Hungary to pay dearly for racist policies ... The economics of abuse For a long time now political parties in Hungary have manipulated social affairs so as to discriminate against the Roma. Three weapons of deception are used to support this fundamentally racist abuse of one of Hungary's oldest established communities (see next article): ethnicism denial of education active support of the Gypsy business Ethnicism Ethnicism is the process whereby governments assert that the cultural values of the community are not immediately conducive to integration within the mainstream system. In the case of Hungarian Roma, part of this ethnicism spin is that the Roma do not speak Hungarian. This is a complete misrepresentation of the facts since all Hungarian Roma speak Hungarian and very few speak Romani. Indeed many Roma in Slovakia and Romania are Hungarian Romungro who were "cut off" after the Trianon Agreement which split Hungary up by giving territory to these countries, and all of whom speak Hungarian and some Romani. During the former regime, Roma were fully employed and ran their own budgets, family affairs, and they participated in most aspects of maintream activities; this the Hungarian government now wishes to deny. This brother and sister, who are Hungarian Romungro, the largest Roma community in Hungary, have no educational rights as a result of neo-Nazi state policies. These policies are in contravention to European laws and the government can carry on breaking them as far as the European Commission, Parliament, Petitions Committee and Ombudsman are concerned. In the European Union, individual liberty, the right to education and equal opportunities are the preserve of non-Roma children only. Denial of education The most serious abuse leveled against the Roma by the Hungarian government (both central and local) is the forcing of the majority of rural Romani children into Special Schools where they receive no useful education. This process is not an old "tradition". The growth in this enforced segregated educational denial occurred after 1989 and was actively pursued by so called "new democratic" political parties using the model applied by the Third Reich Special Schools. The outcome of this perverse and illegal government activity is that during the last 17 years a massive deficit in education and professional skills has been created. This is a direct result of government policy. Active support of the Gypsy business The Gypsy business is a cynical title given to economic activities which are carried out in the name of the Roma. On the other hand the Roma themselves are excluded from any benefits which accrue from such activities. Some of the best examples of this are the millions of dollars and Euros allocated to budgets for "Roma initiatives". These are absorbed by NGOs, government agencies or large consultancy companies whose staff gain very high salaries. The outcome of the work is very seldom anything useful for Roma communities. The resulting reports gather dust on Ministry shelves or lie in filing cabinets and today on hard drives. Their main use is their use by consultancy companies and NGOs as references for their staff CVs and institutional "track records" to win yet more assignments within the Gypsy business tranches flowing out of aid agencies. The Gypsy business is a very effective cover for political parties in government to move cash around to their members under the guise of helping the Roma. The best example of this is the Gypsy business run by the Hungarian government designed to provide a direct incentive to local rural goverments to place rural Roma children in Special Schools (now into Special streams in some vilages). Local governments receive up to 2,000 Euro each year for every Roma child forced into, and kept within, a Special school. These funds are not spent on compensatory education for these children but goes to other things. So children are removed from standard educational provisions and are provided with no compensatory education but are left to languish. This is state policy. The makings of a basket-case economy Recently, that is since 2003, the Hungarian government has had some difficulty keeping down government debt. It wishes to demonstrate its ability to achieve an adequate fiscal control so as to qualify to enter the Euro zone. But its inability to control fiscal debt is directly related to the declining structural productivity of the economy which is progressvely failing to create enough tax take for the government to pay for what are quite often wasteful government activities. The reason this process is structural and therefore difficult to solve, is that it relates to the population structure. The non-Roma population of Hungary is aging and the absolute numbers shrinking. The dependency ratio of the economy, that is the number of people whose welfare and income depends on the productive activity of those in work, is stable and not increasing. This is because the falls in numbers of the non-Roma population is more than made up by the growth in the Roma population which is increasing by more than 2% per annum. As a result the Roma already constitute some 20-25% of the workforce in Hungary. By 2020 more than 30% of the workforce will be Roma. Because of the illegal state policy of segregated educational denial aimed at the Roma, this portion of the workforce has been subjected educational denial. The implications of the trends in an absolute decline in the educational levels and professional skills structure are clear. The Hungarian economy, according to a recent report by SEEL, has already entered a self-imposed structural decline in productivity. This is because the growing Roma portion of the workfoce has an earning capacity which is about 20% of non-Roma workers. As the economic structure shifts more towards services and away from agriculture and industry, this situation will become worse. As a direct result of Hungarian state policy the economy is becoming a basket-case. In quantitative terms is is easy to calculate the order of magnitude of the impacts of this manpower skills structure on the economy. If 25% of the workforce has only 20% of the earning capacity of the mainstream, then the economy is running at 80% of potential capacity i.e. there is a shortfall of 20% which in Hungarian terms means an annual shortfall (loss) in Gross Natiuonal Product of around 8 billion Euro. By the time Roma make up 30% of the workfoce, in just 15 years time, the Hungarian economic capacity will have dropped to 76% or in today's terms a loss of around 11 billion Euro per annum. Hungarian international debt Hungary has one of the highest international debts per capita in the western world and this is equivalent to half of its GNP. Hungary has an aging population becoming dependent on pensions. Unless the economy grows, the value of pensions will decline and nothing the government can do, under current circumstances, can solve this self-imposed problem. This is because the real earning capacity of the population will have fallen. The government take will also decline. No more degrees of fiscal freedom According to the SEEL study, Hungary has already passed the economic threshold beyond which its ability to claw back any fiscal deficit is virtually nil. This is because it cannot increase the tax levels on the already stretched workforce on comparatively low incomes. If the government does attempt to increase taxes then real incomes will go into tail spin. This will impact the retail and wholesale economy and therefore manufacturing and services. This means the national economy would be shrinking rapidly and this is a perfect formula for scaring off foreign private investment. The economy is already shrinking in real terms as a direct result of racist educational policies which deny 25% of the country's children (Roma) an acceptable education. The ongoing greed surrounding the Gypsy educational business only reflects the typical placing of political party interests over those of the people of the country. Difficult to tax corruption A major fallacy voiced by Hungarian politicians. including those in the Finance ministry, is that there is too much tax avoidance amongst the Hungarian public. In more buoyant economies it is a well known phenomenon that when a population is overtaxed then there is a strong incentive to avoid tax because it is perceived to be unfair. However, in the case of Hungary, the reality seems to be more that the government involves itself in wasteful expenditure and a large proportion of the waste is considered to be taken up in various forms of corruption closely associated with the syphoning of money to political party machines. Examples include the Gypsy educational business and road construction contracts going to consortia who provide kickbacks to the political parties. These large money flows are out of sight and condoned, indeed managed by party aperatiks, and these funds enter the "private economy". But it is clear that the politicians close to the action will ensure that these funds are not taxed. In terms of the amount of money flowing through the hands of people not involved in these rackets, there is not enough to make higher tax rates feasible; the money just isnt there. A country with a precarious economic future Besides generalised corruption, the economics of the abuse of the Roma in Hungary is the single most significant economic issue facing threatening the future welfare of the whole Hungarian population. However, Hungarian political party irresponsibility continue to circulate false statistics (see below), sustain the false concept of ethnicism, abandon their responsibility to deliver effective education for all and proactively divert international, European, bilateral and national funding of "Roma initiatives" into the Gypsy business. This all reflects a pattern of cruel insensitivity to the Roma and a horrendous irresponsibility towards the future generations of Hungarians, Roma and non-Roma alike. The track record of the Hungarian body politic Hungarian political parties have always been useless at handling the issue of race. This was indeed one of the motivations which gave rise to the proposals to break up Hungary along ethnic lines as part of the settlement of the first world war, at Trianon. At that moment Hungary lost 66% of its territory and population. The Hungarian governments which have arisen since 1989, have all demonstrated a similar national suicidal tendency marked by their under-estimation of the importance of the national minorities and, especially, the Roma. Even worse successive governments have proactively sustained an increasing institutional discrimination. In spite of showy "minority self governments" which have no power, and even a minority Ombudsman who is largely ignored, the Hungarian governments have yet to organize a manpower planning exercise which can set the country back on track. As it is, it is too late to do anything which can have short term effects. According to SEEL even if Special Schools were eliminated tomorrow and all Roma children were provided with equivalent curricula to non-Roma and even if adult training was brought in, it will take something like 15 years to see the economic impacts in terms of gains in productivity. So in 2020 Hungary will be in a depression falling behind the other countries of Europe. Even if Hungary manages to manipulate statistics to enter the Eurozone, its ability to sustain is fiscal balance will not last more than a couple of years. So exactly 100 years after Trianon the Hungarian government will presiding over a policy set which is directly undermining the state of Hungary but this time not by losing territory and population but by destroying its economy. Source: SEEL-Systems Engineering Economics Lab Agricultural Development Foundation European Committee on Romani Emacipation