The Hungarian National Trading House, affiliated with Hungary’s Ministry of Foreign Affairs and Trade, has been amassing significant financial losses and is mired in corruption allegations, yet it is now expanding to Canada. The MNKH Hungarian National Trading House Cls. published public procurement and bidding documentation online for parties interested in the “creation, operation and management of a Trading House office partner network in Canada…for the purposes of rendering country-specific commercial development services.” According to their website, the Hungarian National Trading House “continuously searches for Hungarian enterprises that could be competitive in external markets as well. On the other hand, with the help of our local trade houses established in the target countries we assess the demand of the given market and explore the potential business opportunities interesting from the point of view of the Hungarian companies.”
The Hungarian National Trading House Cls is currently present in some 40 countries, including the United States, Brazil, Chile, China, Indonesia, Israel, Iraq, Jordan, South Africa and the United Arab Emirates. Canada will soon join this growing list. The organization notes: “Our strategic objective includes the opening of further trading houses in the Carpathian Basin and expansion, within the framework of the policy entitled “Opening to the South,” in the South American region as well.
The Orbán government’s policy of “Opening to the South,” which has raised eyebrows among foreign affairs and foreign policy efforts, has already involved the opening of a Hungarian embassy in New Zealand, as well as an agreement with Kenya, in which Prime Minister Viktor Orbán’s government commits to bringing 50 Kenyan students to study at Hungarian universities on scholarships each academic year. In exchange, Hungarian companies can play a central role in four important areas of Kenya’s economy: the manufacturing of vehicles used in public transport, water filtration, agricultural machinery and medical supplies for hospitals. Hungary’s state-owned Eximbank is providing $70 million in loans to Hungarian companies that want to enter the Kenyan market.
The Orbán government has also launched a strong economic push in Canada, especially since 2014, when Péter Szijjártó took over as Foreign Minister and made international trade his priority, and after Ambassador Bálint Ódor replaced his predecessor, László Pordány, and also emphasized stronger economic ties. Ambassador Ódor gave an interview this month to Ottawa Life magazine, and noted: “Hungary has always been a very innovative country. I think the future between Canada and Hungary is very much in the field of research and development.” He added that historically this trade focused on medical equipment, pharmaceuticals and machinery, with trade between the two countries totaling $634 million in 2012.
It was under the Ambassador Ódor’s tenure that Air Canada Rouge launched direct flights between Toronto/Montreal and Budapest, following Air Transat flights established in the previous year. Air Canada was the main corporate sponsor behind Hungary’s Cultural Week in Montreal.
The opening of a Hungarian National Trading House office in Canada is part of this strategy, but the opposition in Hungary has been raising concerns about the growing losses that are being amassed by the Ministry of Foreign Affairs, through these ventures. In July, the Democratic Coalition demanded that Mr. Szijjártó explain these losses. More than $28 million in public funds was spent on opening new Hungarian National Trading House offices abroad over the past 18 months. Yet these offices have only managed to generate $13 million in business.
Prime Minister Orbán’s family also appears to be involved in the business ventures of these offices. Mr. Orbán’s son-in-law, István Tiborcz, reportedly has private business dealings with the Turkish entrepreneur who represents the Trading House’s interests in Turkey. According to the Democratic Coalition: “on the surface, [the Trading Houses] appear to help small and medium businesses expand their reach, but in reality, billions of forints are leaking away, while greasy private business dealings and corruption permeate the whole story.”
The Democratic Coalition has called on Foreign Minister Szijjártó to resign and has demanded that the Orbán government suspend the whole network of Hungarian National Trading Houses.
But the liberal opposition party is not the only one to sound the alarms about the Hungarian National Trading House Cls. The Politics Can Be Different green party (Lehet Más a Politika – LMP) tried, in vain, to obtain clear information on the budgeting around the Hungarian National Trading House Cls. “The secrecy is explained by those news pieces which assert that the Hungarian National Trading House Cls, under the supervision of the Ministry of Foreign Affairs and Trade, has funded the relatives and confidantes of people close to the government. While the government policy of opening to the east is in ruins, and trade has actually decreased in the majority of target countries, the National Trading House provides a monthly apanage to the government’s discredited people,” remarked Erszébet Schmuck, an MP with LMP.
The conservative Magyar Nemzet daily was among the first to begin asking questions about corruption around the Orbán government’s Hungarian National Trading House Cls. It appears as though a relative of György Matolcsy, Governor of the Hungarian National Bank, and a confidante of András Giró-Szász, a former government spokesperson, both profited from the Hungarian National Trading House Cls. Mátyás Matolcsy served as an adviser to the Hungarian National Trading House Cls for two and half years, collecting some $48,000 for his consulting work.
Zoltán Lengyel, a former Fidesz politician, also managed to get onto the payroll of the Hungarian National Trading House Cls. Mr. Lengyel was hired as a consultant and collected a monthly salary of $3,800.
Petra Hajdú, who previously worked for former Fidesz spokesperson András Giró-Szász as his press agent, also landed a job with the Hungarian National Trading House and makes $4,800 per month. Ms. Hajdú is now based in Colorado and refused to answer media queries, when she was initially contacted for comment.
As the Hungarian National Trading House prepares to establish operations in Canada, Canadians and Canadian companies looking to partner with the Hungarian state should ask questions about the corruption allegations that encircle the organization.