Leading market analyst Péter Duronelly told portal Index.hu in an April interview we only just picked up on that he sees the government’s “reforms” as nothing more than a series of short-term measures to rein in state overspending. Worse still, Gyurcsány and Co. have failed to gain the support even of the party faithful, let alone an electorate Duronelly, chief investment officer of fund manager Budapest Alapkezelő Zrt., said was more interested in complaining than nation-building.
It’s not only the political elite and its flawed economic policies that make Hungary’s prospects of economic recovery seem so distant, Duronelly maintained. “The sad truth is that a forward-looking economic policy needs forward-looking people. A government can’t be prepared, resolute and single-minded enough to go through with a raft of economic reforms without enjoying at least some support from society and their electorate.” Hungarians have also less appetite for work than Czechs, who recently saw a minority government avert recession, he added.
Hungary may have whittled down its budget deficit to less than half in the past two years, but the government’s half-baked and poorly-managed stability program has brought economic growth to a grinding halt, while inflation remains high and tax compliance has only slightly improved, he said, adding that the government has done little but rehash and complicate established systems rather than introduce fundamental and far-reaching changes.
And while some observers point to the Czech Republic, where a minority government in 2002 pulled back the economy from the verge of recession, Prime Minister Gyurcsány has shown extremely poor management qualities while Hungarian parties are too deeply divided to initiate lasting improvements.
The finger-pointing seen in Parliament extends throughout society, he added. “While we Hungarians, whine about everything, we are willing to do little about our situations if this requires hard work and sacrifice. We prefer instead to wallow in the mire of economic slump instead of getting down to business and doing something about our children’s future.”
It doesn’t take much savvy to cut back the budget deficit, but parties need at least the backing of their own supporters if they are to go about implementing fundamental reforms, Dunorelly contends. Today, he says, none of the parties enjoys this kind of support and will unlikely to do so anytime soon unless Hungary is hit by a serious and deep economic crisis similar to the ones that prodded Brazil and Turkey into action.
Alternatively, when it finally comes to the crunch, Hungarians may vote for a savior-like figure like former Russian president Vladimir Putin, who earned the support of ordinary Russians by radiating self-confidence, resolution and competence. But as Russia’s example shows, this leader, even if successful, may create a country few of people would like to live in.
“As a result, it is most likely that nothing will change unless we [Hungarians] seriously falter […] It won’t be any better before it gets a lot worse, simply because we still haven’t realized where we’re headed […] Only time will tell whether we’re like Russians or more like the Turks and Brazilians” Duronelly concludes.