Editorial: Rosy numbers ignore real problems

History

The following is the editorial column from the June 3 biweekly edition of the Budapest Business Journal.

Numbers may not lie, but the people who use them sometimes do.

Hungary’s unemployment figures dipped below 6% in February-April, according to the Central Statistical Office (KSH). But when counting people who have jobs, KSH includes Hungarians who work abroad, as well as those in the state’s workfare program. The figures show improvement, but they don’t show reality.

In reality, the Hungarian economy has been doing moderately well – not as good as some of our Central European neighbors, but good enough to create a shortage of workers in many fields. Nonetheless, there is still a group of people who are stubbornly unemployed, including those on workfare, who earn less than the minimum wage for work like sweeping the street. These people make up an estimated 5% of the work force and they represent a structural problem. The government should be working on special programs that address their needs, not hiding their existence with funny numbers.

Before the Fidesz government came in in 2010, there were far fewer people involved in workfare, and they were counted as unemployed. The current government has ordered the KSH to change the way it tallies unemployment – and the result has been much rosier figures.

In a similar vein, officials are telling the KSH not to include Eximbank (Hungarian Export-Import Bank Plc.) in the government sector when figuring Hungary’s state budget deficit. Eurostat, the European Union’s statistics agency, has said that this is wrong, because Eximbank is a governmental, non-market entity. The head of the KSH and Hungary’s Ministry of Economy are still arguing with Eurostat over how to classify the bank – and this is no small accounting detail. Excluding Eximbank from the government makes Hungary’s official deficit seem much smaller, and allows officials to go deeper into debt in the next year or two, as they prepare pre-election budgets. But thus far, no one has given compelling reasons for letting the government dodge responsibility for the debt of Eximbank – which very much acts like a government institution and frequently makes loans to businesses and people who are favored by officials.

Founded as the Hungarian Royal Central Statistical Office in 1897, KSH is a quasi-autonomous non-governmental organization that was recently approved by a European Commission audit as being impartial. Their web site, ksh.hu, is a trove of easily accessible information about Hungary and its economy – a regular nerd’s paradise.

Efforts to co-opt KSH’s leadership and functions for the benefit of the current government’s propaganda machine risk damaging the credibility of an excellent institution. What’s worse, they risk ignoring serious concerns, including the problem of long-term unemployment and an excessive government budget deficit.

Instead of giving in to the temptation to lie with numbers, officials need to do the math, understand our real problems and look for actual solutions.

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