The Hungarian Prime Minister has made football one of his flagship projects since the very start of his reign, pumping billions of taxpayers’ money (and indirectly EU funds) into Hungarian clubs and stadiums. It may come as a surprise to many, but in Hungary, the majority of the electorate really believes that his involvement in football is so direct and important that his personal intervention was the deciding factor in any club’s future. But what does this really mean? Is Orbán’s football policy about developing Hungarian sports or consolidating power and winning over fans? Is the quality of Hungarian club football good for consumers, or is it not even about satisfying them?

The funding scheme

Orbán’s government has implemented an extensive financial support system for football clubs through multiple channels. One is corporate tax breaks, through which companies can redirect a portion of their corporate tax to sports clubs. This has resulted in billions of forints flowing into club infrastructure, youth academies, and salaries. The primary beneficiaries are clubs owned by the government’s oligarchs and friends. It is not surprising at all that the most money has flowed to the team of the Prime Minister’s home village, Felcsút, with a population of only 1800, boasting a nice stadium with literally no fans, but at the moment, the team is on its way to its first championship in the history of Hungarian football. The government has heavily subsidized this stadium, although the attendance figures do not justify such investment. Many similar stadiums struggle to fill their seats, leading to criticism that they serve as vanity projects rather than practical sporting infrastructure.

It must also be noted that key Hungarian clubs are now run by “businessmen” with close ties to Orbán. Lőrinc Mészáros, Orbán’s childhood friend and one of Hungary’s wealthiest men, owns Puskás Akadémia FC. István Garancsi, another government-linked oligarch, controls MOL Fehérvár FC. At present, all 12 Division One teams are owned by such oligarchs. This ensures that football clubs remain politically aligned and that funding flows where it is most beneficial for Orbán’s political network rather than where it is needed for true sporting success.

Another flagship project related to football was the creation of football academies. Although billions have poured into these youth academies, Hungary has failed to produce world-class players. The Puskás Akadémia, established as Orbán’s football project, receives massive state funding but has contributed little to the national team or top European leagues. Meanwhile, Hungary continues to rely on foreign-born or naturalized players and those who never benefited from the academy system and deliberately avoided it. This raises serious questions about the efficiency and purpose of these academies: they are less about developing players than funneling money into politically connected hands. 

Where are the results?

On the surface, Hungarian football has gone through massive investments. After decades of disappointment, the Hungarian national team has shown moments of promise, qualifying for the last two European Championships. Clubs like Ferencváros have made regular appearances in European competitions. However, there are some serious concerns about these successes. Despite the billions spent, Hungarian club teams are still uncompetitive in top European leagues. Unlike in countries where private investment and strong domestic leagues drive success, Hungary’s reliance on state money has not produced top-tier teams. Another major issue, as seen above with the team “saved by Orban,” is that many clubs would struggle without continued government backing. 

If state funds were withdrawn, clubs heavily reliant on political connections could collapse under financial mismanagement. This was, in fact, the case with the team mentioned above, as it enjoyed the goodwill of the political class as long as the owner (who was the son-in-law of the prominent oligarch) was still part of the family. After the divorce, his company received no state contracts, and his team started to feel hardships.

As we see, Orban’s focus on football serves a dual purpose—while it undoubtedly generates minor sporting results, it also fosters loyalty among voters. Many Hungarians, especially in smaller cities, believe Orbán saved their beloved teams from financial ruin.

The goal? Not goals in the opponent’s net necessarily

Is the objective of making Hungary a serious footballing nation, or is it about Orbán using the sport as a populist tool? The numbers show that Hungary’s football infrastructure has improved, but its clubs and national team still struggle to compete with Europe’s best. If the ultimate goal was football excellence, then the strategy has not fully been delivered. If the goal was to garner political influence, it has worked exactly as intended.

Originally published here

Izin usaha merupakan salah satu faktor penting yang mempengaruhi tingkat investasi dan pembukaan lapangan kerja di suatu negara. Negara yang memiliki kebijakan ramah terhadap izin usaha tentu akan memberikan insentif bagi para investor dan pelaku bisnis untuk menaruh uang dan membuka usaha di tempat tersebut.

Sebaliknya, negara atau wilayah yang memiliki serangkaian aturan dan regulasi yang menyulitkan seseorang untuk membuka usaha tentu akan memiliki dampak yang negatif terhadap pertumbuhan ekonomi dan inovasi. Mereka yang memiliki modal akan memilih untuk menginvestasikan uangnya di tempat lain, dan bukan tidak mungkin juga talenta-talenta yang ada di negara tersebut akan pergi untuk membukan usaha dan berinovasi di negara luar.

Di Indonesia sendiri, diskursus mengenai sulitnya membuka usaha merupakan hal yang sangat umum dibicarakan, dan menjadi pengetahuan umum. Proses yang berbelit-belit, dan juga pendaftaran yang memakan jangka waktu lama, merupakan beberapa contoh umum yang menghambat pembukaan usaha di Indonesia.

Untuk mendirikan usaha di Indonesia misalnya, dibutuhkan banyak izin dari berbagai lembaga pemerintah. Badan Koordinasi Penanaman Modal (BKPM), Dinas Perdagangan, Dinas Lingkungan Hidup, serta kantor pajak dan tenaga kerja merupakan beberapa lembaga negara yang harus dimintai izinnya oleh pelaku usaha demi mendapatkan berbagai izin, seperti izin prinsip, izin lokasi, izin mendirikan bangunan (IMB), izin lingkungan, dan izin operasional. Belum lagi, izin ini juga berlapis tidak hanya di tingkat pusat, tetapi juga tingkat daerah seperti kota dan provinsi (seputarbirokrasi.com, 5/12/2024).

Masalah ini diakui oleh banyak pihak, bahkan oleh mantan kepala negara. Presiden ke-7 Indonesia, Joko Widodo misalnya, mengakui bahwa ketika masih menjadi pengusaha, dia juga harus mengalami berbagai kesulitan ketika mengajukan izin usaha. Bila tidak memiliki izin usaha, tentu akan sangat sulit bagi pemilik usaha untuk menjalankan dan mengembangkan usahanya karena ia tidak akan bisa mendapatkan pinjaman kredit dari bank (cnnindonesia.com, 13/7/2022).

Hal yang serupa juga disampaikan oleh banyak pelaku usaha, bahkan oleh pengusaha besar sekali pun. Direktur Utama Maspion Group misalnya, menyampaikan bahwa Indonesia memiliki masalah terkait dengan berbelitnya proses perizinan usaha. Adanya proses yang berlapis dan juga pembaruan izin berkala setiap tahun atau beberapa tahun merupakan beberapa isu yang harus dihadapi pelaku usaha (olenka.id, 31/12/2024).

Bila hal ini diakui oleh pelaku usaha yang besar, maka hal ini tentu akan semakin membebani pelaku usaha tingkat kecil dan menengah. Hal ini bisa dilihat dari jumlah kredit yang dikeluarkan oleh bank untuk kepentingan usaha misalnya. Dari 6.000 triliun rupiah dana yang dikeluarkan oleh sektor perbankan untuk usaha di Indonesia, kurang dari 20%-nya yang terserap untuk usaha level mikro, kecil, dan menengah. Hal ini disebabkan para pemilik usaha tersebut tidak memiliki izin usaha karena izin yang sangat berbelit dan panjang (kompas.com, 12/8/2021).

Kamar Dagang provinsi Kepulauan Riau misalnya, menyampaikan bahwa untuk mengurus Persetujuan Kesesuaian Kegiatan Pemanfaatan Ruang (PKKPR) misalnya, yang merupakan salah satu syarat dasar izin berusaha, memiliki proses yang sangat lambat hingga sampai 1 tahun. Belum lagi persetujuan lainnya, seperti persetujuan teknis (Pertek) yang memakan waktu tidak sebentar (batampos.co.id, 7/10/2024).

Terlebih lagi, kepulauan Riau merupakan provinsi perbatasan yang dekat dengan negara tetangga seperti Singapura dan juga negara bagian Johor, Malaysia. Adanya izin yang berbelit tentu akan semakin membuat investor enggan untuk menanamkan uangnya ke Indonesia, dan akan memiliki negara lain (batampos.co.id, 7/10/2024).

Untuk itu, adanya reformasi untuk mengubah dan mempercepat proses perizinan usaha adalah hal yang penting, Proses yang berbelit dan ditangani oleh berbagai lembaga pemerintah misalnya, dapat disederhanakan di satu pintu saja, dan dipercepat dengan melalui berbagai langkah seperti pemanfaatan sarana teknologi informasi, dan lain sebagainya.

Bila hal ini tetap dibiarkan, maka yang akan mengalami kerugian adalah berbagai lapisan masyarakat. Para pelaku usaha akan sangat sulit untuk membuka dan menjalankan bisnis. Akibatnya, lapangan kerja juga akan semakin sedikit, yang akan menyulitkan upaya untuk menurunkan pengangguran. Selain itu, konsumen juga akan terkena dampak karena akan semakin sedikit kompetisi dan mereka hanya akan bergantung ke sedikit perusahaan saja yang sudah established dan tidak memiliki kompetitor yang mampu bersaing.

Sebagai penutup, kemudahan izin usaha merupakan aspek yang sangat penting untuk pertumbuhan ekonomi, meningkatkan inovasi, dan juga membuka banyak lapangan kerja baru. Bila izin untuk membuka usaha malah dipersulit, maka dampak negatifnya tidak hanya akan semakin sedikit pelaku usaha yang dapat membuka bisnis baru, tetapi juga akan merugikan konsumen karena pilihan mereka untuk mendapatkan barang terbaik dengan harga yang terjangkau menjadi semakin sedikit.

Originally published here

The beginning of a new year always marks some sort of introduction of a new regulatory framework. The EU welcomed Romania and Bulgaria to the Schengen Zone, and the common charger policy went live (including in Northern Ireland, raising concerns of a BINO again). In the UK however, we had one of the most consequential digital legislation going live: the Digital Markets, Consumers and Competition Act 2024 (DMCCA), which is the framework for digital markets here in the UK.

Not soon after, the Competition and Markets Authority (CMA) with its newfound power, decided to investigate Google for its market dominance as a search engine and in search ads. This investigation is to establish whether Google has a “Strategic Market Status” (SMS) in these fields. Once designated as such, the CMA will then have the power to impose conduct requirements (CRs) or Pro Competition Intervention (PCIs) on how Google can provide its service, which very much affects consumers.

An example of what these interventions might look like can be found in the EU. If you google a restaurant or a shop, a map may be displayed, but clicking on the map has been disabled and the Maps link in the Google search bar has also been removed. This is because the EU believes that Google is promoting its own product, Google Maps, and not allowing other map providers to compete against its product, a concept that is called self-preferencing.

The EU’s demands have been a great source of inconvenience to many consumers, where consumer interface and efficiency have been made worse off thanks to bureaucratic overreach. The CMA will also investigate other companies in due course and has now launched an investigation into Apple.

The CMA has now pulled one of the classic tricks to legitimise their proposed intervention, by launching a consultation and bombarding it with incomprehensible gibberish that throws off the everyday consumer from being able to voice their concerns. Also note that the background for this consultation is pretty much a copy-paste job from their investigation into Google in 2019-2020. Since then, the industry has had seismic changes, such as the introduction of AI in search engines.

The reality is that this investigation is a very loaded question, with the potential to have wide-ranging consequences that the everyday consumer will bear the impact of. If a new independent restaurant is not able to use one of the biggest search engines to locate itself on the map, then how will it be possible for the restaurant to succeed and consumers to enjoy this new restaurant?

I understand the CMA’s dilemma: It is being scapegoated as the institution that has to regulate digital activity with a small team (even smaller now having had to fire 10 per cent of its employees due to a budgeting error). This is an impossible task to achieve, even if you spend 100 per cent of the UK GDP in attempting so. Regulators react to innovation and not preempt it. This also leads to far more restrictive legislation.

The other dilemma is squaring competition with the network effect. What makes the internet an interesting market is the fact that it gains additional value as more people use it. The more people input their data in Google, the more it becomes useful for everyone else. This intuitively would lead to a conclusion that eliminates competition as everyone will be inclined to use Google.

However, this has not been the case. If anything we have seen fierce competition between all the big tech companies, enabling the creation of more innovative products. This is amplified by the introduction of AI, where more and more people are now using Chat-GPT instead of Google, forcing Google to introduce its own AI capabilities in its search engines. This is not a monopoly, this is competition.

Crucially, these regulatory interventions are so bureaucratically minded that these investigations did not even consider current consumer satisfaction with products owned and used, or even attempt to quantify the change of consumer satisfaction before and after such interventions. Meanwhile, for businesses to profit in this sector, they need to greatly factor in consumer satisfaction, an arguably better means of self-regulating consumer protection.

The reality is at a time when the UK has been stagnating economically, it has been due to these restrictive measures. The Whitehall bureaucratic mentality values its ability to control and impose itself over industry rather than working with the markets to encourage innovation and consumer protection and convenience.

To grow, we need to encourage innovation and technological advancements, which will catalyze what resources we have now to increase our output exponentially. Rachel Reeves hinted at such measures when she mentioned the replacement of the CMA chair in her speech. However, amending such a bureaucratically restrictive mentality requires more than just words, which will be the Government’s challenge in the next few years.

To conclude, The First and Second Industrial Revolutions were spearheaded by Britain. Whilst notable British figures assisted in driving the Third Industrial Revolution, we were not in a position to lead, and now as we approach the Fourth Industrial Revolution, the era of Artificial Intelligence, it is the Americans who have created the petri dish for such innovation.

With the inauguration of Donald Trump, it is most likely that their permissive environment for innovation is amplified. Reeves said all the right things in her speech at Siemens, but for the UK to have a decent chance at being a playmaker in digital innovation, we need less investigations and EU alignment, and more entrepreneurial and realistic thinking.

Originally published here