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International Relations

and Diplomacy
Volume 6, Number 8, August 2018 (Serial Number 59)

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★Abdel-Hady (Qatar University, Qatar); Resolution of Disputes, South Africa);
★Abosede Omowumi Bababtunde (National Open ★Menderes Koyuncu (Univercity of Yuzuncu Yil-Van,
University of Nigeria, Nigeria); Turkey);
★Adriana Lukaszewicz (University of Warsaw, Poland); ★Myroslava Antonovych (University of Kyiv-Mohyla
★Ahmed Y. Zohny (Coppin State University, USA) Academy, Ukraine);
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Philippines); Applied Systems Analysis, Austria);
★Basia Spalek (Kingston University, UK); ★Ngozi C. Kamalu (Fayetteville State University, USA);
★Beata Przybylska-Maszner (Adam Mickiewicz University, ★Niklas Eklund (Umeå University, Sweden);
Poland); ★Phua Chao Rong, Charles (Lee Kuan Yew School of
★Brian Leonard Hocking (University of London, UK); Public Policy, Singapore);
★Chandra Lal Pandey (University of Waikato, New ★Peter A. Mattsson (Swedish Defense College, Sweden);
Zealand); ★Peter Simon Sapaty (National Academy of Sciences of
★Constanze Bauer (Western Institute of Technology of Ukraine, Ukraine);
Taranaki, New Zealand); ★Raymond LAU (The University of Queensland,
★Christian Henrich-Franke (Universität Siegen, Germany); Australia);
★Christos Kourtelis (King’s College London, UK); ★Raphael Cohen Almagor (The University of Hull, UK);
★David J. Plazek (Johnson State College, USA); ★Satoru Nagao (Gakushuin University, Japan);
★Dimitris Tsarouhas (Bilkent University, Turkey); ★Sanjay Singh (Ram Manohar Lohiya National Law
★Fatima Sadiqi (International Institute for Languages and University, India);
Cultures, Morocco); ★Shkumbin Misini (Public University, Kosovo);
★Ghadah AlMurshidi (Michigan State University, USA); ★Sotiris Serbos (Democritus University of Thrace,Greece);
★Giuseppe Caforio (Torino University, Italy); ★Stéphanie A. H. Bélanger (Royal Military College of
★Guseletov Boris (Just World Institute, Russia); Canada, Canada);
★Hanako Koyama (The University of Morioka, Japan); ★Timothy J. White (Xavier University, Ireland);
★Kyeonghi Baek (State University of New York, USA); ★Tumanyan David (Yerevan State University, Armenia);
★John Opute (London South Bank University, UK); ★Zahid Latif (University of Peshawar, Pakistan);
★Léonie Maes (Vrije Universiteit Brussel, Belgium); ★Valentina Vardabasso (Pantheon-Sorbonne University,
★Lomarsh Roopnarine (Jackson State University, USA); France);
★Marius-Costel ESI (Stefan Cel Mare University of ★Xhaho Armela (Vitrina University, Albania);
Suceava, Romania); ★Yi-wei WANG (Renmin University of China, China).
★Marek Rewizorski (Koszalin University of Technology,
Poland);
★Martha Mutisi (African Centre for the Constructive

The Editors wish to express their warm thanks to the people who have generously contributed to the
process of the peer review of articles submitted to International Relations and Diplomacy.
International Relations
and Diplomacy
Volume 6, Number 8, August 2018 (Serial Number 59)

Contents
Illiberal Democracy

The Emergence of Illiberal Democracy in the European Union: The Hungarian Case 419
Maria Bordas

Belt and Road Initiative

Australia’s Fear and Greed over China’s Rise: A Discourse Analysis of Mainstream
News Coverage of the Belt and Road Initiative 436
CHEN Zhixin

Migration and Language

Migration, Language, and Language Personality in the Global Context 449


Linna Liberchuk

International Cooperation

The New Shift in the Cooperation of the European Union With Middle and
Upper-Middle-Income Countries 456
Enriqueta Serrano Caballero
International Relations and Diplomacy, August 2018, Vol. 6, No. 8, 419-435
doi: 10.17265/2328-2134/2018.08.001
D
DAVID PUBLISHING

The Emergence of Illiberal Democracy in the European Union:


The Hungarian Case

Maria Bordas
National University of Public Service, Budapest, Hungary

In 2010, the Hungarian government established so-called “illiberal democracy.” Western courtiers have looked on
with bewilderment over the past eight years at this political trajectory of Hungary. Some post-Communist countries
that were committed to common European values, have already been implementing this illiberal democracy model.
The perceived interests of the “nation” are taking centre stage and governments are subject to far fewer checks and
balances. They are turning instead towards an alternative social, political, and economic model, in which the
cultivation of traditional values and distinct national identities are of paramount ideological importance. This new
model is frequently characterised by widespread, systematic state corruption, and an increasingly authoritarian
political culture. The paper tries to shed light on the reasons of development of illiberal democracy in the European
Union by examining the case in Hungary. Furthermore, the paper defines the price of partially giving up certain
principles of liberal democracy, such as checks and balances, political pluralism, economic equality of market
constituents, or the rule of law, in return of hoped greater economic and state efficiency.

Keywords: illiberal democracy, post-Communist countries, transition, modernization, economic governance, public
administration reform

Introduction
In the regions east of the Elbe, there was no tradition of liberal democracy among the institutions.
Bourgeois revolutions erupted with considerable delays, because the capitalist socio-economic conditions
developed later and in a manner contradictory to the framework of feudalism. In these countries, modernisation
began with the reform initiatives of enlightened absolutist rulers, which led to the development of the
institutions of capitalist economies, but without a strong civilian base in the background, would have been
dedicated to the creation of a liberal democratic state.
In the mid-19th century, the civil revolutions unfolding in these regions were unable to achieve spectacular
results in terms of the institutions’ establishment of the rule of law, constitutionality, popular sovereignty, and
political freedoms. The first bourgeois democratic states formed in the first half of the 20th century in
Central-East Europe were no longer able to take shape because of the spread of fascism, so during their
short-term period of operation, they were unable to create the traditions of liberal democracy.
After World War II, the process of modernisation of states under the influence of the Soviet Union in
Central-East Europe stopped for half of a century, because in these countries, the Soviet state and economic

Maria Bordas, Ph.D., Professor, Faculty of Political Sciences and Public Administration, National University of Public Service,
Budapest, Hungary.
420 THE EMERGENCE OF ILLIBERAL DEMOCRACY IN THE EUROPEAN UNION

governance model had been violently introduced. The Soviet state model resulted in a foreign body in the
Central and Eastern European countries, where Western-type liberal democracies had been introduced at the
beginning of the 20th century. The Soviet Communist model which, thanks to the Bolshevik party’s sense of
mission, wanted to establish a higher order of social and economic systems in comparison with capitalism, but
because of lacking democratic traditions remained a system based upon violence and totalitarian ideology, later
just focused on exclusively maintaining the power of the Bolshevik Party. The system of bureaucratic economic
administration based upon planning directives could not increase economic efficiency and it became apparent
that it was significantly lagging behind the developed Western market economies. The promise of the
Communist state that the sacrifices the population endured would only be temporary was not fulfilled and
living conditions deteriorated constantly. The Soviet state began to erode itself.
After the collapse of the Soviet political system in post-Communist states, the processes of modernisation
took place in a controversial way. The most important issue for the Central-East European states was that the
states had just been liberated from the Communist shackles now had to find out which kind of values should be
followed. There was no old tradition of public administration working in a democratic state system in these
countries, because the democracies that had preceded the fascist dictatorships before World War II were
short-lived and too fragile. The institutions of Western-type liberal democracy could not have taken root and
become a tradition.
In post-Communist countries in Central-East Europe, from the transition period, i.e., from the 1990s, the
question of modernization emerged differently from the Western countries. Taking into account the fact that
there was no tradition of democratic state structure and market economy in these countries, the establishment of
these institutions was not free of conflicts. It emerged as a dilemma which one should be introduced from
among the governmental systems and economic governance models already used in the developed Western
states, which also represented a number of trends under the umbrella of liberal democracy itself.
Instead of the Communist state, the institutions of the democratic state, which ensured the separation of
the branches of state power, the system of checks and balances, the constitutionality, the rule of law, the
exercise of the controlling bodies’ functions, and the rights of local self-government, were the first to be created.
The bureaucratic planned economic system had to be replaced by a market economy model operated by
institutions of Western-style economic governance based upon economic constitutionality, social market
economy, market competition, and business freedom.
The development of the Hungarian post-Communist state model is a good example of searching for the
way out, experimenting with the creation of several models leading to extreme administrative systems during
the transition period over the past 28 years. Hungary was the first state in the European Union, where the so
called “illiberal democracy” 1 (Zakaria, 1997, p. 3) developed since the 2010s. This government system
evidently violates certain values of the treaties of the European Union, despite it seems to have stabilized itself
during the last decade. Even more, it serves as an example for some other countries in the region of Central
East European countries post-Communist countries.

1
The definition of illiberal democracy was given by Fareed Zakaria.
THE EMERGENCE OF ILLIBERAL DEMOCRACY IN THE EUROPEAN UNION 421

Problems of Modernization in Hungary in the First Part of the 20th Century


Autocratic Traditions of the Horthy System
The transition period in Hungary was determined by the traditions characterizing the state organization of
the Horthy’s system. The ideology of the government of 2010 is, in many respects, similar to the government
system established in 1919, which was primarily governed by autocratic features. The dominant and
multi-faction conservative political gathering parties 2, representing primarily the big holder aristocracy, the
middle-class nobility, the big and middle capitalist class, and, but in lesser extent, the middle class and the
peasant holders, emphasized parliamentary democracy but rejected the liberal democracy that regarded as the
“rule of the raw masses”. Compared to the conservative governmental parties, one of the poles was the socialist,
liberal, and agricultural parties, with little support and the second pole of the far-right party, which gained more
and more influence in parliament in the 1930s.
The law on the election was amended at that time by government decree which promoted the supporters of
the conservative parties in the way of reducing the right of 80% of the population to vote and replacing the
secret voting with open one in the rural areas.
The governor position of Miklós Horthy established in 1920 had a large power but did not expand beyond
the usual roles of a strong presidential system. According to the law, the government was controlled by the
Parliament, but with regard to the political interconnection of the two powers, that is to the massive
parliamentary majority, the Parliament did not exercise substantive control over the government. In addition,
the weight of regulatory governance increased in times of crisis, especially during the war. Local governance
was controlled by the institutes appointed by the county councils. The municipal elections did not follow the
principle of universal and equal suffrage, as the social groups having privileges, e.g., the wealthy layers, the
professional roles, or the religious denominations were to be the major part of the eligible members of county
councils (Ignác, 1997, p. 1).
With regards political and freedom rights, it can be stated that freedom of press, in particular, had been
restricted by censorship, by banning newspapers and press reports, or by suing the journalists. The restriction of
freedom of association and assembly was mainly hit by the members of the Communist and the far-right
political parties who were usually imprisoned for their political activities. The religious and racial
discrimination of the Jews had been gradually extended since 1920.
However, the Horthy system retained the character of parliamentary democracy until the beginning of the
1930s, but not as a liberal democracy. Due to the governmental system with autocratic features, where general
and equal suffrage did not prevail, political and freedom rights were limited, and local government entirely
lacked the principle of municipal autonomy. However, the governments formed since 1932 became more and
more fascist, and in 1944, after the Arrow Cross Party (Hungarian Nazi Party) had taken over the political
power, the country became an open dictatorship.
The Reform Attempts of the Hungarian Communist Party After the Revolution of 1956
In Hungary, from 1947, in the era marked by the name of Mátyás Rákosi, a Stalinesque Soviet model
emerged, characterised by personal culture and the unbridled terror of the Communist Party. By the middle of
the 1950s, these elements mentioned above undermined the stability of the political power of the Rákosi regime.

2
Three parties won the parliamentary elections following each other since 1922 to 1939, but all of them had the same political
characteristic.
422 THE EMERGENCE OF ILLIBERAL DEMOCRACY IN THE EUROPEAN UNION

The internal opposition of the Communist Party was removed by means of conceptual lawsuits; the old power
elite was executed, deported, or expelled.
The Soviet-style system of state planning, which emphasised forced industrialisation and the development
of the military industry, could not set the economy on the track of permanent development. During nearly 10
years after the Communist Party came to power, the population was increasingly suffering the depths of misery.
After the collapse of the 1956 Revolution, the question of the reform of economic governance could not
have arisen in the atmosphere of repression, and thus was only reconsidered in 1968. The economic reform of
1968 aimed at increasing the self-sufficiency of state-owned enterprises by conceding that they were only
interested in better economic performance in this way. So, their operation becomes more efficiently if they can
make autonomous economic decisions and can deal with the profits they produce. This new system of
economic governance was given the indicator of “indirect” as a tag, representing a more liberal system of
management by using economic regulators instead of planning directives of the Soviet model.
In the indirect system of economic governance, the central administration was also transformed: The
number of ministries decreased significantly and their tasks were restructured. They guided the economy as a
whole, with the tools of economic regulators, instead of the plan directives.
In 1984, a new economic governance reform was introduced. The reason for this attempt at reform was
that the Communist Party-state wanted to develop the reform of 1968, as it had only declared the independence
of state-owned enterprises, however, had not given them any real guarantees. The economic organisational and
legal reform of 1984 gave state-owned enterprises greater economic autonomy and supported organisational
and legal guarantees as well. Self-governing bodies of state-owned enterprises were set up, consisting of
workers’ representatives, which exercised real owners’ rights, appointing and dismissing directors, and
deciding on all the economic issues of the state-owned enterprise. Public authorities managing state-owned
enterprises could only then have lawful control over state-owned enterprises. In other words, they could only
supervise their lawful functioning, but no longer had the right to give direct instructions to companies in
economic affairs.
The 1984 economic organisational and legal reform detached the state-owned enterprises from governing
public authorities and entrusted the exercise of ownership rights to self-governing bodies (Lőrincz, 1981. pp.
187-226).
However, the state-owned enterprises were the entrepreneurial assets of the state and the operation of
which would have required ownership decisions that self-governing bodies managing the state-owned
enterprise were not able to undertake. They did not behave as real owners, because their members, being at the
same time the employees, did not have interests of ownership and could not operate as real and true business
ventures.
These economic governance reforms failed to come up to the expectations. It was because it had been
proved that although the Hungarian experiments at reform were a significant step forward compared with the
direct planning approach, the efforts at efficiency could not be implemented consistently in a centralized and
bureaucratic economic governance system based on the exclusivity of state ownership, and in which market
mechanisms could prevail only in a limited way (Kornai, 1991, pp. 1026-1028).
The uniqueness of the Hungarian Communist economic governance model lies in the fact that the
exclusivity of the state’s economic control role had been broken up by the end of the 1980s. In the economy
THE EMERGENCE OF ILLIBERAL DEMOCRACY IN THE EUROPEAN UNION 423

outside the public sector, private forms of entrepreneurship emerged, though these did not become dominant in
the economy as a whole. As a result, a small business market emerged on the periphery of the economy, called
the “second economy” (Csillag & Lengyel, 1985, pp. 197-199). These reform efforts triggered a process, in
which the transformation of the regime in the economy was not executed in a revolutionary fashion, but
pragmatically, it “gradually evolved in hidden way―in the womb of the “Kádár system” (Sárközi, 2009, p. 34).
The economic governance reforms of the Kádár system did not solely intend to increase economic
efficiency, but also economic growth, which served as a basis to implement a specific social policy that could
provide the population with a higher standard of living.
From the middle of the 1970s, certain forms of small business of the individuals were approved, and later,
it was also possible to operate various small businesses of the state-employees even within the state-owned
enterprises. With these elements, the Kádár system provided to the population with additional income and
enabled higher consumption. In the European Communist states, this was quite exceptional.
The Communist Party could thus succeed in Hungary by improving the welfare of the population. Under
an implicit social agreement, in exchange for prosperity, the population did not initiate movements of
dissatisfaction after the 1956 Revolution. The majority of the population in Hungary accepted the Communist
leadership in the late Kádár era, too, for it made political and cultural life more liberal. As a result, the
significance of the reprisals after the repression of the 1956 Revolution was diminished. With the reforms of
economic governance, the Kádár system created so-called “market socialism”, commonly known as “goulash
Communism”, which could, through the relative liberalisation of the economy, achieve the raising of the
standard of living, wealth, and consumption of the population. Hungary was therefore referred to as the “most
idyllic barracks” in the Communist community.
The welfare policy created by the Kádár system introduced a paternalistic tradition in Hungary, which
later survived. During the period of transition, and subsequently, the population continued to expect state care,
especially those who were not competitive in the labour market in the framework of real market economy
conditions. As a result of this trend, an increasing proportion of the population left the labour market and
became dependent on state social support.
The Kádár regime’s economic and social policy resulted in a large part of the population’s deeply rooted
tradition of not articulating its interests in a pluralistic political system, but also an involved agreement with the
political power, trusting its ability to act in the nation’s interest. Since in the history of Hungary, the bourgeois
democratic state did not develop even until the mid-20th century and the liberal democracy did not have any
traditions. These circumstances greatly contributed to the establishment of the model of illiberal democracy in
2010.

Post-Communist Hungarian Public Administration During the Transitional Period


The Peculiarities of the Political System
The modernisation process of the Hungarian public administration has not shown steady progress in the
last past quarter of a century, one reason for which could be found in the peculiarities of the Hungarian political
system.
The institutions of liberal democracy were established in the early 1990s in the state organisation, as a
result of the negotiations of the so-called “round table opposition political groups” (including the reform wing
of the Hungarian Communist Party) and the modification of the Communist constitution of 1949.
424 THE EMERGENCE OF ILLIBERAL DEMOCRACY IN THE EUROPEAN UNION

The socialist and liberal parties in Hungary considered the American system of public administration
based on the principles of liberalism to be ideal by emphasizing the rhetoric of American neoliberalism: market
mechanisms, competition, minimum state involvement, more self-care, and the importance of political rights
and rights to freedom.
The other extreme case is represented by the right-wing state organisation model that emerged in 2010, in
which the role of one political party is dominant. This state system is characterised by centralisation, limitation
of checks and balances, and massive state intervention. This ideology emphasizes national sovereignty and
national economic interest against the globalisation tendencies.
The main drawback of the process of Hungarian modernisation was the ultimate opposition of the two
political sides. In order to achieve the most important reforms or the amendment of the constitution itself, the
Constitution required that an act be adopted by a two-thirds majority in the parliament, but there was never a
consensus between the current government parties and the opposition. The socialist-liberal political side, on the
one hand, held completely opposing ideas about the institutions of a market economy, state intervention, state
ownership, privatization, or the level of welfare institutions from those of the right-wing side, on the other
hand.
In the political struggle between the two opposing sides, all other aspects seemed to be subordinated to the
acquisition and retention of political power. Party financing and grants to business firms close to the political
parties from the state financial resources, placed government above all other goals. It was because this provided
them with the success of election campaigns and the creation of their own media empire. Building the “spoil
system” too solidly and thus including political loyalty in the appointment of administrative positions also
served this political aim. With this, the principle of expert governance became underdeveloped and the public
administration expert apparatus became subject to daily political interests.
Due to the inability of the two political sides to reach consensus, it has become impossible to create and
implement long-term economic and social policy concepts. Government programmes were therefore
necessarily short-term, for a term of government or an even shorter time. After the elections, the governing
parties usually expunged the results of the former government and pursued a completely different concept that
made reform processes chaotic. The public administration consequently became over-politicised and
government decisions were increasingly determined by party political considerations, causing serious
disruption to the exercise of public administration, as there was no political mechanism that would have been
able to formulate public interests.
Leftist and liberal economic governance during the 2000s had been less and less capable of addressing the
economic problems, which later worsened the effects of the global economic crisis in 2007. These governments
increasingly became unpopular due to the advice of the international financial institutions, which suggested
introducing new austerity measures. The population regarded it as a symbol of weak and powerless governance
vulnerable to global economic processes. The values of the neoliberal economic philosophy did not have real
public support in Hungary. Rather instead, they believed that a strong and caring state was able to execute the
requirements of efficiency. All this was still borne out by the ever-growing corruption scandals that referred to
the involvement of leading government officials and politicians. As a result, the left-wing and liberal ruling
parties lost their landslide popularity, which resulted in the right-wing party’s winning in the parliamentary
elections of 2010, and then the overwhelming winning of the municipal elections that followed, gaining
two-thirds majority in parliament and then in vast majority of local governments.
THE EMERGENCE OF ILLIBERAL DEMOCRACY IN THE EUROPEAN UNION 425

The Political Conception of the Steps to Build Illiberal Democracy in Hungary


The ideology of “majority democracy” emerged in 2010, argued that political will was too fragmented in
the former Hungarian political system because of the constant value debates and the social divide, and therefore
the country had become unmanageable. The winning right-wing party also highlighted that the lack of
modernisation was evident in the fact that the left-wing party, as the successor to the Communist Party, had
transformed its former political power into economic power, had exclusively ruled public administration for
two decades, and had not used it for the public good. It had provided the country with the effects of
globalisation, and its economic policy was individualistic and produced excessive privatisation. At the expense
of the middle class, merely for the purpose of gaining votes, it supported the downsized groups who were living
on state subsidies and were thus heavily dependent on the state. The economic basis of its political power was
the granting of its own “paraselene” to the material benefits through state corruption.
Therefore, according to the ideology of majority democracy, there was a need for a political power, the
so-called “central power field” 3, which can, on the basis of a broad popular mandate, represent the nation’s
interest in the long term and can fulfil its national economic policy. The legitimacy of the new political power
is, according to the argument, the majority of voters who support the national economic policy, so it must be
regarded as a matter of public interest.
The majority democracy model is based on the principle of popular representation, according to which the
demands of a political party with an absolute majority in the parliament should be considered legitimate for a
government decision to be implemented quickly and easily in the public administration. It has implemented the
following steps: restricted the checks and balances in the state system, and the powers of the controlling bodies;
centralised the public administration; extended the “spoil system” to the election of politically loyal public
dignitaries and major public officials; controlled trade unions in order to facilitate the implementation of the
reforms deemed necessary; as well as increased state ownership and the scope of state monopolies in order to
overcome barriers to the government’s attempts at economic intervention.
Majority democracy is hoped by many to become a more efficient state-organisation model in Hungarian
political conditions, but it is the price of partially giving up certain principles of liberal democracy, such as
checks and balances, political pluralism, economic equality of market constituents, or the rule of law.
This government established in 2010 is also referred to as “illiberal democracy”, facing with developed
western states’ liberal democracy already having centuries of democratic traditions. In Hungary, this means that
a ruling party gaining two-thirds majority in parliament in 2010 (and then in 2014 and 2018), with a broad
popular mandate as its own legitimacy, has created a new constitution and also transformed the public law
system. They did all this with the unhidden aim of minimizing the chances of government being replaced by the
means of parliamentary democracy.
The most important step in building “illiberal democracy” was the creation of a new electoral law adapted
by the ruling party to the political party structure emerged in 2010, so that the government can assume its
long-term survival. The non-proportional electoral system thus created allows a party to form a government that
did not achieve at least half of the votes in the elections, only the relative majority. The seats in Parliament are
not proportionate to the number of votes obtained. After the 2014 and 2018 elections, the ruling party, despite
3
This phrase was used first by the prime minister in his well-known speach of Kotcse, in 2007, when he summarized his political
program. The “central power field” means in this context the necessary leading role of the recent governing party in the political
system.
426 THE EMERGENCE OF ILLIBERAL DEMOCRACY IN THE EUROPEAN UNION

gaining less than half its votes, again received parliamentary seats leading to two-thirds majority.
It is a fact that “majority democracy” has been based on the votes of 30% of eligible electors and slightly
less than 50% of actual electors. Electors voting for the ruling party are quite heterogeneous in terms of why
they support the government’s economic and social policies. According to some surveys, about one fifth of the
population feels that they have been the winner of government policy since 2010. Half of the supporters of the
government come from the middle class, whose income has been significantly increased by the government.
This social layer, which includes most of the upper middle class, accepts inequalities of opportunity and large
social differences based on the conservative ideology. A quarter of supporters of the government are made up
of rural and religious people who are authoritarians and adherents of national-Christian ideology. Now among
the supporters of the government, we can find the former left-wing party supporters, such as the pensioners,
skilled workers, and workers having only basic education, i.e., the so called “Kádár’s small people”, for whom
the decrease of utility service prices, casual vouchers, and the minimum wage increase are significant financial
help. This less educated class is also receptive to the messages of government communication in refugee issues
or anti-EU sentiment. This mass of government supporters is the decisive part of the so-called “central power
field”.
The majority of electors with 20% votes, supporting the left and liberal opposition parties, are mainly from
Budapest and metropolitan intellectuals who, due to their ideological attitude, are the advocates of liberal
democracy and widespread political and liberty rights, reject social inequality, but support action against public
corruption and emphasize the development of health and education. This social layer is not susceptible to
national-Christian ideology, devoted in its view to the values of the European Union and a broader integration
with it, encourages a closer contact with the Western states, and rejects the approach to Eastern dictatorships.
This part of the voters has covered some of the right-wing intellectuals who voted for the ruling party earlier
today.
There is no numerical data on how many the supporters of the former far-right party are, which are
currently defining itself as a conservative party. Among the opposition parties, this former far-right party has
the highest support with 20% of eligible electors. The left and the liberal parties are extremely fragmented, and
especially the support of the left-wing and liberal parties formed after 2010 is low (below 5%). The support of
the two left-wing political parties, which are the successor of the former Communist Party, was higher than
that.
The supporters of government’s policy consider state benefits more important to the values of liberal
democracy. They accept the government’s national values and conservative politics emphasizing the
independence of the nation. Leftist and liberal opposition parties have a declining tendency, which reason,
besides their fragmentation, is that leftist and liberal values are less and less popular.
Almost a third of those entitled to elect do not vote, because their misery and poverty have led them to a
hopeless situation that no one of political sides can provide any solution.
Any opponent of the ruling party could have a realistic chance at parliamentary elections to win only if a
single political party replaced the current fragmented opposition parties. However, there is little chance to it in
a long term as the unification or the collaboration of opposition parties, given that they are from far-right
politics to leftist and liberal values, represent a wide range of ideologies, would lead to a massive loss of vote.
For example, the far-right opposition party emphasizes greater independence from the European Union,
promises drastic action against migration, and intends further economic strengthening of the middle class, but
THE EMERGENCE OF ILLIBERAL DEMOCRACY IN THE EUROPEAN UNION 427

the left-wing parties focus on deepening EU integration, managing the refugee situation under the principle of
multiculturalism, which help minorities and the poor. These political differences are difficult to bring under
common name which should be borne in mind. In addition, there is another breakthrough between the
opposition parties: political parties formed after 2010 reject the former left-wing parties, given that they
consider them responsible for the unsuccessful governance before 2010. Common element in the opposition
parties’ policy is the restoration of the liberal rule of law, the eradication of state corruption, and the
improvement of the education and health situation.
The long-term governance of the ruling party from 2010 is assumed to ensure that it can acquire a relative
majority by parliamentary elections in the future, too, which entitles them to form a government under the new
electoral law. To maintain the relative majority, they had developed several strategies that seem to be
successful so far.
It first transformed the media structure by placing public media under direct government control by
appointing members of the public oversight body of the media loyal to the government, as well as removing a
large part of commercial media from the market and then had bought it up with businesses close to the
government. Due to the diversity of media, it is difficult to estimate that the government-based media created in
this way, on the one hand, the government critical media, on the other hand, in which proportion reached the
media consumers, but it is undoubtedly true that government media in this regard represent almost two thirds of
the total.
The governing party from 2010 also announced a political party policy that is attractive to all social strata
in some form. At the heart of its policy is the emphasis on national interests, in which it focuses on the
independence of the nation and the right to sovereignty. In keeping with national economic interests, it
promotes the creation of its own national capital class, economically strengthens the middle class, and provides
various benefits for the poor. With this political party policy over the last eight years, the support of about a
third of the population eligible for voting can be maintained in the long run. The belief that the ruling party’s
economic policy is implemented not by means of the rule of law, but by the elimination of the principles of
liberal democracy and by widespread state corruption is represented only by the other third of the population.
The third of the population does not participate in the elections.
The circle has been closed with this, as the governing party is, in theory, still detachable in democratic
elections, but not in the practical reality. The ideology on the side of the government that the interest in stability
is paramount, as the coalition governance of the divided opposition parties would lead to chaos is close to the
truth, but the criticism from the opposition side that in the long run the elimination of the liberal democracy
does not result efficient governance, is also correct. The division of the two political sides has been
unprecedented since the beginning of the transition period, which completely excludes their cooperation.

Transformation of Public Law System Due to the Principles of Illiberal Democracy


Questions of Centralization and Decentralization in the Public Administration
The new constitution, created in 2012 left the basic institutions of the former state organisation, and
expanded with new provisions that give a chance to the government’s aspirations of monopolisation of political
power. The new constitution hinders from many aspects the scope of the controlling bodies, such as the
Constitutional Court, the State Audit Office, the ombudsman, and the jurisdiction. As another success to
suppress the control over the government, government loyalist members were appointed by the government or
428 THE EMERGENCE OF ILLIBERAL DEMOCRACY IN THE EUROPEAN UNION

elected by Parliament. This assured that government decisions were implemented in the state system without
any obstacle.
Other institutions, including the State Audit Office and the Ombudsman whose function is to control the
executive branch of power are of less importance in this respect because they are one-man-guided, and so can
be controlled more easily by the appointment of a politically loyal leader.
Justice, as the most independent branch of power, has been able to withstand the central government’s
aspirations due to the centuries-old tradition of juridical independence. In 2010, the government established the
Office of Justice whose head is loyal to the governing party, has the right to appoint the judges, decides about
tenders, and increases the salaries of the judges. This all allows the Office of Justice the opportunity to put
political pressure on the jurisdiction. The same political goal was promoted in 2018 by the newly established
administrative court with politically loyal judges.
The limitation of the independence of the judiciary was most clearly achieved by the appointment of a
politically loyal attorney general in 2010. It is the right of the public prosecutor’s office to investigate state
corruption cases, and also to bring an accusation in them, so the suspected corruption cases in business circles
close to the government will not be brought to justice.
In Hungary, in 1990, a decentralised local government system with a strong autonomy was established.
The administrative reform was announced in 2010 to make local and regional public administration more
efficient by simplifying the organisation system, bringing the government closer to citizens, and consolidating
public procurement and digitalisation of public administration. The criticisms of the new administrative system
suggest that the aim was rather to reduce the powers of the local government and to increase the influence of
the central government at local level.
With this in mind, the central authorities have placed the EU funds under their provisions, which meant
wide-ranging oversight, conciliation, approval, and review of the tenders of EU financial resources. This step,
on the other hand, has increased the risk of corruption, but it has also created the conditions for EU funds to be
placed in the business circles preferred by the government. In the post-2010 local government elections, the
ruling party overcame the vast majority of local governments again and again, which ensured this goal of the
government.
The allocation of the EU’s development resources has never been free from political aspirations aimed at
benefitting the “paraselene” of the respective government parties. It is true that the post-2010 government has
far more opportunities to do so by making the role of the controlling bodies (State Audit Office and Public
Prosecutor’s Office) much restricted in this area, and in turn, it has built up a tendering framework based on
political loyalty and personal dependency system.
The Fall of Economic Constitutionalism in the Illiberal Democracy
By 2010, the Constitutional Court formed a significant counterweight to the public authority of the
government and the parliament, so it constituted an important guarantee of constitutionality.
According to the ideology of “majority democracy”, the Constitutional Court exceeded its powers,
because it took over a significant part of the parliamentary constitutional power. In 2012, therefore, the
Government abolished the previous Constitutional Court decisions and the new constitution greatly reduced the
scope of the Constitutional Court’s powers, particularly in economic matters. After 2010, the Constitutional
Court did not play any significant role in the constitutional supervision of the government’s economic activities.
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In the body of the Constitutional Court, every judge after 2010 was appointed by the governing party, so all of
them are loyal to the government, rarely making decisions against the economic policy of the government.
Underestimating constitutionalism on such a large scale may undermine the requirements of economic
efficiency―public policy approaches, stability, predictability, accountability, and quality legislation―which
will confuse the market participants who will evaluate it as inadequate economic governance decisions. It was
much more important for the government that constitutional supervision over government economic policy
decisions no longer should constitute a limitation in the future.
The government in 2010 appointed a person who is politically loyal to it as the head of the State Audit
Office. After 2010, the State Audit Office did not investigate the use of public funds, nor disclose shortcomings.
All of this exacerbates the government influence.
The government denies that the economic policy of strengthening its “paraselene” by granting their
supporters state property, state subsidies, or EU financial resources would be state corruption, because this kind
of economic policy has been regulated by law. These acts that should be the subject of constitutional problems,
and the lawfulness of public procurements, however, are never queried, because of the lack of impartiality in
the operation of controlling authorities, such as the Constitutional Court or the State Audit Office.
Since 2010, the government has openly announced that the goal of use of European Union funds is to
create a so-called “national capitalist class”, and therefore the purpose of the public interest is to provide
immovable property to people close to the government and this is not a state corruption. The vast majority of
tenders for EU funding are won by businesses close to the government, in a likely manipulated procedure.
However, because of the lack of substantive supervision by the controlling authorities over the use of European
Union funds, which is in this way under close government control, the revelation of corruption cases is limited
to OLAF reports and media investigative articles. Prosecution investigations, however, are rarely initiated or
seldom ended with accusation.

The Establishment of Market-Oriented Economy Institutions During the Transition


Privatisation as a Tool of Economic Governance
At the beginning of the transition period, the laws regulated the new market economy institutions that
broke with the bureaucratic economic governance system of the Communist state and its paternalistic social
policy. The new economic governance applied the principles of market competition, freedom of enterprise, and
equality of ownership.
The first step towards the market economy was the privatisation of state-owned enterprises. The biggest
challenge was to make private ownership dominant in the business sector, because a huge amount of
state-owned enterprises’ property should be sold. Political struggles have always accompanied the privatisation
processes since the beginning of the transition, because the political parties have seen the possibility of
strengthening their economic positions through their respective interest groups in privatisation. Therefore, the
assessment of privatisation is difficult from the point of view of economic efficiency, because it has in most
cases served as a political endeavour and not for the public interest.
The literature describes the first form of privatisation in 1988-1989 as “spontaneous privatization”
(Sárközi, 2009, p. 34). The earlier economic reforms grant wide economic autonomy rights to the state-owned
enterprises to privatize themselves. According to many opinions, national wealth was “squandered” because in
the majority of national property was obtained by the old Communist Party elite at low prices. Although no
430 THE EMERGENCE OF ILLIBERAL DEMOCRACY IN THE EUROPEAN UNION

survey on this has stated this yet, it is widely believed that the economic power of the successors of the former
Communist Party is based upon this kind of privatisation.
Since 1990, after the first democratic government was formed, it wanted to bring its own party members
into the most important corporate positions and needed revenues from privatisation for state debt repayment as
well. This stage of privatisation is termed “political privatization” because the State Privatisation Agency,
under strict government control, decided on privatisation using its discretionary legal authority based on tenders
whose criteria, aspects, and procedures were not subject to parliamentary supervision. This privatisation
practice has been criticised because of the lack of legality and democracy. Privatisation, therefore, slowed down,
became bureaucratized, and evolved into a hotbed of corruption (Ágh, 1991, pp. 16-18).
In the subsequent period, legal regulations allowed the privatisation of more and more property formerly
belonging to the state, exclusively through government decision-making, which meant that by the end of the
2000s, only very few enterprises remained in exclusive state ownership. There are no reliable data on the extent
of corruption in the privatisation processes, but according to a report made by the State Audit Office,
approximately a quarter of state assets disappeared during privatisation.
The privatisation in Hungary was rushed, because the share of state ownership was reduced to unduly low
levels, and therefore strategic assets of the national economy came under ownership by foreign companies. This
tendency made way for globalisation and a chance for the multinational enterprises to infiltrate into Hungarian
economy, which had some negative impacts, too.
Shaping Economic Policy by the Let-Wing, the Liberal and the Right-Wing Parties
At the beginning of the transition period, the Hungarian economy lost its earlier potential for dynamic
development, since after the disappearance of the markets of the former Communist countries; it became
apparent that it was no longer competitive in the world economy (Lentner, 2010, p. 11).
This was still borne out by the economic anomalies caused by the transition to the market economy.
Privatisation revenues did not cover the public debt and could not compensate for significant losses in the state
budget. The budget deficit was also heightened by the fact that the emerging grey economy was based on
illegal labour and tax evasion. The revenues of the budget had therefore significantly decreased as well as by
the massive unemployment emerged as a result of the disappearance of state-owned companies, and this
resulted in a downsizing class that was not competitive on the labour market. However, this sector still
expected state care, which led to widespread welfare expenditure. Because of these reasons, the government
deficit and government debt were so high that state bankruptcy threatened.
The fiscal balance in the mid-1990s was restored by the neoliberal economic policy of the
Socialist-Liberal Government, known as the “Bokros package”, which sought to reduce consumption by
reducing incomes, mainly by cutting social spending. The irrefutable differences of opinion between the two
political sides were beginning to emerge.
According to right-wing politics, the governance of the left-wing party meant a Communist legacy,
because it saw any conceivable economic reform only in restricting the population, and demanded from the
middle class a sacrifice, which later proved unnecessary. It did not focus on investment, development, and
employment, but supported only the poor in a great extent in the form of social assistance. The left-wing
welfare policy remained a distributor, merely with the political goal of buying votes.
In the late 1990s, right-wing economic policy supported the investments of domestic small and
THE EMERGENCE OF ILLIBERAL DEMOCRACY IN THE EUROPEAN UNION 431

medium-sized enterprises, housing construction, and implemented state investments with which they created
jobs and increased the living standard. This government raised the minimum wage, created a new employment
policy for the dislocated stratum of the labour market, and built up the family support system. This economic
policy concept used the Keynes demand-driven fiscal policy instruments against the austerity measures of the left.
By the end of the 2000s―not least as a result of the impact of the global financial crisis―an economic
crisis emerged in Hungary, which the left-wing liberal government sought to address with additional
restrictions on the population and an increased tax burden on businesses, as a condition of credit provided by
the National Monetary Fund. A large majority of the population by then did not support the government’s
economic policy.
The so-called “unorthodox” economic policy introduced in 2010, defines itself as being against neoliberal
economic policy, and it entitles the state to have an active role in managing economic processes. Its economic
policy was built on anti-globalisation and the emphasis on national economic interests and on increasing the
welfare of the population (Matolcsy, 2008, pp. 211-213).
As a tool, it increased the share of state ownership and the number of state monopolies, introduced robust
money market regulation and multinational corporations with special taxes, supported small and medium-sized
enterprises, increased investment and employment, established favourable tax conditions for the middle class,
and reduced the social assistance.
Increase of state ownership was achieved by reorganising the market in such a way that state-owned
enterprises and business firms close to the governing political party benefited from certain sorts of advantages
conceded by the government. Thus, these new economic stakeholders could expel the former market players.
Due to the special taxes, a large part of multinationals in the banking sector, the media market, the energy
sector, and the telecoms market have suffered significant losses, which forced them to give up their operation in
the country. As another way, the state has made acquisitions, expanded the state monopolies or withdrew local
public services from local governments, and placed them within the scope of state power. This facilitated the
redistribution of the markets, with more intense economic intervention. It provided for the government’s
economic “paraselene” very significant financial assets in order to achieve equality with the benefits of the
left-wing entities in this area. In the banking sector, the state-owned banks offer preferential loans to start
up-to-run businesses close to the government, and to purchase of certain economic sectors of businesses close
to the government.
The scope of state monopolies has increased not only in the public service sector but also in the business
sector since 2010, which is an unusual phenomenon in the market economy-based Western management
systems. The purpose of this is to obtain new markets for the enterprises close to the government party. The
government accomplished this goal by declaring several economic activities as a state monopoly, and then by
setting up public companies in these markets and donating them favourable market positions. New tenders were
issued after having declared these activities state monopolies, and in a non-fair competition, the government
preferred their own holdings by granting them the right of the operation of these economic activities.
The “unorthodox economic policy” could stabilise the economy, keep the budget deficit below the
expected 3%, trigger economic growth (though not as expected), economically strengthen its own voting power,
and promote economic positions of strength for the government through its own “paraselene”. Additionally, in
fact, it built its own media empire.
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Despite the anomalies, the “unorthodox economic policy” is supported by a wide range of people, and its
success is basically due to its rhetoric breaking with the previous economic policy, but emphasising welfare
principles and the interests of a national economy as opposed to neoliberal principles. Strong, centralised public
administration seems to be more closely aligned with Hungarian traditions, keeping economic processes under
control by having a well formulated and strong economic purpose, and also by providing care for its favoured
middle-class citizens. It is argued that the neoliberal state based on the “laissez faire” principle, which trusts in
the omnipotence of the market and encourages citizens to self-help, is a foreign body in Hungarian public
administration. The left-wing political side represented a neo-conservative economic policy that was
increasingly rejected by the population.
The “unorthodox economic policy” using unusual methods in advanced market economies is not easy to
judge from the point of view of economic efficiency. The state was able to increase its controlling role in
economic processes, to achieve its social and economic goals fast and easily. The government has largely
repressed the aspects of economic constitutionalism, along with, at many points, the institution of the rule of
law. From many perspectives, it was not able to achieve more efficient governance, either, much rather the
rearrangement of the economic positions.
Public Utility Prices as a Tool of the Politics
In the Communist economic governance system, public utilities were provided by state-owned public
utility enterprises, which, despite the reforms aimed at economic autonomy, remained under close state
administrative control. The reason for this was that the Communist state regarded public utilities as goods
forming part of basic needs, whose price was set at a much lower level than the market price by price regulation.
The efficiency and profitability of utility companies did not become a priority, but the focus was more on the
general availability of services.
During the transition period, the privatisation of infrastructure public utilities in Hungary took place in the
second half of the 1990s. In the 2000s, the government liberalised the infrastructural public sector in line with
EU directives, enabling any enterprise to enter the market, thereby creating a competitive market.
In Hungary, the price of infrastructure public services has become a field of political struggle since the
1990s. The welfare gained in the Kádár era was lost by a large part of the population at the beginning of the
transition period, who still insisted on state care, one of which was the low price of public utility and transport
services. In the early 1990s, therefore, the government had a major political interest in keeping the price of
infrastructure public services at a low level, even at the cost of state-owned public utility companies making a
loss, rather than their being privatised.
Public infrastructure services were privatised in the mid-1990s, the profit-oriented companies provided
higher quality, but a more expensive service. The government, however, kept the right for itsel to regulate the
prices of the utilities.
It was a continuing debate that the government-established energy prices were indeed aligned with world
market prices, as governments have regularly argued, or, according to opposition critics, the government’s price
control practices provided extra profits to foreign investors in the energy sector. This question proved to be
unanswerable because it was not based on objective calculations, merely upon political views.
Price regulation in the energy sector, which had been the central issue of the election campaigns from the
beginning, took a new turn in 2010. The election promise made by the government set up in 2010 was the
THE EMERGENCE OF ILLIBERAL DEMOCRACY IN THE EUROPEAN UNION 433

so-called “decrease of utility service prices”, consistently implemented not only in energy services, but also
other services.
The ongoing liberalisation process was stopped. By the end of the 2000s, state monopolies disappeared in
the public service sector, as a result of liberalisation policies, and the price regulation became the exception.
From 2010, the government tried to buy the service companies in the infrastructure public service sector, which
was easy, because companies in foreign ownership suffered serious losses, due to the drastic decreases foreseen
in the price regulations of public services. The government aimed to squeeze out the companies that had
already been in the market, as well as by creating new state-owned public service companies with more
competitive conditions, such as grants of state subsidies or EU development resources. In other cases, the
government declared the public service as a state or municipal monopoly, or invited new tenders in which
newly established state-owned applicants became winners, and the old ones were pushed out.
The aim of this new policy since 2010 was to increase the share of state ownership and the number of state
monopolies in the infrastructure public sector, which served as a tool to reduce the ability and bargaining power
of multinational companies in the government price determination. As a result, more and more infrastructure
public services―energy services, all sectors of transport, parking, highway tolls, universal communications,
water and sewerage services, and waste collection―have again have been subject to price regulation in order to
reduce the prices.
Within a short time, this has brought spectacular political gains, but in the longer term, the government
will have to compensate for the losses of state-owned public utility companies, and also provide additional
resources for their development in order to maintain the quality of public services together with the somewhat
lower prices.
Reforms of the Welfare System
In Hungary, during 40 years of Communism, the state provided welfare for individuals and raised their
standard of living, especially in the late Kádár era. During the transition period, when the economic conditions
of the population deteriorated because of the economic downturn and economic restructuring, governments had
a major political loss in the drastic reduction of welfare.
The public felt that the public debts to which they were required to pay were too high, and that the state
was using public money in a wasteful way; and because of the corruption of the political elite, public money
was becoming private assets. As a result, income of the state budget was decreasing, due to the reluctance of
population to pay taxes. Only long afterwards, by the end of the 2000s, did the techniques used to filter out
“free riders” from the beneficiaries of welfare system develop. From the end of the 1990s, the Tax
Administration Office became an ever stronger and more powerful public administration organisation, and in
addition to administrative fines, it also received the power to law enforcement.
Left and liberal governments have been accused of supporting only lumpen elements that do not want to
work with the provision of large-scale social assistance. It has resulted in generations of this social group the
tradition that they are not earning income but receiving social aid. However, there are those who say that the
status of this social layer is basically determined by the low potential on the labour market, and the lack of job
opportunities in some regions of the country. The middle class had been less and less supportive of the extensive
social support system for the poor, and then argued that it does not even encourage work because there is
virtually no difference between the salary of the lower middle class and the income earned by social assistance.
434 THE EMERGENCE OF ILLIBERAL DEMOCRACY IN THE EUROPEAN UNION

The level and availability of welfare benefits declared since 2010, the so-called concept of a “work-based
society”, meant that, as a rule, everyone should work, which signified the government wanted to provide public
work, but it did not mean real job opportunities, but something rather in the nature of forced labour. The
creation of public work opportunities is the responsibility of local governments, which puts public employees
into a dependency position, and can be used for political purposes, such as buying votes.
From 2010, the government has provided grants to the middle class, largely to support only those who
have access to work at a certain level of income, such as family tax relief for children, state loan for buying
homes, and childcare allowances. In parallel, it introduced the flat tax system, which also increased the income
of higher income groups. Family income support can be used primarily by the higher income earners, too.
At the same time, from 2010, the government has drastically reduced social assistance for the poor, which,
moreover, only goes without the availability of public work in the given settlement. The government set up, in
2010, a radical cut of social aid affirming that anybody had the opportunity to undertake public work. Public
work, however, does not assure even the minimum wage regulated by law, only the half of it. The children
allowance, which is quarter part of the family tax allowance, is subject to certain rules of conduct, such as
school attendance and work.
This social policy, with preferring those who have work and have higher income, openly supports the
willingness of the middle class to have children and makes the poorer strata counter-appealing. With this social
policy, the government gained considerable support from the middle class, at the same time, it has resulted that
the numbers of poor people have dramatically increased during the last eight years.

Summary
The fall of liberal democracy in Hungary in 2010 is due to several reasons. Liberal democracy has no
traditions in the country’s modern history. The Horthy system in the first part of the 20th century was a
multi-party parliamentary system with autocratic features, emphasizing authoritarianism and conservative
national traditions.
The half-century existence of the Communist system also hindered the development of democratic
traditions in Hungary. At that time, the reform of the Communist economic governance model was a step
forward, but it established unfavourable traditions, too, which later became disadvantageous for the
modernisation processes.
The paternalistic social policy of the Kádár system put an end to self-care of the population, which led to a
public attitude to wait from the state to take care of the population. There was also a lack of demand for
democracy, because everyday living for the population was more important than participating in political
decision-making processes. Furthermore, the time of transition in Hungary was peaceful, which led to
continuity in the society, as opposed to the other post-Communist country in the region, where dictatorships
were overthrown by revolution. With these traditions emerging in the Kádár regime, the institutions of liberal
democracy could not be built up in the long run. Instead, the need for a strong, centralised state grew and later
gained broad support from the population.
It has been also clear that the former Communist elite was not entirely deprived of its political and economic
power. As a result, they succeeded in successfully transforming their political power into an economic power
from the second half of the 1980s, which, from the time of the transition, made it possible for the former
Communist Party’s successor, the recent socialist party, to build its own “paraselene” and media overweight.
THE EMERGENCE OF ILLIBERAL DEMOCRACY IN THE EUROPEAN UNION 435

However, in the socialist party, in the coalition government with the newly established liberal party,
beyond the paternalistic politics for the poor, it pursued a neoliberal economic policy that was based on the
emphasis of market mechanisms, the state’s non-interference in economic processes, and self-care. In the
Hungarian society, however, there were no traditions of liberalism, much rather a limited recognition of
political and freedom rights, and it is not considered as primary goal to assure equal opportunities. The
economy of the country has been exposed to the effects of globalization by over-privatization, and they have
not sufficiently supported the strengthening of the domestic capitalist class and middle class that are committed
to national values.
The right-wing party introduced illiberal democracy from 2010 believed that it had to compensate for its
disadvantaged situation, and therefore over-asserted its political power by means of public law, which, through
its social and economic policies, was the first to receive support from the middle class and then from the
“Kádár’s small people”, too. The success of this policy has been greatly contributed to the fact that
neoliberalism has also been in crisis as a result of the global economic crisis in 2008, and a growing expectation
of a strong state that can solve public interest problems quickly and efficiently.
However, this raises a question: Does the end justify the means in the sense that is it worth sacrificing the
values of liberal democracy for the hoped greater efficiency?
The extent of economic and social inequality has continued to increase, employment indicators have only
been improved by the ratio of public work, and the quality of education and health has not improved. The
positioning the “paraselene” to favourable economic position will further undermine the competitiveness of the
economy in the longer term, despite the government declares it as building a new national capitalist class,
replacing the dominant multinational enterprises.
The society has been divided into three parts: The “paraselene” has become spectacularly rich, the income
of the middle-class has improved, although it shows a tendency to deteriorate in the EU comparison (which has
led to mass migration of the employees, and later to a shortage of labour), and the position of the poor living in
a relative, or deep-seated poverty has not changed. Only a slim class, the so called “new bourgeois” has become
a real beneficiary of the illiberal democracy in Hungary.

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International Relations and Diplomacy, August 2018, Vol. 6, No. 8, 436-448
doi: 10.17265/2328-2134/2018.08.002
D
DAVID PUBLISHING

Australia’s Fear and Greed over China’s Rise: A Discourse


Analysis of Mainstream News Coverage of the
Belt and Road Initiative

CHEN Zhixin
Beijing Foreign Studies University, Beijing, China

China’s rise has stirred up world-wide debate. In Australia, China has been one of the keywords in its foreign and
strategic policies and on news media. Its rise intensifies the dual functions―benefit provider and security offender
to Australia and the tensions between greed of economic gains and fear of China’s increasing geopolitical strength
and influence. The “fear and greed” narration is well-presented on Australian mainstream media. Such ambivalence
can also find its expressions in the recent typical case of China’s rise―the Belt and Road Initiative. It is worthwhile
to find out how Australia’s ambivalence to BRI and China’s rise is represented on media and to draw the
sociopolitical inferences behind “fear and greed”. The thesis is going to take BRI as a typical example of China’s
rise to examine the ambivalent “fear and greed” narration on Australian mainstream news media. Data sample
includes news reports of BRI from ABC News, The Australian, The Australian Financial Review, The Sydney
Morning Herald, and The Age from September 1st, 2013 to October 31st, 2017. The discourse analysis on China’s
images finds that Australia is rather biased against China, regarding China both as a lucrative friend and a
threatening enemy. The bias lingers on for centuries and generates misunderstanding, mistrust, and anxiety. Profit
drives Australia to establish closer economic ties with China, while value differences would not allow too much
proximity but help to maintain a robust alliance with its allies. Australia’s position between its major economic
partner and traditional allies has caused much concern and will have a long-term influence on its policy-making
decisions.

Keywords: China’s rise, Belt and Road Initiative (BRI), fear and greed

Introduction
The past four decades have seen China’s remarkable achievements in national strength, especially
economic growth. Australia has been one of the largest beneficiaries among those who benefit from China’s
economic rise. However, along with the tremendous trading benefits also comes overwhelming anxiety of
China. It is reported that Tony Abbott admitted Australia’s China policy is driven by two emotions―fear and
greed (Garnaut, 2015). Malcolm Turnbull has reportedly called China as Australia’s “frenemy”, a seeming
friend but underlying rival (Grigg & Murray, 2017). This “fear and greed” narration is often referred to when it
comes to the geopolitical and geo-economic implications of China’s rise.

CHEN Zhixin, Master student, the Australian Studies Centre, School of English and International Studies, Beijing Foreign
Studies University, Beijing, China.

 
AUSTRALIA’S FEAR AND GREED OVER CHINA’S RISE 437

0The current typical case of Australia’s fear and greed over China’s rise lies in China’s Belt and Road
Initiative (hereinafter referred to as BRI or the Initiative). BRI is the largest development strategy initiated by
the Chinese government. The Initiative was proposed by President Xi Jinping in 2013. Spanning over 60
countries, which altogether hold around 60% of the world’s population and one third of global GDP, BRI aims
to redraw the trade routes―the Silk Road Economic Belt connecting China and Europe and Africa over the
Eurasian land, and the 21st century Maritime Silk Road, extending from China’s coastal area to South East
Asia, the Indian Ocean and as far as Africa via sea routes. The whole world is paying attention when China
makes her commitment to dramatically upgrading the infrastructure including highways, railways, and ports,
and hence building better trade routes and increasing mutual economic dependence on each other. It is
considered the country’s most ambitious foreign trade and investment project.
Australian governments seem reluctant to join the Initiative. Probably the title sounds rather odd or
irrelevant to a nation far away from the southern hemisphere, but it is much worried about China’s motivations
and real intentions. Several questions may linger: Is BRI a contemporary “Marshall Plan”, or is it a strategy to
expand Chinese influence and strengthen Chinese leadership, counter the U.S. leading alliance on the Pacific
Rim or even replace the U.S. primacy? Driven by these doubts and suspicion, the Australian government has
adopted a wait-and-see stance.
Against this background, this thesis is going to take BRI as a typical example of China rise to examine the
ambivalent “fear and greed” narration of the Initiative and China’s rise based on the BRI-related news reports
from ABC News, The Australian, The Australian Financial Review, The Sydney Morning Herald, and The Age
from September 1st, 2013 to October 31st, 2017, and then further provides a discourse analysis on China’s
images created by Australian media and unveil the deep-held fear and anxiety over China’s rise.

China’s Rise and the “Fear and Greed” Narration


In Australia, there are wide-ranging discussions on the geo-economic and geopolitical implications of
China’s rise. It is reported that Tony Abbott commented Australia was caught between “fear and greed” over
China in his private conversation with the Chancellor of Germany Angela Merkel at the G20 Summit in
November 2014 (Garnaut, 2015). Similarly, Malcolm Turnbull labeled China as Australia’s “frenemy” at a
public event in October 2016, a friend in economic terms but an enemy or a rivalry because of China’s
increasing influence and military buildup, implying his toughening attitude to China’s rise (Grigg & Murray,
2017). Fear and greed are opposed sentiments, but such narration has long been imbedded.
Australia’s discourse on China’s rise has been constantly driven by the sentiment of anxiety (Walker, 1999;
Walker & Sobocinska, 2013; Pan, 2014) or Changst (Chu, 2013, p. 6). MacKerras (1989; 2015) had pointed out
the historical and contemporary stereotypes of China in the Western world. The China anxiety or China threat
discourse is almost pervasive among all issues that are Chinese, such as Chinese overseas students and Chinese
investment (McCarthy & Song, 2018), cheap goods, economic displacement, hordes of unwelcome Chinese,
and strategic and political challenges (Goodman, 2017). It has never been easy to interpret Australian discourse
on China because it is more of unlinked feelings with two extremes―fear of threats and greed of benefits.
The anxiety also lies in triangular relations. Hugh White warns of the risk of underestimating China’s
ambitions and that Australia may have to choose between Beijing and Washington (White, 2005; 2010; 2012).
White’s theory has stirred up much debate over how Australia should approach or accommodate to China’s rise
and concerns about the geo-economic, geopolitical, and strategic implications of power increase in Australia.

 
438 AUSTRALIA’S FEAR AND GREED OVER CHINA’S RISE

Several “strategies of balancing, engagement, hedging and accommodation” (He, 2012; Terada, 2013) have
been adopted to maintain the economic benefits from closer ties with China and counteract the strategic threats
by strengthening its alliance with the U.S. (Manicom & O’Neil, 2010). Regarding Australia’s foreign policies,
McCarthy and Song (2015; 2018) argued that Australia treats China with ambivalence―“one a narrative of
economic complementarity” and “the other of fear and anxiety”. This discourse misreads China through the
deep-seated Eurocentrism and capitalism views of history that depict China as “the threatening anachronistic
other”.
A comparative study by Brookes (2012) reveals the “long-held fears of China as an unknowable ‘other’”
and that representation of China’s rise on Australian media mainly focuses on strengthening the U.S. alliance
and hedging against the potential threat of China’s expanding influence in the region. Caught between
increasing economic ties China and ongoing political and military alliance with the U.S., Australia is constantly
anxious. This tension is fundamentally caused by the construction of China as “other” and of the U.S. as “us”.
Similar “otherness” construction can be found in media representation of Chinese overseas investment (Cai,
2012).
Australian media construction of China’s rise has two dimensions―the greed over China’s economic
prosperity and the fear that China’s growing political influence and military strength may contribute to
hegemony and the rewriting of international orders. This research may add to the significance of media study
on China-Australia relations, and further demonstrating Australia’s attitude toward China’s ascendance in
power and influence. This thesis aims to address three sets of research questions:
RQ 1: How do Australian mainstream news media present BRI? More specifically speaking, what are the
salient features in covering BRI, including chronological trend, prominent themes, and overall tone?
RQ 2: What dominant narratives have been employed in covering BRI?
RQ 3: What images of China are presented on Australian mainstream news media and in what ways is the
ambivalence of “fear and greed” reflected in such images?

Research Methods
This paper adopts discourse analysis to answer the questions above. The unit of analysis is the individual
news report on BRI from ABC News, two national newspapers The Australian and The Australian Financial
Review, and another two state newspapers The Sydney Morning Herald from Sydney, and The Age from
Melbourne, which are selected as the sources of data due to their wide range of influence.
The sample population is drawn from the database Factiva. The time span is set from September 1st, 2013
to October 31st, 2017, ranging from the time when the BRI was first proposed to the most recent period as of
this writing. In order to guarantee the validity and credibility of this paper, the least relevant and highly
identical articles are sorted out manually. As a result, 164 reports are finally collected as sample, 7 from ABC
news, 10 from The Age, 13 from The Sydney Morning Herald, 43 from The Australian Financial Review, and
91 from The Australian.

Findings
After a textual analysis of all the news reports, the paper draws upon several patterns in Australian
mainstream news media coverage of BRI.

 
AUSTRALIA’S FEAR AND GREED OVER CHINA’S RISE 439

The Chronological Trend


As is shown in Figure 1, the amount of news reports on the BRI has been increasing.

30

25

20

15

10

Number of news reports

Figure 1. The number of news reports on a monthly basis.

But BRI remained nearly invisible from 2013 to 2015. The year 2016 saw a rapid increase with 37 reports
and then the coverage ballooned in 2017 with 106 reports and three peaks in presenting BRI, the first one in
March when BRI got high visibility from home and abroad under several circumstances, including the NPC and
Chinese People’s Political Consultative Conference (CPPCC) sessions, Premier Li Keqiang’s state visit in
Australia, etc., the second one in May when the Belt and Road Forum for International Cooperation was held,
and the third one in October when several issues got high profile including ALP’s Future Asia policy, the 19th
CPC National Congress, and Trump’s state visit to China. Therefore, the visibility of BRI on Australian
mainstream news media was corelated to the major domestic events in China and China’s engagements with the
world, particularly Australia.
BRI’s low exposure does not necessarily mean that Australia shows no interest in BRI project. But the
scarcity of news coverage does imply that BRI has not aroused serious attention from Australia. Since Australia
is not geographically relevant to either the Belt or the Road projects, it is more feasible for Australia to engage
in BRI by joining the Asian Infrastructure Investment Bank than directly signing up to the Memorandum of
Understanding on BRI. The other explanation is that Australia is yet accommodated to the Initiative and
China’s rise. As a result, the Australian government has been standing back from any further engagement.
Therefore, BRI gets limited publicity on Australian mainstream news media.
Overall Tone
The examination of overall tone in each report depends on: (1) the conclusive statement; and (2) the

 
440 AUSTRALIA’S FEAR AND GREED OVER CHINA’S RISE

selected aspects of BRI. Usually, the tone of conclusive statement is consistent with the
positive/neutral/negative description of BRI (see Figure 2).

Overall tone
Total Australian AFR
SMH Age ABC

43
27
Postive 12
2
1
1
49
29
Neutral 14
3
2
1
72
35
Negative 17
8
7
5

Figure 2. The overall tone in covering BRI.

Australian mainstream news coverage of BRI tends to be negative, with 43 reports (26.22% of the total)
generally positive, 49 (29.88%) generally neutral, and 72 (43.90%) generally negative. As for each news
platform, The Australian and The Australian Financial Review present balanced but slightly negative attitude to
the Initiative, while the other three platforms are basically negative about BRI.
Themes
Australia’s ambivalence is also expressed through issues associated with BRI made salient on Australian
mainstream news media. Three categories are highlighted: economic, political, and strategic (see Table 1).

Table 1
Themes Associated
Category Themes
China’s new restrictions on investment in overseas development.
Australia’s over-dependence on China’s growth.
Expansion of China’s geo-economic influence.
Solution for the problems in economic reform.
Shelter for Chinese enterprises to go out.
Economic Balance countries’ comparative strengths via building connectivity.
Further demand for resources and energy, maintain market stability and sustain growth in various sectors.
Benefits to trade and business.
New opportunities for international cooperation and Sino-Australia economic ties.
The link between BRI and NAIF.
The link between BRI and Sydney’s new airport project.

 
AUSTRALIA’S FEAR AND GREED OVER CHINA’S RISE 441

(Table 1 continued)
Category Themes
The 19th CPC National Congress and transparency concerns.
China’s new diplomacy.
Australia-China relationship in the face of Trump’s presidentship.
Political donations scandal.
A surge in Chinese pride and confidence.
China’s influence penetrating in Australia.
Li Keqiang’s visit to Australia.
Power shift in Australia’s policymaking on China.
Political
Labor’s Future Asia policy.
Australia’s decision to join AIIB.
The ambitious Marshall Plan.
Expansion of China’s geopolitical influence through BRI.
Economic clout to rebalance the global order and reshape geopolitics.
A vehicle for Beijing to exert regional influence.
Increasing uncertainty and tension in the region.
Lack of details and transparency.
The issue of the Port of Darwin and Landbridge.
Concerns over China’s moves in the South China Sea including its military build-up and assertive foreign
policy.
Military build-up.
Concerns over China’s strategic intentions with its rising to global power.
Strategic Concerns over China’s potential militarization in the Indian Ocean through infrastructure projects.
Japan’s proposal of reestablishing the Quadrilateral Security Dialogue.
Economic leverage to expand its strategic and political interest.
Counter the maritime vulnerabilities.
Vehicle for China to flex its muscle in strategic interests.
Geostrategic motives behind BRI.
Cultural The wisdom of the ancient globalizing Tang age.

In the economic dimension, the description of BRI involves more positive issues than negative ones. The
positive views focus upon the economic benefits for Australia, while the negative ones shed light on China’s
geo-economic influence, domestic economic problems, and Australia’s over-reliance. In general, positive views
slightly outnumber negative ones. However, the political dimension tends to be generally negative with
concerns over China’s intention of extending geopolitical influence and ambition for global leadership. The
strategic angle is overwhelmingly negative, emphasizing China’s military buildup and potential threat to
Australia’s national security and to the traditional balanced regional order and stability.
Considering that only one report touches upon the positive cultural dimension, this report is not included
in the following analysis.

Media Representation of China’s Images


Based on the empirical results above, three major dimensions are consistently salient in Australian media
coverage. Economically speaking, China is portrayed as a major driving force to progress, while it is politically
as an octopus-like power seeking giant and strategically as a threat to Australia’s national security.

 
442 AUSTRALIA’S FEAR AND GREED OVER CHINA’S RISE

China’s Economic Image: A Major Driving Force to Progress


As Australia’s largest trading partner, China offers huge profits and potential. The economic ties between
two countries are far more fruitful and sustainable than political relations. The positive image comes from those
pro-business views that encourage Australia’s further engagement.
In regard to international relations, some believe BRI is a positive force that drives progress, and through
the Initiative, Australia can further its engagement with the region (Mitchell, 2017). As Chris Bowen argues,
Australia’s prosperity depends on stronger links with Asia and a Labor government must keep an “open mind”
to new possibilities (Needham, 2017). Unlike the coalition, labor is considering how BRI can facilitate its
Northern Australia Infrastructure Facility project (Coorey, 2017). In fact, the north has already been a gateway
for Asian markets, which makes it “a logical destination” for inclusion in BRI so as to facilitate trade and
investment flows by improving physical infrastructures and providing financial initiatives and preferential
policy environment. The Initiative can be a channel to better connect Australia with China and the world
(Cripps, 2017).
Peter Drysdale believes the engagement on BRI is for Australia an “appropriate diplomatic response” to its
leading economic partner (Tillett, 2017a). Australia’s geographic location has brought itself huge economic
benefits from Asia’s growth for so long that it assumes the economic gains must continue even if it does not
sign up the BRI project. But in a time when protectionism and isolationism are continuously challenging global
economic governance, its Asia engagement commitment can no longer rest on only geography, but more
preference on trade and investment. Australia’s inclusion in BRI will push forward the integration process of
the Asia-Pacific region, together with other efforts, such as bilateral/multilateral agreements and platforms.
Therefore, the pro-business group of people is calling on Australia to enhance its ties with its Asian neighbors
and engage with China on the BRI projects to further push regional growth.
It is also believed the Initiative will probably bring indirect but significant impact on Australian business
(Robin, 2017). In Asian markets, the growing middle-class population represents remarkable demand for
premium products and services from Australia. And the huge infrastructure gaps in Asia can also be an
opportunity for goods and services export. These views recognize that the Initiative has the potential to
“enhance the economic integration of Australia with the Asia-Pacific region” and the capacity to “boost growth
in developing nations and to invigorate global capital markets” (Tricaud, 2017).
However, there are some doubts that the potential benefit for Australia is vastly exaggerated and questions
on China’s domestic economic reform and its capability to manage the ambitious plan. Peter Jennings believes
the Initiative is not “for the health of the Asia Pacific” but for China’s strategic interests, which will disturb the
current regional economic stability and order (Clark, 2016). China’s domestic problems have also diminished
the effectiveness and reliability of the projects, such as slowing economic growth, surging debt, overheated
financial market, overcapacity, and other problems in economic reconstruction (Robin, 2017). A lack of
transparency is another worry that keeps Australia standing back. Despite the merits promoted by the
pro-business group, Australian mainstream news media remain skeptical of China’s economic intentions,
domestic economic challenges, and institutional problems.
It can be concluded that BRI has produced excitement and enthusiasm as well as wariness and skepticism
in Australia. Australian businesses generally support more engagement with the infrastructure plan. A number
of financial and legal service companies have been involved. And labor, together with the Northern Territory

 
AUSTRALIA’S FEAR AND GREED OVER CHINA’S RISE 443

government welcomes more trade and investment and advocates the alignment of BRI projects with the
northern Australia development plan. But the Coalition government has been conservative and cautious. When
it comes to Chinese investment, there has been “xenophobic hysteria that is being worked up over China”, as
Andrew Robb has argued, “there is also a great deal of hesitance and suspicion around Chinese investment”
(Daly, 2017).
It seems that the dual themes of “fear” and “greed” of China’s rise remain constant in Australia: “Doubts
about the initiative linger in Australia, even as evidence mounts about the considerable opportunities it will
present to individual countries, business and investors” (Tricaud, 2017). This ambivalence partly explains
Australia’s reluctance towards BRI. And another issue is Australian diplomatic policy in the structural
contradictions of the international political system. Strategic competition between two powers, China and the
U.S., in Asian-Pacific region has forced Australia to painstakingly explore a compromising path between its
major trade partner and allies. Given the fact that its major allies have not joined in, Australia has to consider
the balance between its allies and China.
China’s Political Image: An Octopus-Like Power Seeking Giant
The political message indicates great concerns about China’s influence and ambition, despite a few
positive comments on Premier Li Keqiang’s visit to Australia, Labor’s Future Asia policy, and Australia’s
decision to join AIIB. It is reported that China is utilizing BRI as leverage to control Eurasia and becomes
centre of the world and China has influence not only in Australia, but also in developing countries which are
likely to trade off their own independent control of infrastructure for short-term economic gains (Kelly, 2017).
This trade-off narration is popular in the debate over Australia’s choice between the trading partner and allies
and on the possibilities of whether and how to engage in BRI without losing its own independence. China is
stretching out its tentacles to Australia.
The political thinking of BRI is premised on the assumption that the project is so big and exotic that it
must harbor either explicit or implicit motives, such as ambition of dominance, extension of geopolitical
influence, overtaking US primacy and so forth. As a result, anxiety grows over China’s political intentions.
There are several keywords in the statement of the Coalition’s stance on news media—unease, nervous, wary,
reluctant, lukewarm, conservative, skeptic, and biding its time—all describing a negative attitude towards BRI
and China’s rise. China is represented as an octopus-like power seeking giant which Australia has not been
accommodated to. Australia seems “a bit muddled as to where to go on” like “a deer in the headlights”
confronted with China’s power and influence (Borys, 2017).
BRI is on the one hand portrayed as a channel for China to infiltrate its influence across Australia. It is
noteworthy that China’s influence is associated with anything that is Chinese: The 19th CPC National Congress
has been themed on the ever-stronger Chinese leadership; Chinese overseas investors, overseas students,
community groups, Chinese-language media, and surging public patriotism (or phrased as nationalism) are all
tools for Beijing to exert its influence. Australian intelligence agencies have conducted investigations on
Chinese donations to major parties and universities. There remain concerns about China’s buying mainstream
media (Wen, 2016) and much uncertainty on China’s growing power and influence as China demands not only
“a say in international affairs” but also “the role to redefine order and rules” (Tillett, 2017b).
On the other hand, BRI is analogized as Chinese Marshall Plan with an explicit intention of expanding its
sphere of influence worldwide, overtaking US supremacy, reshaping regional geopolitics and rewriting Chinese

 
444 AUSTRALIA’S FEAR AND GREED OVER CHINA’S RISE

rules in global order. It is reported that China is utilizing its strength in infrastructure construction, financial
support and trade and investment to extend its influence, “reshape the world’s trading map” (Murray, 2017) and
further “displace the US presence in Asia” (Shanahan, 2017). BRI, AIIB, and other initiatives are all tools for
China to advance its geopolitical benefits, establishing a new China-centric Asian order or even “a new
international order with a hierarchy based on China’s wealth” (Dibb, 2017). These views construct an
ambitious China, seeking to become the center or hub of Asia or even the whole world.
In these two patterns, the adjectives used to describe China are ambitions, assertive, proactive, muscular,
confident, and aggressive. In fact, everything about China is considered as too big or too foreign, the same with
BRI which is too big for Australians to figure out what it is, where it goes, or where it may end. But one point
for sure isic and Australia’s econom geographical proximity to the north gives China a chance to sprawl out its
tentacles.
The octopus image is not new in Australian history (Pan, 2012, pp. 253-254). One of the early images
depicted a Chinese man as an octopus with eight ferocious tentacles (see Figure 3). It seemed this Chinaman
brought several types of evils and viciously contaminated the land. Demonisation of China has long been
embodied in historical and contemporary biases. The octopus metaphor in the 21st century targeted former
Chinese President Hu Jintao (see Figure 4).

Figure 3. The Mongolian Octopus―his grip on Australia1.

Figure 4. Hu Jintao2.

1
By Phil May, The Bulletin, August 21st, 1886. Quoted by Pan (2012) in his paper “Getting excited about China.” In D. Walker
and A. Sobocinska (Eds.). Australia’s Asia: From Yellow Peril to Asian Century (p. 253). Crawley: UWA Publishing.
2
By Ward O’Neill, The Australian Financial Review, April 4th, 2009. Quoted by Pan (2012).

 
AUSTRALIA’S FEAR AND GREED OVER CHINA’S RISE 445

Fear and anxiety over China’s invasion has long been resonated in Australia. Now that BRI has come
close to its economic front, the massive infrastructure project becomes a powerfully disruptive tentacle that will
grab every possibility to influence Australia. The octopus image of China―an ambitious nation which pursues
to become centre of the world—can be concluded in the political framing of China, which reinforces the idea of
“China anxiety” or fear of China’s rise.
China’s Strategic Image: A Threat to National Security and Regional Order
The strategic thinking of BRI tends to be overwhelmingly negative. BRI is often referred to within the
security net led by the U.S. which aims at keeping China either exclusive or contained. Strategically, BRI is
seen as a vehicle for the Chinese government to flex its muscle and expand its strategic interest.
For Australia’s domestic concerns, several key issues are associated in framing the China threat to
Australia’s security: spying, infiltration, and espionage. It is warned that espionage and interference from CPC
is very likely to threaten Australia’s national security, sovereignty, and political integrity since Chinese power
and influence has infiltrated in higher education sector, communities, Australian media, and political system.
Several figures (Four Corners) are constantly considered as the communist agents in Australia―Ye Cheng,
Chau Chak Wing, Huang Xiangmo, and Sheri Yan due to their ties with the Chinese government and CPC. In
response to the fear of infiltration, the Australian mainstream news media have raised the importance of
Australian national interests, sovereignty security, and independence of foreign policy.
On the regional or even wider global level, one of Australia’s strategic focuses is that China attempts to
“create a strategic bloc to counter the influence of the United States” by means of BRI (Riordan, 2016). The
China-Pakistan Friendship Road is regarded as “a strategic play for Beijing” which can facilitate China’s access
to the Indian Ocean, help to reduce China’s “reliance on the Strait of Malacca”, and diversify sources of
China’s energy import. And the China-Pakistan Economic Corridor is also taken as a move against India’s
rivalry (Murray, 2017). The U.S. alliance bloc is under threat. And another case of China challenging the
U.S.-led strategic network is the South China Sea. BRI is presented not only as “an attempt to gain a strategic
advantage”, but also a plan for the Chinese government to “validate its claims over disputed waters in the South
China Sea” (Grigg & Murray, 2016).
Australia might believe that China is asking for regional dominance and hegemony. The power dynamic
between the U.S. and China will be the most influential factor to shape the whole strategic landscape and
rewrite international rules. China’s new diplomacy is labeled by Australian media with adjectives like muscular,
aggressive, assertive, confident, and ambitious. Such descriptions warn Australia that China has been ready to
bring seismic shift to the world and the rising China will lead to a more contested “Indo-Pacific” region where
great powers are racing with each other on economic strength, political influence, and more importantly
military capacities (Tillett, 2017b).
China’s infiltration and espionage actions and the newly created Eurasia-wide strategic bloc are terrifying
enough for Australia to take China as its enemy. How to deal with the disruptive China has become a major
issue in drafting the new foreign policy white paper. Australian defence departments have warned the strategic
consequences of officially signing up BRI (Greene & Probyn, 2017). Along with the so-called “Indo-Pacific
democracies”, Australia attempts to build a containing net in response to China’s aggressive military operations
in disputed waters and territories.

 
446 AUSTRALIA’S FEAR AND GREED OVER CHINA’S RISE

Japan has taken the initiative to reestablish the Quadrilateral Security Dialogue (the U.S., Japan, Australia,
and India) which aims to strengthen economic ties and defence collaboration among Indo-Pacific democracies
in the range from the South China Sea through the Indian Ocean to Africa, and more specifically to counter
China’s growing influence through the Belt and Road infrastructure projects (Murray & Grigg, 2017). In these
four democratic allies, Japan and India have formed a “Tokyo-New Delhi axis” against China. They are also
working on establishing an “Indo-Pacific freedom corridor” (Grigg, 2017). The notion of “Indo-Pacific
democracies” brought by the 2017 Foreign Policy White Paper is clearly China-exclusive. In order to contain
China’s power increase, the best solution for Australia as acknowledged by the Department of Foreign Affairs
is to continue its hedge and balance approach, providing cautious support to China’s Belt and Road plan, at the
same time pushing forward the security cooperation with its allies.
Hugh White’s “China Choice” theory has its updated forms: whether to engage in BRI to uphold whatever
consequences—economic, political, and even strategic that may bear, whether to take the Japanese initiative to
form a four-way security net that keeps monitoring and deterring China’s moves, whether it is likely to
maintain both the economic gains from China’s rise and its genuine independence in foreign affairs,
sovereignty security, political system, and Western values. The answers can never be easy. White (2012) had
argued that “Australia’s equivocation about whether to participate in One Belt One Road to avoid becoming
entangled in China’s strategic interests” is not a big concern for China. With or without Australia’s official
support, the plan is going to where China wants and contributes to China’s rise. However, declination of
signing up might leads to the loss of considerable economic opportunities and benefits (Hewett, 2017). White’s
explanation can be the plain version of Australia’s fear and greed towards China.

Conclusion
Through the analysis of news reports on China’s Belt and Road Initiative, this paper finds that the “fear
and greed” narration has its economic, political, and strategic expressions. Most of the positive views come
from the economic dimension, while the political and strategic thinking indicates a particularly negative
attitude towards China’s rise. Australian mainstream news media interpret BRI dichotomously, believing it
brings not only new opportunities and a huge amount of economic benefits, but risks and threats under the
suspicion that China might hold the intention of expanding its sphere of influence or even ascending to world
leadership. China is not only seen as Australia’s leading economic partner, but as an ambitious giant and a
threat.
Just as the labels like “fear and greed” and “frenemy”, the ambivalence in defining China’s position
implicitly proves Australia has not yet found the best response to China’s rise. No other country in history has
such a radical change in national strength. For BRI, policy-makers are constantly concerned about how China is
going to use its growing financial resources in the infrastructure projects and how China plans to achieve its
geopolitical intentions behind the powerful economic leverage based on their assumption that China is pursuing
supremacy, which will bring uncertainties and risks in the region. But it is also inevitable that Australia’s
prosperity depends much on regional stability. In order to secure its interest, it will become more dependent on
the strategic alliance with the U.S. if China expands its influence and geopolitical power.
China has dual functions, serving as a lucrative friend and a common enemy for Australia and its allies. In
terms of economic interest, Australia always takes China as top priority. But referring to national security
interest, it would prioritize common values shared by its allies. Such ambivalence has caused fundamental

 
AUSTRALIA’S FEAR AND GREED OVER CHINA’S RISE 447

misunderstandings. The most important one is that China’s rise leads to the result that China will dominate the
region and marginalize those who are against its interests. But China’s prosperity also relies on regional
stability, and China has been and will continue to be faced with the constraints from multiple neighboring
countries and its increasingly complicated domestic issues. The other misunderstanding is expansion of
influence will follow up with the extension of economic power, but it does not mean aggressive invasions or
territorial occupations. China has maintained friendly relationships with its neighboring countries for thousands
of years. The assertiveness in dealing with international disputes demonstrates its resolution in protecting its
own interests, which cannot be translated into aggressiveness. These misunderstandings can only be erased
when the importance of common interest and mutual understanding overrides differences.

References
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Chu, B. (2013). Chinese whispers: Why everything you’ve heard about China is wrong. London: Weidenfeld & Nicolson.
Clark, A. (2016). Big China. The Australian Financial Review, August 1st, 2016.
Coorey, P. (2017). Labor goes all in with Beijing. The Australian Financial Review, September 29th, 2017.
Cripps, T. (2017). China opens the gate to booming economies. The Australian, March 24th, 2017.
Daly, N. (2017). One Belt One Road: NT businesses welcome Chinese investment despite reluctance over “new Silk Road”. ABC
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Dibb, P. (2017). Beware of China’s One Belt binding us. The Australian, May 17th, 2017.
Garnaut, J. (2015). “Fear and greed” drive Australia’s China policy, Tony Abbott tells Angela Merkel. The Sydney Morning
Herald, April 16th, 2015.
Goodman, D. S. G. (2017). Australia and the China threat: Managing ambiguity. Pacific Review, (3), 1-14.
Greene, A., & Probyn, A. (2017). One Belt, One Road: Australian “strategic” concerns over Beijing’s bid for global trade
dominance. ABC News, October 22nd, 2017.
Grigg, A. (2017). India, Japan push back against China. The Australian Financial Review, May 31st, 2017.
Grigg, A., & Murray, L. (2016). MPs warned of new Silk Road agenda. The Australian Financial Review, August, 31st, 2016.
Grigg, A., & Murray, L. (2017). Frenemies with benefits: Turnbull’s path from “Panda hugger” to “China hawk”. The Australian
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MacKerras, C. (2015). Western perspectives on the People’s Republic of China: Politics, economy and society. Singapore: World
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International Relations and Diplomacy, August 2018, Vol. 6, No. 8, 449-455
doi: 10.17265/2328-2134/2018.08.003
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DAVID PUBLISHING

Migration, Language, and Language Personality in the Global


Context

Linna Liberchuk
The Institute of World Politics, Washington, DC, United States

This article explores key aspects of migration, modern views on language, and language personality and their
interrelations that affect socio-economic, cultural, educational, and security segments of a global labor market.
Migration and linguistic dimensions include sociolinguistic issues as well as technological, economic,
socio-cultural, and language transformations of the 21st century, which determine policies toward national and
foreign languages and globalization of modern education. Our research efforts aim to identify
migration-language-personality characteristics relevant for current economic development of the global workforce.
Interrelated social-linguistic activities and multinational and multicultural interactions, grounded on digital business
and electronic communication and provided by the international workforce, serve for the global businesses and for
the national interests as well. In this article, we examine the following considerations: (1) migration issues and
factors that determine linguistic implications of migration in the global labor market; (2) language and alternative
modern visions on language and its functions; (3) language personality theory and its various interpretations related
to social settings in the global context; and (4) challenges for a global workforce/migrants associated with language
issues.

Keywords: migration, global labor market, linguistics, language, personality

Introduction
Global Workforce
The major changes of the 21st century rooted in globalization that establishes economic market advantages
and real power for the global labor pool and those who engage in global developments of economic,
technological, and educational innovations. The global workforce is the international labor pool associated with
diverse companies, organizations, and multinational corporations and could connect through a global system of
networking and production, those who are immigrant workers, transient migrant workers, and telecommuting
workers and those in export-oriented employment. The global workforce establishes the relationship of
communication between suppliers and demanders to do business together in the global market, to learn and to
use ideas and customs from the other countries, and to work for the good of a whole world. The global labor
market is often functioning without physical location: Buyers and sellers arrange exchanges via email,
telephone, and fax machine by doing business at a long distance in a global virtual market. Many international
organizations, such as (Brazil, Russia, India, China, and South Africa) BRICS, Eurasian Economic Union,
WTO, the World Economic Forum, European Union, and others represent the global market that requires to

Linna Liberchuk, PhD, The Institute of World Politics, Washington, DC, United States.
450 MIGRATION, LANGUAGE, AND LANGUAGE PERSONALITY

manage the global workforce and to develop relevant professional skills for the needs of a particular industry
(e.g., cybersecurity) or the sector (e.g., pharmaceutical products). Technological, economic, and socio-cultural
transformations are changing global visions of organizational culture: today, an organization’s success depends
on effective communication, language skills, and speech strategies of the individuals. Economic models of the
21st century, based on the global collaboration, determine how language uses and serves the different needs of
the individuals in the civilized world.

Migration Parameters and Their Linguistic Implications


Social and migration studies, focused on global evolutionary processes, recognize various ways, in which
current globalizing migration has intertwined with a number of language themes. Paul Kerswill (2006)
considered how the linguistic consequences of internal and external migration—a dynamic process of human
affairs in a modern world—reflect in the dimensions, such as “the society of origin, the society of destination,
and the migrants themselves” (p. 1). These three areas of migration-language issues are grounded on the
following concepts: (1) migration is an extra-linguistic factor that influences language contacts of migrants and
linguistic changes in the “host” speech society and national languages of migrants determining multilingualism,
borrowing, and second language acquisition; (2) language contacts occur when speakers of different languages
and dialects must communicate with each other on a new linguistically territory. The nature of contacts might
lead to accommodation, mixing, and simplification of language units at various levels. For example, in the UK,
new patterns of “standard-and-regional” pronunciation have been discovered in the English speech of
“in-migrants” from Scotland; (3) migration boundaries, distance, and direction affect regional dialects. Thus, in
the UK, a local accent of people from Yorkshire who moved from this area to London marks language
interaction and depicts their regional identities; (4) migration time determines daily, periodic, seasonal, and
long-term migratory categories. Researchers noted a loss of dialects or formation of the so-called koineised new
dialects of migrants’ speech. Among other things, German speakers-re-settlers from eastern parts of the country
after WWII transformed their “old” dialect into a new dialect. It was also revealed that the long-term migrants
(e.g., businessmen working abroad and students studying far away from homeland) might provide and enhance
language contacts as “language missionaries” (Kerswill, 2006, p. 6); and (5) motivation and social-cultural
factors generate personal linguistic preferences in language learning: In African countries, located at the
boundaries of French-speaking or English-speaking metropolitans, the internal migrants can choose the
language (French or English) for their further education and communication. According to the author, the
concepts described above might be useful in analyses of: (a) assessment of sociolinguistic tendencies in
migration groups; (b) considerations and projections of migration flow, types of language-cultural contacts
between migrants and “host” communities, and language planning approaches; and (c) preservation of lingua
franca and national languages. It should be added that in recent years growing xenophobic nationalism and
hostility in many countries (e.g., Ukraine) indicate a complicated communication breakdown in education and
language use for various migrants’ settings. The negative attitude towards the others is forming another
important factor of migration policy nowadays.

Language, Its Functions, and Their Implications for the Society


The research literature on language associated with various social dimensions and events is extensive. Our
consideration of understanding language and its functions are based on linguistic interpretations that can be
MIGRATION, LANGUAGE, AND LANGUAGE PERSONALITY 451

found in recently published books of prominent British, American, and Russian scholars (Katzner, 1995;
Crystal, 1997; Kolesov, 1994; MacNeil & Cran, 2005; McWhorter, 2001). The world’s authorities on
linguistics represent various views on language, propose different definitions of language, argue about
fundamental functions of language, and describe major current language trends in their books. Although
scholars present British, American, and Russian linguistic schools, they examine the basic concepts related to
language in the following similar ways. Firstly, the authors differentiate the public’s and linguists’ views on
languages. The general public takes language for granted. The linguists, presenting two camps—conservatives
and liberals—identify language whether as a system of strict rules/standards established by an elitist group [the
educated upper middle class in the UK and US, and the intelligentsia in the RF—abbreviated from the Russian
Federation] or as a dynamic system of living language (e.g., Amglish) that includes a variety of formal,
informal (e.g., fastforwarding, preapproved, what is your mix?), and colloquial expressions 1 . Language
teachers and educators, who are involved in teaching and language planning, might be associated with a public
social “layer” that particularly concerns of how best to teach languages and about directives on language
policies. The non-native speakers, foreign-born temporary or permanent residents in the “host” countries,
migrants, and global workers present a special group of those who have to learn hard both a particular language
by levels and speech skills at the same time. Despite the lexical contribution of different languages to English
(e.g., boss, waffle, kaput, glitch, pizza, ranch, and corral), non-native speakers might originate a language
self-identification (e.g., a mixed bag: Amglish, Spanglish, Italish, or Newspeak) that irritates English speakers
(Rowse, 2011; Timofeeva, 1995). The conservative English-speakers often blame liberal American-speaking
fellows for degradation of English. At the same time, most of liberals and conservatives agree that the media
(talk show style), incompetent English teachers, and society itself cause battles over the state of the language.
They can say, “I think a society in which the uneducated lead the educated by the nose is not a good society”
(MacNeil & Cran, 2005, p. 18).
Secondly, the authors of different nationalities agree that language is a fascinating dimension because of
its unique role in capturing human intellectual activities―thoughts. Therefore, considering ways of human
interaction and linguistic needs to serve for it, scholars put forward the most important language functions, such
as to communicate human ideas (e.g., facts, concepts, opinions), to perform mental activities (e.g., language vs.
thoughts, “an inner speech”, the need to speak thoughts aloud, to perform calculations in mind), and to control
reality (e.g., rituals in church events, performance of social roles―judges or doctors). The second group
combines the functions that are linked to actions, such as to express emotional states (e.g., verbal reactions to
beauty, arts or frustration (wow, Lord), to explore how the sounds affect speakers and listeners (e.g., oral poetry,
a typical ball-bouncing phonetic game―I like coffee, I like tea, I like radio, and TV) (Crystal, 1997), and to
maintain social interaction (e.g., Happy Monday! Lovely day! Glad to meet you!). The language function
directed to record the facts (e.g., historical records, surveys, accounts, legal acts, and databases) is identifying
with a systematic organization of human knowledge in various classifications and databases. In connection with
classifications of information in our digital age, language performs a newly formed function aimed to store and

1
Additionally, we can compare different approaches reflecting in definitions for a word “language” provided by recently
published explanatory English and Russian dictionaries: (1) Russian: “Language is a system of verbal expression of thoughts
possessing particular sound and grammar structure and serving as a means of communication” (Russian Explanatory Dictionary,
1999, Saint-Petersburg). (2) English: “Language is the speech of a country, region, or group of people including its diction, syntax,
and grammar” (Encarta, 1999, St. Martin’s Press).
452 MIGRATION, LANGUAGE, AND LANGUAGE PERSONALITY

transmit electronic/digitalized data in a virtual reality. The systematic investigation of language functions
provides valuable knowledge about particular social situations, in which communicative characteristics of
different languages affect the speakers’ behavior. This aspect of sociolinguistics also plays a crucial role in
determination of language policies in modern multilingual communities.
Finally, a powerful function of a human language to express personal identity marking linguistically
national/regional origin, social background, level of education, occupation, age, sex, personality, and “who we
are and where we belong” must be underlined. The social and functional characteristics of language related to
social categories of speakers were recently described by the Moscow sociolinguist L. Krysin 2. The concepts of
language identity, personal linguistic identity, and language personality have been considered from different
perspectives in sociolinguistics. These identities might coordinate with characteristics and functions that
manifest linguistic and social behavior in particular communicative situations. However, we consider that a
concept of language identity is grounded on the following elements: (a) identification of speakers with a
particular national language (e.g., Russian or American English); (b) identification of distinctive features in a
linguistic portrait of an individual (e.g., sounds and intonation can indicate a particular language); (c) reflection
of cultural characteristics in a speaker’s perception/production of formal/informal speech (e.g., forms of
greetings); (d) attitudes towards local dialects (e.g., accents in modern American speech are common, but
accents in Russian cause jokes and negative reactions); and (e) the use of language to mark an age or an
occupation of speakers (e.g., “codes” in various forms of electronic interaction). These considerations have
been used as a foundation of a concept of language personality that is describing below.

Language Personality Theory and Its Implications for Language Education


The Western linguists believe that in the mid-1930s, a Russian scholar-psychologist L. Vygotsky initiated
first efforts in the development of language personality theory. 3 Later, in the 20th century and in the beginning
of the new millennium, many sociologists, linguists, psychologists, and philosophers from different countries
contributed to this theory: Their names can be founded in bibliographical sections of this article. In our view,
language personality is a unique individual manner of performing language operations that provide four major
functions of human communication—listening, speaking, writing, and reading. That manner involves a
personal linguistic portrait (unique phonetic, lexical, and stylistic features, qualities of voice, and speech
strategies). The following concepts supporting the theory were introduced: (1) Language personality is
connected with considerations of an individual’s speech production behavior in a variety of contexts, for
example, language behavior of a speaker in a family and a work place or individual characteristics interrelated
with values of a speaker (e.g., a language portrait of a modern business woman in the UK, US, and Russia or a
diplomat or an exchange student); (2) language personality is analyzing in a context of computer-mediated
communication and language learning based on technology in modern British and American sociolinguistics
and educational technology (Baron, 2000); 4 (3) language personality plays a significant role in learning foreign
languages. In Russian school of thoughts, linguists and psycholinguists developed the criteria to evaluate

2
Dr. L. P. Krysin is a representative of the Moscow linguistic school that in the mid-1980s developed methodology of
sociolinguistic research as an innovative approach to our understanding of issues of language and society.
3
Lev Vygotsky, a prominent scholar, who originated perspective ideas, adopted across the globe since the 1960s in pedagogy,
linguistics, and psychology, was murdered in 1934 during political repressions.
4
In connection with this new aspect of the issue, we might refer readers to following works: Baron, Naomi (2000) and the
publication by Professor Frank Borchardt (Duke University) in the above list of references.
MIGRATION, LANGUAGE, AND LANGUAGE PERSONALITY 453

features of language personality in language learning settings. The following components were taken into
account: language ability (understanding of various combinations of signs, forms, and meanings), language
mechanism (to distinguish phonemes of different languages), and language activities (to continue a speech act,
handling it linguistically).
Characteristics of Language Personality in Learning Foreign Languages Environment
In 1995, the Department of Psycholinguistics at Moscow State Linguistic University conducted research
on foreign language acquisition by gathering the data from 50 teachers of foreign languages 5. The key point
was to determine the nature of abilities for better studying foreign languages. The set of characteristics were
established and classified according to their degree of frequency in answers of the respondents. The results of
surveys are presented below:
Characteristics/Intellectual qualities: (1) Memory―80%; (2) general erudition―70%; (3) logical
thinking―65%; (4) abstract thinking―45%; (5) humanitarian mind―55%; (6) sense of language―40%; (7)
imitation―32%; (8) good ear for music―20%; (9) motivation―15%; (10) interest―15%; (11)
sociability―12.5%; (12) diligence―7.5%; and (13) flexibility―6%.
Russian researchers considered that the most important components for learning foreign languages are
memory, general erudition, logical and abstract thinking, humanitarian type of mind, and a sense of language
(“the feeling of the language”). “The feeling of the language” can be considered as a special intellectual feature,
a means of cognition, and the important characteristic of a language personality. Moreover, “the feeling of the
language” is an ability of an individual to develop knowledge about language and mental capacity to generalize
linguistic information. To determine “the feeling of language” is a first condition in the selection of students for
studying foreign languages in the philological classes Russian universities. Also, modern linguistics-researchers
consider that today there are many innovative methods to develop language personality. For instance, a feeling
of language can be developed in the technology-based course of practicing skills in a target language. At the
same time, linguistic myths, social and educational policies on learning languages, and personal language tastes
towards foreign languages (e.g., private priorities, sometimes business demands, are always remaining in
choosing language to study) might influence the development of a sense of language. Indeed, for many students,
the linguistic nature of Arabic or Russian or Italian might dictate the choice. Additionally, the national
character and the open-minded communication (e.g., the Russians are more introversive than the Americans,
but more extroversive than the Chinese) affects teaching/learning foreign languages. Thus, Americans are more
“problem-solving oriented” students then Russians and Chinese. However, Russians are more flexible in terms
of logical and abstract thinking, and Chinese are more comfortable with “semiotic” abilities. Discussing various
techniques in language personality development, we might speak about a cultural-mental-language complex:
for example, for representatives of Scandinavian countries learning activities based on games (role-plays,
singing, and verbal performances in brainstorming or arguing) are not productive in a foreign language class.
Finally, experts on language instruction mentioned that the ability for a foreign language is not a homogeneous
formation: It is a complex of psychological, cognitive, and language traits connected with intellectual creative
thinking capabilities of a learner. As a whole, the Moscow experiment showed that 85% of students are capable
to study foreign languages, although “inborn” abilities for foreign languages have only 70% of students

5
Professor Belyanin shared the information in the paper presented at a meeting of the International Association of Applied
Psycholinguistics in 1995.
454 MIGRATION, LANGUAGE, AND LANGUAGE PERSONALITY

involved in language studies. The results of the survey can be used in the development of innovative
methodology and approaches for learning languages, presentation of language knowledge and skills in
intercultural communication in international business establishments, further research on cognition, linguistics,
and cultural diversity influence new models of relationships between an individual and a modern multilingual
society.

Conclusion
Challenges for a Global Workforce and Migrants Associated With Language Issues
Language status (how cool is your language?) remains a persistent problem in the society. This
“web-question” reflects the attitude towards language in bilingual communities and the desire of people to
know a particular language: e.g., studies identify the following socioeconomic rates—English is # 3, Russian is
# 8, German is # 13, Italian is # 21 (Liberchuk, 2016). Language can be considered from: (a) a state of its
important functions; (b) a state of relations with social groups; (c) a state of educational policies and modeling
promising strategies in teaching/learning foreign languages; (d) a state of consideration of language personality;
and (e) perspectives of globalization and movement people around the world. The language world is changing.
This process has a number of links to new images of the world, new ways of social organization of national and
international communities, new representations of human cultures, categories of knowledge, and
communicative behavior in a native or foreign language environment. The fundamental challenges for those
who represent global labor and migrant groups are language policy regarding promoting knowledge of foreign
languages as a commodity and measurement of language proficiency skills. Traditional interpretations of tests
(e.g., content of language tests, standards/norms in speaking) are becoming a debatable topic for educators,
language experts, and the general public as well. Innovative technologies applicable for writing speeches or
analytical reports and summaries available for official, business, or teacher-student interactions (and translation)
play a critical role in contemporary reality. The electronic resources might serve as grounds for various
modifications of curriculum, implementation of language pedagogical programs, and business “without borders”
companies. Finally, the increasing demands in services provided in foreign languages marked by global
internationalization of the Internet in English: A few linguists are asking a rhetoric question, “Will the Internet
always speak English?” In this connection, David Crystal (2004) noted,
Global English has given extra purpose to a variety of Standard English in the way it guarantees a medium of
international intelligibility; but it has also fostered the growth of local varieties as a means of expressing regional identity,
and some of these new varieties will, in due course, evolve into new languages. (p. 92)

New language situations will foster rethinking of linguistic identities of non-English speakers (Timofeeva, 2003)
and provide a plenty of opportunities to discover new distinctive features in relations between language,
language identity, language personality, and bilingual communities. The Internet, electronic gadgets, social
media, and the global labor market force many unimaginable areas of communicative behavior (e.g., customer
service in the global market) and intellectual activities that are changing the standards of traditional interactions
and create a new area for sociolinguistic interpretations of units of language systems and differences in
perception of natural human speech.

References
Baron, N. (2000). Alphabet to email. London: Routledge.
MIGRATION, LANGUAGE, AND LANGUAGE PERSONALITY 455

Bauer, L., & Trudgill, P. (Eds.). (1998). Language myths. London: Penguin Books.
Belyanin, V. (1995). Theory of language personality. Portugal: International Association of Applied Psycholinguistics.

Borchardt, F. (1997). Theory, assessment, praxis: On the body and soul of computer assisted language learning. In K. A.
Murphy-Judy (Ed.), Nexus: The convergence of language teaching and research using technology (pp. 13-27). Durham, NC:
CALICO.
Crystal, D. (1997). The Cambridge encyclopedia of language (2nd ed.). Cambridge: Cambridge University Press.
Crystal, D. (2004). The language revolution. Cambridge: Polity Press.
Katzner, K. (1995). The languages of the world. London: Rutledge.
Kerswill, P. (2006). Migration and language. In K. Mattheier, U. Ammon, and P. Trudgill (Eds.), Sociolinguistics: An
international handbook of the science of language and society (2nd ed., Vol. 3). Berlin: De Gruyter.
Kolesov, V. (1994). A history of Russian. Moscow: Terra Incognito.
Krysin, L. (2003). Modern Russian: Social and functional differentiation. Moscow: Languages of Slavic Culture.
Liberchuk, L. (2016). How technological, economic and socio-cultural transformations determine migrants’ language skills in the
global labor market. New York: NESEEES.
MacNeil, R., & Cran, W. (2005). Do you speak American? New York: Random House.
McWhorter, J. (2001). The power of Babel: A natural history of language. New York: Times Book.
Rowse, A. E. (2011). Amglish, in like, ten easy lessons: A celebration of the new world lingo. Lanham, MD: Rowman & Littlefield.
Timofeeva, G. G. (1995). New English words in Russian language. Saint-Petersburg: JUNA.
Timofeeva, G. G. (2003). The Russian language on the Internet: Lexical units in variants and alternatives. In E. Ortells, J. R.
Prado, A. Bolanos, and A. Alcina (Eds.), Internet in linguistics, translation and literary studies (pp. 453-469). Spain:
Santiago Posteguillo.
International Relations and Diplomacy, August 2018, Vol. 6, No. 8, 456-468
doi: 10.17265/2328-2134/2018.08.004
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DAVID PUBLISHING

The New Shift in the Cooperation of the European Union With


Middle and Upper-Middle-Income Countries

Enriqueta Serrano Caballero


El Colegio de San Luis, San Luis Potosí, Mexico

The objective of this article is to analyze the new cooperation of the European Union, in particular with middle and
upper-middle-income countries, in order to understand the development policy of the Union in view of the new
global scenario, taking into account the new status that these countries have acquired and the implications of this
entails in international cooperation processes. This leads us to delve into how the EU cooperates with the
middle-income countries and more advanced developing countries. The contribution of this work addresses some of
the challenges and perspectives that are currently being planned about the EU’s development policy, providing
different elements of analysis and reflection on its future evolution.

Keywords: international cooperation, middle and upper-middle-income countries, European Union, sustainable
development

Introduction
The policies of cooperation and development aid are currently changing their approaches and practices
worldwide. The main objective is aimed at ending poverty and moving towards sustainable development. In
this scenario of change, the European Union (EU) development cooperation has become more selective and is
concentrating more and more on the poorest countries.
To this, it must be added that in 2015, the General Assembly of the United Nations adopted the 2030
Agenda for Sustainable Development, which includes 17 Sustainable Development Goals (SDGs); in addition,
in that same year, the Paris Agreement on Climate Change and the Addis Ababa Action Agenda on financing
for development were approved. This change led to a new international scenario of differentiation and
graduation for some countries, thus the EU directs its cooperation according to a minimum approach 1 for
middle-income countries (MICs), which may be inconsistent with the 2030 Agenda and the fight against
climate change.
These new times demand that the European Union adapt its policies of cooperation and development,
implementing (and financing) innovative forms of association suited to the particular realities of the countries
and the global challenges of sustainable development, which should not necessarily mean the end of the
bilateral cooperation with MICs. In this way, the challenges for the external action of the EU in the upcoming
decades, including those defined in the Global Strategy of the Union’s Foreign and Security Policy (2016); the

Enriqueta Serrano Caballero, Ph.D., professor, Program of International and Political Studies, El Colegio de San Luis, San Luis
Potosí, Mexico.
1
This means that bilateral aid will only be granted to low-income countries, while MIC and UMIC are considered for cooperation
in the form of political dialogue and regional or thematic aid from the EU.
THE NEW SHIFT IN THE COOPERATION OF THE EUROPEAN UNION 457

revised European Neighborhood Policy (2017); the new European Consensus Development (2017); the 2030
Agenda; the Abis Ababa Action Agenda (2015); the Paris Agreement on Climate Change (2015); and the
Sendai Framework for Disaster Risk Reduction (2015), constitute the axes on which the EU’s commitment to
the most advanced developing countries and middle-income countries is based on the financing of development,
although these norms do not always offer clear guidance.
The international and community regulatory framework establishes a new paradigm to achieve the SDGs,
based on the efficient use of all financial flows, as well as non-financial means of execution (European
Commission, 2018, p. 1). In this change of paradigm, the policy of cooperation for development cannot be
understood without the new European Consensus for Development (2017), which aligns the development
policy of the EU with the SDGs and the 2030 Agenda, since this instrument establishes a common vision and
framework for action for all EU institutions and all the member states, with special emphasis on the
development of cross-cutting vectors, such as: (a) gender equality; (b) youth; (c) sustainable energy; (d) the
fight against climate change; (e) investment; (f) migration; and (g) mobility. To achieve these objectives, the
EU needs to modernize the external dimension of the budget with the aim of increasing its effectiveness,
efficiency, and visibility, as well as greater coordination between external and internal policies.
Given the growing interconnection of regions and new challenges around the world, it is necessary to
emphasize that states alone cannot give an effective response to these global dynamics; instead, the EU together
with its member states can face these new challenges and opportunities, as well as playing a key role in the
benefits of globalization to spread the values of the EU, and provide security and stability to its citizens; in all
of this, the EU’s external action programs represent an essential part.
In order to continue and provide a response to the objective we have stated, it is necessary to explain the
transformation that has taken place in the last decade regarding the designation of official development aid
(ODA) beneficiaries, which directly affects the middle and upper-middle-income countries and the cooperation
policy for development of the EU.
The document encompasses three major aspects of the EU’s new cooperation dynamic with the countries
that have acquired a new status due to their economic performance: middle-income countries and
upper-middle-income countries. The first part deals with the conceptual framework to analyze the shift in the
cooperation of the European Union. The second part describes the normative and strategic framework of the
EU’s cooperation policy specifically with middle and upper-middle-income countries; and finally, the third part
touches upon some of its most important financial instruments of the external action toolbox with
middle-income countries.

A Conceptual Framework for Analyzing the Cooperation of the European Union With the
Most Advanced Developing Countries
The level of per capita income is the main criterion for grouping countries according to their level of
development, and therefore, for the allocation of international cooperation flows. The World Bank (WB) uses
gross national income (GNI) per capita to generate income thresholds and classify countries into four groups:
low-income countries (LICs), middle-income countries (MICs), upper-middle-income countries (UMICs), and
high-income countries (HICs).
The most advanced developing countries (MADC) include MICs and UMICs (see Table 1). The technical
significance and its usefulness are perceived in terms of the differentiating category from which the profile of
458 THE NEW SHIFT IN THE COOPERATION OF THE EUROPEAN UNION

those who are in a position to receive help is designed and those who have already passed that frontier, which
theoretically would disable them to be candidates for receiving cooperation.

Table 1
Upper-Middle-Income Economies (GDP per Capita $4,036 to $12, 475))
Albania Colombia Jamaica Palau
Algeria Costa Rica Jordan Paraguay
American Samoa Cuba Kazakhstan Peru
Angola Dominica Lebanon Romania
Argentina Dominican Republic Libya Serbia
Azerbaijan Equatorial Guinea Ecuador Macedonia. FYR Russian Federation
Belarus Fiji Malaysia St. Lucia and the Granadines
Belize Gabon Maldives Suriname
Bosnia and Herzegov Georgia Marshall Islands Thailand
Botswana Grenada Mauritius Turkey
Brazil Guyana Mexico Turkmenistan
Bulgaria Iran, Islamic Rep Montenegro Tuvalu
China Iraq Namibia Venezuela.
Note. Source: World Bank (2017).

As a reference of the destination of the aid in the new paradigm, the denomination and categorization of
this countries are ambiguous since they all are labeled as “graduated” countries (OECD, 2017), and from there,
the recommendation of not being eligible to obtain development cooperation is given; at the same time, it is
pointed out that they are countries that are in conditions to contribute to development. It seems that we are
facing a new category of countries that distinguish themselves thanks to certain characteristics they share, but
also, they have a good number of realities that differentiate them.
The paradox that leads to this simplification referred to as MICs―consistent with the indicators
considered by the WB and the OECD (Organisation for Economic Co-operation and Development)―is clear
when we take into account that approximately 47% of UN members belong to this category and that almost all
of Latin America would be in that condition, with the exception of Haiti, as the most emblematic case of
low-income country.
Cooperation of the European Union With Middle and Upper-Middle-Income Countries
The EU and its member states consider MICs and UMICs as allies in combating global issues and as
important counterparts for building leadership in different regions. The possibilities for cooperation include
global collective action and mutually beneficial partnerships that go beyond the classical scope of development
cooperation. The debate on the most advanced developing countries focuses on two points (ECDPM, 2018, p. 1):
(a) How to improve collaboration with upper-middle-income countries and some low-middle-income
countries with which the EU wishes to forge partnerships in favor of sustainable development, based on
common interests.
(b) How to guarantee the continuity of relations and the validity of the lessons learned in the field of
cooperation when countries cease to be eligible to receive ODA; according to the list of the Development
Assistance Committee of the OECD.
THE NEW SHIFT IN THE COOPERATION OF THE EUROPEAN UNION 459

MICs and UMICs are classified as such according to a single indicator (per capita income) which is
limited in scope and does not reflect the diversity and complexity of the development challenges facing these
countries, such as poverty, inequality, vulnerability to economic setbacks, climate change, or natural disasters,
lack of innovation and competitiveness in dynamic economic sectors, the risks of falling into the
“middle-income trap”, and institutional weaknesses. Together these countries have the largest number of poor
people in the world, so we run the risk of global development cooperation no longer being effective if the
support given to them is suppressed or insufficient.
The MADCs also have certain subnational structural inequalities, which means that the growth of the
average income of the population alone does not necessarily translate into an effective reduction of poverty or a
better distribution of wealth, thus the label “more advanced developing countries” could be a conceptual
innovation that poorly reflects the reality of some this countries, for this category includes countries as diverse
as Argentina, Mexico, Kenya, or China.
In view of this diversity, the use of categories based on average income for the construction of
development policies, and in particular, to determine the withdrawal of development aid has been criticized
from various sides. The 17th goal of the 2030 Agenda sets the aim of developing indicators that “measure
progress in sustainable development and complement gross domestic product”. This can be considered as a
basis for constructing more appropriate sustainable development measures.
The Cooperation of the European Union Towards Middle and Upper-Middle-Income Countries
The EU’s development policy seeks to eradicate poverty, promote the sustainable development of
developing countries, defend human rights and democracy, promote gender equality, and overcome
environmental and climate challenges. Development policy is a cornerstone of the EU’s relations with the
outside world and contributes to the objectives of the EU’s external action, together with foreign, security, and
trade policy (and international aspects of other policies as a means environment, agriculture, and fishing). The
Union acts on a global scale together with the member states; together they are the main providers of ODA:
only in 2017, they contributed a total of €75.700 million (Development Assistance Committee [DAC], 2017).
The EU and its member states have consistently been at the forefront of global efforts in the area of
financing development. Since 2015, the year of the adoption of the Addis Ababa Action Agenda and the 2030
Agenda for Sustainable Development, EU collective aid has grown by €7.8 trillion, which is 12% of total aid in
the world (European Commission, 2018). The EU, in recent years, has had to face a series of internal and
external challenges that are closely interrelated, in which the goals and objectives of the external action set out
in Article 21 of the Treaty of the Lisbon Union (2009) have been subordinated to short-term or national
interests.
The EU has introduced a differentiating approach to development cooperation by reducing financial
support for countries graduating to the middle-income category. The differentiation will apply to these
countries in the next MFF 2021-2008. Despite this, the European Union must support the MICs to achieve the
SDGs; but it is up to each partner country to determine how it wants to do it. The EU can use its support
methods to help national processes and help create favorable conditions so that they comply with the 2030
Agenda and the SDGs. EU aid must be adapted to take into account the specific situation and needs of each
country, together with the added value that such assistance can bring and an assessment of the specific interests
and potential risks for the EU. The starting point should be, in general, the assessments made by the countries
460 THE NEW SHIFT IN THE COOPERATION OF THE EUROPEAN UNION

themselves of their needs and how they can be addressed.


In the process, the EU should respect the involvement of the partner country in the process, as well as the
principle of coherence in the development of policies that affect developing countries, and the principle of
sectorial concentration with regard to development cooperation. Also, it should take into account a
comprehensive and lasting approach that will allow the EU to help in the democratic and economic transition
processes faced by the MICs. For this, coordination between the different authorities involved is important.

The Regulatory Framework of the Development Policy of the European Union


EU action in the field of development cooperation is governed by the principles of aid effectiveness,
coordination with the member states and international actors, and the coherence of European policies with
development objectives. Development policy occupies a central place in the Union’s external policies. Its
objectives are to eradicate poverty, promote sustainable growth, and defend human rights and democracy; it
also focuses on promoting gender equality and overcoming environmental and climatic challenges.
The Treaty of Lisbon (2009), also known as the TFEU, has placed cooperation policy as one of the central
objectives of the EU; as stipulated in Article 208, “the main objective of the policy of the Union in this area
will be to reduce and, finally, eradicate poverty” (p. 141). The Treaty identifies four key elements: coherence
(Article 208 of the TFEU), consistency, complementarity, and coordination (Article 210 of the TFEU). The
principle of “coherence” is essential to achieve the objectives of development cooperation policies, since it
establishes that “The Union shall take into account the objectives of development cooperation when applying
policies that may affect developing countries” (Official Journal of the European Union, 2010, p. 142).
Article 210 of the TFEU states that in order to promote the complementarity and effectiveness of their
actions, the Union and the member states shall coordinate their policies on development cooperation and shall
coordinate their aid programs, also within the framework of international organizations and international
conferences.
The importance of coordinating aid with other donors was established in the “European Consensus on
Development” of 2000, revised in 2005, modernization of the European Consensus of Development (2017), the
“Code of Conduct of the European Union on complementarity and Division of the Work” of 2007 and the
Operational Framework based on the international aid effectiveness agenda: The Paris Declaration (2005), The
Accra Agenda for Action (2008), and the EU Common Position for Busan (2011).
The “Program for Change”: differentiation and concentration of aid (2011), aims to concentrate EU
assistance on a smaller number of political priorities -democracy, human rights and “inclusive growth”, as well
as in poorer countries; and increase the effectiveness of EU aid by concentrating on three priority sectors in
each recipient country, with at least 20% destined for social integration and human development. In this
approach, the criterion of differentiation plays a key role, which aims to adapt the Union’s aid to a world in
which the economic growth of the emerging countries places them in a new role as “Partners” to face the global
challenges and not in their role as recipients of ODA.
Development aid is a limited resource. For this reason, the Union is committed to the effectiveness of aid
and promotes close relations with partner countries in terms of programming and implementing development
actions. With this perspective, the “EU Code of Conduct on the division of labor in the field of development
policy” was adopted in 2007 and the “Operational framework on the effectiveness of development aid” was
adopted in 2011. These measures are consistent with the international measures undertaken in response to the
THE NEW SHIFT IN THE COOPERATION OF THE EUROPEAN UNION 461

2005 Paris Declaration of the OECD, which promotes ownership, harmonization, alignment, results, and
mutual responsibility in development assistance.
Years later, new agreements were adopted to improve the impact of cooperation for development, based
on the principles of the Paris Declaration. The Declaration of Bogotá (2010) committed the partners to exercise
South-South cooperation in order to deepen the exchange of knowledge and mutual learning. The Declaration
of Dili (2010) proposed to counteract conflicts and the fragility of the State through processes directed by the
countries themselves, towards the consolidation of peace and the construction of the State. Finally, the Istanbul
Principles (2010) had been established with the aim of providing guidance to civil society organizations on how
to become effective development actors.
The international framework on aid effectiveness has been reviewed twice, on the occasion of the Accra
Agenda for Action (2008), the Busan Alliance for Effective Development Cooperation (2011), the Sendai
Conference (2015), and the Addis Ababa Action Agenda (2015) on financing for development is considered an
integral part of the 2030 Agenda. The Addis Ababa Action Agenda, as an integral part of the 2030 Agenda,
establishes a new application paradigm through the use of effective use of financial and non-financial means
and placing national action at the forefront, as well as viable policies.
In addition, the 2030 Agenda is complemented by the Sendai Framework for Disaster Risk Reduction and
the Paris Agreement on Climate Change, which entails the integration of the global cooperation agendas for
development and protection for the environment, as well as an improvement in the integration of the funding
agenda, which provides a legally binding framework and gives a new direction to the global efforts to combat
climate change. The achievement of these commitments must be sustained on a rules-based world order, with
multilateralism as a key principle and the United Nations as the axis.
The Global Strategy of the European Union and the European Consensus on Development (2017)
The eradication of poverty continues to be the priority objective of development policy according to the
new consensus. The text is structured around the five priorities of the 2030 Agenda: people, the planet,
prosperity, peace, and association. International cooperation and development have gone from being a policy
focused on mitigating measures to offering an opportunity to share joint values with partner countries based on
shared agendas.
The EU changed its operational strategy by introducing a differentiating approach to development
cooperation in the Multi-Annual Financial Framework (MFF) 2014-2020. In the MFF (2014-2020), it
channeled funds to the least developed countries and reduced funds for other countries. It also committed
development funds to certain countries for a limited number of years, instead of the full MFF cycle, after
reviewing the needs of partner countries. Likewise, the EU graduated certain MICs; in these cases, the
European Commission (EC) offered assurances that countries will receive support in other ways, for example
through political dialogue and responsible trade cooperation.
The European Consensus on Development adopts the 2030 Agenda with explicit commitments from the
EU institutions and the EU states and commits the EU to create innovative cooperation mechanisms, adapted to
the different stages of development of middle-income countries.
The Global Strategy of the European Union (2016) and the European Consensus on Development (2017)
are the drivers of the EU’s commitment to the most advanced developing countries, but they do not offer clear
guidance. This is partly due to tensions between different objectives: for example, between an emphasis on the
462 THE NEW SHIFT IN THE COOPERATION OF THE EUROPEAN UNION

EU neighborhood and the 2030 Development Agenda; or between the short and long-term interests of the EU.
The new concept of “adaptation” entails different interpretations: (a) adaptation of the EU’s external
commitment to the interests of the EU; (b) support the results of the political dialogue and dialogue of sectoral
policies, with the partner countries on the basis of mutual interests; and (c) gradation approach: using
development cooperation tools specific to each country.
The benefits of greater agility and administrative and political flexibility supposedly generated by
adaptation must be opposed to the risks of a piecemeal approach and less responsibility.
Although the EU’s priorities in the neighborhood have led to a substantial increase in aid to
middle-income countries, there are large differences between different countries and between the external
financial instruments of the EU. Income-based development measures leave little room for political
maneuvering, but they are manifestly inadequate as a tool for policy making in a diverse world. This
compensation could be smoothed out by a more coherent and adapted approach that creatively combines all the
means of EU implementation. Better collaboration with the member states and in all EU institutions, and closer
cooperation with actors beyond governments and the development community, would also help.
The Principles of Adaptation and Graduation: Gradation
The European Consensus for Development (2017) is based on the EU’s Change Program (2011), which
establishes the principles of differentiation (concentration in the countries that need it most) and graduation (the
end from bilateral aid to some UMIC). For some actors, the principle of adaptation means adapting the
commitment to European interests. For others, “adapting” is about supporting the results of a political and
policy dialogue, between the EU and partners based on mutual interests. The interest in specifying a specific
policy for the more advanced developing countries or establishing a list of more advanced developing countries
in practice is low. This gap in the discussion could be detrimental to the definition of a more coherent, effective,
and innovative approach.
The step from graduation to gradation 2 could allow continued participation in a new form of international
cooperation; because of this, the new paradigm of development and cooperation for development requires
designing a set of effective instruments for developing countries. All these tools of the set follow a gradation
approach that allows continuing to support countries that stop receiving development assistance (ECLAC, 2018,
p. 41).
In the current set of EU’s external financing instruments (EU’s EFI) and their underlying policies,
countries with similar challenges can be treated differently due to the configuration of the EU, rather than their
needs or even its relevance to the EU. An example is a way in which the Agenda for Change, a policy aimed at
focusing EU assistance on the poorest countries, has resulted in different EU EFIs. Under the Development
Cooperation Instrument (DCI), the richest countries are excluded from the bilateral aid of the Union.
The external financial instruments of the EU that cover the MICs and more advanced developing countries
differ in the justification of the collaboration, their geographical coverage, and the size of their budgetary
allocations to the middle-income countries. As a result, countries that face similar problems can be treated
differently depending on the instrument used, instead of being considered according to their needs or even their
relevance to the EU.

2
The graduation mechanism is based on countries passing from one income level to the next and no longer qualifying for
assistance sources to support their development.
THE NEW SHIFT IN THE COOPERATION OF THE EUROPEAN UNION 463

The European Development Consensus (2017) established that cooperation priorities must emanate from
an association based on political policy dialogue, which promotes shared interests for the exchange of
experiences and knowledge. The new instrument of Neighborhood, Development and International Cooperation
of the European Commission gives greater importance to mobilize the knowledge of public administrations.
The EU can contribute to the institutional development of MICs in several ways, such as budgetary
financial support, blending, including, where appropriate, state construction contracts, project support, policy
dialogues, and technical assistance, the exchange of good practices and “twinnings”; these are all mechanisms
that promote exchange between the national administrations of the European countries with the partner
countries of the neighborhood, the candidate countries of the EU, and with third countries. The overall
objective is to support institutional development and the rule of law. These mechanisms are aimed mainly at
public administrations with the intention of developing institutional capacities and building stronger and more
reliable institutions with partner countries.

The Toolbox of the European Union


The EU’s toolkit for political relations, financial resources, and expertise is an important asset in its
collaboration with middle-income countries and more advanced developing countries. The EU has at its
disposal a multitude of diplomatic, technical, and financial tools to collaborate with middle-income countries:
political dialogue, political coherence for development, aid donations, technical assistance, knowledge
exchanges, triangular cooperation, and mediation in South-South cooperation.
These are tools that the EU could use more effectively and with more flexibility. A better use of the toolkit
could help to address existing gaps in funding and better mediate between the multiple, sometimes conflicting,
goals that the EU intends to achieve at the international level. In the context of the presentation of the EU
budget after 2020, the debate on medium and high MICs risks being affected by the change of priorities and
focusing on the concern to protect the resources already allocated to the MADCs, and its neighboring countries.
The compensation is real and must be observed carefully. But the debate on the EU’s commitment to the MICs
is much broader.
As it has been mentioned before, a vast range of tools is available to the Union, including political and
policy dialogue, policy coherence for development, knowledge exchange and technical exchanges between
public administrations, fusion, and others. In this sense, the EU should make use of its financial, political, and
technical toolbox as a package, where several tools can be adapted to different circumstances. However, this
must happen under the umbrella of clear and shared objectives in the Union and in dialogue with third countries.
A better division of labor and greater collaboration among the EU Member States, whenever possible, could be
a win-win option for an EU more in tune with the times. It could also help solve some of the anxieties of those
member states that are concerned about protecting funds for their priority areas.
The EU’s toolkit for political relations, financial resources, and expertise is an important asset in its
collaboration with middle-income countries and more advanced developing countries. The effective use of tools
would be a means to better address the inevitable contradictions that result from limited political and financial
resources. Contradictions exist, for example, in finding the balance between the EU’s commitment to the least
developed countries and cooperation with middle-income countries; or between the focus in neighboring
countries and the global ambitions of the Union.
The current emphasis on combined funding and peer-to-peer exchanges of public administrations may
464 THE NEW SHIFT IN THE COOPERATION OF THE EUROPEAN UNION

work in some contexts, although it does not provide a solution to all problems. The granting of resources will
continue to be fundamental to, for example, supporting the civil society of a country or financing experimental
initiatives. In addition to making more effective use of certain tools, EU institutions also need to adapt to new
times and new challenges. This implies the improvement of coordination, beyond the general directorates of the
European Commission with an exclusively external mandate, and the assignment of a more relevant role to the
EU delegations. Some of the most important strategies at the EU’s disposal regarding cooperation with MICs
and UMICs include (Di Ciommo & Sayós, 2018, p. 29):
(a) The blending of loans and donations.
The blending mechanism is based on combining loans and donations in the same operation (European
Commission, 2015, p. 2). Since 2007, the EU has launched several operations 3 combining EU and member
state grants with loans from European, multi and bilateral financial institutions. The potential of the instrument
lies in the fact that it allows leveraging a significant volume of resources to make investments in contexts and
sectors without much appeal to the private sector.
The role of these operations is to offer a subsidy to improve the conditions offered by the funder. Its
rationale is that the donation reduces the total cost of the project and the effective interest rate for the borrower.
The subsidy can be addressed to technical assistance and studies, direct subsidies to investment, subsidies based
on conditionality or performance, and subsidies to interest rates, guarantees, non-refundable financing, and risk
capital.
(b) Technical assistance and knowledge exchange.
What is known as “twinning” was designed as a fast and efficient method to fill the administrative
deficiencies of the countries of Central and Eastern Europe in view of their accession to the EU. It is a
mechanism for the development of projects to strengthen institutions and the administrations established in the
Accession Partnerships. At present, the twinning is used as an instrument of the EU’s neighborhood policy.
The TAIEX is an EU technical assistance and information exchange instrument, which is responsible for
providing the short-term technical assistance needed to achieve accession conditions, based on three main
activities: workshops, expert missions, and study, what facilitates the exchanges at institutional level between
the regions (Di Ciommo & Sayós, 2018, p. 29).
Twinning and TAIEX have also been used under the Association Instrument, for example, the expert
missions in the EU-Mexico political dialogue “on security and justice” or “human rights” and in South Korea to
improve understanding of regulations phytosanitary and EU security, which led to the elimination of trade
barriers in some EU products.
In Asia, there are similar cooperation mechanisms within the EU-ASEAN dialogue. The READI
(EU-ASEAN Regional Dialogue Instrument) is a political dialogue mechanism, which provides a platform for
the exchange of experiences between officials and experts of those two regions, in a broad spectrum of policy
areas. Another, more ambitious program followed E-READI (Enhanced Regional EU-ASEAN Dialogue
Instrument) which started at the end of 2017.
There is extensive experience in EU cooperation mechanisms that have used similar approaches, both at
the level of thematic programs, such as MIEUX or SOCIEUX (Di Ciommo & Sayós, 2018, p. 29), and in

3
These include the Infrastructure Trust Fund for Africa (ITF), the Neighborhood Investment Facility (NIF), the Western Balkan
Investment Framework (WBIF), the Latin America Investment Facility (LAIF), the Investment Facility for Central Asia (IFCA),
and the Asia Investment. Facility (AIF).
THE NEW SHIFT IN THE COOPERATION OF THE EUROPEAN UNION 465

regional programs in Latin America and the Caribbean, Africa, Asia, and the Pacific; through the use of
TAIEX-like methodologies, which is a more sustainable, results-oriented approach.
MIUEX 4 is an initiative of experts that applies a training approach between peers and assists partner
countries and regional organizations to better manage migratory flows and mobility through the provision, upon
request, of rapid and customized assistance. It is a mechanism that offers personalized technical assistance to
partner countries, addressing their priority needs and challenges related to migration.
SOCIUEX+ is another of the technical assistance mechanisms that aim to extend and improve access to
better employment opportunities and inclusive social protection in the EU’s partner countries. Its specific
objective is to develop the capacities of the institutions of the partner countries to design and manage better and
more inclusive social protection, labor policy, and employment systems with a multiregional approach
(SOCIEUX, 2014). It carries out short-term technical assistance actions carried out by experts from public
administrations and delegated bodies of the EU member states 5. It is based on the EU experience and promotes
triangular cooperation actions in collaboration with professionals from outside Europe 6. SOCIUEX+ is based on
demand; the actions are adapted to the needs of the country, which ensures the commitment and appropriation
of the action by the institutions. It is a simple, fast, and flexible mechanism.
The TAIEX mechanisms for exchange of information and technical assistance seek to strengthen
institutional capacities and support the MICs to face the 2030 Agenda, the SDGs, and climate change. For this,
it is very important that the EU accompanies them and shares their experiences, since this could help solve
problems to partner countries beyond the neighborhood or the accession in their own contexts.
(c) Triangular cooperation as support for South-South cooperation.
In a world of increasingly global challenges, international and development cooperation has gone from
being a policy focused on palliative measures to offering the opportunity to share values with partners on the
basis of shared agendas. The 2030 Agenda and in particular SDG 17 on the “Global Partnership for Sustainable
Development” is a reflection of a new reality that is especially relevant to the EU’s relationship with partner
countries and UMICs and MICs.
The new European Consensus (2017) established that the EU is committed to creating innovative
cooperation mechanisms adapted to the partner countries in their different phases of development. Also, the
need for an innovative commitment with the most advanced developing countries was noted. As part of this
commitment, the consensus states that the EU and its member states will work with these countries to promote
South-South cooperation and triangular cooperation, in accordance with the principles of development
effectiveness. In this sense, the objective of the Triangular Cooperation is to mobilize additional resources to
reach the SDGs and contribute to the reduction of poverty. It should be noted that one of the hallmarks of EU
development cooperation in the last decade is the relative importance that has been given to MICs in the
distribution of ODA. The 2030 Agenda and the SDGs recognize the global challenges that must be addressed
through a regional and global approach. They are based on the notion of global partnership, joint
entrepreneurship, and collective execution, regardless of the level of development of a particular country.
For this reason, when South-South Cooperation (SSC), led by the MICs and experienced an expansion in

4
Learn more about MIUEX online.
5
The duration of each individual activity is one to two weeks, each action completed, up to six activities.
6
This program will be implemented with the financial support of Europe Aid and will be managed by an association of public
agencies of member states specialized in cooperation.
466 THE NEW SHIFT IN THE COOPERATION OF THE EUROPEAN UNION

the last decade, the EU decided to actively support it. An important form of support has been through the EC’s
contribution to forging an international consensus on the importance of SSC and triangular cooperation, issues
highlighted in the Busan Partnership as important elements of a more inclusive agenda of effectiveness.
Support for South-South cooperation has become an increasingly relevant element of EC action (Di Ciommo,
2017).
This coincides with the growing interest of the European Commission to expand its collaboration with
partner countries through triangular cooperation, which reinforces its own actions and supports the SSC.
Triangular cooperation (TC) is a modality in which two or more countries (generally a traditional donor and a
middle-income country) associate their human, technological and financial resources to the benefit of a third
country. Finally, also contribute with your own resources.
The TC is becoming increasingly relevant to mobilize and increase cooperation capacities outside the
traditional paths of development cooperation, attempting to reverse the classical north-south transfer and the
roles of those involved, even to meet the objectives of Sustainable development. The TC seeks horizontality,
promoting cooperation and South-South exchanges, filling gaps in knowledge and mobilizing better technical
and policy levels. TC can also be a vehicle for resources from emerging donors to take advantage of shared
development agendas.
The European Commission also supports SSC and complements its triangular initiatives through its
contribution to strengthening the capacities of agencies and other entities responsible for the policy and
management of SSC in partner countries.

Final Considerations
These pages have addressed the new cooperation of the EU with the countries of middle and
upper-middle-income, from the transformation that has suffered the policy of cooperation of the EU in the last
decade with the graduation of these countries and the introduction of the differentiating approach proposed in
its “Agenda for Change” (2011); which has led to the interruption of bilateral aid to the graduated countries as
of 2014, although they can receive regional and thematic aid from the EU.
The shift in the cooperation for development paradigm entails that the relations among most advanced
developing countries and the EU move away from the traditional top-down, north-south dynamic and become
less asymmetrical. In this new scenario, the MICs and UPMICs are no longer just passive aid recipients, but
strategic partners in their own development strategies and in the EU’s efforts to address global issues.
This approach includes some key advantages: cooperation dynamics lose verticality and become more
multilateral, horizontal, and segmented; as partners, MICs and UPMICs must acquire greater responsibility in
adapting their institutions and practices to reap the benefits of international cooperation; new forms of
cooperation are introduced, while previous practices develop a new focus; and triangular cooperation and
South-South cooperation are boosted.
However, there are some things that should be acknowledged. Despite a high economic performance, most
advanced developing countries still battle with profound structural challenges, like corruption, inequality, and
lack of transparency. Cooperation strategies may be jeopardized or could prove ineffective if a greater role is to
be assigned to these countries without addressing structural issues.
As it has been discussed in these pages, the European Union must accompany the middle and
upper-income countries to reach the 2030 Agenda. In this light, there should be better and closer cooperation
THE NEW SHIFT IN THE COOPERATION OF THE EUROPEAN UNION 467

between the EU and the middle and upper-middle-income countries as allies facing global challenges, which
requires a change in the ways of working of the EU, far beyond the design of its external financing instruments.
The EU needs to find new forms of cooperation with middle and upper-middle-income countries, based on
joint programming and the creation of common agendas at a global and regional level, and in addition to the
cultural diversity and richness they generate, to establish closer political relations between countries and with
specific institutions. The EU must adapt to the new needs of the partner countries and leave traditional vertical
cooperation behind. This means adopting a new paradigm on international cooperation for development with
countries in transition, as horizontal cooperation would be more in line with the new and old development
challenges that the middle and upper-middle-income countries are currently facing.
The new European Consensus on Development tries to adapt the development policy of the EU to the new
emerging world order, in which the EU considers these middle and upper-middle-income countries as key
actors for the achievement of the objectives of the 2030 Agenda and strategic partners in the EU’s objective of
reducing and, ultimately, eradicating, poverty. From now on, the negotiated normative guidance could be
combined with operational flexibility by adapting the action to the specific objectives of the EU and to the
requirements of the partner countries. The collaboration with different actors both inside and outside the EU,
the private sector, local authorities, and civil society would also bring specific advantages. However, it is
necessary to continue using the toolbox that the EU already has to apply them to each country in order to set
out to make development aid effective.
To conclude, it should be noted that the EU must develop the partnership with its strategic partners, since
the EU alone cannot comply with the 2030 Agenda without the collaboration between its member states and
other public-private actors. In addition, the EU must adopt new instruments of development cooperation
different from the traditional ones: subsidies, concessional loans, or special trade measures, such as
development aid. The alternative measures are the strengthening of capacity, the transfer of technology, and the
exchange of knowledge, regional sector policy dialogues, among others.

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