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POLAND


 

 
Key Economic Data 
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 187,670 176,300 157,600 22
         
GNI per capita
 US $ 4,570 4,230 4,170 71
Ranking is given out of 208 nations - (data from the World Bank)

REPUBLICAN REFERENCE

Area (sq.km) 
304,500

Population 
38,633,912

Capital
Warsaw

Currency 
Zloty 

President 
Aleksander 
Kwasniewski 

Private sector 
% of GDP 
70% 

  

Background:
Poland regained its independence in 1918 only to be overrun by Germany and the Soviet Union in World War II. It became a Soviet satellite country following the war, but one that was comparatively tolerant and progressive. Labour turmoil in 1980 led to the formation of the independent trade union "Solidarity" that over time became a political force and by 1990 had swept parliamentary elections and the presidency. A "shock therapy" program during the early 1990s enabled the country to transform its economy into one of the most robust in Central Europe, boosting hopes for acceptance to the EU. Poland joined the NATO alliance in 1999. 

Update No: 081 - (01/02/04)

The EU beckons, but repels
The Poles are poised to enter the EU in May. While they feel that they have had no option but to join, they have grave misgivings all the same. They fear the new competition, not without reason, and the prospect of becoming the playground of forces beyond their control, the multinationals. Having been dominated by foreigners in the past, after the three Partitions of Poland (1772-95), and then incorporated into the Soviet bloc, they at last acquired their true independence, so they thought in 1989,. Now it appears it was only to see it given away voluntarily in 2004 to Brussels and all that that portends. Such is the reasoning of many patriotic Poles reluctant to accept EU tutelage forthwith.
Actually the adhesion of ten new countries to the EU, with Poland at their head, is likely to change the Union profoundly, making the dreams of a Federal Europe far less easy of realisation. Poland, for instance, has rejected new proposals that will make it and the other nine countries up for entry into the European Union liable for recent changes to the EU common agricultural policy (CAP). 
Poland's Europe minister Danuta Huebner has complained that the plans were "unacceptable". Talking to EU political website Eupolitix.com, she dismissed Commission claims that the changes amounted to technical tinkering to bring the membership agreements in line with the new legal reality.
"The commission may not want to renegotiate, but seeing as these proposals are unacceptable in their current form, we're going to have to at least 'rediscuss'," said Huebner. 
The Poles, indeed, view the current round of Common Agricultural Policy (CAP) reform as the European Commission's way of getting off the hook of the world trade organisation (WTO), and reducing the costs of the CAP to the wealthier members of 'the club'.
It is generally agreed that the new policy of subsidising agricultural land, rather than production does represent a change for the better, It should remove many of the current distortions of the agricultural market. However, all systems of subsidy inevitably lead to distortions. The new policy, if implemented, is likely to distort the land market and cause resistance to changing land-use from agriculture to more socially and economically useful activities. 

Losing emigrants
Young educated Poles speak English, and often French and German, as a matter of course. They feel that the world is their oyster and want to explore it by emigrating.
Attitudes such as that from Poland's best and brightest cannot be much comfort to the politicians driving Poland's entry, along with nine other countries, into the EU in less than four months.
But for young and ambitious Poles, their best chance of opening their own business and making it was during the go-ahead 1990s, when communism had been freshly overthrown, bureaucrats were on the run, the economy was growing rapidly and Poland was seen as the economic tiger of central Europe.
Much of that energy and promise was squandered by governments of both the left and right. Corruption scandals sapped popular support for politicians while red tape staged a comeback.
Economic growth revived in 2003, to about 3.9%, after two years of stagnation. But so far much of that growth is export driven, helped by the fall in the zloty, and little optimism has percolated through society as a whole.
Unemployment is still very high, at 17.4% in October. Monthly salaries are much lower than in the EU, averaging 2,160 zlotys (US$579, €460), only about a third of the EU average.
Although, if they stayed in Poland, students from the Warsaw School of Economics could expect to earn more than that average, with at least three languages and a business education they are also well placed to be successful abroad.
One of the fears of the existing 15 EU members is that by opening their labour markets to Poland, they will be greeted with a flood of immigrants.
Many young Poles are eyeing the US as the promised land. There is an extensive Polish Diaspora in the US, as in Canada, already. But Poland has a quarrel with the US all the same.

Absence of an Iraq pay-off
The Poles are miffed about the absence so far of any pay-off for their unique role in Iraq. Alone among the large countries of the European mainland, excepting Ukraine, they have a substantial force there assisting the Americans and the British to make peace in the defeated country. Yet they are getting few, if any, contracts for its reconstruction.
There are now 2,500 Polish soldiers in Iraq, indeed some in the dangerous Sunni triangle in the centre. They are in charge of a large 9,000 international force there. One Polish soldier has lost his life already, the first casualty in combat since the Second World War.
The Poles have had extensive connections with Iraq for decades since then. They were heavily involved in Soviet times in providing Iraq with infrastructure and engineering equipment of all sorts. They know the ropes and feel that, after deploying troops in the war itself, they deserve better treatment at the hands of their American allies. 

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AUTOMOBILES

Polish new car sales up 20% year-on-year: Samar report

Polish new car sales continued to be buoyant in November, last year, rising 19.9% to 30,655 units in the month, pushing the 11-month result up 13.1% to 320,523 units, the best since 2000, according to data released by car-market research firm Samar, Interfax News Agency reported.
The November result, which actually marked a 4.3% decline in month-on-month terms, puts the Polish new car market's recovery on firmer ground. Sales have been higher in annualised terms in every month in 2003.
Still, despite rising sales and quickening economic growth, the 11-month total remains some 44.6% below the 578,653 new cars sold in the same period of the record year of 1999. In terms of makes, there were no changes among the top 10. 

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AVIATION

New Polish company to build air terminal for low-cost flights in Cracow

The Cracow municipality, the Province of Malopolska and the Military Property Agency [AMW] have set up a company that will build and operate a terminal to service low-cost carriers in the Balice airport in Cracow, PAP News Agency reported.
The terminal will be commissioned in the summer. The project will cost 20m zlotys (around US$5.3m) and will be financed from private funds.
"The company (called Krakowski Port Lotniczy) will attract more shareholders who will contribute the money necessary to complete the project," Cracow Mayor, Jacek Majchrowski, said.
The city authorities hope that the terminal will result in 8 to 10 new air connections. The letters of intent have been signed with Germanwings and Ryanair and less advanced talks are under way with several other lines.
"Assuming that each new line means 100,000 new passengers annually, the overall number of incoming passengers could increase to 1.5m, counting also 500,000 people serviced by the existing airport," Majchrowski added.

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ENERGY

Eelktrim Patnow II power plant gets loan

The Warsaw-based telecom/power group Elektrim's Patnow II power plant has received a 226m zloty 10-year loan from the National Fund for Environmental Protection and Water Management (NFOSiGW) to finance investments, Interfax News Agency reported.
The Patnow II power plant, part of the Elektrim-controlled ZE PAK power plant group, will invest in increasing its capacity by building a 460MW power block. 
Elektrim, which bought into PAK in a 1999 sell-off, and the treasury in October 2003, finally put aside a long simmering dispute by signing a deal to extend to July 1st, 2006, the deadline for a capacity upgrade Elektrim, as strategic investor, is obliged to carry out in PAK. The Patnow II investment is part of that deal. Sides agreed to change the corporate statutes of PAK and to the draft an agreement regarding PAK Infrastruktua, a company that will carry out the Patnow II investments.

PKE seeks co-financiers for 1.6bn zlotys in investments

The state-owned Poludniowy Koncern Energetyczny (PKE), Poland's largest energy-producing group, now plans to secure financing for 700m zlotys out of a planned 1.6bn zlotys investment, company spokesperson, Pawel Gniadek, said recently.
PKE had originally wanted to settle the financing by year-end, 2003. PKE is also negotiating with the Polish power grid operator, PSE, for access to the transmission system, thereby allowing the company to export the power generated in the 1.6bn zlotys new power block to be built at PKE's Lagisza plant. PKE hopes the move will support the bank's search for credit. Talks on this are expected to be completed in the near future. "Talks with potential creditors are still under way, but I think we will be able to complete the negotiations soon. We also hope to complete talks with PSE about access to the high voltage transmission system, which would allow us to export energy produced in Lagisza's new power block. This sales guarantee could be a good argument for banks to extend credit," Gniadek said, Interfax News Agency reported.
The Lagisza investment is to be the largest energy-sector investment financed without long-term contracts as a guarantee. Poland established a system of long-term contracts between generators and PSE to allow generators to leverage the guaranteed income to finance investments, but the long-term contracts are to be liquidated by July. Besides the external financing, Gniadek said PKE would use its own capital as well as procure money from assorted Polish environmental protection and state funds. Of its own funds, the company plans to spend some 50m zlotys a year for six years on the investment, giving a total of 300m zlotys. PKE, which could see a partial share flotation in 2004, generates some 18% of all power and 16% of all hear produced in Poland.

Polish oil company concludes two deals worth more than 1.4bn dollars

PKN [Polish Oil Concern] Orlen concluded two one-year contracts to sell petrol and BP Polska and Shell Polska diesel oil of an estimated gross value of 3.34bn zlotys and 1.92bn zlotys, respectively.
After three quarters of 2003 the PKN group posted 24.4bn zlotys in sales revenues against 19.2bn zlotys in the corresponding period last year, PAP News Agency reported.

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MINERALS & METALS

Successive Polish coal-mining restructuring programme begins

The law on coal-mining restructuring in the years 2003 to 2006 became effective on 1st January. It provides for debt cancellation worth 18bn zlotys (around US$4.8bn), reduction in coal extraction, liquidation of certain collieries and social [welfare] cushions for miners. Some 28,000 miners must be laid off in the years 2003 to 2006, of which 14,000 will be sent on so-called miner's leave, another 8,500 will be retrained to take up new jobs or provided with funds to start own businesses, and 7,000 more will become pensioners or switch to another job of their own accord.
Extraction will be reduced by 12m to 14m tonnes annually from the present level of 102m tonnes, PAP News Agency reported.

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