In an extensive article published on the website of the European Council on Foreign Relations (ECFR), Balázs Orbán outlines some key considerations that in his view determine the strategic direction in which Hungary should be moving in the coming years. An erudite scholar and the PM’s political director, Balázs Orbán often speaks and writes on diverse platforms on broader policy issues and on what he calls the Hungarian way of strategy, including in his book titled The Hungarian Way of Strategy, a very recommended reading also reviewed by Hungarian Conservative.
In his latest analysis on the ECFR site, titled ‘Connectivity: A Hungarian globalisation strategy’, Orbán focuses on what he sees as the number one challenge that Hungary must try to overcome: escaping the middle-income trap.
The author starts off by stating that while it is unquestionable that Hungary belongs to the West, the current bloc-based international order ‘clutters Hungary’s path to development.’
Orbán argues that the current globalisation model is based on a unipolar world order led and essentially dominated by the United States. This model has failed in many ways, the political director points out, as it has eliminated meaningful regulation and state control in economic matters, a weakness that was exposed by the 2008 economic crisis. What’s more, the neoliberal doctrine that went along with the model placed emphasis on the service sector and profitability, while allowing the industrial production capacities of many Western countries to decline, leaving Europe and the United States exposed to Asian countries that had not outsourced or downsized their manufacturing. ‘The neoliberal order is faltering’, Orbán offers, noting that Russia’s war against Ukraine may be the final blow to it.
Meanwhile, he reminds, the West has been trying to preserve its global influence, mainly by attempts at ‘decoupling’, that is bringing under its control all the states it can. In this system, it is only through the leading states of the various blocs that economic and cultural transfers can take place. This is bad news not just for Hungary, Orbán notes, but for the whole of the EU, as it threatens its autonomy. But the peripheral states of the Union fare even worse, because it is the central states that control both the relations between the blocs and the ‘distribution of resources within the bloc.’
Hungarian historical experience suggests that such bloc systems are always unfavourable for the country, Orbán says. From a divided Hungary under Turkish occupation to being subordinated to industrialised regions under the Habsburg rule and to being relegated to the periphery of the Eastern bloc under the Soviets, Hungary has had to choose a centre. Such centres have invariably become the ‘exclusive connection to other countries’; should the bloc system remain unaltered, it would leave Hungary perpetually among the ranks of developing countries.
To illustrate the adverse effects of the bloc system, Orbán cites the Russo-Ukrainian war: ‘In the current war and resulting economic sanctions, east-west trade routes – which have long been crucial to Hungary’s economic success – are blocked, limiting Hungary’s capacity for development.’
The Hungarian alternative to the neoliberal order and the model of globalisation based on international blocs is what Orbán calls the connectivity model. The gist of the model is that Hungary ‘should strive to maintain connections with as many other countries and market players from all over the world as possible. These connections should not be purely economic, but can also include trade, infrastructural ties, investment, and knowledge transfer, as well as public diplomacy.’ According to Orbán, this model eliminates the dangers of peripheralization, increases resilience, boosts economic productivity and innovation, and ‘is especially suitable as a breakout strategy, since the growth in the number of contacts progressively increases the economic influence of the given country.’
Hungary is in fact already applying the model, the political director reminds, highlighting the country’s low tax environment, the state support for foreign companies investing in Hungary, while at the same time strengthening domestic companies such as MOL, OTP Bank, and the telecommunications company 4iG, ‘so that they can become dominant players at the regional level.’
Orbán underscores the importance of the military and the infocommunication industries, as strategic sectors that can serve as breakout points, and also highlights the need for Hungary to strengthen regional links, taking advantage of the ‘economic and geographical unity of the Carpathian Basin.’ The Hungarian government should also strive to strengthen the Hungarian banking sector into a regional and global player and continue to transform higher education in such a way that universities ‘promote knowledge transfer between different industrial actors and distant research centres.’
What is also crucial to the strategy proposed by Balázs Orbán is the preservation of interconnectivity within the West. Strengthening the cornerstones of Western civilisation, rooted in Judeo-Christian values, is paramount, the political director underscores in his piece, adding that sovereignty, religion, and family must be defended from destructive attempts to ‘undermine our shared values and identity.’ In that spirit, the Hungarian government stands for respect of national sovereignty, the effective protection of borders, and fighting illegal migration, Orbán states. The government also invests in the building and renovation of churches across the Carpathian Basin and allocates over 6 per cent of GDP ‘in a unique pro-family policy to ease the burden on parents who would like to have more children.’
Balázs Orbán opines that the ambitious strategy outlined in the article will make it possible for Hungary to escape the middle-income trap in the next decade. ‘The task is no small one, and the path to prosperity may be more difficult now than it has ever been. Yet we Hungarians believe that our country is destined for great things and that we are on the brink of a historic opportunity, the success of which depends on us alone,’ the political director concludes.