Establishes an investigation committee to reveal the beneficiaries of the privatization and “spontaneous privatization” between 1988 and 2000 and to present the possible state security and party-state involvement of the new government.
Why is this important? The process of spontaneous privatization is quite well developed, but the colloquial interpretation of the term is quite different from the technical literature, so it is not yet clear what the government wants.
- The announcement in connection with spontaneous privatization, he uses the term “committed free robbery”, which corresponds more to the colloquial interpretation.
Top view: spontaneous privatization took place between 1988 and 1990, and it is called spontaneous because the companies transformed themselves not at the initiative and intention of the owner (the state), i.e. not centrally organized, but based on their own decision and by the spontaneous application of legislation.
History: In 1988, the company law, which did not exist until then, was created, specifically because of the urgent need to raise capital for state companies in a serious situation, and in order to stimulate the economy with private money.
- A mixed onethey wanted to create an economy that remained largely state-owned, but to a lesser extent privately owned.
- To the company law the main goal was to enable foreign investors to appear in Hungarian companies, and to enable the easy establishment of new Hungarian-owned companies.
- The socialist state on a systemic level, it did not think about selling public companies, therefore it did not have a privatization law, the main goal was not to transfer state assets to private hands.
- Privatization strategy and legislation lack of it, in 1989 the tasks were settled in the transformation law, in which it was stated that the management of state-owned companies could carry out the ownership reform (that is, the way of carrying it out was given to the companies quite freely).
- Ultimately it is the legal combination made it possible for movements different from the purpose of the legislation to start, i.e. the situation could also be used to transfer state assets into private hands.
Bottom view: in the majority of cases, everything took place legally, and often only the transformation took place, the wealth did not migrate into private hands.
- However, there were such caseswhen legal loopholes were used in a highly morally questionable way, for this reason the concept of spontaneous privatization became synonymous with free robbery in common parlance.
- Now the future government also uses the term in this sense, but once the investigation begins, the much more nuanced picture accepted in the literature will emerge.
- Because of socialism logically, privatization could not be called to account either, but the economy was in crisis, and the company transformations had many advantages.
- Additional additivethat the value of the companies spontaneously privatized before 1990 dwarfs that of the companies sold following the actual (non-spontaneous) privatization after 1992, but mainly after 1994.
In numbers: according to estimates in the spontaneous era, the state assets open for transformation were worth HUF 2,000-3,000 billion, but the country had only HUF 100-150 billion of capital that could be mobilized for investment.
- That’s why they opened up the opportunity with the legislation before the foreigners (and the transformations), but there was never a chance that the property would change hands at a realistic value.
- In three years 300 million dollars of foreign investment came into the country, while between 1972 and 1980 the total was only 200 million dollars.
Broader context: since in the socialist party state, the state required (at least formally) ideological commitment on some level to manage the most important/larger companies, and the spontaneous privatization was led by the management of the companies, a possible investigation will necessarily reveal political connections.
- At the same time, the literature it is also clear that in important companies, the management could not act without higher (even informal) permission in such far-reaching matters.
- In light of this from the perspective of almost 40 years, untangling the actual events, but especially their weighting, promises to be a rather difficult job.
What do they say? Perhaps the most important researcher of the topic is Péter Mihályi in his book (Privatization and nationalization in Hungary) writesthat the concept of spontaneous privatization
“it was first used by György Matolcsy in a manuscript study, in praise and not as a term of abuse. For him, spontaneous privatization meant nothing more than a change of ownership based on corporate initiative, during which the difficult-to-grasp state is replaced by a new, but not necessarily private, owner with precisely defined powers.”
- It is also clear from Mihályi’s bookthat during this period the later Minister of Economy and Governor of the Central Bank (like many other professionals) participated in the management of corporate transformations as a consultant.
- According to the book it is worth quoting Matolcsy’s (1998) reminiscences about this period: “We persuaded several large state-owned companies to run ahead, separate their factories from the center, give them more decision-making rights, and let the center focus on strategic decisions. This was the beginning of spontaneous privatization. Between 1986 and 1989, I assisted in the transformation of fifty large state-owned companies. It was a good experience, entrepreneurial I also gained income.”
