Hungary’s newest strategic partner: Kazakhstan

Prime Minister Viktor Orbán’s foreign trips are usually announced only a few hours before his actual departure. One understands why U.S. President Obama’s visit to Afganistan was announced only after his arrival, but in other instances his traveling schedule is known well ahead of time. Not so in the case of Orbán. In great secrecy the prime minister’s financial and economic advisers prepare a foreign trade agenda and then suddenly there is the announcement.

This was the case with Orbán’s two-day visit to Kazakhstan. MTI received the news at 7 a.m. on Wednesday, May 2, that the next day the prime minister would be flying to Astana. In case you are not familiar with the name of the Kazakh capital, don’t feel too bad. The city used to be called Akmola and it wasn’t even the country’s capital until 1998. Prior to that date the capital was Almaty or Alma Ata. Yes, that “alma” has something to do with the Hungarian word for apple. I understand that Kazakhstan was most likely the geographical origin of apples.

Kazakhstan’s wealth no longer has much to do with apples. Instead this very large area with only 16 million inhabitants is one of the best endowed countries as far as natural resources are concerned. It is rich in natural gas, oil, chromium, lead, zinc, manganese, copper, iron, and gold. Due to high crude oil prices, Kazakh GDP growth figures are impressive. Between 2000 and 2008 the average yearly figure was 10.1%. Per capita GDP is still relatively low, $13,000, but Kazakhstan has made great strides since independence in 1991.

Kazakhstan is not exactly a democracy. It is listed by the Democracy Index as an authoritarian state, alongside such countries as Belarus, China, Vietnam, Zimbabwe, and Syria. President Nursultan Nazarbayev, a left-over from Soviet times, is normally reelected with over 90% of the votes and with almost 90% of registered voters participating. Currently there is only one opposition member in the Kazakh parliament. In addition to Nazarbayev’s party there is a second party that was founded by his daughter. So, it is a family affair. Elections normally are rigged, and members of the opposition media are beaten, sent to jail, or forced to emigrate. There are daily reports of violations of human rights in Kazakhstan. A long list of such cases was compiled by Zsófia Mihancsik on Galamus.

But back to the secrecy which surrounds these trips. MTI, for example, learned from Gazeta.kz, a Russian-language Kazakh site, that Orbán’s trip also includes “the third session of the Hungarian-Kazakh inter-government committee and a business forum with the participation of businessmen from both countries.” Clearly, this trip has been on the front burner for a while. I might also add that the initiative seems to come from the very large office of the prime minister while the foreign ministry is taking a back seat. For example, it was Mihály Varga, former minister of finance and currently the head of the prime minister’s office, who talked to journalists about Kazakh-Hungarian relations. He emphasized the importance of Kazakhstan and noted that in the last seven years the size of its GDP had quadrupled. He specifically mentioned trade and mutual investments in agriculture and industry, especially in projects connected to gas and oil production.

Viktor Orbán, shortly after his arrival, talked about the importance of Hungary’s “opening to the East,” which is supposed to be his answer to “the changes of global world economics.” He gushed over the fantastic development Kazakhstan has managed to achieve in the last twenty years. According to him “Kazakhstan is living proof that there is no such thing as a world economic crisis. There are parts of the world where there is a crisis and others where there isn’t. We come from a part of the world where there is and have arrived in a part where there isn’t.”

Orbán also played on the alleged Kazakh-Hungarian ethnic relationship. He came to Kazakhstan not only as the prime minister of Hungary to the prime minister of Kazakhstan but “as a western brother to an eastern brother.” As for the Hungarian right’s fascination with Central Asian relatives of Hungarians, you can read quite a few posts on Hungarian Spectrum on that subject. 

On a more practical level Orbán would like to set up Kazakh-Hungarian joint companies and have funds in place to ensure these companies’ business activities. Orbán said that MOL, which at the moment has a small role to play in Kazakhstan, should be given greater opportunity for expansion.

On the second day of his stay Orbán had the opportunity to meet the great Nursultan Nazarbayev, the president of the country for the last twenty odd years. The two must have hit it off well. Originally, the meeting was supposed to last half an hour, but in the end the two men talked for more than an hour. Nazarbayev assured Orbán of his support and, in return, Orbán told the Kazakh president that Hungarians “pay great attention to historical and cultural ties that unite our peoples. I admire the capital of Kazakhstan. This city is a symbol of humanity’s new phase of development. At a time when much of the world stays in a crisis, your country continues to move forward.” What Orbán neglected to mention was that without all the oil and gas Kazakhstan’s horsemen would be still wandering around the arid landscape.

Astana cityscape

The Hungarian opposition media seem to be leery of Orbán’s “opening” toward authoritarian regimes. Népszava’s headline accompanying the article on the Kazakh visit read: “Partner or example?” No question, Nazarbayev is a dictator with practically unlimited powers. But he is also a promoter of private enterprise. The reforms he introduced aimed at limiting the size of government and state ownership. Orbán nationalized private pension funds while in Kazakhstan 16 pension funds exist, all in private hands. In Kazakhstan the banking system is developing rapidly. Several major foreign banks have branches in the country and the Kazakhs don’t tax the banks to the point that they are unable to lend. They don’t nationalize banks either. Orbán is doing everything possible to make the foreign banks bleed out financially and has begun an ambitious nationalization project of some small banks. If he goes on like this, banking will soon be a state monopoly in Hungary.

Orbán may envy Nazarbayev’s enormous political power, much greater than his own, but he doesn’t seem to be able to grasp that the Kazakh president’s policies that helped to create a booming economy have nothing in common with his own ideas of state capitalism.