The following editorial is from the November 14-27 print edition of the Budapest Business Journal.
As the world marked the 25th anniversary of the fall of the Berlin Wall, it was hard to sit here in Hungary and celebrate the end of Soviet-style communism. Looking at the actions of the Fidesz Government, it feels more like we are caught in a retro nightmare, and the whole system, or something like it, is starting up again.
The parallels to old-style communism are everywhere:
• the effort to control the media, which began as soon as Fidesz took power in 2010;
• the reduction of seats in Parliament and redrawing of voting districts in an attempt to ensure one-party rule;
• the special taxes on banks, telecoms, the media – businesses making what government officials bizarrely describe as an “unfair” profit;
• the nationalization of industries;
• the love affair with Moscow and criticism of Western Europe and America;
• the questioning of capitalism without proposing any reasonable alternative.
Along with all these maneuvers, there is also an apparent effort to create a new proletariat, a hard-working, underpaid underclass of people who must learn to enjoy Hungary, because they cannot afford to leave it.
The government has announced its intention to eliminate unemployment in a few years, and they are already bragging about bringing the number down below 8%. But they are counting “fostered workers” as employed. Fostered workers are people who cannot find jobs, so the state gives them menial labor for wages averaging a barely livable HUF 78,000 a month. In a similar vein, the government has tried to outlaw homelessness – who needs shelters when you have jail cells and work camps? Fortunately, a court has, at least temporarily, rejected that law.
But it is not just the treatment of the jobless that is a problem. Even the majority of the employed are poorly paid. The average salary in Hungary is HUF 234,600 before taxes, and this country generally has some of the lowest wages in the European Union. As long as the forint is low, and relative wages are low, Hungary can continue to be a good place to locate a factory, which is why the country has so many manufacturers here.
This setup is good for exports and production numbers, but not so great for workers. The setup is also apparently good for the government, which seems to have made it a conscious policy to keep the forint at a low value. And the new education policy, which mandates vocational training after grade school, seems designed to continue the guaranteed supply of cheap factory workers.
Meanwhile the government seeks to make up for the low incomes by making natural gas and nuclear deals with Russia. The stated purpose of these deals is to keep utility bills low, which is supposedly all the average citizen has to worry about.
There are bright and capable people in this country, and a lot of them leave, because opportunities are so much better elsewhere. The less fortunate are forced to stay in Hungary, financial captives in a country that increasingly seems caught in a retro version of the bad old, pre-1989 days.