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Vote now, ask questions later

September 17, 2010 Leave a comment

Prime Minister Viktor Orbán’s Fidesz party is trying to win the October 3 municipal elections using roughly the same tactic that brought it a 68% majority in Parliament last April: Make vague, crowd-pleaser promises without disclosing the dirty details of how they will be fulfilled – or more importantly, who is going to pay for them. There is certainly nothing unusual about politicians making unrealistic promises. But Fidesz has raised it to an art form: When pressed for more information, party leaders not only resort to tried-and-true political subterfuge, they behave as if they have no obligation to explain themselves.

Fidesz’s state secretary in charge of healthcare, Miklós Szócska, last week refused to elucidate his plans to overhaul the medical system, saying it would inappropriate during a political campaign, according to the Népszabadság newspaper.* This is an interesting take on democracy: A sitting government should clarify its budgetary priorities only when the voting is over. The press would have skewered Szócska in the United States, where he earned his master’s in public administration from Harvard University. But his words barely made a ripple on the Hungarian political radar screen.

Leading Fidesz candidates see no reason to defend their positions in public debates – a basic tenet of democracy in developed countries. István Tarlós, the runaway favorite to become Budapest mayor, refuses to go head-to-head with his rivals. His spokeswoman said Tarlós prefers to spend his time with the people of Budapest rather than other politicians. Ákos Kriza, Fidesz’s mayoral candidate in Hungary’s third-biggest city, Miskolc, did not show up for a September 15 debate with incumbent Socialist Mayor Sándor Káli and independent Ákos Hircsu. This means neither Tarlós’ nor Kriza’s ideas will be subject to the kind of scrutiny that only a debate can bring. Of course, both men have a strong precedent: Orbán refused to debate other parties’ nominees for prime minister ahead of the April 11 ballot.

Fidesz is also keeping its plans for the 2011 budget under wraps. On July 5, Fidesz restored an old law that extends the deadline for the government to present its draft budget until Oct. 31 in election years. Without this change, the Orbán administration would have had to send its 2011 spending plan to Parliament before the municipal vote. It is understandable that a brand-new government needs an extra month to get its spending priorities in order. However, Fidesz is facing an EU-imposed budget-deficit target of 2.8% of GDP for 2011, which would be a record-low shortfall since 1995. The budget is therefore bound to bring some negative news, whether it be delays in promised income-tax cuts, lower social spending or sector-specific corporate levies similar to the “bank tax.” Problem is, voters will not know the details until after the polls close.

Nonetheless, Fidesz is poised to sweep every county and nearly every major city on election day, if opinion polls are correct. Popular revulsion toward the main opposition party, the Socialists, is so strong that many Hungarians will stick by Fidesz no matter what they say. Perhaps it would be wise to recall the words of U.S. President Andrew Jackson: “Eternal vigilance by the people is the price of liberty.” In modern-day parlance: “Democracy: Use it or lose it.”

*Szócska’s office declined to confirm or deny whether the Népszabadság quote was accurate.

Alex Kuli

Common Misunderstandings About Hungary

Over the past few weeks I have been meeting with leading analysts from banks, funds and other financial institutions from all over the world. Everybody is interested in what’s going to happen to Hungary after the elections and what risks the future may hold. I have come to realize that there are two common misunderstandings about Hungary.

The first is about the euro. Accession to the euro zone is not the focus of the election campaign at all. Except for the far-right Jobbik party, all mainstream political parties agree that Hungary needs to adopt the euro as soon as possible. This is actually the only political issue that enjoys widespread political consensus. Parties don’t campaign for or against the euro and don’t expect any political benefits from doing so. Financial analysts tend to see the euro as essential for political success, but that’s not the case. The issue is simply not on the table. Of course, should Jobbik perform surprisingly well in the elections (which is exactly what I anticipate), the euro may get into the spotlight. This scenario is unlikely, since Jobbik will not have any real power unless it becomes Fidesz’s coalition partner or wins the elections. Neither scenario can be excluded, but at this stage neither has much chance.

Certainly Fidesz has not helped foreign analysts better understand its stance on euro. Fidesz’s economic- and fiscal-policy talking heads have declared several times that boosting the economy (even at the price of boosting the deficit) is a priority, while introduction of the euro is not. There is a persistent conflict within Fidesz between the desire for short-term economic growth and quick Eurozone accession.

The second misunderstanding stems from Western political experience. In old democracies, voters usually reward or punish the incumbent government based on the country’s economic situation. If the economy is doing fine, voters tend to support the incumbent party; if not, they vote for the opposition. This is not valid for Hungary. The country’s economic performance has never had any effect on the outcome of the elections. There is no correlation between support for the government and GDP growth.

At the same time, Political Capital’s research has found a strong correlation between support for governing parties and the perceived state of the economy and the perceived outlook for living standards. Hungarian voters are strongly influenced by perception — and there is frequently a disconnect between the popular perception of economic growth and reality. This is why many of the analysts I met were surprised that Hungarians don’t appreciate the caretaker government’s performance.

Krisztian Szabados

Categories: Hungary, populism Tags: , ,

The Threat of “Regional Elitism” in the Post-Communist Bloc

February 21, 2010 Leave a comment

Regional inequities in wealth are extremely high in post-communist countries, according to the latest data from Eurostat. The richest regions of Slovakia, Hungary, the Czech Republic and Romania — including the capital — show relatively solid economic figures, while regions far from the capital show remarkably poor results. It is as if the “East-West” frontier isn’t drawn along international borders, but within these countries.

The most shocking difference is in Slovakia: GDP per capita is 160% of the EU-27 average in the western Bratislavsky kraj region — more than three times higher than in the Vychodná Slovensko region in eastern Slovakia, where per-capita GDP is 46% of the EU average.

In Romania, per-capita GDP in the Bucuresti-Iflov region is also more than three times higher than in the Nord-Est, Romania’s least-developed region:

We can see similar imbalances in Hungary and the Czech Republic:

The EU’s new member states also show a much higher imbalance in regional economic production than the EU-15:

These inequities may have crucial political consequences. People in formerly communist countries are nostalgic for big-government paternalism, have strong egalitarian ideologies and a need for high state redistribution. The majority of voters feel that the transformation to a market system has brought unbearably high gaps in income levels and huge social injustices.

These figures show that national governments and the EU have a lot of work to do in increasing social and regional cohesion.  Although a huge amount of money has been spent on closing the gap between the regions, people!s wishes remain unfulfilled.

Possible risks of these regional economic imbalances:

  • Social instability and a rise of social (or agrarian) populism. Regional inequities can be used as a political tool to mobilise voters in the poorest regions. Political parties can build upon the voters’ feelings of relative deprivation and fuel dissatisfaction in the countryside. As in most countries, the capital is by far the most developed region, and agrarian populism built upon the urban-rural rift can be a driving political force. On the other hand, if governments raise spending on regional integration, the more developed regions can accuse the poorer regions of “free riding”.
  • Ethnic tensions. In the CEE countries mentioned, the majority of the Roma population lives in the least-developed regions. Frustration over unemployment is high in these places, and anger over the lack of opportunities is even stronger. Welfare chauvinism can become a powerful force in politics.
  • A good opportunity for extreme right. Far-right populist parties can capitalize on the above factors, using dissatisfaction over living conditions and ethnic conflict to harvest votes. This is exactly what is happening in Hungary’s 2010 parliamentary elections, where the far-right Jobbik party stands to make the biggest gains in the least-developed counties. In some counties, Jobbik may even beat the governing Hungarian Socialist Party into second place.

Csaba Molnár- Péter Krekó

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