4 February 2013
The stalemate between the Hungarian Government and the IMF over the negotiations for a loan facility are regularly cited by the Hungarian media as a prime example of the government’s obduracy in the face of superior knowledge. Prime Minister Viktor Orbán and his Finance Minister, Györgyi Matolcsy are held up by many in the media as being financially illiterate and incapable of understanding the finer points of global finance.
Rarely if ever, do the Hungarian media suggest that perhaps the Hungarian government’s negative view of the IMF, the EU (partners to the negotiations) and the international banking community might have some validity.
Let’s consider this in more depth.
The international banking and financial community contributed greatly to the financial catastrophe in 2008. They and the credit ratings agency were totally negligent in failing to see that their policies and predictions – based on inadequate market surveillance and too much risk – led the world to the brink of global economic meltdown. How many of the so-called ‘masters of the universe’ actually lost their jobs or even their bonuses?
How much has it caused to bail out the international banking system? Taxpayers have paid a heavy price to rectify the damage wrought by failure – both human and systemic. How much credibility can we now place on those same credit rating agencies, which repeatedly failed in their primary duty and so badly duped investors? Is it not reasonable that Hungary’s government question the validity and competence of those who pass judgement on Hungary’s credit rating?
Another party to the IMF negotiations is the EU. This is the same EU that has witnessed the near collapse of the Eurozone due to mismanagement, incompetence and the fiddling of figures. They have the audacity to chide Budapest on its unorthodox fiscal and economic policies while the results of their orthodoxy is felt in countries such as Greece, Ireland, Portugal, Spain and Italy. What price orthodoxy? Why should anyone assume that they have the answer to Hungary’s problems – much of which was self-inflicted by the previous Socialist regime?
As for the IMF, you can easily find many informed commentators critical of their policies in the past. How can we ignore the blistering criticisms of internationally acclaimed experts like Jospeh Stiglitz or former senior IMF-insider like Peter Doyle? When was the last time the Hungarian media aired their comments? In light of the comments of these people, Viktor Orbán has every right to be wary of IMF competence.
The Hungarian media is sadly lacking when it comes to objective economic analysis. The mainstream journalists simply do not know the questions to ask.
Perhaps the time has come for the Hungarian media to invest in some additional education and training on those areas, which have been for too long neglected. Simply asking questions of similarly ill-educated commentators and analysts – few, if any, with actual experience in the commercial world or with the development of national economic and fiscal policy – will reap nothing other than ill-informed and superficial responses which in turn is passed on to the average Hungarian as some sort of knowledgeable insight.
By all means, hold the government accountable for its economic policies but do so from a position of knowledge and objectivity, not laziness, indifference and bias.