After joining the European Union in 2004, Hungary seemed to be on the path toward a more prosperous future. However, once Hungary’s Prime Minister Viktor Orbán touted the idea of Hungary becoming an illiberal state, tensions between Brussels and Budapest reached new highs, threatening to destabilize the European Union with an autocratic member and potentially increase poverty in Hungary.
Orbán Erodes Democracy in Hungary
After first holding office from 1998 to 2002, Prime Minister Orbán returned as head of government in 2010, wanting to redesign governmental institutions. Orbán, a member of the Fidesz political party, subverted democratic norms and cemented one-party rule to ensure his assignment as prime minister and the supermajority of his party Fidesz.
In more than a decade since Orbán returned to the premiership, the Prime Minister and Fidesz have completely undermined Hungary’s democracy, erasing governmental integrity through the following methods:
- Rewriting Hungary’s Constitution
- Undermining the independence of the judiciary
- Controlling media, including the Internet, television channels and even school textbooks
- Gerrymandering to guarantee a Fidesz majority
- Suspending civil society organizations
As a result of Orbán’s reforms, the think tank Freedom House demoted Hungary to the status of partly free, indicating that Hungary’s democracy is at the cusp of autocracy, according to E-International Relations.
Poverty in Hungary
Despite Hungary’s descent from a protected democracy, poverty under Orbán’s leadership is reaching new lows.
From 2015 to 2019, there was a 2.2% drop in poverty rates, leaving only 12.3% of Hungarians below the national poverty line. The COVID-19 pandemic interrupted this trend of alleviating poverty rates, but official numbers are not yet available, as per the World Bank.
Hungary Depends on EU Funds
As Brussels and Budapest continue to clash, Hungary may become subject to financial repercussions. As one of the largest recipients of EU funds, the landlocked nation may find itself in tough times if cut off from much-needed aid.
From the 2014-2020 budget, Hungary received €40 billion ($40.8 billion). In just 2018, Hungary received €6.3 billion ($6.43 billion) from the EU, almost 5% of the country’s GDP. Without EU funding, the nation’s economic growth and ability to counter domestic poverty may stagnate or suffer.
Confrontations Between the EU and Hungary
Hungary’s turn against democratic norms puts it at odds with the European Union, prompting concerns about whether the EU should continue funding the nation as it refutes the multinational organization’s liberal democratic values.
Hungary’s violations of rule-of-law principles by undermining the country’s judiciary, education system and electoral integrity have prompted the EU to assess the best path forward to divert Hungary from autocracy, according to E-International Relations. In addition, the EU has accused Hungary of mishandling its funds, citing a lack of transparency and corruption (including 52 probes into misuse of funds) in how the nation utilizes EU funds.
In the past, the European Union has explored two main tools to handle Hungary’s disobedience: Article 7 of the Treaty of Lisbon and infringement procedures.
Under Article 7 of the Treaty of Lisbon, the EU can suspend certain rights of member states if a nation violates liberal democratic values, according to E-International Relations. However, this procedure requires a unanimous vote by all EU member states, rendering this feat impossible due to Orbán’s staunch ally in Poland.
The other main tactic the EU has tried is infringements procedures, which, simply put, is a legal action against an EU country that does not uphold EU law. In the past, infringement procedures in Hungary totaled €100,000 a day, according to E-International Relations. However, taking Hungary to court is time-consuming and potentially too ineffective to curb the nation from authoritarianism.
Brussels has resorted to withholding funds from Hungary within the past two years. The EU prevented Hungary from accessing more than €7.2 billion ($7.34 billion) from the bloc’s coronavirus response fund, citing ongoing breaches of EU law.
Now, as tensions rise, Brussels can leverage its conditionality regulation. This tool, which came into effect in January 2021, allows the EU to withhold money from its general fund from member nations for rule-of-law breaches. The European Union can prevent Hungary from accessing €40 billion ($40.8 billion) from its 2021-2027 budget if Orbán does not abide by the EU’s rules. This robust measure, which could push Orbán farther away from autocracy, may ultimately be detrimental to poverty in Hungary.
A Path Forward
As Brussels and Budapest continue clashing over democratic principles and funding, the future of poor Hungarians is in limbo. Financial penalties could prevent infrastructural development, welfare assistance and other critical programs that combat poverty, impeding the progress made under Orbán’s regime.
However, chances for a compromise remain hopeful. In June, Orbán stated, “Everything is ready for an agreement to be struck between the union and Hungary, which I think both sides need.”
With the two sides approaching an agreement and potentially unlocking withheld funds, Hungary could hopefully be on a path away from both autocracy and poverty.
In the meantime, non-government organizations are working to combat poverty in Hungary, with Habitat for Humanity Hungary being a notable example. Habitat for Humanity began its work in Hungary in 1996 and it helps supply homes for the impoverished. In 2019, Habitat for Humanity has helped more than 230 Hungarians, trying to minimize the number of people in poor living conditions.
Although the political situation remains precarious, there is still hope for the poorest Hungarians. Brussels and Budapest are inching closer toward an agreement, hopefully bringing more assistance to the poorest Hungarians shortly.
– Michael Cardamone
Photo: Flickr
Rising Income in Japan During Hyperinflation
Increasing Minimum Wages
Japan’s Central Minimum Wage Council recently issued a new policy, which is to raise the minimum wage standard across Japan by ¥30 per hour. This is the largest minimum wage increase ever issued by the Japanese government. Rising domestic prices stimulated this policy in Japan due to the sluggish yen and the Russian-Ukrainian war. The policy ensures the rights and purchasing power of ordinary Japanese workers.
Senior officials of the Japanese government have also attached great importance to basic wages and livelihood issues. In an interview with reporters, Deputy chief cabinet secretary Seiji Kihara said that raising the minimum wage is an investment in the people and he hopes that the rising trend of basic wages can keep up with the development of new capitalism.
Rising Total Income in Japan
In addition to setting requirements for basic wages, the Japanese government not long ago encouraged Japan’s major companies to raise workers’ wages on the premise of rising prices. In fact, the government wants companies to raise wages to the same extent as prices rise. This major move came with the support of Japanese Prime Minister Fumio Kishida’s economic policy. In fact, it was he who promised to bring New Capitalism to voters, which requires “a virtuous cycle of growth and redistribution driven by investment into people,” according to Japan Times.
Many Japanese companies have followed suit, including major car companies such as Toyota and Hitachi. They heeded the government’s call, even though their business was hurt by soaring oil and wheat prices as a result of the Russia-Ukraine war. In February 2022, Labor unions of major electronics and car manufacturing industries planned to raise workers’ wages by around ¥3,000.
The rising income in Japan during hyperinflation is the result of the government’s efforts to ensure a virtuous circle of the economy, as well as maintain the normal living standards and purchasing power of the people. Although the world economy in 2022 could cause difficulties for many countries, the Japanese government’s practical actions tell us that every government may have a role in caring for the needs of the people.
– Ella Li
Photo: Flickr
TPO Cambodia: Leading Mental Health Awareness in Cambodia
Poverty in Cambodia
There are several substantial poverty issues in Cambodia needing addressing. According to Asian Development Bank (ADB), 17.8% of Cambodians are living below the poverty line. Additionally, 9.2% of the nation is living on $1.90 or less a day.
This could relate to mental health issues since Cambodia is a country with one of the highest risks of mental health-related issues. It is estimated that 40% of Cambodians suffer from mental health issues. Post Traumatic Stress Disorder (PTSD) and suicide rates are also higher than the worldwide average.
Poverty and Mental Health
Studies have shown that mental health issues among individuals lead to higher rates of impoverishment from struggling to remain employed or find employment. Furthermore, economic conditions are one of the foundations of mental wellness. This means that when one is living in a more deprived area you are more likely to suffer from mental health issues.
According to the BJPsych Bulletin study, 23% of men and 26% of women had mental distress potentially related to a psychological disorder in the most impoverished areas in Scotland, compared with 12% and 16% of men and women on the opposite side of the economic spectrum.
Mental Health in Children
Psychological problems often start at a young age and can have serious consequences as individuals progress through life. This starts people at a social disadvantage lacking stability to keep long-lasting relationships. Additionally, child psychological problems also lead to economic issues. Researchers found family income for those aged 50 who suffered childhood traumas decreased by 25%.
TPO Cambodia
This is an organization directly confronting the issues mental health brings by trying to identify problems Cambodians are experiencing to help them better function in their jobs, families and societies as a whole.
TPO Cambodia works to provide local community-building mental health programs that offer more effective and cost-friendly care than mental hospitals which can lead to dehumanizing patients.
The ultimate goals of their programs are to educate Cambodians on mental health issues and become more aware of previously unseen issues in their own lives. Healing scars and social conflict are also important so that Cambodian citizens feel more invigorated and active to be able to actively participate in society.
Since its establishment in 1995, more than 200,000 Cambodians received mental health care and support.
Mental health is a serious issue in the world today. Traumas often start at young ages and can have serious consequences on the economic and societal well beings of citizens. However, with organizations such as TPO Cambodia tackling this issue, more and more are becoming aware of mental health and its effects and are receiving treatment.
–Alex Havardansky
Photo: Flickr
6 Facts about Mental Health in North Korea
5 Facts About Mental Health in North Korea
Looking Ahead
North Korea’s failure to properly diagnose and treat mental illnesses with psychiatric care has caused the problem to fester over time. Historical traumas dating back to the nation’s strict rule and history of famine have made the problem endemic in North Korean society. However, other issues connected to mental health in North Korea, such as stigmatization of those in need of help, are not necessarily unique to North Korean society, with similar problems occurring in Western countries as well.
– Salvatore Brancato
Photo: Flickr
The Impact of Diamond Mining in DRC
Process of Diamond Mining in the DRC
Miners work in artisanal mines and small-scale mines where the use of machinery is rare and in most cases nonexistent. Miners have to dig through layers of dirt, rock and gravel up to 50 feet deep to find the location of the diamonds. They then have to wash and sift through it to find any remnants of diamonds.
The miners’ bosses then take the diamonds and the Congolese people only receive a small portion back. In 2004, the DRC mined a total of $1 billion in worth, its treasury department only saw $40 million of it.
Impact on People
Because of the harsh conditions of diamond mining and the little pay it provides to the workers, much of the Democratic Republic of Congo is in poverty. According to UNICEF, the DRC contains over 50% of Africa’s water reserves, but 33 million people in rural areas do not have access to potable water.
In the village of Tshikapa, the cost of food is very high because people turn to diamond mining over agricultural farming, leaving the fields with no workers, according to the Time. The roads are unpaved and many can’t even visit a doctor because the price is too high. Hundreds of those miners each year die in drowning or tragic accidents because of the workplace environment that has no safety regulations.
On June 9, 2022, a collapse in one of the artisanal mining wells occurred killing six people in total. Because they often dig these wells by hand and have no safety precautions, people often die mining diamonds. Additionally, last year, a toxic spill from a diamond mine in Angola killed 12 people in the DRC, because of the pollution of the River Congo.
Environmental effects are very common as pollution of water sources and exploitation of water occur because of the mines’ locations and the materials needed to run the mines.
Helping the Miners
While diamond mining in the DRC negatively affects many Congolese people, there are organizations taking steps to stop these blood diamonds. In 2003, Global Witness, an NGO dedicated to ensuring the relationship between natural resources and the environment globally, launched the Kimberly Process, a government-pioneered safety certificate.
Since its launch 75 diamond-producing countries have taken part in this process and are required to establish safe and conflict-free export and import systems. This is one of the first actions taken to stop blood diamonds worldwide.
Diamond mining in the DRC has affected the Congolese people for many years. Many can’t access the resources they need to survive because the mines infect the water sources, environment, and infrastructure of cities in the DRC. Even though many of the miners are suffering in poverty, there are steps in place that are working toward a safer and more sustainable process of mining diamonds in the DRC.
– Janae O’Connell
Photo: Unsplash
Increase in Orphans in Peru Following COVID-19
Influx of Orphanages
Reportedly one out of 100 of Peru’s children’s population lost at least one parent to COVID-19. This large statistic only added to the grand total of 550,000 children who grow up parentless. Many children have lost their grandparents to COVID-19, which leaves devastating results for children in a country where it is common for grandparents to be the primary caregiver of their grandchildren.
Child poverty increased as a result of the pandemic as well, with around 39% of Peruvian children living underneath the poverty line, according to UNICEF. There are even some parents who are choosing to move to orphanages so that their children will have access to food and water.
This rising influx of Peruvian orphans poses a determinant to the mental, physical and economical health of Peru’s future generation. In addition, at least 1,000 Peruvian children have died as a result of COVID-19, The Guardian reports.
Solutions
As a result of the massive uptake of orphans, the Peruvian government introduced the “orphan pension.” Introduced in March 2021, the orphan pension pays $55 monthly to children under 18 who lost a parent as a result of COVID 19. These cash transfer programs intend to address childhood poverty by fostering human capital investments in children. Evidence suggests that children who receive cash transfers receive positive benefits such as reduced poverty, increased food consumption, and increased access to mental health services, according to The World Bank report.
This increase in orphans in Peru is a serious matter. However, spreading awareness and bringing effective sources to the matter is a great stepping stone to fixing the problem at hand.
–Luke Sherrill
Photo: Flickr
Argentina’s Economy Minister Resigns
Guzmán’s Career
On December 6, 2019, Argentine President (then-president-elect) Alberto Fernández designated Guzmán as Argentina’s economy minister. At the start of this career, the newly appointed Brown graduate had his first bill approved by the Senate just 11 days after his first day in office. The bill imposed tax increases in specific areas of the middle and upper class while providing tax benefits to the impoverished.
In early August 2020, the Argentine economy minister struck a deal to restructure $65 billion in foreign bonds. Most notably, the former minister engineered a $45 billion debt deal with the International Monetary Fund (IMF). The agreement aims to “promote growth and protect social programs” to tackle Argentina’s economic crisis.
Before resigning, Guzmán planned to head to France to discuss a $2 billion debt deal with the Paris Club of sovereign lenders.
Argentina’s Economic Crisis
Argentina’s economy has been suffering for decades. In July 2022, many Argentine sovereign bonds were worth as low as 20 cents on the dollar — a stark difference from higher rates in October 2020. Inflation in Argentina is staggeringly high, moving toward 70% by the end of 2022. As of July 2022, one United States dollar is worth about 126 Argentine pesos and this exchange rate is still increasing.
An economic disruptor includes truck drivers’ strikes, which have halted delivery of grain, “one of Argentina’s main imports,” to ports. In addition to the COVID-19 pandemic, the devaluation of the peso and a sizeable foreign debt of more than $323 billion by 2020 have sent Argentina into further economic turmoil.
Alongside these struggles, Argentina’s poverty levels are sharply increasing. Due to the severe inflation, the poverty rate in urban centers stood at 37% in the latter half of 2021 and is expected to increase to 39% after the first six months of 2022. This would equate to 500,000 more impoverished people.
The Economy’s Future
Guzmán’s resignation has raised concerns over the economy’s trajectory, most fearing it will head in an even worse direction. Other concerns regard Guzmán’s IMF deal and whether Argentina can meet these needs without the architect of the deal.
On July 3, 2022, one day after Guzmán’s resignation, President Fernández named Silvina Batakis Argentina’s new economy minister. Batakis previously served as the Secretary of Provinces in the Ministry of the Interior and as economy minister of the Buenos Aires province from 2011 to 2015. This week, she stated her belief in “fiscal balance” and her intention to follow President Fernández’s economic program.
In June 2022, the deal with the IMF that former minister Guzmán crafted underwent its first review. This is a sign that the deal may indeed make progress and ultimately come to fruition. A press release regarding this step stated that the program’s policies “will be critical to support Argentina’s economic recovery.”
There are other solutions and aids to Argentina’s economic crisis besides the appointment of a new economy minister — foreign aid. Amid this instability, at least 48 NGO projects in Argentina aim to improve the lives of the country’s poor. A notable organization is Fundación Integrar (Integrate Foundation). The foundation helps young Buenos Aires and La Pampa citizens living in poverty complete their higher education by providing financial aid and guidance to students. With the help of donations, the foundation has given higher education scholarships to 140 students to date.
In office, Argentina’s new economy minister Batakis will need to address the nation’s high inflation rate and foreign debt along with an increasing poverty rate. Yet, she is not alone in this fight — a deal with the IMF is underway and tens of organizations are serving the country’s poor.
– Sophie Buibas
Photo: Flickr
Migrant Workers in Qatar and the 2022 World Cup
Migrant Labor in Qatar
About 30,000 migrant workers have undertaken the task of erecting these state-of-the-art stadiums, most of whom traveled from Asia and Africa in search of greater economic opportunity. Even after the stadiums are complete, migrant workers will be responsible for the day-to-day service operations and hospitality provided to guests of the World Cup. The long-awaited thrill of the soccer games themselves and the economic output that the events will provide for Qatar would not be possible without the hard work and sacrifice of these impoverished migrant workers in Qatar.
However, Amnesty International reports that these workers endure exploitation despite their vulnerability and necessity to the project. Individuals are subjected to high debt procured while trying to cover illegal recruitment fees. For example, about one-third of the Qatari foreign labor force consists of Nepali and Bangladeshi migrants whose typical recruitment fees amount to around $4,000 each — a debt that takes a minimum of 12 months to pay off.
Another practice that has received increased scrutiny as World Cup preparations are underway is the protracted non-payment of wages. This is a particularly distressing issue considering that workers must make payments on the loans they took out to cover recruitment fees. Many workers are also responsible for family members back home, who rely on them financially. Amnesty International found that thousands of workers have endured underpayment or no payment at all for months and sometimes years.
In 2019, hundreds of migrant workers in Qatar took part in protests over these practices and the generally poor working conditions.
The Kafala Labor System
Key to this exploitation is the “kafala” legal system of labor, in which private companies and employers can sponsor migrant workers, providing housing in dormitories and covering foreign relocation expenses. These migrant laborers are bound to their sponsoring employers and cannot quit, change employers or leave the host country without their employer’s permission. Workers cannot join trade unions either.
The good news is that in 2017, Qatar signed a treaty with the United Nation’s International Labour Organization, promising reform. Qatar lived up to that promise through the passing of several pieces of legislation. In 2018, the country ended the requirement that migrant workers obtain permission from their employers to leave the nation, and in 2020, Qatar undertook further reform to allow all migrant workers to change jobs without their sponsors’ permission and introduced a minimum wage.
In March 2018, Qatar also established Committees for the Settlement of Labour Disputes to stand in place of the country’s “ineffective [labor] courts.” These Committees guaranteed that workers would receive their judgments from the court within six weeks. Qatar also established a “workers’ support and insurance fund” for exploited workers who do not receive payment from their employers.
The Story of Bijoy
However, the promise of these reforms has not quite panned out as desired as courts are overwhelmed with cases and processing times are backed up. Amnesty International’s reporting on Bijoy’s story captures the human toll of this bureaucratic backlog.
Bijoy is a migrant worker from India who worked for three years at a Qatari construction company. Bijoy had more than $3,500 of unpaid wages owed to him by the company. He waited three months to have his claim processed by the labor committee, living in conditions of squalor with no money. Finally, after seven months of non-payment, Bijoy accepted just $275 and ticket fare for a flight to India as compensation as he had a sick father to return to in India. Stories like Bijoy’s are unfortunately all too common.
Looking Forward
As the November 21 World Cup 2022 kick-off date approaches, excitement is building around the world as audiences prepare to experience the culmination of years of planning and effort. However, Amnesty International is advocating that FIFA and the Qatari government refund recruitment fees and compensate individuals for abuses before the footballing celebrations move forward. Amnesty International recommends that FIFA set aside $400 million out of the $6 billion in expected revenue, almost equivalent to the total prize fund for the World Cup, for these purposes. Amnesty International continues to push for a commitment to compensation from Qatar and FIFA, hopeful that Qatar will, as it has done in the past, implement the reforms and restorative justice necessary to uphold the rights of migrant workers in Qatar.
– Grace Ramsey
Photo: Flickr
Bukavu’s Elderly Produce Sustainable Energy in Congo
Producing Sustainable Fuel Pellets
With plenty of energy and enthusiasm to spare, Mubake provided the spark to change his community for the better. The process begins with collecting waste such as leaves, maize stalks and cardboard. This mixture is soaked, dried and ground into a powder, which is then combined with sawdust to mold into energy-giving briquettes that communities can rely on for fuel.
“This work helps me to educate my children, to have food on the table and also to have enough to buy clothes and other things,” Mubake explains in an interview with Reuters.
Mubake’s work presents a lifeline for those in communities that have limited or no access to energy. According to Our World in Data, as of 2020, access to electricity sat at 19.1% across Congo. A lack of access to energy contributes to poverty in the nation. According to the International Monetary Fund (IMF), in 2018, 73% of the population in Congo experienced extreme poverty.
Mubake and other retirees like him create the sustainable fuel pellets at Bukavu’s Rehabilitation Center for the Elderly. Three months into operation, the center produces an average number of 2,000 briquettes on a weekly basis. The sale of the briquettes produced by Mubake and the other retirees provides a source of income for the group.
Protecting Congo’s At-Risk Environment
The briquettes look to provide a sustainable alternative to the more traditional means of energy usage in Bukavu — locals cut down trees in the national park to use as charcoal. With the considerably low price of the sustainable briquettes made from waste standing at just $0.05, there is hope that efforts such as these, spearheaded by locals within the community, will help to reduce the dependency on Congo’s natural abundance of forest.
Dependence and depreciation of Congo’s natural forests are also fuelled by the abundance of high-value resources. According to World Wildlife Fund, “The Congo Basin is abundant in natural resources such as timber, diamonds and petroleum, but current methods and rates of extracting these resources are unsustainable and threaten the future of this vast wilderness area.”
Mubake’s innovation presents a solution to a much more significant problem that Congo faces, as the preservation and security of the Congo Basin are constantly under threat. On top of the ever-growing demand for natural resources across the Congo Basin, mass agricultural projects particularly in the region of South Kivu, home to Bukavu, present a genuine threat to wildlife due to deforestation.
According to data provided by Global Forest Watch, in a 20-year-period from 2001 to 2021, Congo lost “34% of its total tree cover loss.” Tree cover across the Congo Basin not only helps to deal with the absorption of harmful emissions but provides a home to countless unique and endangered animals such as the eastern lowland gorilla.
Ensuring protection for endangered species such as the eastern lowland gorilla is vital to annual tourism as thousands of tourists every year travel to Congo to experience one of the nation’s greatest spectacles. Not only do attractions such as the eastern lowland gorilla help to further Congo’s economy but they also help to provide employment for impoverished people within the community.
Through the efforts of Bukavu’s elderly, access to energy in Bukavu, while not universal as yet, is heading toward a promising goal. Hope remains that such actions will set a precedent for how communities can produce sustainable energy in Congo through initiative.
– James Garwood
Photo: Flickr
Nuclear Energy In Developing Countries
4 Facts About Nuclear Energy in Developing Countries
Looking Forward
While nuclear energy may have a slow start in many developing countries, it certainly has a promising future. For instance, in March 2022, Nigeria committed itself to construct a power plant, which could provide energy to millions of impoverished Nigerians.
Along with that, in 2021, Bangladesh began construction of the Rooppur Nuclear Power Plant with the primary purpose of solving Bangladesh’s longstanding energy problem.
There are certainly hurdles to developing nuclear energy in developing countries. However, as seen in Nigeria and Bangladesh, it is definitely possible to establish nuclear energy within developing countries. As these countries transition away from fossil fuels and into renewables such as nuclear energy, they could be providing a stable source of energy to tens of millions of impoverished people that could live a life with energy without the threat of global disruptions.
– Humzah Ahmad
Photo: Flickr
Orbán Might Increase Poverty in Hungary
Orbán Erodes Democracy in Hungary
After first holding office from 1998 to 2002, Prime Minister Orbán returned as head of government in 2010, wanting to redesign governmental institutions. Orbán, a member of the Fidesz political party, subverted democratic norms and cemented one-party rule to ensure his assignment as prime minister and the supermajority of his party Fidesz.
In more than a decade since Orbán returned to the premiership, the Prime Minister and Fidesz have completely undermined Hungary’s democracy, erasing governmental integrity through the following methods:
As a result of Orbán’s reforms, the think tank Freedom House demoted Hungary to the status of partly free, indicating that Hungary’s democracy is at the cusp of autocracy, according to E-International Relations.
Poverty in Hungary
Despite Hungary’s descent from a protected democracy, poverty under Orbán’s leadership is reaching new lows.
From 2015 to 2019, there was a 2.2% drop in poverty rates, leaving only 12.3% of Hungarians below the national poverty line. The COVID-19 pandemic interrupted this trend of alleviating poverty rates, but official numbers are not yet available, as per the World Bank.
Hungary Depends on EU Funds
As Brussels and Budapest continue to clash, Hungary may become subject to financial repercussions. As one of the largest recipients of EU funds, the landlocked nation may find itself in tough times if cut off from much-needed aid.
From the 2014-2020 budget, Hungary received €40 billion ($40.8 billion). In just 2018, Hungary received €6.3 billion ($6.43 billion) from the EU, almost 5% of the country’s GDP. Without EU funding, the nation’s economic growth and ability to counter domestic poverty may stagnate or suffer.
Confrontations Between the EU and Hungary
Hungary’s turn against democratic norms puts it at odds with the European Union, prompting concerns about whether the EU should continue funding the nation as it refutes the multinational organization’s liberal democratic values.
Hungary’s violations of rule-of-law principles by undermining the country’s judiciary, education system and electoral integrity have prompted the EU to assess the best path forward to divert Hungary from autocracy, according to E-International Relations. In addition, the EU has accused Hungary of mishandling its funds, citing a lack of transparency and corruption (including 52 probes into misuse of funds) in how the nation utilizes EU funds.
In the past, the European Union has explored two main tools to handle Hungary’s disobedience: Article 7 of the Treaty of Lisbon and infringement procedures.
Under Article 7 of the Treaty of Lisbon, the EU can suspend certain rights of member states if a nation violates liberal democratic values, according to E-International Relations. However, this procedure requires a unanimous vote by all EU member states, rendering this feat impossible due to Orbán’s staunch ally in Poland.
The other main tactic the EU has tried is infringements procedures, which, simply put, is a legal action against an EU country that does not uphold EU law. In the past, infringement procedures in Hungary totaled €100,000 a day, according to E-International Relations. However, taking Hungary to court is time-consuming and potentially too ineffective to curb the nation from authoritarianism.
Brussels has resorted to withholding funds from Hungary within the past two years. The EU prevented Hungary from accessing more than €7.2 billion ($7.34 billion) from the bloc’s coronavirus response fund, citing ongoing breaches of EU law.
Now, as tensions rise, Brussels can leverage its conditionality regulation. This tool, which came into effect in January 2021, allows the EU to withhold money from its general fund from member nations for rule-of-law breaches. The European Union can prevent Hungary from accessing €40 billion ($40.8 billion) from its 2021-2027 budget if Orbán does not abide by the EU’s rules. This robust measure, which could push Orbán farther away from autocracy, may ultimately be detrimental to poverty in Hungary.
A Path Forward
As Brussels and Budapest continue clashing over democratic principles and funding, the future of poor Hungarians is in limbo. Financial penalties could prevent infrastructural development, welfare assistance and other critical programs that combat poverty, impeding the progress made under Orbán’s regime.
However, chances for a compromise remain hopeful. In June, Orbán stated, “Everything is ready for an agreement to be struck between the union and Hungary, which I think both sides need.”
With the two sides approaching an agreement and potentially unlocking withheld funds, Hungary could hopefully be on a path away from both autocracy and poverty.
In the meantime, non-government organizations are working to combat poverty in Hungary, with Habitat for Humanity Hungary being a notable example. Habitat for Humanity began its work in Hungary in 1996 and it helps supply homes for the impoverished. In 2019, Habitat for Humanity has helped more than 230 Hungarians, trying to minimize the number of people in poor living conditions.
Although the political situation remains precarious, there is still hope for the poorest Hungarians. Brussels and Budapest are inching closer toward an agreement, hopefully bringing more assistance to the poorest Hungarians shortly.
– Michael Cardamone
Photo: Flickr