Corruption is inevitable in the Hungarian business sector, a recent report by Transparency International (TI) titled Corruption Risks in the Business Sector concluded. According to a summary of the report in Világgazdaság, it is extremely difficult or impossible to operate in the business sector without corruption. The full report can be downloaded in English from here.
The report points out that while regulations on businesses provide a solid basis for freedom and clean competition, enforcement of these regulations is inadequate. At the same time, certain laws on party and campaign financing, public procurement, lobby, bankruptcy, and the tax system have shortcomings which generate even more corruption.
It is estimated that public procurement is 20% to 25% more expensive than should be as a result of corruption, because there is a strong personal connection between political and business circles. Another problem is that in Hungarian business culture, corruption is nothing to be ashamed of.
Corruption is present in both the SME sector, where it serves “subsistence,” and large multinational companies. Although the latter brought a cleaner business culture into the country, if they are caught breaking regulations, they have the power and influence to avoid punishment.
In the form of solutions to the problem, TI proposed a reform of party and campaign financing, public procurement and the tax system. Additionally, it would be necessary to introduce and implement an ethics codex in the private sector, improve internal checks of companies, lessen local government bureaucracy and for the civil sector and independent media to step up against the phenomena.
The key words are “accountability” and “transparency”. Corruption is like bad weather these days. You can complain about it but there’s not much you can do to change it.
Take the recent government website scandal. They spent HUF 200 million on a completely unnecessary site. The cost should have been HUF 0 (zero).
Even if we believe that it serves a purpose, the acceptable budget for a similar site is normally between 2 and 5 million, and definitely no more than 10.
This overpriced contract somehow made it into the media and the usual uproar followed. When asked why so expensive, the spokesperson’s answer was brief: “it’s the best value-for-price offer”. That’s it.
The public and the media will eventually get over it. There will be new and even more outrageous waste of money tomorrow. This case will be filed under “business as usual in Hungary”.
What can we do about it? How can we stop this insane waste? How long can we finance corruption from expensive loans?
No easy answer here and no simple solution. Soft reforms and occasional change of personnel in the government will do nothing. I’m afraid a much more radical approach needed.
We cannot simply leave it to professional politicians to clean up the system, they are part of it. Where can we find decent people willing and able to take over?
Any ideas?