China’s debt-trap plan for Hungary

|
  • 0

China’s debt-trap plan for Hungary

Sunday, 20 June 2021 | Dr Makhan Saikia

China’s debt-trap plan for Hungary

The current protests in Budapest are all about an attack on Orban's democratic backsliding, lack of transparency and his authoritarian policies. But Beijing's economic expansion and ever-growing greed are just a symptom of its bigger power game in Eastern Europe

Why are thousands marching against the right-wing Government of Prime Minister Viktor Orban in Hungary? The principal reason behind the massive demonstrations is a proposed Fudan University (Shanghai) campus, a Chinese university, at the heart of Budapest. Besides, there is a genuine fear that the capital city of Hungary is fast slipping into the debt trap of China with its murky development projects.

Beijing’s lending and investment ventures have mostly led to a “quiet debt trap” in most of the countries so far. China’s opaque overseas policies and hidden agenda are an open secret.

Beijing’s bosses are trying to master the economic statecraft and translating it into a massive power play in various parts of the world. China observers advocate that by expanding its economic might (for example Belt and Road Initiative), Chinese “life-time” President Xi Jinping and his power brokers are probably in a mad rush to buy global goodwill and influence in many pockets of the world.

Fudan University is planning to open an overseas campus in Budapest offering master’s programme in liberal arts, medicine, business and engineering for about 6,000 students with 500 faculty members.

The Hungarian Government signed a strategic contract with Fudan University on April 27 this year to accomplish this venture in three years. This controversial project is pushing Prime Minister Victor Orban’s dealing with Beijing into a national spotlight ahead of parliamentary elections in the country in 2022.

In early April, a Hungarian investigative journalism outlet known as Direkt36 reported that the pre-tax construction costs of the Fudan Campus are estimated at $1.8 billion. Unfortunately, this cost is more than the entire expenditure of the education system of the Hungarian Government in 2019. Leaked documents reveal that the Orban Government would take a hefty loan of around $1.5 billion from a Chinese bank to cover the large part of the establishment expenditure of the campus. Further, the Hungarian Government would engage a number of China-based construction companies to complete the project by 2024.

Also, an opinion poll published in the beginning of this month by the liberal Republikon Institute, a think tank, says 66 per cent of the Hungarians say absolute no to the campus and hardly 27 per cent are in favour of it.

This venture will be the first such Chinese campus in any European Union nation so far and the first foreign outpost of the Shanghai-based university. The Orban Government defends the deal, saying the Fudan campus will enhance the higher education standard in this East European nation.

Orban has been the Prime Minister of Hungary since 2010. But he is better known for his authoritarian streak that he has been demonstrating for the last more than a decade. Also, he has been functioning as the President of the Fidesz, a national conservative party since 1993, except a break between 2000 and 2003. This is his second prime ministerial stint, first being 1998-2002, just for four years. An Oxford alumnus, Orban was once famous as a democracy activist in his youth. Clearly, one of his greatest contributions to post-Soviet Hungary was no other than the establishment of the Fidesz, with other students. And this word “Fidesz” refers to “Alliance of Young Democrats”.

Ironically, today Fidesz is no longer regarded as a democratic party in Hungary. Orban, the founder himself, has started deviating from the path of democracy and embracing the ethos of “illiberal democracy”. Probably, 2020 was one year in which he initiated many steps to dismantle the foundations of the rule of law, judiciary and finally, democratic institutions of the country. Freedom of speech and freedom of press were severely compromised in the last year and the Covid-19, the global pandemic, gave him the right opportunity to herald a regime of terror to Hungary.

This March, the Orban’s Government passed a special act, what the critics justifiably called as “Enabling Act” that allows the Prime Minister to rule by decree for an indefinite period, supposedly to contain the Wuhan-borne Covid-19 pandemic. Critics feel that Orban’s Enabling Act demolishes the few remaining credentials of democratic accountability in Hungary. This Act has emboldened him to move for an absolute concentration of power over the flow of information about the pandemic and its management system in Hungary.

Looking at a forthcoming parliamentary election and high underinvestment in the country’s public health system in the last decade, he desperately needed to control the Covid-19 narrative across the country. Else, the enraged Opposition will hound him for ignoring basic services to Hungarians. Unlike any European country, this new law empowers Orban to punish a person up to five years in prison if he is found to spread false information about the virus.

Thus, a real sword is hanging over both the journalists and doctors alike at a time when they are trying to grapple with the deadly disease at the cost of their lives.

Many of Orban’s supporters call this entire affair a misinformation cacophony from the country’s frustrated Opposition. But it is not so because this deal is symptomatic of wider concerns to do with transparency and corruption that is embedded with the current government of Hungary.

Only with the coming of Orban to power in 2010, the policy makers in Budapest got a new opportunity to initiate its famous “Eastern Opening” to cultivate firmer relations with both China and Russia. Even in recent times, Orban attracted the ire of the other EU countries by inching closer to illiberal regime of Vladimir Putin.

His primary motive behind this new policy framework was to simply attract investments, to introduce economic opportunities and to forge relations with anti-democratic forces in the very aftermath of the global financial downturn. Not only this, but Budapest also angered more allies in the democratic pantheon by preventing critical statements from the EU on China’s blatant violation of human rights especially in Hong Kong, Xinjiang and Tibet.

With all these grandstanding, Xi thanked Orban for safeguarding the overall China-Europe ties.

At the moment, Orban’s staunch rival and Budapest Mayor Gregely Karacsony has renamed surrounding streets of the proposed Fudan University after the victims of alleged human rights abuses by China in recent times.

As per the plan of the mayor, one street will be renamed after the Dalai Lama, the spiritual leader who has been in political exile since 1958 in India and whom Beijing consider as a dangerous separatist in all its official policy documents. Another road will be named as “Uighur Martyrs Road”. This Uighur Muslims are those minority ethnic groups that are victims of China’s genocide in its westernmost province of Xinjiang. A third street will be named as “Free Hong Kong Road”, a Chinese island outside the mainland that used to be governed by the historic Basic Law as agreed to between Beijing and London on the wake of its handing over to the former on July 1, 1997.

But unfortunately, today the Xi regime has twisted the basic tenets of the original agreement and set aside the unique system of “one country, two systems” principle on the basis of which the island territory should have been governed till 2047.

While a fourth street will be renamed after a jailed Chinese Catholic bishop. This seems to be a befitting reply to how Orban is planning to push his country into China’s debt-trap diplomacy.

At this point, it is worthwhile to understand what is China’s model of international development. The western model of international development is associated with governments, multi-lateral lenders and non-governmental organisations in rich countries offering development assistance to poor nations. However, for China, development is not all about aid. Its international development narratives and policy paradigms encompass a wide range of often state-backed trade from investment to lending. Therefore, China’s overseas engagements like the one in Hungary hint at the country’s growing economic clout hidden behind a long debt-trap.

Currently, Washington has come out of its trajectory of self-sabotage with Donald Trump gone and Joe Biden looking up to widely engaging with the international community. He has already indicated that he will not be soft on China. His administration has stated in recent times that China is the “biggest geopolitical test” for the US. Also, Biden’s just concluded meetings with the G-7 leaders and the NATO allies make it clear that America will strengthen its partnership with Pacific and Atlantic nations to contain China and Russia. And this will be helpful for preventing China from encircling many parts of the world, including Hungary, from building its future Empire accompanied by absolute aggression and opaque economic statecraft.

It’s the high time the Hungarian Opposition put a full stop to Beijing’s weaponisation of trade relations with its country. But the Opposition groups and their sympathisers who are now making the Fudan University issue a rallying point should not go soft once it dies down.

The current protests in Budapest are all about an attack on Orban’s democratic backsliding, lack of transparency and his authoritarian policies. But Beijing’s economic expansion and ever-growing greed are just a symptom of a bigger power game in Eastern Europe. Orban, a post-Soviet right activist, who demanded the withdrawal of imperialist troops from its soil in 1989, must flash back what he and his Fidesz once stood for.

(Dr Makhan Saikia has taught political science and international relations for over a decade in institutions of national and international repute after specialisation in globalisation and governance from Tata Institute of Social Sciences, Mumbai. He is the chief editor of the Journal of Global Studies, an international research journal)

Sunday Edition

Covishield's Shield In Question

05 May 2024 | Archana Jyoti | Agenda

A Night in Ostello Bell Shared Stories, Shared Spaces

05 May 2024 | Pawan Soni | Agenda

Cherry Blossoms, Cheer and Camaraderie

05 May 2024 | Shobori Ganguli | Agenda

Gurugram's latest Culinary Contender

05 May 2024 | Pawan Soni | Agenda

astroturf | Mother teaches how to make life better

05 May 2024 | Bharat Bhushan Padmadeo | Agenda