Hungarian business leader criticizes Viktor Orbán’s economic policy

Hungarian opposition newspapers have an annoying habit. If someone just once says something critical of Viktor Orbán or the policies of the current government, the liberal newspapermen practically elevate him to sainthood. All his past sins are forgotten. This is what is happening now with Sándor Demján, the managing director of VOSZ (Vállalkozók és Munkáltatók Országos Szövetsége = National Association of Entrepreneurs and Employers).

Demján is apparently the richest man in Hungary. He is a real estate developer and his company, Tri-Gránit Fejlesztési Zrt., builds shopping centers throughout the region, including Poland and Ukraine. The man might be a good businessman, but his ideas about the world are often reprehensible. In the past he frequently accompanied Viktor Orbán on his foreign trips, especially to China and Central Asia. Demján was very impressed with the Chinese way of doing business and expounded on the secret of Chinese success: using huge numbers of poor Chinese as a labor force. Poverty ensures progress. He added that the Chinese practice would be a good example for Hungary to emulate. At one point he suggested lengthening the work week to six or even seven days. After all, the country is in economic trouble. He also talked about “financial dependence being worse than tanks invading the country because in the latter case at least the picture is clear.” Almost as if he had heard István Csurka of MIÉP.

So, this man who before the 2010 elections said that “it is in the interest of every Hungarian that the Fidesz team wins the election because if they don’t that is bad for everybody” now seems to be dissatisfied.  The opposition papers are enthusiastic about Demján’s criticism of Orbán, and very few of them actually sat down and analyzed Demján’s suggestions for economic recovery, some of which at first blush seem unrealistic.

When Viktor Orbán suggested to the leadership of VOSZ that he meet with them he was undoubtedly expecting the usual adulation. But this is not what happened. Demján delivered an hour-long speech that was highly critical of the “unorthodox” economic policies of Viktor Orbán as delivered by György Matolcsy. That rattled Viktor Orbán so much that he asked for a ten-minute break, saying that in the wake of Demján’s speech he had to rethink his own. What resulted was largely nonsensical mumbo-jumbo; what was comprehensible was outright frightening.

Let’s see what kind of wisdom Demján entertained his audience with. “It is growth that creates wealth” and “one needs wealth because a country that is poor gets assimilated by globalization.” Whatever that means. Other comments, although not revolutionary, were at least on target: without investment there can be no growth. Foreign investment in Hungary has practically come to a halt. Bloomberg just published an article entitled “Orban’s Tax Binge Repels Investors.” Not surprisingly, Demján is not terribly worried about foreign investment. He wants Hungarian-owned companies to grow. But there is not enough domestic capital accumulation to help finance them. Therefore he suggests setting up a large investment fund for the sole purpose of assisting small- and medium-size Hungarian-owned companies.

I’m not going to go into the details of Demján’s plan for constructing such a fund because according to experts it is not realistic. But another idea of his might be more practical (at least if default or a government grab is off the table): to introduce something Demján called a “solidarity bond issuance” that would be “a kind of compulsory savings plan.” Otherwise, Demján is all in favor of an agreement with the IMF-EU. I think that Demján is far too optimistic on the subject, at least from what Orbán had to say on the subject in the last couple of days.

Viktor Orbán and Hungarian businessmen

So, let’s see what Orbán managed to put together in a great hurry after Demján’s speech. As I said, some of it was outright frightening, especially this sentence: In Central Europe a new economic system must be built “and let us hope that God will help us and we will not have to invent a new type of political system instead of democracy that would need to be introduced for the sake of economic survival.” A stunning admission that Orbán has been thinking of the possibility of governing by decree. As his political opponents said, this is one of the few honest words he has spoken of late.

He again repeated what we can hear constantly: that Western Europe is in decline while Central and Eastern Europe is on the rise. The latest economic data don’t support Orbán’s contention, but figures never bother the Hungarian prime minister too much.

He did admit that 90% of the current investments come from European Union subsidies: “There is no Hungarian money for development.” But if that is the case, why is he waging a war of independence against the European Union?

As for the negotiations with the IMF-EU delegation, “one needs cold logic, patience and calmness.” He is glad that “the IMF was not here in the last two years because then the government couldn’t have introduced certain elements of its economic policy.” According to him, if there had been an agreement with the IMF in 2010 the country would have saved 100 billion forints on its sovereign debt but the government couldn’t have received 200 billion forints yearly from extra levies on certain sectors of the economy. Moreover, they couldn’t have taken away the savings of the private pension funds. That’s why critics of the Orbán government claim that it is the IMF and the European Union that will safeguard the interests of the Hungarian people against their own government.

Orbán repeated that foreign banks that do business in Hungary are reluctant to extend credit because they remain in dire financial straits. The truth is not so simple. The “mother banks” had to allocate extra capital to their affiliates in Hungary because of the enormous taxes the Orbán government levied on them. The Hungarian affiliates are not profitable.

It is practically impossible to have an Orbán speech without the mention of the necessity to build a society “based on work.” Orbán and some of his supporters often intimate that Hungarians are lazy slobs who just don’t want to work. Of course, this is not the case. The majority of the people would love to work if there were an opportunity to do so. But there isn’t. There is a segment of society that is dreadfully undereducated. This is especially true of the Roma population. Others, although qualified, can’t find jobs because companies in a no-growth economy simply aren’t hiring.

Viktor Orbán seems to think that public works projects paid for by the government are the remedy for unemployment. A few hours of mostly useless public work is also dole, but I guess it looks better when the employment statistics come out. In a year or two there will be no welfare payments without enrollment in a public works project. That would seem to include child support, to be administered through a “system of work” (munka rendszere). What on earth is this? Is it possible that Orbán is alluding to a child support system that is available only to families where one or both of the parents are gainfully employed?

Work seems to be the remedy for everything, including the unity of the country. Demján suggested consulting with the opposition, an idea that is far from Orbán’s thinking. According to the prime minister, “there is no need to shake hands [parolázás] with the opposition.” Instead, the unity of the country can be achieved by “giving work instead of government assistance to the people.”

And I left the best to last. “Cooperation is a question of force, not of intention. Perhaps there are countries where things don’t work that way, for example in the Scandinavian countries, but such a half-Asiatic rag-tag people as we are can unite only if there is force.”

Well, well, well. Do you remember what happened to Ákos Kertész, the Kossuth Prize winning author, when said something about Hungarians being genetically servile? He was chased all the way to Canada, where he asked for political asylum. Surely nothing like that will happen to Viktor Orbán, but the best answer to this unspeakable statement came from Gergely Karácsony of LMP: “The prime minister should know very well that Hungary in the last one thousand years, ever since the reign of Saint Stephen, has been part of Europe.” Admittedly, like every other nation, Hungarians also made mistakes. For example, when “they gave political power to an Asiatic-style despot.”

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30 comments

  1. ““The main thing for us is not participation but winning. ”

    – Alexander Lukashenko – president of Belarus

    Good news. Orban still has one dictator worst then him.

  2. Mutt Damon :
    ““The main thing for us is not participation but winning. ”
    – Alexander Lukashenko – president of Belarus
    Good news. Orban still has one dictator worst then him.

    Sorry … I was watching the olympics opening ceremony …

  3. I was scratching my head how can I sneak in my adoration of the yesterday’s opening ceremony. Then this morning I read an article in the HVG from Tamas Gomperz. He wrote exctly what I was thinking while I was watching the ceremony.

    The connection to this brain dead Orban speech is the apparent difference between this ceremony in London and the one 4 years ago in Beijing. The two shows spectacularly highlight the difference between the two worlds: Orban’s “half-Asiatic” east and the West.

    In Beijing everything was precise, calculated, well “executed” spectacular but very mechanical and emotionless and humorless. Typical from a country of Orban’s ideals. Collectivism enforced by the central power. It was a perfect 10.

    In London it was the exact opposite. The individual was in the center, the little house in the middle of the stadium, where people try live their life in freedom and equality. It was witty, a bit kitschy, perhaps sentimental, but very honest. I found it very cute the way the Brits presented their treasures – from industrial revolution through Valdemort to Freddy Mercury (a gay artist). Then the queen parachuted into the stadium with James Bond.

    And outside of the stadium huge traffic jam – cab drivers on strike. Yes, it’s the west. You’d be in the gulag if you tried this in Beijing.

    I hope Hungarians felt what is the difference is between Orban’s centralized Asian style ideals and the West. The West, that according to Orban is dying. It’s time to choose.

    PS: I missed Monty Python and the Sex Pistols.

  4. PANNONIAN PATÉ

    Pannonia’s Poster-PM, Viktor Orban, has found yet another scapegoat to blame for Hungary’s economic and social problems. No, it still can’t be the fault of his own inspired policies of appropriating people’s private pensions, imposing a flat income tax on the populace, inflating taxes on foreign companies and banks, dismantling the independence of the banks and the judiciary, punitive press control laws, government-side FUD campaigns against philosophers critical of Mr. O, crony political and commercial appointments, property appropriation, self-enrichment and corruption, self-perpetuating rigging of electoral boundaries, covert and overt support to irredentist and fascistic groups and sentiments and using his unearned but technical super-majority to ram through an undemocratic and self-serving new constitution designed to keep his party, appointees and sentiments in power for decades to come.

    None of these are to blame.

    Now that it’s not the Russians with their uniforms who are responsible for Hungary’s malaise, but the Europeans with their suits (joining a long line of prior oppressors — Turks, Austrians, Reds, Whites, other political parties, foreigners, gypsies, and, of course, the Jews) — Mr. Orban now ascribes magyar malheurs to Europe’s preoccupation with protecting geese and pigs from maltreatment. The lament will sell well with the ladies who spend their time with geese heads firmly wedged between their thighs, forcing food down their throats till their livers get sufficiently diseased to cater for the French appetite for paté de foie gras. Hungary is one of the last European paté suppliers — but the supply of putative perpetrators of Pannonia’s problems (always excepting, of course, themselves) is inexhaustible.

    http://www.reuters.com/article/2012/07/28/us-hungary-eu-idUSBRE86R0CC20120728

  5. London Calling!

    Well said Mutt – but you failed to comment on the crowning glory!

    Thomas Heatherwick’s ‘cauldron’ sculpture at the end.

    Heatherwick is an amazing sculptor – he has had many public commissions and most incorporate his mischievous sense of humour.

    His Monastery is amazing.

    The Olympic sculpture is such a simple concept – each country carried one of the copper petals that eventually made up the whole. After each was lit – they then all rose into a single cauldron for ‘unity’. Beautiful.

    I know Hungarians have a keen sense of design – I was amazed at how creative you can be with just some bicycle racks in Győr at the university. And some of the blocks of flats are imaginative too. (But you have too many ‘brutal concrete’ gulag blocks though!)

    Sometimes you do get things right! Tell me some Hungarian architects please.

    (Here’s TH’s wiki link for convenience…just in case you are interested!)
    http://en.wikipedia.org/wiki/Thomas_Heatherwick

    Regards

    Charlie

  6. London Calling! (Again! Sorry!)

    Stevan – you are dangerously funny!

    It’s amazing how Orban has the arrogance to imply that only he has all the economic answers.

    We all know “it’s ‘growth’ stupid” and all the most expert economists are grappling with the simple problem: How can we all stimulate growth when all the markets are declining due to their massive debts?

    Even the British know you can’t plough a lonely furrow – we have to ensure that our measures don’t impact our sister countries – that’s the key.

    And a very strong argument for economic unity. (From a Brit????)

    We have to all grow together – or we will collapse from within (“at last!” the communist faithful say.)

    Plough on lonely Orban and Matolcsy – and blame everyone else when it fails – as it inevitably will. At least you can eat the foie gras (sorry Pannonian Pate!) with the Tokaj at the wake.

    Regards

    Charlie

  7. Orban said “They [EU] prescribe that pigs should be given toys to play with, and the mood of geese is an important European issue,”
    I agree with him 100%, as I said all along they should leave Orban to himself and all of hos toys should be taken away.

  8. I do find it strange that OV speaks of a half-Asian nation without explaining what he intends to say by that but I do not think it was meant as an invitation to insult Asians. Europe has also had its fair share of despots (and if it were so clear how to avoid them, Gergely Karacsony would not have to make his comment). But independently of that fel-azsiai nepseg is different from an outright kelet nepe, so I would like to learn whether he was referring to something that has been or is somehow invoked in public debate lately. I have heard of it only with reference to Szechenyi or the periodical of the 1930s.

  9. Exactly how is Hungary a “half-Asian nation”? Stand in any Hungarian high street for half an hour and see how many Slavic or northern European – for the very good reason that they mostly are.

    The language may have originated in the East, but the people didn’t.

    Some years ago a history professor at Debrecen Egyetem was greeted by the leader of a visiting delegation from the far-east with a remark about them being cousins reunited. The briefest glance at the uncomfortable embrace that followed would have shown you just how un-Asiatic the professor looked next to his ‘cousin’.

  10. One thing I DO miss about the old TypePad blog was the ‘preview beore post’ feature! That last post was tampered with by evil gremlins, and should have read:

    Exactly how is Hungary a “half-Asian nation”? Stand in any Hungarian high street for half an hour and see how many even vaguely Asiatic looking natives you can spot. Most Hungarians look Slavic or northern European – for the very good reason that they mostly are.

    The language may have originated in the East, but the people didn’t.

    Some years ago a history professor at Debrecen Egyetem was greeted by the leader of a visiting delegation from the far-east with a remark about them being cousins reunited. The briefest glance at the uncomfortable embrace that followed would have shown you just how un-Asiatic the professor looked next to his ‘cousin’.

  11. “Others, although qualified, can’t find jobs because companies in a no-growth economy simply aren’t hiring”

    How about the effects of an unstable regulatory environment that makes business planning almost impossible and employment laws that make hiring financially prohibitive for small businesses. Hire someone and you get to pay the government more than you pay the employee!!!!

  12. harshona :

    Listen to Orban’s speech on youtube – http://www.youtube.com/watch?v=Q1-qlG8jjVM

    The exact wording he actually used at 1:00 is “fél-ázsiai származékok”, i.e. semi-Asiatic
    derivatives, speaking about his subjects, the Hungarians.

    “származék” means derivative only in linguistics. Here it means “offspring,” or “descendent.” But with a twist because “származék” has a disparaging, degrading connotation. The rag-tag–a word I used is closer to the original meaning.

  13. “származék” is residue literally. He’s talking about our Asian heritage in a derogatory sense. He meant we are unable to unite for a cause unless we have a leading political force – in other words we have no initiative, we just follow. The “Asiatic” is a bit of cheating, there’s no Asian/Asiatic distinction in Hungarian but it’s good to highlight his disdain.

  14. Eva S. Balogh :
    For those who read Hungarian and interested in the Olympic games I would like to call attention to Endre Aczél’s daily comments on the Hungarians at the game on Galamus.The first installment was excellent:
    http://galamus.hu/index.php?option=com_content&view=article&id=152966%3Aa-g-7-vendege-az-olimpia-ideje-alatt-aczel-endre-ujsagiro&catid=80%3Ag-7

    I didn’t like it. He should wait with this type of harsh, cynical criticism until the end of the games.

  15. Mutt Damon :

    Eva S. Balogh :
    For those who read Hungarian and interested in the Olympic games I would like to call attention to Endre Aczél’s daily comments on the Hungarians at the game on Galamus.The first installment was excellent:
    http://galamus.hu/index.php?option=com_content&view=article&id=152966%3Aa-g-7-vendege-az-olimpia-ideje-alatt-aczel-endre-ujsagiro&catid=80%3Ag-7

    I didn’t like it. He should wait with this type of harsh, cynical criticism until the end of the games.

    Well, it’s not the best beginning.

  16. This particular Englishman is very glad indeed that he is 1,000 miles away from the Olympic Games. I also, thankfully, missed the ridiculous torch procession through our local town. And the opening ceremony made me cringe. This is not the country I grew up in.

  17. Eva S. Balogh :
    Well, it’s not the best beginning.

    We are number 8 on the medal count on the first day (1 gold, 1 silver, 1 bronze). Not too shabby for a county with only 159 athletes (China, US have more than 500).

    Come on people! This is serious stuff, not politics! This is sport!

  18. Charlie H:” Tell me some Hungarian architects please.”

    Eszter Dörnyei – Plúsarkitektar EHF, Reykjavík, Iceand
    Zsolt Takács – Plúsarkitektar EHF, Reykjavík, Iceand
    Péter Páczelt – Xavier Vilalta Studio d’Arquitectura, Barcelona, Spain
    Tímea Egervári – PiemonteSamsarelouArquitectos, Barcelona, Spain
    Dániel Katona – HCP Arquitectos, Malaga, Spain
    Ákos Mihályi – 3A Architectural Design Studio, Bodrum, Turkey
    Petra Tóth – 3A Architectural Design Studio, Bodrum, Turkey
    Adrienn Tamás – MGM Arquitectos, Sevilla, Spain
    Zsófia Takács – Miguel ArrudaArquitectosAssociados, Lisbon, Portugal
    Erzsébet Csete – END-STUDIO, London, United Kingdom
    Gabriella Révész – Agrodome project, Wageningen, the Netherlands
    Gábor Szücs – Agrodome project, Wageningen, the Netherlands

    and while you may not like his politics, to mee Imre Makovecz was outstanding also.

  19. Mutt Damon :

    Eva S. Balogh :
    Well, it’s not the best beginning.

    We are number 8 on the medal count on the first day (1 gold, 1 silver, 1 bronze). Not too shabby for a county with only 159 athletes (China, US have more than 500).

    Come on people! This is serious stuff, not politics! This is sport!

    Aczel wrote this piece right after the what happened with Cseh swimming alongside of Phelps. That was pretty bad. He was after all one of the contenders for the gold and he doesn’t make the finals?

  20. nyaripal :
    This particular Englishman is very glad indeed that he is 1,000 miles away from the Olympic Games. I also, thankfully, missed the ridiculous torch procession through our local town. And the opening ceremony made me cringe. This is not the country I grew up in.

    You men this the first time the Queen parachutes?

  21. Mutt: “Ahh, Kovach. You have dived on it like a fly on pile of doodoo”

    No,while I often disagree with her, I have more respect for Dr Balogh than to compare her posting with doodoo.

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