When Diplomacy Becomes a Distortion: Rethinking Hungary’s Foreign Trade Machinerys

For more than a decade, Hungary has operated a parallel system within its foreign policy apparatus – a sprawling network of so-called foreign trade attachés (KGA), conceived as one of Minister Péter Szijjártó’s signature projects. Today, with 134 attachés stationed across 86 countries, the operation costs taxpayers an estimated 20 billion forints annually, a figure that invites the obvious question: what, exactly, does the Hungarian economy receive in return?

The honest answer is: very little.

Author: Dr. Georges Suha & Szilárd Szélpál

A System Built on the Wrong Logic

Hungary’s exports tell a blunt story. Nearly three-quarters of all Hungarian exports flow to just ten EU member states, the economic neighbourhood where real commercial ties, supply-chain integration and investment dependencies lie. Yet only 26 trade diplomats serve in these crucial markets.

The remaining 108 attachés are dispersed across the globe – from Rwanda to Ecuador, Mongolia to Cuba – often in posts with negligible relevance to Hungarian exporters. The result is an expensive, politically driven structure that prioritises presence over performance.

The explanation lies in culture, not geography.
The Ministry of Foreign Affairs and Trade is fundamentally a bureaucratic, protocol-centred institution, calibrated to political calendars rather than business cycles. Commercial promotion, which relies on agility, profit-orientation, market research and rapid decision-making, suffocates in such an environment. Business deals requiring swift responses often drown in multi-layered approvals. Firms miss opportunities; the state wastes resources; accountability is nowhere in sight.

There is no transparent, public system that tracks how many forints of export growth this vast network actually generates. The word “transparency” – once a Fidesz slogan – has long vanished from government vocabulary.

Misaligned Incentives, Misused Diplomats

Recruitment practices replicate the flaws. Many attachés are career diplomats rather than commercially trained professionals. Others are political appointees – parachuted Fidesz loyalists, relatives, or athletes with party affiliations – whose expertise lies closer to domestic patronage than international trade.

This distorts priorities. Ribbon-cutting ceremonies, ministerial photo-ops, hurried “lightning visits” and public-relations messaging routinely substitute for measurable business outcomes. Performance reviews are opaque or nonexistent, allowing budgets to flow into questionable initiatives branded under “Eastern Opening” or “Southern Opening” diplomatic slogans.

Sometimes the absurd turns farcical.
A few years ago, all attachés stationed across Europe were urgently summoned to Budapest for a two-day “priority assignment”: finding buyers for a politically connected company’s surplus cherry-preserve inventory. Neither success nor professionalism followed; the jars remained unsold, and the gathering likely cost more than the revenue it sought to generate.

The Catalogue of Flagship Failures

The structural dysfunction becomes even clearer when examining the government’s much-publicised “flagship” foreign trade projects, many of which have collapsed without leaving a trace in export statistics.

The most notorious example remains the 300 million-dollar Indonesian toll-road project, heralded as a historic technological breakthrough. Years later, it has produced no tangible results. That a senior official from the Interior Ministry – rather than economic experts – was involved illustrates the misplaced institutional logic.

The pattern extends further.
The drought-prevention institute, the potato research centre, the 50 million-dollar meteorological credit line, as well as a range of vaguely described “water-diplomacy” ventures in Africa connected to murky Transylvanian business networks, have all yielded zero export impact.

This year’s decision to extend 42 million euros in tied aid to Cape Verde, justified by “shared Christian heritage”, reflects the increasingly ideological, unprofessional rationale behind Hungary’s overseas funding allocations.

A Ministry Designed for Politics, Not Markets

The deeper issue predates Szijjártó, but it flourished under him. Historically, Hungary separated diplomacy from economic management. Foreign trade ministers existed intermittently before 1990; later governments kept technical trade representation under the MFA, but economic strategy remained with sectoral ministries.

The 2014 merger that created today’s Ministry of Foreign Affairs and Trade (KKM) was an institutional engineering experiment – one that fused diplomacy with business development, public relations, political campaigning and, at times, ideological combat.

The result is a hybrid structure: part state administration, part NER-era corporate vehicle, part futsal club, complete with its own Airbus jet, a rarely functioning seaport, the HEPA export-development agency (12 billion forints in annual costs), and HIPA, the investment promotion agency, whose real budget remains opaque. Meanwhile, ventilator procurement scandals, offshore aid projects and politically motivated credits illustrate the system’s drift toward financing the broader NER ecosystem with little commercial rationale and no accountability.

What Must Change After April

Hungary must finally confront the institutional contradiction at the heart of its foreign trade policy.

Diplomacy and economic promotion serve fundamentally different missions. Diplomacy is political, protocol-oriented, hierarchical. Foreign trade demands speed, market competence, risk assessment, transparency and measurable returns.

The two cannot effectively exist inside one ministry.

Hungary needs a structure that:

• restores the separation of political and economic functions,
• streamlines decision-making in commercial matters,
• professionalises recruitment,
• and implements transparent performance metrics tied to export outcomes.

Government insiders say this debate has surfaced repeatedly, most recently due to the rising influence of Minister Márton Nagy, whose economic policymaking increasingly intersects with export strategy and foreign delegations, much to Szijjártó’s displeasure.

Whether political will exists to reform the system remains an open question. But the stakes are clear. Without institutional realignment, Hungary will continue to spend billions on a foreign trade architecture that delivers little to the businesses it claims to support and even less to taxpayers.

For now, the KGA remains a monument to misallocation: a network that resembles foreign trade only in name, not in function. The hope – perhaps after April – is that Hungary rediscovers the virtues of competence, transparency and economic logic before even more resources drift into the fog.

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Cover photo credit: ChatGPT