Economic Impact on Refugee Crisis, Interview with CCTV

How much countries are spending to help asylum seekers?  Is the money enough to tackle the crisis?

What is the cost of potential policy alternatives?  What are the incentives decision makers could use to keep people in the country?

Watch an Interview with CCTV-AMERICA:

Hungary’s Unacknowledged Leadership

Hungary has a strategic position in the heart of Europe. The country offers a highly developed logistics system. Its traditional role as a trading post makes it important as a regional production and distribution center.  Porsche, General Motors, and Audi are now producing many of their cars in Hungary – with other suppliers working for and close by. A recent investment by Mercedes Benz re-affirms the auto cluster formation in Hungary. The significant development of industries like information technology, electronics and automotive has attracted Foreign Direct Investment (FDI) at a rising rate.  Hungary’s acceptance as a member of the European Union and the Schengen Zone further boosted its own and its European partners economic, social and political development and stimulated more R&D activities.

All this is now jeopardized because of major EU internal strife over immigration policies. I observed the early stage of human flow between Serbia and Hungary which was then a 200-kilometer long green zone. Groups of 30 to 50 men, women and children slowly walked across the border. The local chief of police shrugged since he neither had the manpower nor the physical resources to round up or process the waves of humanity. In 2015, more than 400,000 people entered Hungary from Serbia, aiming to settle in Germany, France or Britain. The march through Hungary used to encounter an ostrich policy of “carry on and ignore”. But the people who immigrate were worn out and not any less hungry because they were in Hungary. To rest, or feed themselves, they trespassed on property and took fruits and other food. Locals were weary and talked about organized protection for their harvest. Pressures and complaints are like sparks in a tinder box.

The government of less than 10 million Hungarians has only limited resources to respond to the clashes. A wall has been built to stop the immigration flow across the most accessible border areas. The public response in Europe to Hungary’s defensive measures have been complaints, accusations of government over reaction, and lack of sympathy towards restriction of mobility. Prime Minister Orban, a democratically elected head of government was accused of a lack of sentimentality and guilty of behaving like a political winner (DUH)!

Today, Hungary is again encountering its traditional environmental ambiguity. In history, the country has been too far East to be part of the West, and too far West to be integrated into the East. There have been long-term occupations by the Tatars, Ottomans and Austrians. The treaty of Trianon, removed large portions of Hungary’s population and resources. During the Cold War Hungary kept conditions at least lukewarm with its Gulyas communism, and was often at the forefront of clamoring for change, for example, with its 1956 revolution against the Soviet Union, and the 1989 opening of its borders to help escaping East Germans.

Again Hungary has been an early proponent of the need to monitor refugee access to a country for purposes of justice, information, planning and control. Given its small size and population, repercussions of new factors are simply felt more quickly and demand more rapid actions than for nations which have lots of reserve resources to deal with new conditions. Even those players eventually recognize the need for new policies.

Accusing the Hungarians of inhumanity for their regulation of migration is unwise. To protect nations many walls have been built: just think of the Roman Hadrian or the Chinese Qin Shi Huang 2000 years ago. Walls are still being built today, by Austria, Serbia and now also by Turkey. Doing so is not a disregard for human lives, but rather an institutional requirement for control of the distribution of resources. Even Herculean effort is to provide food, shelter and security for migrants can fail if there is no timely count and assessment of human needs and the direction of the massive flow of people. It has not been sensible to overburden Hungary with expectations and demands for accommodative actions which, as we can see now, has shaken up major countries as well. In today’s times, leaders are all-to-often confronted with asymptotic conditions, where they encounter major demands for actions by outsiders who are shouldering neither the political burden nor are paying for all their wonderful suggestions. Later on, those who earlier decried and dismissed responsible government action often turn about and imitate the once so deployed steps. Particularly in groups of nations which disagree about idealistic policies, one winds up with the unfortunate constant of politics: foresight and early implementation of corrective action has no international payoff. No gratitude, no memory, no long term, no acknowledgment, just like an unhappy couple.

Assault at the Cathedral

On New Year’s Eve, there were mass attacks on women in Cologne, Germany. More than a thousand young men, many of them with an apparent migration background, congregated next to the famous cathedral of Cologne where they assaulted, groped and even raped women passing by. Local police, far outnumbered, did not intervene in the mayhem. In the days to follow, police, press and government tried to downplay the disaster, in order to avoid controversy about migrants, of which Germany admitted more than one million in 2015, with many more to come.

Since then, statements by police who had been ordered to stand down,  by eye witnesses and by social media, have emboldened the victims to file more than 625 criminal complaints with 40% of them related to sexual assault. Many of the alleged attackers are Arab or North African, which has led to severe discontent with the government and its migration policy. There have been a series of protests, particularly in eastern Germany, blaming Chancellor Angela Merkel’s government and her open-door refugee policies.

Beyond the very serious criminal charges which are for the police and judiciary to resolve there additional serious questions. First, are European countries such as Germany ready to accept so many refugees both mentally and physically? Second, given the huge number of migrants still in motion, who will provide them with a domicile? Third, and most importantly, the desire for temporary tranquility has invalidated the fight for the equality of women, shod the aversion  of violence against women, and done so at a dangerous cost to societal transparency and progress.

For decades, even centuries, western countries have been trading partners with authoritarian regimes in the Middle East, selling weapons, automobiles and other lucrative products. But the encouragement of an Arab Spring has led mainly to an Arab Fall. Yet, a large financial overhang, mainly resulting from international business, has not led to an assimilation of values and behavior. Instead many funds are used to help the distribution of fierce rhetoric, giving rise to Osama bin Laden and many other extremists. These developments are paired with an asymmetry of political correctness in the Western World, leading to new rope which the victim sells to its miscreant.

With decreasing demands for mutual integration, concurrently rising migration and outdistanced procreation, there are fewer viable landing strips for students, women and willing economic participants.

Right now, many of the migrants seek out primarily Germany and Sweden as asylum territories, which is understandable in light of the accommodations and benefits offered. But there are also important cultural milestones and preferences of governments and citizens who receive the human wave. Integration means that hosts learn more about their visitors, but also requires the new arrivals to accept key standards and expectations of their hosts. Though large immigration is likely to dilute rigid norms, it also must lead to asymptotic movement towards established standards.

The EU,  taking on a leadership role consistent with the Treaty of Lisbon,  should pr0otect the human rights of asylum seekers, but also has  right to determine where this protection should take place. For example, the Middle East and Africa have many locations where refugees can be housed, fed and clothed, and protected. Countries such as China and India could develop entire settlement policies for the resolution of a global problem. These are not meant to create new colonies, but rather endorse the establishment of pop-up protectorates, to temporarily provide succor, shelter and peace to refugees.

Third, and perhaps most chillingly because it can set the future rails for disaster, is the failure of the public media to distribute honest information rapidly. An almost week-long delay of media reports was broken only when too many other sources broke the mantra of keeping bad news about migrants out of the public spotlight. This is wrong! Silence is a blow to the victims of violence, and lets them be hunted like game. Women deserve better.

The violent, brutal and sexist treatment of women must be combated radically.The event in Cologne reveals a major flaw societal shortcoming which cannot be tolerated. Germany is an internationalized country due to the composition of its population and its dependence on foreign trade. If it wishes to continue with its international leadership role, Germany must recognize that such role is one of immersion into the world which must result in simultaneous juridical, social and economic leadership. Female equality is a crucial entitlement for more than half of the population. To declare otherwise is wrong for the native locals as well for the wave of newly arriving migrants. The events in Cologne must not become the opening act for continued misery and disrepute.

The attempt to muffle the powerless laments of the victims with the blanket of public silence is most treacherous. One should not cry ‘fire’ in a cinema, but doing so is  encouraged when the flames are in the roof. The suggestors, the targets of the suggestions as well as the self-motivated absconders with truthful information must recognize how their behavior has fertilized the ground for future misinformation and knowledge abuse. Effective steps must be taken to truly make a difference. It is time for such action with specific details clearly spelled out by democratic transparency. As was already promulgated by St. John:” And you will know the truth and the truth will make you free.”

Professor Czinkota presents international marketing at Georgetown University in Washington D.C. 

Lunch with Dr. Theo Weigel

On the first of October, Professor Michael Czinkota hosted a private lunch with Dr. Theo Weigel at the McDonough School of Business, in collaboration with the Washington D.C. office of the Hanns-Seidel Foundation. Dr. Weigel served as the German Minister of Finance from 1989 to 1998, in the Cabinet of Chancellor Helmut Kohl. He was instrumental in the creation of the European monetary union, and the common currency. He was accompanied by a team of delegates that included his wife, Irene Epple-Weigel, the former alpine skier and Olympic medalist, and their son, Konstantin, a law student in Munich. Also part of the delegation was Richard Teltschik, the Director of the Hanns-Seidel Foundation in Washington. Georgetown University was represented also by Professors Thomas Cooke, Ricardo Ernst, Charles Skuba, David Walker, and Lee Pinkowitz. Also in attendance were three students – one from the McDonough School of Business, and two Masters candidates from the Walsh School of Foreign Service. Additional visitors came from the Hanns-Seidel Foundation and the German Embassy.

The lunch was inaugurated by Professor Czinkota, who gave a welcome address that included an introduction of Dr. Weigel’s many accomplishments. Following this, Dr. Weigel addressed the attendees of the lunch. He discussed his experiences with the creation and establishment of the Euro, relating both facts and anecdotes. One such story was of how the common currency came to be known as the “Euro,” rather than the other alternatives under consideration at the time, such as the Frank, Mark or ECU. He vehemently denied the common perception that the Euro was Germany’s reward of others for support of reunification, asserting that the two momentous events were planned and executed separately. Dr. Weigel talked about the fall of the Berlin Wall and the reunification of West and East Germany, at what was the eve of the 25th anniversary of the reunification. Yet it was not only German history that was discussed at the lunch, but also contemporary German politics and European current affairs. The issue of the refugee crisis in Europe was explored by Dr. Weigel as well as the other participants. Dr. Weigel believes that Germany can absorb the current volume of incoming refugees, approximately 800,000, for one year (possibly two). This will help the German economy, which is currently facing a demographic shortage of working-age and job-seeking citizens. Any absorption of refugees beyond this number, however, would end up harming the German economy.

For more than an hour, issues such as U.S.-Germany relations, collaborations and perceptions by the youth of the two countries, and Germany’s leadership role in the world were addressed in the question and answer session following Dr. Weigel’s speech.

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