European Voice, 20 November, 2008
"Just another European country, really," I used to tell people who asked what Hungary was like, in a manner more proud than dismissive. I would rage at Western newspapers still referring to us as "a former Communist country". My line was that we had more or less arrived, for a decade the golden boy of New Europe.
In the wake of the biggest bailout in IMF history, this fiction is a bit harder to sustain. We seem to have escaped an Iceland-style meltdown. We're still a fairly comfortable country. But the complacent idea that many Hungarians have of themselves, that they are basically the one serious nation in a region of young and really quite silly countries, deserving of proper first-world living standards, must surely be buried.
It is tempting to blame the politicians. And part of the blame does lie there. It was ministers who borrowed and spent that money. Money for the ridiculous 13th month salary for public servants, for the lie of free health care, of free education, of free everything we cannot afford. After a frenzy of social spending, borrowing hit a mind-boggling 9.3 percent of GDP in 2006, the highest in the developed world. Our Communist-style - creaking but expensive - welfare state means we have the biggest public debt in the region.
But boy, it worked. We got used to it. And then it was too late. Hungarians, who nearly went broke in the early nineties, want to hear no more of taxing reforms. Mild efforts at change, finally adopted under pressure from the EU in 2007, led to political crisis and street violence. An idiotic opposition built its entire political identity around resisting market-style reforms, labeling them sell-outs to Western financial interests and boons for party bosses. The political elite has boxed itself into a corner, telling us for a decade we can have have our cake and eat it. Cheap credit and huge inflows of foreign investment allowed them to get away with it. When some of them tried to turn around, as Prime Minister Ferenc Gyurcsany was forced to in 2006, it was too late. No-one believed them anymore.
But in a democracy people have leaders they deserve. If we were lied to, we are guilty of believing the lies. As a Hungarian novel has it, egy okos embert csak kétszer lehet becsapni - a clever man can only be tricked twice. We've been tricked about a million times by now. We really did think we deserve it, the free everything. We really did think we can have it all, while having the lowest employment rate in the European Union. Three million people pay taxes in a country of ten million. (Come to think of it, that might be one of the reasons.)
Sadly, recognition doesn't mean we can kick the habits of Communism. I have friends who'd agree with every word here. They also proudly cheat on public transport, payed for by other people's fees. Tax-avoidance has acquired the status of art, leisurely discussed at dinner parties.
You'd be tempted to think that near-bankruptcy will puncture all these lies. I tend to think, though, that the irresponsibility and parochialism of Hungary's elites knows no boundaries. They mismanaged revolutions, wars, the old Empire. They can surely mismanage welfare reform, financial crisis, the entire system of modern democratic capitalism. They are now telling us that the crash was all the fault of bankers, speculators, the media. Short-termism is their second name. They would blame everybody but themselves.
Watch us follow them lemming-like.
A shorter version of this comment appeared in last week's European Voice.
Wednesday, November 26, 2008
Nice, yes?
Perhaps this one time some self-advertisement will be forgiven: I have won this Hungarian award. It's called Junior Prima and it's given out every year for people under thirty who are not too bad at what they do. It's got various categories and I was awarded it for best journalism (along with a number of other people). Nice, yes?
Monday, November 17, 2008
Gyűlölködni iszonyú fárasztó
Origo, 2008. november 17.
Usman Raja iszlámista agitátor volt Londonban. A kilencvenes években a csecsenföldi ellenállóknak kalapozott pénzt, térített és fizikai tréninggel készült a nagy felkelésre, amikor a muszlimok végre átvehetik az uralmat a Nyugat felett. Néhány társa megjárta az afganisztáni al-Kaida-kiképzőtáborokat. Öt éve meggondolta magát, most egy alapítványnál dolgozik, ami szélsőséges nézeteket valló muszlimokat próbál megtéríteni egy békésebb iszlámnak. Interjú a fanatikus iszlámról és arról, ami esetleg a helyébe léphet.
Hogyan kerültél bele az iszlámista szervezkedésbe? A környezet teszi, ahol felnőttél?
Usman Raja iszlámista agitátor volt Londonban. A kilencvenes években a csecsenföldi ellenállóknak kalapozott pénzt, térített és fizikai tréninggel készült a nagy felkelésre, amikor a muszlimok végre átvehetik az uralmat a Nyugat felett. Néhány társa megjárta az afganisztáni al-Kaida-kiképzőtáborokat. Öt éve meggondolta magát, most egy alapítványnál dolgozik, ami szélsőséges nézeteket valló muszlimokat próbál megtéríteni egy békésebb iszlámnak. Interjú a fanatikus iszlámról és arról, ami esetleg a helyébe léphet.
Hogyan kerültél bele az iszlámista szervezkedésbe? A környezet teszi, ahol felnőttél?
Usman Raja: Farmborough-ban nőttem fel, Délnyugat-Angliában, az 1980-90-es években, vegyes környéken, fehérek és muszlim bevándorlók között. Ez viszonylag oké, ennél sok rosszabb hely van Angliában: az északi városokban a muszlim bevándorlók elzárt gettókban élnek generációk óta, magas köztük a munkanélküliség, rasszizmusnak vannak kitéve. De nekem se volt könnyű dolgom, minden nap verekedni kellett a fehér kölykökkel, mindennap leköpdöstek. Nem csak arra emlékeztettek minden nap, hogy nem vagyok angol, hogy pakisztáni vagyok, de arra is, hogy muszlim vagyok. Idegen, aki nem való ide. Emlékszem, kb. 12 éves lehettem, amikor elsétáltunk egy kocsma mellett, ahol valami karácsonyi rendezvényt tartott éppen az iskola. Amikor benéztünk, a tanárnő ránkszólt az ajtóból: "Semmi keresnivalótok itt, ti muszlimok vagytok."
Folytatás itt.Saturday, November 15, 2008
What happens when China slows down?
Two interesting pieces of news about China. One in today's New York Times about how the worldwide economic slowdown has led to the shutdown of at least 67,000 (!!) factories in China. The other is a Reuters story from last week that says China's growth is dropping below the tipping point of 8 percent per year where it can no longer keep up with growth in demand for jobs and with rapid urbanisation.
China is going to get even more interesting now, I think. The Communist leadership has enjoyed an easy ride so far because it is relatively easy to run a country that has 11-percent economic growth every year. Political systems are tested during times of crisis, not during times of plenty. China has vast social, economic, political, and environmental problems, and so far they have been able to simply throw money at them. But it won't be like that forever.
So to those who have been saying that China can become a rich and modern capitalist country without democracy and the rule of law, I say, well, wait and see. Rigid and closed authorian systems are not very good at dealing with big downturns and social upheavals. They tend to crash and burn. Democracies tend to be better at that because they are more flexible. They are more open to change: they have regular elections and they allow more individual freedom. Leaders also enjoy more legitimacy because they are elected. It is a cliché that China's leadership derives its legitimacy (its uncontested right to govern) from rapid economic modernisation (making people richer, essentially). What will happen when that is lost?
UPDATE:
Lest I appear to be enjoying China's troubles, here is some good news, too: Chinese 'living longer than ever'
China is going to get even more interesting now, I think. The Communist leadership has enjoyed an easy ride so far because it is relatively easy to run a country that has 11-percent economic growth every year. Political systems are tested during times of crisis, not during times of plenty. China has vast social, economic, political, and environmental problems, and so far they have been able to simply throw money at them. But it won't be like that forever.
So to those who have been saying that China can become a rich and modern capitalist country without democracy and the rule of law, I say, well, wait and see. Rigid and closed authorian systems are not very good at dealing with big downturns and social upheavals. They tend to crash and burn. Democracies tend to be better at that because they are more flexible. They are more open to change: they have regular elections and they allow more individual freedom. Leaders also enjoy more legitimacy because they are elected. It is a cliché that China's leadership derives its legitimacy (its uncontested right to govern) from rapid economic modernisation (making people richer, essentially). What will happen when that is lost?
UPDATE:
Lest I appear to be enjoying China's troubles, here is some good news, too: Chinese 'living longer than ever'
Thursday, November 13, 2008
Lost in Economic Space
Transitions Online, 13 November
The financial crisis highlights how dearly Hungarians are paying for an unreformed welfare state – and a childish, parochial political class.
It is a cliché that European integration moves from crisis to crisis – a bit like the construction of the Second Galactic Empire in Isaac Asimov's science fiction epic Foundation. New challenges are met by moves toward more integration because it makes sense. So the crises in the Balkans accelerated the construction of a common foreign and security policy for the European Union. EU enlargement led to the Treaty of Lisbon. The union itself was born out of the destruction of war. Crisis means opportunity.
For some of the new EU member states, small ships that nearly capsized in last month's financial storm, the crisis can only mean one thing: pull into the safety of the euro harbor. Slovenia, Cyprus, Malta, states that had already adopted the common currency, survived unscathed. Their economies may yet suffer as their export markets in Western Europe plummet. But the currency crisis that befell the Icelandic krona and the Hungarian forint concerned them not.
It is easy to read the tea leaves. The protection of the world's biggest regional union and its strong and credible currency look more attractive than ever. Hungary in particular may have avoided financial collapse thanks to the 5 billion euro credit line extended to it by the European Central Bank last month and because of a subsequent bailout by the International Monetary Fund, EU, and World Bank. The EU could not have allowed one of its own to fail. Few things look more important now than to quickly gain entry to its still deeper chambers, to put another wall between ourselves and the threatening world. The same conclusion is being drawn in Copenhagen, Stockholm, and Reykjavik.
Joining the eurozone means cutting public spending, something that cozy Hungarians, with a strong sense of entitlement to things they cannot afford, have tried very hard to avoid. It's a sad insight into the state of Hungarian democracy that this is what it took to get moving after years of being stuck in the mud. The Socialist governments of Peter Medgyessy and Ferenc Gyurcsany had very nearly led the country to bankruptcy, only to discover a passion for public sector reform after borrowing hit 9.3 percent of GDP in 2006, the highest in the developed world.
The country then slid into political paralysis and occasional street violence over such modest proposals as introducing a 1.20 euro fee for seeing your doctor. The government more or less retreated from its reformist agenda after losing a hysteria-induced referendum on health and education fees. Things were looking pretty hopeless after that, thanks partly to an idiotic opposition that blocked every government effort to introduce even modest reforms to the wasteful monoliths of the public sector. They would describe, in a populism not only mindless but lame to the point of hilarity, every new proposal as a plot designed only to pander to the financial interests of the ruling party and to the financier circles of Western capitals. Hungarians are paying not simply for spending too much. They are paying for their infantile politics. The national debt is now the highest in the region, a prime facilitator of the currency and credit crisis.
But then the wave hit. Since then it has been a bonanza for the enthusiasts of reform. It was deeply instructive to watch the speed with which the Hungarian parliament, under pressure from the IMF, got rid of such cripplingly expensive perks as the "13th month" salary for civil servants, a social extravaganza emblematic of the country's unwillingness to leave its communist-style welfare system behind. Thank God for a good crisis every now and then.
IT'S PAYBACK TIME
Or perhaps not. Crises may bring change. But half-forgotten demons have also climbed out of dark corners, sensing their time had come. So some columnists in right-wing newspapers have banged on about "Jewish financiers from Brooklyn." Muscular Marxist commentary has reappeared, slightly frightening were it not such a caricature of itself. Of course, even Americans are blaming their bankers (although not only them) for this mess. Silly anti-capitalism always appears when the markets collapse. But in Eastern Europe it comes with a strong dose of outright anti-modernism, perhaps because we made the transition from feudalism to modern capitalism very late and with great suddenness. Some of our discourse remains firmly stuck in the 19th century. We have learned almost nothing.
Worst of all, we blame and lash out at everything but ourselves. Incredibly, even some Western-educated professionals have told us that the crash was actually "the fault of the media" for reporting data and events "irresponsibly." Andras Simor, governor of the otherwise highly professional Hungarian National Bank, sounded plain pathetic on CNBC, comparing market speculators to lions and his poor, poor country to an antelope that had fallen behind the rest of the herd. I half expected him to start begging for mercy. But grown men don't blame newspapers and speculators.
Prime Minister Gyurcsany, to his credit, did take some of the blame for his government's early, mindless spending spree. In his infamous 2006 speech to party delegates, he admitted that his government "had lied morning, noon, and night" about the economy to win reelection, and that it may be time to try something new. The speech was greeted with violence on the streets of Budapest. Few had bothered to listen to the whole thing, although perhaps this can be understood. Seemingly a reformist at heart but with his credibility in tatters, he has been unable to govern ever since.
Cheap credit, a global boom, and steady foreign investment for nearly two decades have meant that Hungarians could get away with having an unreformed and cripplingly expensive welfare state. They have also elected and reelected a political class that is childish, selfish to the point where democracy can no longer properly function, parochial beyond description, and almost totally blind to the realities of the world. Perhaps the crash and the pain of the coming recession will change that. But then again, it might not.
The financial crisis highlights how dearly Hungarians are paying for an unreformed welfare state – and a childish, parochial political class.
It is a cliché that European integration moves from crisis to crisis – a bit like the construction of the Second Galactic Empire in Isaac Asimov's science fiction epic Foundation. New challenges are met by moves toward more integration because it makes sense. So the crises in the Balkans accelerated the construction of a common foreign and security policy for the European Union. EU enlargement led to the Treaty of Lisbon. The union itself was born out of the destruction of war. Crisis means opportunity.
For some of the new EU member states, small ships that nearly capsized in last month's financial storm, the crisis can only mean one thing: pull into the safety of the euro harbor. Slovenia, Cyprus, Malta, states that had already adopted the common currency, survived unscathed. Their economies may yet suffer as their export markets in Western Europe plummet. But the currency crisis that befell the Icelandic krona and the Hungarian forint concerned them not.
It is easy to read the tea leaves. The protection of the world's biggest regional union and its strong and credible currency look more attractive than ever. Hungary in particular may have avoided financial collapse thanks to the 5 billion euro credit line extended to it by the European Central Bank last month and because of a subsequent bailout by the International Monetary Fund, EU, and World Bank. The EU could not have allowed one of its own to fail. Few things look more important now than to quickly gain entry to its still deeper chambers, to put another wall between ourselves and the threatening world. The same conclusion is being drawn in Copenhagen, Stockholm, and Reykjavik.
Joining the eurozone means cutting public spending, something that cozy Hungarians, with a strong sense of entitlement to things they cannot afford, have tried very hard to avoid. It's a sad insight into the state of Hungarian democracy that this is what it took to get moving after years of being stuck in the mud. The Socialist governments of Peter Medgyessy and Ferenc Gyurcsany had very nearly led the country to bankruptcy, only to discover a passion for public sector reform after borrowing hit 9.3 percent of GDP in 2006, the highest in the developed world.
The country then slid into political paralysis and occasional street violence over such modest proposals as introducing a 1.20 euro fee for seeing your doctor. The government more or less retreated from its reformist agenda after losing a hysteria-induced referendum on health and education fees. Things were looking pretty hopeless after that, thanks partly to an idiotic opposition that blocked every government effort to introduce even modest reforms to the wasteful monoliths of the public sector. They would describe, in a populism not only mindless but lame to the point of hilarity, every new proposal as a plot designed only to pander to the financial interests of the ruling party and to the financier circles of Western capitals. Hungarians are paying not simply for spending too much. They are paying for their infantile politics. The national debt is now the highest in the region, a prime facilitator of the currency and credit crisis.
But then the wave hit. Since then it has been a bonanza for the enthusiasts of reform. It was deeply instructive to watch the speed with which the Hungarian parliament, under pressure from the IMF, got rid of such cripplingly expensive perks as the "13th month" salary for civil servants, a social extravaganza emblematic of the country's unwillingness to leave its communist-style welfare system behind. Thank God for a good crisis every now and then.
IT'S PAYBACK TIME
Or perhaps not. Crises may bring change. But half-forgotten demons have also climbed out of dark corners, sensing their time had come. So some columnists in right-wing newspapers have banged on about "Jewish financiers from Brooklyn." Muscular Marxist commentary has reappeared, slightly frightening were it not such a caricature of itself. Of course, even Americans are blaming their bankers (although not only them) for this mess. Silly anti-capitalism always appears when the markets collapse. But in Eastern Europe it comes with a strong dose of outright anti-modernism, perhaps because we made the transition from feudalism to modern capitalism very late and with great suddenness. Some of our discourse remains firmly stuck in the 19th century. We have learned almost nothing.
Worst of all, we blame and lash out at everything but ourselves. Incredibly, even some Western-educated professionals have told us that the crash was actually "the fault of the media" for reporting data and events "irresponsibly." Andras Simor, governor of the otherwise highly professional Hungarian National Bank, sounded plain pathetic on CNBC, comparing market speculators to lions and his poor, poor country to an antelope that had fallen behind the rest of the herd. I half expected him to start begging for mercy. But grown men don't blame newspapers and speculators.
Prime Minister Gyurcsany, to his credit, did take some of the blame for his government's early, mindless spending spree. In his infamous 2006 speech to party delegates, he admitted that his government "had lied morning, noon, and night" about the economy to win reelection, and that it may be time to try something new. The speech was greeted with violence on the streets of Budapest. Few had bothered to listen to the whole thing, although perhaps this can be understood. Seemingly a reformist at heart but with his credibility in tatters, he has been unable to govern ever since.
Cheap credit, a global boom, and steady foreign investment for nearly two decades have meant that Hungarians could get away with having an unreformed and cripplingly expensive welfare state. They have also elected and reelected a political class that is childish, selfish to the point where democracy can no longer properly function, parochial beyond description, and almost totally blind to the realities of the world. Perhaps the crash and the pain of the coming recession will change that. But then again, it might not.
Subscribe to:
Posts (Atom)
Posts
