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Peter Mihályi Will our children ever come back? (Visszajönnek-e a gyermekeink?) Talk at the Rotary Club of Budapest-City 28 January, 2014.

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Az előadások a következő témára: "Peter Mihályi Will our children ever come back? (Visszajönnek-e a gyermekeink?) Talk at the Rotary Club of Budapest-City 28 January, 2014."— Előadás másolata:

1 Peter Mihályi Will our children ever come back? (Visszajönnek-e a gyermekeink?) Talk at the Rotary Club of Budapest-City 28 January, 2014

2 2 Introduction of Prof. Dr. Péter MIHÁLYI Born in Budapest (1953) Education: Karl Marx University of Economics (Budapest) Author of 10 books and many articles. Work experience: : United Nations Economic Commission for Europe (Geneva, Switzerland) : Deputy Government Commissioner for Privatization : Deputy Minister of Finance May, 2006 – December, 2007 Head of the Health Reform Committee of the Hungarian Government January, 2008 – May, 2008: Special adviser to the Minister of Health to date: University professor (Budapest, Veszprém) I.

3 Sorry, this is in Hungarian 3 „Még magasról nézvést Megvolna az ország, Werbőczi-utódok Foldozzák, toldozzák. A Föld nem tud futni, Csak a Földnek népe S ezer Kinizsi sem Térülhet elébe.” Ady Endre

4 Outline 1)Migration in the modern, globalized world economy: Number of people on the move Money on the move. 2)The perceived take-off in Hungary after )What is normal and what is unique in Hungary? 4

5 1. 5

6 Migration is normal. It is driven by the „pursuit of happiness” – i.e. better living conditions 6

7 Out of Africa… 7

8 Today: Two driving forces Push effect (trivial): People are aware that in other countries they can generate higher incomes. Thus they go… Pull effect: a) The rich countries may erect administrative barriers to inward migration. b) If the borders are open, the size of the diaspora is the most important explanatory factor.  This is a one-way street. The bigger is the diaspora, the easier to make the migration decision. World: Stock of immigrants 216 mn or 3.2% of population. The best, the richest and the most entrepreneurial citizens of their native countries. 8

9 Main tendencies (people) Migrant destination countries: USA (43 mn), Russia (12 mn), Germany (11 mn), Saud Arabia (7 mn), and Canada (7 mn) [Wealth and language!] Immigration countries, relative to population: Qatar (87%), Monaco (72%), the United Arab Emirates (70%) and Kuwait (69%). Emigration countries, relative to population: West Bank and Gaza (70%), Albania (45%), Armenia (28%), Georgia (25%), Kazakhstan (24%) and Portugal (21%). Surprisingly the South  South migration (migration between developing countries) is larger than migration from South  North [Administrative barriers] Largest migration corridor: Mexico - USA, former USSR  Russia, Ukraine and Ukraine  Russia 9

10 Main tendencies (money) Main sources of remittances: USA ( - 48 bn $), Saudi Arabia, Switzerland and Russia. Recorded remittances flowing back to developing countries are nearly three times the amount of official aid and almost as large as FDI flows to developing economies Top recipient countries: India, China, Mexico, Philippines and France. Top recipient countries as a % of GDP: Tajikistan (35%), Lesotho (25%), Moldova (31), Nepal (23%) … Serbia (13%), Albania (11%). 10

11 2. 11

12 The perceived emigration take-off in Hungary after Nobody knows the real figures, unlike in 1956, when 180,000 able-bodied, young people left the country after the revolution. The best present estimate is 500,000. Much or little? So far, 500,000 Hungarian passports were distributed in Romania, Serbia, etc. Relevant developments: 1.The Hungarian economy has been stagnating since 2006, and the 2010 elections didn’t really change the growth perspectives. 2.Spring 2011: The young medics, fulfilling their mandatory Residential Program had a very loud campaign for better salaries and working conditions. 3.Autumn 2011 and first half of 2013: Student mass demonstrations against tuition fees and drastic cuts in university enrollment limits.

13 Sorry, this is in Hungarian again… 13 „Nem tetszik, hogy egyre szarabbul érzem magamat hazámban. Nem tetszik, hogy a haverok, a rokonok nemsokára disszidálnak Nem tetszik, hogy senki sem egész Nem tetszik, hogy mindenki fél. Nem tetszik, hogy a szegények fizetnek meg mindenért. Nem tetszik, de nagyon nem "Hull az elsárgult levél..." Nem tetszik, hogy a diplomám egyre inkább szart sem ér.” (Pálfi - Karsay - Máthé – Jónás) 2011

14 Only anecdotal evidences… 14 1)Target countries: EU member states where English and German is spoken. 2)There is a very considerable cross-border commuting flow (on weekly basis) 3)Young and well-trained workers are overrepresented. 4)Off-springs of high- and middle-income families are also overrepresented. This is not conducive to increase remittances.  5)More and more 18-years old start university abroad. 

15 Remittances as a % of GDP 15

16 The Internet – as pull effect beauty parlor - hair-dresser real estate - psychologist - lawyer - church - school Others: low-cost airlines, , Skype

17 3. 17

18 Letter from my cousin living in Sweden… 18 „ Peter, why do you think that Hungary is different? You know very well, that our children are also in London and New York.”

19 The outward migration figures are not very different! 19 All these countries are classified as high-income countries by the World Bank.

20 … but look at the inward migration data 20

21 The Hungarian problem is the lack of immigration! 21 Most of the countries listed on the previous slide (but also other countries, like Russia) are capable to attract large number of unskilled, cheap labor and/or highly qualified, ambitious workers. There hasn’t been much of this happening in Hungary, except the absorption of native Hungarians from the neighboring countries during the first half of the 1990s. Well-documented: Hungarian speaking doctors arriving from Romania and the Ukraine. It seems that this process is over. Both are vital for fast economic growth.

22 The number of foreigners residing in Hungary (> 1 year) 22 Source: Eurostat

23 The past and the future 23 Twenty years ago, speaking in a Hungarian refugee camp set up during the Balkan war, Prime Minister Péter Boross declared that „Hungary is full”. Since then, the country’s population fell by 500, – 2024: According to the Hungarian Central Statistical Office, the total population will shrink by 412 thousand, while those in the working age ( years) by 579 thousand.

24 24

25 A semmilyen idegen nyelvet nem beszélő felnőtt lakosság aránya néhány Európai országban 2011-ben 25

26 A kivándorlók becsült aránya különböző viszonyítás alapok szerint (2010) 26

27 A Magyarországon kiadott összes nyelvvizsga bizonyítvány számának alakulása 27 Source: Radó Péter kivandorlas-az-agyelszivargas- mertekerol-2386/

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