Hungary

   

Social Policies

#38
Key Findings
Increasingly reflecting the state’s conservative ideology, Hungary’s social policies place it in the bottom ranks (rank 38) in international comparison. Its score on this measure has improved by 0.1 point relative to 2014.

Major education-system reforms, including spending cuts and centralization, have undermined student outcomes. A controversial higher-education act has sought to drive the Soros-funded Central European University out of the country. Poverty is worsening, and the middle class is being further weakened. Roma are deeply marginalized, particularly with regard to education and employment.

Health care is a highly conflict-ridden area, leading to a series of scandals and protests. Problems include widespread mismanagement and corruption, hospital debt, and a brain drain of medical staffers. Support for families is tied to anti-immigration policies. Child care has been expanded, and counseling centers created to help women combine parenting and employment.

Disparate pension systems have been merged, but pensioner poverty has increased. The government has taken a strongly xenophobic anti-refugee stance both domestically and in an EU context. However, non-EU citizens can obtain Hungarian passports in return for investments in the country.

Education

#40

To what extent does education policy deliver high-quality, equitable and efficient education and training?

10
 9

Education policy fully achieves the criteria.
 8
 7
 6


Education policy largely achieves the criteria.
 5
 4
 3


Education policy partially achieves the criteria.
 2
 1

Education policy does not achieve the criteria at all.
Education Policy
3
Since the beginning of the decade, the education system has undergone major changes. Spending has been cut, competencies and control have been centralized, private and religious schools have been strengthened, and secondary education has been restructured with a view to strengthening vocational education. Most international comparisons suggest that the relative performance of Hungarian students has worsened as a result of these changes. The World Economic Forum’s recent “Global Human Capital Report” identifies an “inadequately educated workforce” as the single most importance obstacle to doing business in Hungary and puts Hungary on place 87 (111) with regard to primary (higher) education.

In the period under review, public debates on education policy have largely focused on the new act on higher education passed by parliament in April 2017. The act has targeted the Soros-founded Central European University (CEU), the most prestigious institute of higher education in the country in an effort to force it out of the country. Massive protests both inside and outside Hungary, including threats of an infringement procedure on behalf of the EU, led the government to amend the act in October 2017, without really giving up on its goal of disturbing the work of the CEU.

Citations:
Bárd, P. (2017) The Open Society and Its Enemies: An attack against the CEU, academic freedom and the rule of law, CEPS, Policy Insight No. 2017/14, Brussels (https://www.ceps.eu/system/files/PBard_Hungary%20and%20CEU.pdf).

World Economic Forum (2017) The Global Human Capital Report 2017: Preparing People for the Future of Work. Genea (http://www3.weforum.org/docs/WEF_Global_Human_Capital_Report_2017.pdf).

Social Inclusion

#33

To what extent does social policy prevent exclusion and decoupling from society?

10
 9

Policies very effectively enable societal inclusion and ensure equal opportunities.
 8
 7
 6


For the most part, policies enable societal inclusion effectively and ensure equal opportunities.
 5
 4
 3


For the most part, policies fail to prevent societal exclusion effectively and ensure equal opportunities.
 2
 1

Policies exacerbate unequal opportunities and exclusion from society.
Social Inclusion Policy
4
The basic social message of the Orbán governments has always been that they would fight for upward mobility of “hard working people” in Hungarian society, representing the interests of both the middle class and low-income earners. Despite the economic recovery since 2013, however, both the impoverishment of people in the lower income deciles and the fragmentation and weakening of the middle classes have continued. Ranking 35 out of 38, Hungary trails behind in the OECD’s Life Satisfaction Index, and only one-third of Hungarian society can achieve a way of life similar to that in the developed EU countries. There are also strong regional disparities in terms of social inclusion, with big islands of poverty prevailing in Eastern Hungary, and a growing segregation of the Roma population. Some 80% of the Roma population have only a basic education level (first eight years), while this is true for only 20% of the rest of the Hungarian population. As a result, most Roma are low skilled and 42% of the “employed” Roma are stuck in the public works system. Since 2010, skyrocketing salaries for managers of public corporations and Fidesz officials’ high earnings have become a political issue. Before 2010, Fidesz had criticized the then-existing HUF 2 million monthly salary ceiling for managers of public corporations as being too generous. However, as of 2017, many top managers receive more than HUF 5 million a month.

Citations:
OECD, Better Life Index (http://www.oecdbetterlifeindex.org/topics/life-satisfaction/).

Szikra, D. (2018): Welfare for the Wealthy: The Social Policy of the Orbán-regime, 2010-2017. Budapest: Freidrich-Ebert Foundation (http://library.fes.de/pdf-files/bueros/budapest/14209.pdf).

TÁRKI (2016): Social Report 2016. Budapest.

Health

#40

To what extent do health care policies provide high-quality, inclusive and cost-efficient health care?

10
 9

Health care policy achieves the criteria fully.
 8
 7
 6


Health care policy achieves the criteria largely.
 5
 4
 3


Health care policy achieves the criteria partly.
 2
 1

Health care policy does not achieve the criteria at all.
Health Policy
3
Health care has become the most conflict-ridden policy field in Hungary. A continuing series of scandals have made this issue a major Fidesz policy weakness and a subject of large-scale public protest. Health care policymaking has suffered from the absence of a ministry tasked with addressing health care issues and from a limited health care budget, which is one of the lowest in the OECD. The Orbán governments have failed to tackle the widespread mismanagement and corruption in the health sector, the large debt burden held by hospitals, the discretionary refusal of services by medical staffers, and the increasing brain drain of doctors and nurses to other countries. The main reform project of the third Orbán government has been a monstrous organizational reform in which those units of the National Health Insurance Fund (Országos Egészségbiztosítási Pénztár, OEP) dealing with cash benefits were merged with the Pension Insurance Fund (Országos Nyugdíjbiztosítási Főigazgatóság, ONYF), whereas the other units became the National Institute of Health Insurance Fund Management (Nemzeti Egészségbiztosítási Alapkezelő, NEAK). Inspired by the widespread feeling that health care is the worst public service in the country, the democratic opposition parties began the drafting of a common basic program for health care policy in mid-September 2017.

Families

#28

To what extent do family support policies enable women to combine parenting with participation in the labor market?

10
 9

Family support policies effectively enable women to combine parenting with employment.
 8
 7
 6


Family support policies provide some support for women who want to combine parenting and employment.
 5
 4
 3


Family support policies provide only few opportunities for women who want to combine parenting and employment.
 2
 1

Family support policies force most women to opt for either parenting or employment.
Family Policy
5
Family policy has always been a rhetorical focus for the Orbán governments. In the context of the government’s campaign against refugees, it has attached even greater importance to family policy. The government has repeatedly stressed its view that the ongoing decline in population must be tackled not by immigration, but by increasing birth rates in the country and has declared this to be a major political goal. Unlike in the past, the government has gone beyond measures to raise family assistance and other social benefits for families. Since 2016, it has paid more attention to expanding child care facilities. In 2017, it also established a network of 67 local counseling centers tasked with helping women find employment and combine parenting and employment. In institutional terms, family policy has been strengthened by the announced creation of a cabinet committee on family affairs that is scheduled to meet at least once and month and is chaired by the minister of human capacities.

Pensions

#34

To what extent does pension policy realize goals of poverty prevention, intergenerational equity and fiscal sustainability?

10
 9

Pension policy achieves the objectives fully.
 8
 7
 6


Pension policy achieves the objectives largely.
 5
 4
 3


Pension policy achieves the objectives partly.
 2
 1

Pension policy does not achieve the objectives at all.
Pension Policy
4
Hungary introduced a three-pillar pension system along World Bank guidelines in 1997 that featured a strong mandatory, fully funded second pillar. Upon coming to office, the second Orbán government abolished this second pillar and confiscated its assets. It also shifted disability pensions to the social assistance scheme, eliminated some early-retirement options and did not reverse the shift from Swiss indexation (which adjusts outstanding pensions by the average of the price and wage indices) to price indexation, as it had been introduced by the previous government in the context of the great recession. These changes have improved the financial sustainability of the first pension pillar but have also increased poverty among pensioners. The third Orbán government has failed to address this issue. Its main reform project has been the monstrous merger of the Pension Insurance Fund (Országos Nyugdíjbiztosítási Főigazgatóság, ONYF) and part of the National Health Insurance Fund (Országos Egészségbiztosítási Pénztár, OEP) adopted in June 2016. In a populist move, the government also sent to all pensioners vouchers worth HUF 10,000 (€33), accompanied by a letter by, and a portrait of, Orbán in the 2016 and 2017 Christmas season. With the parliamentary elections in April 2018 approaching, debates about pension reform intensified in 2017.

Citations:
Gál, R. (2016): Reorganization of the pension administration in Hungary. European Social Policy Network, Flash Report No. 2016/52.

Integration

#33

How effectively do policies support the integration of migrants into society?

10
 9

Cultural, education and social policies effectively support the integration of migrants into society.
 8
 7
 6


Cultural, education and social policies seek to integrate migrants into society, but have failed to do so effectively.
 5
 4
 3


Cultural, education and social policies do not focus on integrating migrants into society.
 2
 1

Cultural, education and social policies segregate migrant communities from the majority society.
Integration Policy
3
The refugee crisis has proven that Hungary is still primarily a transit country with only a small number of migrants who want to stay in the country. The fragile economic situation, low wages, a difficult language and a government-orchestrated xenophobic public climate are deterrents. While the integration of ethnic Hungarians from neighboring countries – above all from Romania, Serbia and Ukraine – has gone fairly smoothly, the integration of other migrants remains a controversial process. The Orbán government has fiercely refused the integration of non-Europeans and non-Christians as a lethal danger to Hungarian national culture and identity. In September 2017 the European Court of Justice refused the Hungarian – and Slovak – attempt to sue the EU over quota arrangements, but it is still uncertain how the Orbán government will react to this decision.

The Orbán government’s tough stance on refugees contrasts with the government’s Hungarian Investment Immigration Program. In this framework, non-EU citizens can get Hungarian passports for investing in the country. So far, the government has collected €403 million from these residency bonds issued for twenty thousand persons, many of them from China. This business has been organized by the Antal Rogán, the head of prime minister’s cabinet office, and managed by Fidesz close offshore companies accumulating a large amount of private profit from this business. Because of protest against this intransparent scheme, the business was allegedly suspended in March 2017, but still seems to be going on in some ways.

Citations:
Helpers HU (2018): Hungarian Investment Immigration Program. Budapest ( https://helpers.hu/services/immigration/investment-program/).

Safe Living

#35

How effectively does internal security policy protect citizens against security risks?

10
 9

Internal security policy protects citizens against security risks very effectively.
 8
 7
 6


Internal security policy protects citizens against security risks more or less effectively.
 5
 4
 3


Internal security policy does not effectively protect citizens against security risks.
 2
 1

Internal security policy exacerbates the security risks.
Safe Living Conditions
5
In Hungary, regular crime is largely within normal limits. While the number of registered crimes slightly increased in 2016, for the first time since 2013, Budapest is a rather safe capital city and the crime incident rate in the country remains relatively low. However, the government’s attempts to prevent atrocities from being perpetrated against Roma, Jews and homosexuals, as well as to protect opposition demonstrators, have remained rather half-hearted.

Global Inequalities

#39

To what extent does the government demonstrate an active and coherent commitment to promoting equal socioeconomic opportunities in developing countries?

10
 9

The government actively and coherently engages in international efforts to promote equal socioeconomic opportunities in developing countries. It frequently demonstrates initiative and responsibility, and acts as an agenda-setter.
 8
 7
 6


The government actively engages in international efforts to promote equal socioeconomic opportunities in developing countries. However, some of its measures or policies lack coherence.
 5
 4
 3


The government shows limited engagement in international efforts to promote equal socioeconomic opportunities in developing countries. Many of its measures or policies lack coherence.
 2
 1

The government does not contribute (and often undermines) efforts to promote equal socioeconomic opportunities in developing countries.
Global Social Policy
3
Hungary pays only relatively little policy attention to developing countries. The Orbán government adopted a strategy for international development cooperation and humanitarian aid for the period 2014-2020 in March 2014. Hungary’s development cooperation focuses on countries which have a large Hungarian minority and strong trade links with Hungary (Serbia, Ukraine) or in which Hungary has been militarily involved (Afghanistan). About 80% of all funds go to Serbia and Ukraine. Hungary’s net ODA has fallen short of the official EU and OECD targets and has further declined relative to GDP in recent years.

Citations:
OECD (2017): Development Co-operation Peer Review Hungary 2017. Paris (http://dx.doi.org/10.1787/dcr-2017-24-en).
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