Tag Archives: Orbán government

Conservative economists on Hungary’s prospects

It was exactly a year ago that I wrote about the “József Eötvös Group,” organized by a number of conservative economists and legal scholars. In the choice of its name, the group honors József Eötvös (1813-1871), who was minister of education in 1848 and again between 1867 and 1871. Eötvös, along with Ferenc Deák and István Széchenyi, is one of the few admirable nineteenth-century Hungarian politicians whose moderating influence was eventually overshadowed by nationalist politicians with little wisdom.

Eötvös was a writer of some renown who joined the turbulent political life of the 1840s. One of his political aims was the reform of the inhuman conditions of Hungarian prisons. He also worked on the theoretical foundations of a future Hungarian parliamentary system and made sure that it became part of the program of the opposition. He served briefly as minister of education in the Batthyány government (March-October 1848). When, after the Compromise of 1867, he became minister of education again, he was at last able to put his ideas into practice. In the first few months parliament passed his bill for the emancipation of the Jews. A short while later, he completed a reform of the Hungarian school system. Finally, the Nationality Law of 1868 became the law of the land, which was a liberal document at the time.

Robert A. Kann in his monumental book A History of the Habsburg Empire, 1526-1918, called Eötvös an enlightened man and added that “had Eötvös’s and Deák’s spirit prevailed, the Hungarian treatment of national groups might not have been inferior to that administered by the Austrian authorities.” Today we would call him a liberal conservative. He is a perfect fit for those liberal-conservative intellectuals who want to offer an alternative to Viktor Orbán’s populism. Interestingly, liberal members of MSZP turned to Ferenc Deák as their idol and established the Ferenc Deák Circle. The two groups are not that far apart ideologically.

The Eötvös Group holds regular open meetings on defined topics. A year ago, when I reported on one of the group’s meetings, the theme was the nature of Viktor Orbán’s system. The key speaker was András Körösényi, a political scientist, who described Fidesz’s world as a political system based on Viktor Orbán’s “oligarchic interests.” It doesn’t really matter where Orbán’s critics come from: their ideas are quite similar. For instance, the liberal Bálint Magyar describes the same phenomenon as a mafia state.

Source: index.hu

This time the topic was the sorry state of the Hungarian economy. While the government is in the midst of a campaign to sell the idea that the economy is booming, the two economists who delivered lectures at the meeting, Tamás Mellár and László Csaba, painted a different, quite grim picture.

It is perhaps telling that while a year ago only a handful of people were interested in the group’s lectures and discussions, this time the place was packed. In fact, extra chairs had to be added, and even then some people had to stand.

Tamás Mellár told his audience that ever since the 1970s for every 1% in economic growth 2.5% of funding has been needed. Thus, between 2001 and 2010, a 17% economic growth required 34% in additional funding. The situation became worse between 2010 and 2015 when, to achieve 10% economic growth, the country needed 35% in additional resources. Most of this came from the European Union, but some of the money came from the nationalization of the private pension plans, loans, and depletion of some of the foreign currency reserves of the Hungarian National Bank. That cannot go on, Mellár declared.

What does Mellár suggest after the removal of the Orbán government? As far as economic measures are concerned, a new government will have to abolish the flat tax introduced by the Orbán government and replace it with a progressive income tax. He would also introduce a wealth or equity tax on the total value of personal assets over a certain limit, which would be one possible way of recapturing some of the public wealth stolen by Orbán’s oligarchs. Instead of forced industrialization, the government should pay attention to new technologies, new business solutions, education, and research. But in order to see any change, Hungarians must break out of the apathy that currently exists in the country. “Now there is no Russian pressure anymore. This time we ourselves caused all this trouble, and we must be the ones who get us out of it.”

Although the government’s predictions for next year are optimistic, László Csaba sees little hope for the expected great economic growth. Interest rates in the United States will most likely rise, and who knows what Donald Trump will be up to. Meanwhile, there is the refugee crisis, populism, low economic growth in Europe, the Russian-Ukrainian conflict, slowing emerging markets, and unpredictable oil prices. One cannot count on European Union subsidies forever. Hungary must rely on itself.

He is convinced that “without comprehensive reform of the education system there is no hope.” The government should leave higher education alone. Instead of constantly reorganizing colleges and universities, the government should concentrate on kindergartens and elementary schools because these are the crucial years where students’ futures are decided. As far as the government’s economic predictions promising high growth are concerned, “they are completely unfounded.” Hungarian GDP at the moment, calculated in U.S. dollars, still hasn’t reached its 2008 level. This is worrisome even if it includes the fact that the forint is now weaker against the dollar. “We don’t have enough capital, we don’t have enough manpower, we spend too little on research and development, and the external environment is not favorable. In fact, the only increase we can expect is an increase in debt.” As for the government propaganda regarding recent tax reductions, it is a sham because for each tax cut there are many new increases elsewhere. “There is a feeling of hopelessness in the country.” He concluded his talk with a Seneca quotation: “If one does not know to which port one is sailing, no wind is favorable.”

Still, there are some hopeful signs. The Momentum Movement’s introductory meeting was filled with interested people. The young organizers urged the audience to ask them questions about their political plans. On the very first day the activists gathered 10,000 signatures of the mandatory 138,000 and by now they reached almost 40,000. People have been standing in line to add their names to the list. The government seems to be taken aback; they didn’t expect such an enthusiastic reception to an anti-Olympics drive. Therefore, attacks on the group began in earnest in the many government-financed newspapers and internet news sites. Since the topic of the Eötvös Group’s next gathering will be “Do we need an Olympics?” pestisrácok naturally discovered a close connection between the learned economists and the young political hopefuls, which apparently does exist. All in all, one can see some early signs of a societal awakening.

January 22, 2017

Vulnerable Democracies — An interview with János Kornai

János Kornai, professor emeritus at Harvard and Corvinus, is the foremost economist in Hungary today. Several of his books have been translated into English, including a book that made him a maverick in the tightly centralized planned economy of the 1950s titled Overcentralization in Economic Administration (Oxford University Press, 1959). He is also the author of Anti-Equilibrium (Amsterdam: North Holland, 1971; 2d ed., 1975 in English); Rush versus Harmonic Growth (Amsterdam: North Holland, 1972); Growth, Shortage and Efficiency (Oxford: Basil Blackwell and Los Angeles: University of California Press, 1982); Road to a Free Economy. Shifting from a Socialist System: The Example of Hungary (New York: W. W. Norton, 1990); Vision and Reality, Market and State: New Studies on the Socialist Economy and Society (New York: Routledge, 1990); The Socialist System. The Political Economy of Communism (Princeton: Princeton University Press and Oxford: Oxford University Press, 1992);  and By Force of Thought. Irregular Memoirs of an Intellectual Journey (Cambridge-London, The MIT Press, 2007), his autobiography. Professor Kornai has been awarded honorary doctorates from dozens of prestigious universities.

The online version of the interview that follows appeared in two installments in HVG on December 28 and 29. The first bears the title “Immovable powers, autocracies and their Hungarian variation.” The title of the second is “There is no way Viktor Orbán’s government can be removed peacefully.”

This interview, conducted by Zoltán Farkas, originally appeared in the print edition of Heti Világgazdaság, vol. 2016/41 (October 13), pp. 10-13. In the online version only Zoltán Farkas’s questions and János Kornai’s answers are presented. The Hungarian original also includes a map and a summary of the central ideas. The latter are not presented here as both are available in the longer paper “The System Paradigm Revisited” in Acta Oeconomica vol. 4, (2016). The interview was translated by Dóra Kalotai and Christopher Ryan. Zoltán Farkas and János Kornai are indebted to them for their careful translation.

Hungarian Spectrum has had the privilege of publishing a number of János Kornai’s shorter works in English, either in full or in summary form. For example, his essay on “Centralization and the Capitalist Market Economy,” “Threatening Dangers,” “Hungary’s U-turn,” and “Breaking Promises, The Hungarian Experience.” I’m grateful to Professor Kornai for permission to publish this interview.

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Source: HVG / Photo by István Fazekas

It was six years ago when you first wrote that many important basic institutions of democracy in Hungary had been dismantled, and Hungary had become an autocracy. Now, in a study recently published in Közgazdasági Szemle, you have already summarized the characteristics of autocracies. Has your previous premonition been proved correct?

I feel I have been proved completely correct. Usually, a researcher is filled with pride when he is among the first to recognize a tendency. My pride, however, is overshadowed by bitterness, because the fact that my predictions have come true makes me depressed and bitter.

But Hungary is not unique in this sense. You write that barely one-tenth of the population of the 47 post-socialist countries live in democracies and fifteen percent in autocracies, while the vast majority live in dictatorships. It’s almost as if democracy was the exception. Were we chasing illusions at the time when the regimes changed?

If we start from the knowledge that we possessed at the time of the regime change, based on the experience of democratization carried out in other countries, our hopes for a more successful development – compared to what actually happened – were not just an illusion. It is worth taking a look at the two largest countries, China and Russia. In the latter the elements of democracy were beginning to emerge, free elections were held, and under the leadership of Yegor Gaidar a liberally inclined government was formed. But it did not last long. Anti-democratic elements came to the fore, led by Vladimir Putin, who established his own autocratic system. Repression grew heavier and heavier. China is another story. Perhaps for a while it was not only an illusion that it was, even if slowly, making progress towards democracy. The example of Taiwan is well-known: a tough dictatorial system gradually turning into a democracy. But in China events did not take this turn. How a regime defines itself is always revealing; according to the Chinese regime, theirs is “a socialist market economy with Chinese characteristics.” In my interpretation, on the other hand, China’s system is a capitalist one, even if the ruling party calls itself communist. And politically they have a dictatorship: a one-party system, without elections, with terror. Among countries that changed their regime, democracy has stabilized in very few places as well as it has in the Baltic states. Since 2010,  many fundamental institutions of democracy have been demolished in Hungary, and an autocratic regime has come out on top. Poland has taken the first steps in the same direction, but that particular match has not yet been played out. The abandonment of democracy is a threat in the other post-socialist countries of Central and South-eastern Europe as well.

Which are the characteristic features of autocracy, the marks that set it apart?

Before anything else, I have to say that there is no consensus on the interpretation of democracy, autocracy or dictatorship among political scientists, politicians and people working in the media. There is complete conceptual chaos; I can’t even begin to hope things can be put in order here. Thus I shall undertake a more modest task: I would like to supply my readers with a sort of explanatory glossary of what I mean by these expressions. The main distinguishing characteristic of autocracy can be linked to Joseph Schumpeter, one of the most significant thinkers of the 20th century. Many authors, among them Samuel Huntington, follow his lead in viewing democracy as a procedure: a course of actions in which the government can be removed in a civilized way: legally, without bloodshed. This is in contrast with non-democracies, in which the change does not take place in a civilized fashion, nor does it usually happen without blood being shed. For instance, the tyrant is assassinated, or his regime is overthrown by a palace revolution. An example of the latter case was when the First Secretary of the Soviet Communist Party, Nikita Khrushchev was removed from power by his opponents within the Party. In other places the change of regime happens in the wake of a military coup or when a revolution by the masses threatens. If the government cannot be removed or is, to use an everyday phrase, cemented in place, there is autocracy. Schumpeter and others following him, myself included, restrict the name democracy to that politico-governmental form, and only that form, which guarantees that the government can be voted out of office. This is the minimum requirement. The other point is that in an autocracy the ruling group dismantles those checks and balances which would offer a realistic chance of forcing the government to correct its mistaken measures between two elections, and of changing the government at elections.

Fareed Zakaria defined as ‘illiberal democracies’ those systems in which the government came to power via legal elections, and has maintained the outward forms of democracy, but has systematically dismantled the checks and balances. You maintain that there are no illiberal democracies. Why?

When he first wrote about the topic Zakaria did not concentrate on the possibility of voting out the government, but rather on how the majority voted during the election, and on how the winners would uphold certain democratic structures later on, but dismantle others. When the Hungarian prime minister introduced the concept of illiberal democracy into public discourse at Tusnádfürdő, Zakaria, disagreeing with Orbán’s interpretation, refined the explanation of the notion. Personally, I consider this concept a dead end: illiberal democracy is like an atheist pope: the adjectival structure itself is contradictory. In my view all democracies are liberal. I lost my taste for concepts of democracy with an adjective when the communist dictatorship referred to itself as a ‘people’s democracy’, clearly distinguishing itself from the so-called ‘bourgeois’ democracies. But let us return to the significance of checks and balances. Let’s consider the case of President Nixon in the United States, who felt inclined to ‘consolidate’ his position, and had his political rivals bugged, but after being exposed was unable to get his Republican party colleagues, the attorney general or the chairman of the House Judiciary Committee to stop the proceedings against him. The representatives were not bound to a ‘party line’: they wanted to find out the truth – the checks and balances functioned. These are necessary in a democracy. Just like a free press, in which the voice of the opposition is at least as powerful as that of the government. At the same time, it is also true that democracy is vulnerable because the enemies of democracy can also make use of fundamental rights – the freedom of the press, the rights of assembly and association. Those who have built an autocratic order have learned from this. They do not allow themselves the luxury of being voted out at an election where there is the real possibility of a variety of outcomes.

But if this is so, why is it not a dictatorship?

Dictatorships and autocracies do share some common features. One is that in every important issue; indeed, often even in less significant matters, it is the leader who makes decisions. But there are also significant differences. A dictatorship abolishes the multi-party system by law as well. The opposition is not weak; it is non-existent. It is driven underground. In contrast, opposition forces are allowed to function in an autocracy. Autocracies also make use of intimidation, but they do not go as far as extracting confessions by torture or executing large numbers of people. Many people have good reason to be afraid in autocracies as well because they may be thrown out of their jobs or become victims of character assassination; maybe they will be arrested on trumped up charges. But anybody who believes that there is only a difference of degree between autocracy and dictatorship has not yet lived under a dictatorship. Having said this, autocracies do have a tendency to turn into dictatorships. Maybe modern Turkey will illustrate this, almost before our very eyes. We shall see whether they reach the stage of complete, total dictatorship.

You did not list nationalism as one of the characteristics of autocracy. In Hungary, however, one has the impression that they go hand in hand.

I tried to mention only those characteristics of autocracy that appear exclusively in this political-governmental structure; that is, the features which differentiate it from democracy and dictatorship. An obvious counter-example would be corruption, which can be observed in all three types. Innumerable cases of corruption crop up in certain democracies, while there are puritan dictatorships in which money cannot buy everything. Unfortunately, nationalism is another anomalous phenomenon: democracy does not make us immune to it. One of the most tragic examples of this is the period of World War I, when a wave of nationalism swept through both sides; through both of the coalitions that were to go to war against each other. It was a nationalist thirst for revenge that was at work in the politicians of Western European democracies when they imposed humiliating and impossible peace terms on Germany. In this context, to take a great leap through history, the Trump phenomenon is worth mentioning. One of the great parties of the United States nominates the extreme nationalist Trump for the presidency. Even if he does not win the elections, the political camp that supports him will remain strong, and because the United States is a democracy, they will make their voices heard. Recently, a strong wave of nationalism has been felt in Great Britain as well.

What is your impression of Hungarian nationalism?

I am really worried about it getting stronger, not for myself, but for the future of the country. Because I do not deny that in Hungary autocracy and nationalism go hand in hand. An autocrat is indeed able to turn the wave of nationalism to his own advantage; Trump is doing the same. The main element of his rhetoric is xenophobia, especially against Latin Americans. He adds that the gates are too wide open also to immigrants from overseas, and rejects President Obama’s suggestion that ten thousand Syrian refugees should be allowed to the country. By the way, communist dictatorships that advocated internationalist theories were nationalistic as well. Non-Russian minorities were oppressed in the Soviet Union, and the same can be said of non-Chinese ethnic groups and speakers in China. Nationalism exists in both dictatorships and democracies, not only in autocracies.

In this conceptual framework why do you define Viktor Orbán’s system as an autocracy?

Because it bears in itself all the important characteristics of autocracy, both its primary and its secondary features. This period started with the leader announcing that he intended to establish a system which would last for at least ten or twenty years. He declared that he wanted to cement himself in place. Since the day he came to power, he and his party have been continuously dismantling the system of checks and balances. Not like in a revolution, when they take over every powerful position at the same time, but step by step. Every week, something has happened. One of the first things they did was to reduce the Constitutional Court’s sphere of authority and pack the Court with people connected to Fidesz. Then came the new media law, which created almost endless opportunities for government propaganda. They also took over a significant part of the private media. The bureaucratic dismantling of checks and balances is combined with the use of market methods. The process culminated in the changing of the law on elections.

You write that the interplay of anti-market and anti-democratic elements has formed Orbán Viktor’s system into a coherent one; the mechanism of the state does not work according to the rules of the capitalist market economy. So how does it work?

Even in democracies it is taken for granted that the market cannot be left entirely to its own devices: there is not a single economist with any common sense who would oppose some regulation here and there when there is a real reason for it. In cases of monopoly, state regulation is clearly necessary. Even then, mistakes can be made. For example, the authorities may set prices too high or too low because they don’t understand the situation or are incompetent. Too high, and whoever is running the monopoly will make a handsome profit; too low, and they will make a loss. It is possible for regulation to be done badly as a result of incompetence, but it can also happen if other people’s interests, for example. cronies’, are prioritized. A business can be ruined through regulation so that a friend or client can buy it up cheaply. The tendency towards regulation that is not compatible with the functioning of the market is one of the characteristics of an autocracy. The Hungarian government exercises far more regulatory power than would be reasonable. There are numerous possible underlying motives for their unnecessary, excessive and – not infrequently – distinctly damaging interventions. On the one hand, the central authorities wish to extend their power across as many activities as possible. The knowledge that “I control everything: nothing can happen without me” is a very powerful motivation. An equally strong motive is the need to court political popularity, to make populist promises.

What are the results when autocracy works this way?

It is a mistake to believe that there are so many things wrong with the economy, that because of the numerous incompetent and biased interventions it functions so erratically, that it is bound to collapse in the end. This may happen, but it is by no means bound to happen. A state that gets along badly with the market does not push the economy over the edge into catastrophe; it just makes it harder for it to fulfill its potential. It will not be innovative enough, not competitive enough; it will lose the best experts. This will become obvious only in the long run. The trams still run, only more rarely, the teachers complain, but teaching doesn’t stop, health care is beset by dire problems, but they still try to look after patients in hospitals. It is not that the economy is unable to function, only that it fails to achieve as much as it could. As a result, it falls behind its rivals, behind those countries where the state and the market work together in greater harmony, where people involved in the economy discuss what they have to do, where they listen to people before passing laws that affect them. In the past, I had many arguments with people who claimed that the Soviet economy did not work. The truth is that it did not collapse until the very end: it functioned, however badly and inefficiently, in spite of all the well-known, serious inadequacies and problems. It fell further and further behind its historic rival, the capitalist West. The question arises: does the state play a lesser role in a democracy than in an autocracy? At any rate, it would never occur to anybody in the U.S. or the Scandinavian welfare states that education should be brought under the control of a single center, as has happened in the Hungarian autocracy.

Every day we hear Fidesz trotting out some of the well-known catchwords of socialism. They promise full employment, they consider state ownership superior; they utter anti- profit slogans. Are they leading the country back to socialism? Is that what they want to restore? Even in a different form?

I do not see any danger of this. At the time of the regime change, people used to say “You can make an omelet out of an egg, but an omelet will never turn back into an egg.” Whatever happened is irreversible. Autocrats coexist happily with capitalism. Indeed, it is the only system they can really coexist with because they make use of the opportunities offered by capitalism to maintain their own authority. Looking at it from the other side, some capitalists are attracted to stable and authoritarian governments. Many western or multinational companies that have set up shop in China would not like the situation there to change. It is just the same in Hungary. Anybody who enjoys special advantages in public procurements and certain tenders, in the opening times of shops or the purchase of raw materials, who can count in bailouts if they get into financial difficulties, they are having a good time. In autocracies, given the private economy, a wide circle of clients can be built up from the supporters of the system who receive financial support. They can pay for these favors if and when the time comes. Far from wishing to bring socialism back, this regime gets on very well indeed with capitalism.

Has this system reached a point where the government can no longer be voted out of power?

Only the historians of the future will be able to answer that question. If it turns out that the government can be removed peacefully, in a civilized way, in the voting booth, then I have been wrong. I’m not making any predictions. What I can say is this: in Hungary, the regime has done and will continue to do everything possible to make itself irremovable. I hope you will not misunderstand me: the last thing I want to do with my analyses is to discourage those who are prepared to fight to change the situation. People for whom the values of democracy are important: individual autonomy, freedom of speech, freedom of the media and press, constitutionalism, legality, rule of law–they should not make their behavior dependent on the likelihood of change. They should not lie low during these years, but they should act, in their own ways, using the methods of their choice.

December 29, 2016

OLAF finds irregularities–fraud and possible corruption–in the Metro-4 megaproject

So what else is new? Politico reported that the European anti-fraud office, OLAF, after looking into the financing of Budapest’s fourth metro line, found “serious irregularities—fraud and possible corruption.” OLAF recommended, because it has no authority to do anything else, that Hungary return €228 million to the European Commission and €55 million to the European Investment Bank. OLAF’s investigation covers the period between 2006 and 2015. As Politico noted, this period spans not just the two Orbán administrations “but also two Socialist-backed governments that ruled between 2004 and 2010.”

I have already written about the difficulties surrounding the building of this new metro line, so I will not recount the story here. Suffice it to say that when the line was eventually finished, it bore little resemblance to the original plans. It was only about 7 km long, running between the Kelenföld train station in South Buda and the Eastern Station on the Pest side. Originally, it was to run all the way to the outer sections of the city in Bosnyák tér, but because of financial difficulties the second part of the project was abandoned. As a result, the line is severely underutilized. And its cost was enormous. Benedek Jávor, Párbeszéd MEP, considers the project as it stands now “completely senseless.”

It is difficult to come by hard figures, but Politico puts the total cost of the project at €1.7 billion. According to the Hungarian version of Wikipedia, the cost was 450 billion forints, of which 180 billion came from the European Union and almost 170 billion from the central government. The City of Budapest contributed about 70 billion. The balance most likely came from the European Investment Bank.

As soon as the news of OLAF’s findings reached Budapest the debate began over who the guilty party is. The government’s first reaction was that it had absolutely nothing to do with the project. Everything was handled by the City of Budapest. (The City of Budapest, I would note, didn’t get a copy of the 104-page report OLAF sent to the government.) According to Lord Mayor István Tarlós’s office, as far as they know all the irregularities occurred between 2006 and 2010. So, the Gyurcsány and Bajnai governments and Gábor Demszky, former lord mayor of Budapest, are responsible for all the “irregularities” while the Orbán government is blameless. This is hard to believe.

Since the government has not released the OLAF report, we are in total darkness about the nature of these “irregularities.” I am, however, somewhat suspicious about their alleged timeline. For starters, it was only in September 2009 that the European Commission made the decision to finance the first 7-km section of Metro-4. Of course, that doesn’t preclude the possibility that fraud and corruption occurred before that date. Most likely it did. We know only too well how business is conducted in Hungary, especially when it comes to the prospect of “free money” from Brussels.

As you can see, no money was spared on the appointments

What strengthened my suspicion of the Orbán government’s culpability in this affair was an article that appeared in the government mouthpiece Magyar Idők only a few hours ago. The title of the article is telling: “Brussels wants to saddle Orbán with the affairs of Medgyessy and Demszky.” Brussels, it would seem from the headline, is pointing the finger at Orbán. Perhaps in anticipation of such a finding, the Orbán government set out to shift the blame to Medgyessy and Demszky.

Péter Medgyessy was prime minister of Hungary between 2002 and 2004. After his political career ended, he returned to his consulting business and in this capacity received 597,000 euros from the French company Alstom in 2006, the year when the final decision was made by the City of Budapest to buy Alstom cars for the new metro line. In December 2014 Alstom was found guilty of paying more than $740 million in bribes to government officials around the world.

A few months ago Hungarian authorities began an investigation into the connection between Medgyessy and Alstom. The final verdict on Medgyessy’s innocence or guilt has not yet been reached, but even if it turns out that he lobbied the Demszky administration on behalf of Alstom, for which he received money from the company, it is unlikely that OLAF considers this something for which either the Hungarian government or the City of Budapest is responsible. Unless, of course, they can prove that Medgyessy tried to bribe the officials responsible for the decision to buy Alstom cars. It seems, however, that the investigative committee set up by the Budapest City Council in September has been singularly unsuccessful in proving that any of the lobbyists tried to bribe those responsible for the decision. The final report of the committee has not been published yet, but probing questions by the right-wing media to Fidesz members of the committee have failed to unearth anything about money exchanging hands in connection with the purchase of the Alstom cars.

We can’t expect any information on the OLAF investigation from official sources for months. But, just as in the past, it can easily happen that the document will be leaked to the Hungarian media. After all, Politico is in possession of certain material already. Until then it’s a guessing game.

December 22, 2016

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

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

Jobbik and the U.S. presidential election

The latest on Ghaith Pharaon

First, I think I should say a few words about the latest developments in the Ghaith Pharaon case. Heti Válasz, a conservative weekly, learned that in January 2014 Pharaon received not only a Hungarian visa but also a residency permit “for the purpose of business and investment activities.” It was the Jordanian honorary consul in Budapest—who by the way was Viktor Orbán’s host at that by now infamous dinner in Pharaon’s honor—who requested the visa, and it was the Hungarian consulate in Beirut that issued it. By the look of things, the Hungarian authorities ignored all the rules and regulations to make Pharaon’s life in Hungary trouble free. For a residency permit the applicant’s fingerprints must be taken but, when pressed, the ministry of interior admitted that Pharaon wasn’t even required to have an official photograph. For almost three years Pharaon had the right to travel to and from Hungary at will. He could also, if he chose, travel anywhere in the European Union. All national security precautions were dispensed with in this case. He most likely enjoyed the protection of Viktor Orbán himself.

Jobbik on the U.S. presidential elections

The government’s rejoicing over Donald Trump’s victory knows no bounds. The pro-government media is full of stories of the “liberal rabble” on the streets who have been aroused against the president-elect by people like George Soros. Relentless attacks on the Obama government and Hillary Clinton can be found daily in all the right-wing papers.

Interestingly enough, Jobbik’s reaction is a lot more tempered and, I must admit, more realistic. The government-financed 888.hu was outraged when it found that Ádám Mirkóczki, Jobbik’s spokesman, in response to a question from a reporter of HVG, called Trump “an unfit and poor candidate” who is “an unpredictable madman.” Otherwise, he said, the choice was difficult because neither candidate was inspiring.

A few days later, in an interview with Magyar Nemzet, Mirkóczki was more restrained in the sense that he didn’t repeat his one-liner about Trump’s state of mind, but he further elaborated on Jobbik’s position that the presidential choice this year was poor. The interviewer assumed that Jobbik “is as satisfied with the results of the American election” as Fidesz is, but he didn’t get the answer he was expecting. Mirkóczki said he feels for the American people, who had to choose between two poor candidates. He shares the government’s opinion that Clinton “would have been a disaster for Hungary” and in that sense between the two “catastrophic candidates, the less bad won.” Jobbik only “hopes that Trump’s policies will coalesce with Hungary’s interests.” But Mirkóczki was more than cautious on that score because “we don’t know anything about [Trump’s] political ideas.” If we can believe the Jobbik spokesman, the party hopes that Trump will mellow in time because “a radical leading the United States is not in Hungary’s interest.”

Ádám Mirkóczki, Jobbik spokesman

Ádám Mirkóczki, Jobbik spokesman

Jobbik doesn’t think that with Trump’s victory U.S.-Hungarian relations will be much better. Orbán will remind the American diplomats of his early support for Trump, but such messages are “irrelevant as far as economic, political, or military relations are concerned between two countries.” In plain English, as long the present government continues on the same path it has followed in the last six years, change of presidency or not, U.S.-Hungarian relations will not improve.

About a year ago Gábor Vona delivered a speech in which he talked about his party’s intention to develop direct relations with politicians in Washington. As far as I know, several Jobbik politicians visited Washington and other larger cities. Jobbik is no longer an outcast, so its politicians had the opportunity to meet with several ambassadors in Budapest, including U.S. Ambassador Colleen Bell. Mirkóczki thinks that Orbán’s diplomatic approach to the United States has been counterproductive. Jobbik would strive for consensus, a style void of the “arrogant, lecturing, and negative style” that Fidesz has chosen in its dealings with the United States.

Of course, it is difficult to tell how much of this is merely for show. Recently BBC’s Nick Thorpe wrote an article about the metamorphosis of Jobbik “from a radical nationalist party … to a moderate ‘conservative people’s party’” and said that Vona “now promises to restore the checks and balances lost under Orbán.” He quotes Vona, who nowadays tries to avoid political labeling, who said that “if [he] lived in Greece [he] would probably vote for Syriza, though they are supposed to be on the left.” He also adopted Bálint Magyar’s characterization of Orbán’s regime and called it “a mafia-type state.”

Given Jobbik’s past, it is probably wise to take much of this with a grain of salt. But Jobbik’s cautious attitude toward the impending Trump presidency is much more statesmanlike than the Orbán government’s uncritical admiration of Trump’s radicalism. In this respect at least, Jobbik sounds more like a conservative party; Fidesz, the radical one.

November 16, 2016

Mátyás Eörsi declines the government nomination

At the beginning of August I devoted two posts to a “candid interview” of Péter Szijjártó, minister of foreign affairs and trade, by András Dezső and Szabolcs Panyi of Index. I prefaced my articles by saying that members of the Orbán government rarely give interviews to publications critical of its policies. It is possible that the relatively relaxed manner in which the interview was conducted was Szijjártó’s attempt to show the readers of Index that the government he serves is actually the paragon of cooperation. At one point he dwelt at length on all the assistance the Orbán government extends to opposition politicians in their travels abroad, for example to Ferenc Gyurcsány in China. He added that “it was the most natural thing for me to ask the Department of Chinese Affairs to put together some preparatory material for the former prime minister.”

Seeing the journalists’ astonishment, he decided to surprise them even more. “But I can also tell you some breaking news! Recently I had a visit from Mátyás Eörsi, who lives in Warsaw and works as deputy-secretary general of an international organization called Community of Democracies. This organization has 18 members, among them Hungary, and Eörsi would like to run for the post of secretary-general, but he needs the nomination of his government. He asked me whether such a nomination would be possible, and I said: of course. I visited the prime minister and told him that this was a good idea. He said that [Eörsi’s] merits at the time of the regime change deserve respect even if we have since disagreed on many things.”

In the second part of my two articles I gave a brief introduction to the Community of Democracies. As far as Mátyás Eörsi’s distinguished political career is concerned, a short biography can be found in the English-language Wikipedia. Below you can see the interview with Mátyás Eörsi on ATV’s Egyenes beszéd (Straight Talk) in August, after the Orbán government’s endorsement of him for the post.

Prior to the interview Eörsi published an announcement of his nomination by the government, which was followed by a fairly acrimonious debate in liberal circles, which I described in the second part of my post on the Szijjártó interview.

Since then Mátyás Eörsi had a change of heart. Below you will find his letter to Foreign Minister Szijjártó informing him of his decision to decline the nomination of the Hungarian government for the post of Secretary General of the Community of Democracies. The translation is mine.

♦ ♦ ♦

Péter Szijjártó
Minister of Foreign Affairs and Trade

Warsaw, October 11, 2016

Dear Mr. Szijjártó:

First of all, let me thank you once more for the support of the Hungarian government in nominating me for the position of Secretary General of the Community of Democracies.

I have to inform you with heartfelt and profound regret that as a result of the incidents that have taken place in Hungary over the past days and weeks I cannot accept your endorsement. I have already informed the president of the Community of Democracies and the State Department of the United States of America of my decision.

When I speak of the reasons for declining your support I have to be, above all, self-critical. Although I have been aware of the Hungarian government’s actions during the past six years by which it has systematically destroyed the democratic institutional structure that functioned more or less well before, I still hoped that as the head of an international organization I could effectively assist the consolidation and development of democratic norms in the participating countries. I thank you specifically for mentioning my accomplishments at the time of the transition to democracy. Over and above my role at that time I hoped that through my past work as caucus leader in the Parliamentary Assembly of the Council of Europe and in the Liberal International—then still in alliance with Fidesz—I had gained sufficient international credibility to enable me to perform this task.

But we must be clear that past merits can provide only a foundation for credibility. A person nominated by a government that has become infamous for destroying democratic institutions cannot credibly lead the Permanent Secretariat of the Community. While my aspiration is still to serve the cause of democracy, it seems ever more impossible with the support of the present Hungarian government.

The hate campaign full of untrue allegations that cost more than the aggregate campaign for and against Brexit in the United Kingdom was unacceptable for a democrat. Claiming victory over a clearly lost referendum and the politically motivated shuttering of the largest Hungarian daily, Népszabadság, marking a crucial landmark in the liquidation of free print media, are diametrically opposed to the Warsaw Declaration of the Community of Democracies signed by Hungary.

While once more I want to thank you for the nomination, please permit me to seize this opportunity to caution you, the Hungarian government and the government party, Fidesz, whose original members were once my friends. Historical experience shows that a government without checks and balances restricts democracy. Its aim is to annihilate those it considers “enemies” of the nation, believing that once the “enemy” is destroyed it will restore democracy.

This was the original idea of the communists who wanted to get rid of Nazism, of Colonel Qaddafi who wanted to get rid of the dictatorship of King Idris, and of Fidel Castro who brought the oppression of Batista to an end, and many others who originally with good intentions began the destruction of their opposition. Slowly, without realizing it, they themselves became the oppressors. By that time there was no way back if for no other reason but fear. Please, don’t misunderstand me: Fidesz and the current government, even if it made attempts at the incarceration of its political opponents, haven’t gotten to this point yet. But you have to be aware of the consequences of the destruction of institutions and the liquidation of critical media and civil society. Once this is done there will be no one to prevent fatal mistakes, the consequences of which can be a catastrophe for the nation, including its leaders. As the saying goes, those who fail to learn from history are doomed to repeat it. Although I have no reason to think so, I would still like to believe that the government will come to its senses and will restore democratic norms in order to prevent a tragedy.


Mátyás Eörsi

October 18, 2016