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Saturday, August 11, 2012

Plunder of Last Remaining Public Assets Imminent in Hungary

It seems that privatization of some of the last bits of collective assets in Hungary, the Budapest Public Transport Company, and the State Railways, is imminent. I have arrived at this conclusion from a number of observations.

To start with, it is almost impossible not to notice the striking negligence with which the government has intentionally bled these companies of investment, creating a public transport infrastructure that is embarrassingly run-down, unreliable, dirty, environmentally polluting and overall a real shame. And this from a status quo ante until the early-to-mid-nineties that was actually, for the country's level of economic performance, quite acceptable.

Viewed from a global perspective, of course this makes perfect sense. As I have argued repeatedly, an apparently "essential" feature of the post-state-socialist governments' economic strategies, irrespective of political orientation otherwise, was a full commitment to privatizing assets and institutions in its possession (essentially neglecting the responsibilities to the public that place those assets and institutions in the hands of the government pretty much everywhere in the world). Since almost everything has in fact been privatized in Hungary, it takes hardly rocket science to predict what will happen to the remaining assets. Those remaining assets, in today's Hungary, include the health, culture and education infrastructures, the road system, the existing railroad infrastructure and the companies that operate those assets. Then there is the air, the water and the country's geopolitical and -economic location. That's just about it.

Trouble is, these assets are exceedingly difficult to privatize--for many reasons, one of which is that they most are actually necessary for the reproduction of society. Hence public sentiment regarding the state's actual performance in operating those assets is key to determining the order in which they will be privatized. It is not enough intentionally to run down these assets. There needs to be a public conversation that is hyper-critical of them, and it needs to be concluded that the state is essentially unsuitable to provide public services through institutions it owns and manages.

That public conversation is pretty much everywhere in Hungary--but, the fact that I got reminded of all this has to do with an op-ed piece, published in the "liberal" daily today, arguing that corruption is a necessary part of state-provided services, and that a municipally owned public transportation company has no right to exist in Budapest.

There is only one set of questions--who the lucky winners are to be. Of course this is the point about which there have been slight disagreements between the middle and right wing governments in the past. I really don't want to guess this, but if I had to, I would say I expect a combination of some of the most powerful "oligarchs" in the Hungarian economy and multinational capital, most likely from the EU. That's it. Game over.

What the subsequent governments will be able to plunder (to strengthen "their" own capital groups, etc.) is of course an open question. But, given the legendary creativity of Hungarian society, I'm sure they will find something.


  1. There is now one political movement, 4K, that has noticed the same problem. Here is their website (alas, in Magyar). Way to go.

  2. K4 has filed police charges against unknown perpetrators for plunder of public assets in the matter of the bus privatization deal in Budapest. Stay tuned.


cover page of the book

cover page of the book
image used for the cover design by Anannya Dasgupta