lot might also be responsible for some of the failures of the new political elite. Many of the economic ills of Hungary in the last twenty-five years stemmed from a fear of moving in a direction that might lead to a severe drop in living standards, to which Hungarians, given their relative well-being under the Kádár regime, would react very negatively. Much more negatively than the populations of other post-communist countries who were accustomed to hardship and privation. Therefore, a restructuring of the economy was postponed time and again because of fear of a backlash. Over the years, governments overspent in order to satisfy economic demands only to be forced later to introduce austerity measures when the deficit spiked. No one dared to bite the bullet and make the Hungarian system a fully functioning market economy in the western sense. The irony of it all is that the economic system that more than half of Hungarians hate is not really a market economy in the classical sense. As someone rightly put it, Hungarian capitalism has all of the negative features of the market economy without any of its benefits. János Kádár’s system continues to cast a dark shadow over today’s Hungary.