BUDAPEST — This year, like every year, millions of visitors will flock to Hungary. Retirees will set forth from large cruise ships lining the banks of the Danube; students will fly in on low-cost flights operated by Hungarian Wizz Air. And in some parts of central Budapest, it will make more sense to address a stranger in English than in Hungarian.
Throngs of tourists will venture into streets lined with glittering riverside palaces and slick EU infrastructure projects — sights that might suggest the country is enjoying a golden age. But if they walk along the city’s side streets, peek into a municipality-owned apartment, or strike up a conversation with a government employee, they might discover a hint that Hungary’s apparent prosperity is just skin deep.
To be sure, the country has undergone an architectural — and economic — makeover. Until a few years ago bullet holes — mementos of World War II and the 1956 revolution — still marked many façades in Budapest’s central neighborhoods.
In recent years, abandoned lots where buildings had stood before the war have been repurposed as open-air bars. Gray, decaying, turn-of-the-century buildings have been restored with bright façades. In many ways, Hungary’s elegant, multicultural capital has more in common with the Budapest of 1906 than the Budapest of 1966. New generations only vaguely remember a time before open borders and multinational corporations.
[In the late 19th century] America sparkled with newfound wealth, but rippled with underlying tension. The same is true in Hungary today.
On paper, the changes are impressive, too: GDP has more than tripled over the past 20 years, the value of exports has grown over five-fold, the rate of unemployment has dropped to 5.1 percent. Meanwhile, money keeps pouring into the country in the form of funding from the European Union, which, in 2014, amounted to more than 6 percent of gross national income.
And yet, the glitter and the growth cannot conceal the dark underbelly of the Hungarian transformation. In the late 19th century, the American author Mark Twain coined the term “gilded age” to describe his country’s economic contradictions. Rapid industrialization had led to an economic boom and great opulence, but also to corruption, the rise of tycoons, dislocation and poverty.
America sparkled with newfound wealth, but rippled with underlying tension. The same is true in Hungary today.
Members of the local gypsy community clean up an area around their village of Gyongyospata on August 4, 2011, as part of a government pilot program for employment | Karoly Arvai /AFP via Getty Images
Many of the tidy, picturesque villages that dot the countryside have no private sector jobs or any significant professional development programs. More than 200,000 Hungarians participate in the state’s public works program, where they earn less than minimum wage for what is essentially manual labor.
In some areas, entire villages are dependent on this program. Residents spend their days mowing lawns, painting sidewalks and planting flowers — all for less than the legal minimum wage they would earn in the private sector. They are, however, considered “employed,” and thus help inflate official employment statistics.
Policymakers are so focused on filling quotas for the public works program that they put little effort into helping jobseekers find work in the private sector, or gain the skills needed to thrive in today’s economy.
A large segment of the population has been left behind. In 2015, the Hungarian Central Statistical Office (KSH) found that 35 percent of the population lives under the poverty line. The finding was so much in contradiction to Hungary’s formal narrative of progress that the agency quickly announced it would no longer release data on poverty levels.
Hungarian employers report they are struggling to find workers. But this shortage is not due to a lack of people looking for decently paid, full-time jobs. A villager in the poor areas of northeastern Hungary likely lacks the education and skills necessary for work in a factory or a small business. And if a job applicant happens to be Roma, he or she is far more likely to be rejected by employers regardless of his or her qualifications.
By appealing to voters on issues like migration, [Prime Minister Viktor Orbán] has deflected attention from rampant corruption and inequality.
Those who possess the needed skills and education are leaving the country in droves, mostly for Western Europe. Milestone Institute, a competitive after-school program that helps talented high school students prepare for university admissions in the West, exemplifies Hungary’s brain drain. More than a fifth of graduates end up at Oxford or Cambridge. These highly educated and ambitious young Hungarians are unlikely to return to their country; they will accept lucrative positions in cities like London or Brussels instead.
Prime Minister Viktor Orbán may not have set the stage for Hungary’s own gilded age, but the gap between its sparkling façade and the harsher realities has widened rapidly during his time in office.
Orbán became a successful leader by constructing a patronage network — in part by using EU funding — that guarantees strong support within his own party and parts of the business community. He knows the fears of a society in transition and is very effective at tailoring his rhetoric and policies to match these insecurities. By appealing to voters on issues like migration, he has deflected attention from rampant corruption and inequality.
But the longer he — and the rest of Hungary’s political class — ignores its internal failings, the more obviously hollow its outward success will become.
Lili Bayer is a political analyst based in Budapest. She specializes in Central and Eastern Europe.