Hungary seeks diaspora labour boost as it fights bitter immigration battle on other fronts

Hungary seeks diaspora labour boost as it fights bitter immigration battle on other fronts
Hungary is pushing to support its food and agricultural sectors with a little help from the neighbourhood
By bne IntelliNews September 30, 2016

Companies from the Hungarian food industry are reportedly advertising in Ukraine to attract migrant workers from the diaspora, as the labour shortages in the region increase in intensity, local press reported on September 29.

The news follows reports that Budapest is stepping up efforts to open the doors to immigrants from Ukraine. This drive looks to be a neat fit for the government of Prime Minister Viktor Orban - which has been running a harsh anti-immigrant campaign ahead of its referendum on the EU’s migrant quota system on October 2. On the one hand, Orban can use the policy to “prove” to international critics that Hungary is not against immigration per se; on the other, it taps into the nationalism at home that informs his core support.

The message appears to have been picked up quickly by companies in the food sector that are struggling to find workers. Media reports claim an increasing number of companies are targeting the diaspora in the neighbourhood - including Ukraine.

Magyar Idok reports that one unnamed company based close to Budapest has published front-page ads in newspapers in Zakarpattia Oblast – the southwestern Ukrainian region home to a significant Hungarian minority. The company is offering HUF120,000-150,000 (€390-490) per month for semi-skilled work, and will also cover the cost of accommodation, meals and a visit back to Ukraine once per year.

"There is a shortage of both skilled and unskilled workers," Tamas Eder, president of the National Food Processors Association told the paper. "The workforce has left the country, as wages are higher not only in Western Europe but also neighbouring countries.”

Forced last year to dismantle a tax on the sector that the EU ruled unfairly targeted the large foreign grocery retailers that rule much of the Hungarian market, officials in Budapest have said several times this year that they are working on plans to force the supermarkets to help local farmers and the food industry. The head of the prime minister’s office Janos Lazar said on September 29 that a package of proposals for the retail sector will be presented to the government on October 5. 

Close to the heart

The ads in Ukrainian newspaper suggest the drive to open the way for labour from the east will help the domestic food and agriculture sectors as much as any. It’s a policy that taps into several issues close to the government’s heart.

On the one hand, the shortage of labour is becoming ever more critical. Hungarian unemployment dropped below 5% in August.

While the tightened labour market is good news in the short term for an economy heavily dependent on consumption to drive growth, further out there is a real risk that difficulty finding workers and the raised costs will trim investment – already a weak point – and GDP growth in the medium term.

Yet despite claims from economists that migrants tend to bring with them a positive overall effect for ageing and developed economies such as are found in the EU – and that should be especially true for Central & Eastern European states losing their young to richer peers to the west – the Hungarian government is desperate to stem any inflow of refugees from the likes of Syria and Afghanistan.  

At the same time, the subtext to the effort to recruit the diaspora is an old Hungarian wound - the Treaty of Trianon. Signed at the end of the first world war, the agreement saw huge lumps of Hungary chopped off and handed to neighbours. A perceived injustice that underlies modern Hungarian nationalism, the populist Orban government can point out to its international critics its efforts to support “refugees” from Ukraine while at the same time flagging up Trianon, whether openly or not.

Support for Hungarians unlucky enough to find themselves cast adrift by the same western elite that now wants to foist foreigners on the country is clearly a neat fit for Orban and his populist rhetoric. A couple of years ago, as Russia warned in the wake of its annexation of Crimea that western Ukraine was being over-run by armed gangs of neo-nazi’s, the Hungarian PM infamously demanded autonomy for Zakarpattia Oblast.

The diaspora in Ukraine is not the only exception to Budapest’s unforgiving stance on immigration. Other non-EU nationals can buy themselves a Hungarian residence permit – and therefore free travel across the Schengen zone – with a €300,000 investment into a special five-year sovereign bond.

Hungary has handed out around 3,650 such permits – mostly to Chinese investors, but also those from Russia and other eastern states - reports. Under the EU quota system that is the target of Hungary’s referendum, the country would be required to take in 1,300 refugees.

Hungary is not selling citizenship through the scheme, Lazar stressed. He also said Budapest expects Brussels to open a new infringement procedure against Hungary over its refusal to take back refugees from other EU states under the Dublin Convention. Several states have complained over the issue.