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POLAND


 

 

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Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 209,563 187,670 176,300 24
         
GNI per capita
 US $ 5,270 4,570 4,230 71
Ranking is given out of 208 nations - (data from the World Bank)

Books on Poland

REPUBLICAN REFERENCE

Area (sq.km) 
312,685

Population 
38,626,349

Capital
Warsaw

Currency 
Zloty 

President 
Aleksander 
Kwasniewski 

Private sector 
% of GDP 
70%



Update No: 094 - (24/02/05)

The fading of the Polish pope
The fact that the pope since 1978 has been Polish, John Paul II, is a major factor of contemporary history. He is likely to go down as one of the great popes of history, who left an indelible mark on his times. He is now ailing from an advanced stage of Parkinson's disease and at 84 cannot have much longer to live. His departure will be a massive event, not just for the Roman Catholic Church and Christianity, but for Poland itself.
Stalin is renowned for saying disdainfully of one papal predecessor, Pius XII, an implacable opponent of Marxism in his time: "how many divisions has the pope?" This is an epitome of the under-estimation of the role of ideas, and the especial contempt for contrary ideas, that was to be the eventual undoing of the Soviets and all their ilk.
Little did Stalin suspect that the papacy in the shape of a Polish successor to Pius was to have a major role in finishing off communism, not just in Poland, but in the USSR itself. He may have had a premonition that incorporating Poland into the Eastern bloc in the postwar years was a dubious idea from the point of view of his creed. He is on the record as saying: "Communism fits Poland like a saddle does a cow." To which apothegm the student of the Marxist theory of history can add that Marxism fits Indian history as a saddle does a holy cow! 
In each case religion is absurdly under-estimated. The key event came when John Paul II came on a week-long trip to Poland, just after his inauguration. Brezhnev had opposed the idea of the visit; but the Polish leader of the day, Gierek, wisely was obdurate in his insistence that it had to go ahead, which it duly did. 
For one whole week the Polish people, living in the People's Republic of Poland after all, were as one in organising the Pope's itinerary through their lands. When it came to the crowning occasion of a mass, a truly massive mass at that, held in Stanislav Square in the centre of Warsaw, the significance of the affair was not lost on the more perceptive of by-standers. Overseeing the event from a balcony above the square with a KGB officer and observer beside him, his Polish counterpart simply said; "Ivan, this means the end of socialism in Poland." Indeed, it did: and not just in Poland either!

New times; new mores
But that was a quarter of a century ago. A whole new generation has come about since then. They are by no means enamoured of the Pope's entrenched Catholic conservatism. Church attendance, sky-high in communist times, is right down. Secularism, nay agnosticism and even atheism, are now the rage, coupled with unbridled materialism and consumerism. The main shopping streets of Warsaw are choc-a-bloc with all sorts of goodies.
The Pope, as he prepares himself for death, must be in some anguish that the liberation from communism has brought about the very opposite of what he wanted in his very own homeland. Indeed, the consumer abundance and diversity, now on offer to the more enterprising and assiduous of the younger generation at least, is exactly what the communists were always promising - even if they could never deliver it!
History has strange twists and turns, as the last century amply attested. Let us pay tribute to a remarkable man, an inspirer of the human spirit in adversity, before he himself receives his final obsequies.

Chequered, but colourful, political landscape
The Poles are historically a turbulent, fissiparous and fractious people. In times gone-by they operated a crazy system of allowing just one member of their national assembly of noblemen to exercise a veto over legislation. One bad apple could rot the rest. It is hardly surprising that the nation then lost its independence largely as a consequence. It was divided up by Russia, Prussia and Austria in the course of the three great Partitions of Poland in 1772-95.
Poland won a belated independence again in 1918. But in effect a fourth partition of Poland took place in 1939 between Nazi Germany and the USSR. Towards the end of nearly five decades of communism, the Poles staged a great revolt. A Polish pope elected in 1978 and the rise shortly afterwards of Solidarity, the trade union movement led by Lech Walesa, provoked the imposition of martial law in 1981. Stasis and stagnation once again.
But the Pope and Solidarity remained intact. Then came the emergence of Mikhail Gorbachev in Moscow in 1985. This happy conjuncture brought renewed independence in 1989. It is of course now highly cherished, although the Poles agreed to join the European Union (EU) last year, in principle a derogation of independence that ultimately safeguards it for good.
Solidarity proved better at fighting the communists than ruling itself. The pro-EU and pro-NATO Democratic Left Alliance (SLD) has governed Poland since crushing the Solidarity government in the September 2001 election. But the government, which lacks a majority, has suffered from complaints over unemployment, budget deficits and corruption. The country's unemployment rate was 18.4 per cent in November, the highest in the EU. 
Prime Minister Leszek Miller stepped down in May 2004 after Poland officially joined the EU. Miller had administered the government since 2001, but lost his majority after a split with the Peasants' Party (PSL) in March 2003. In March 2004, a year later a group of deputies bolted the SLD to form a new party, forcing the resignation of Miller on May 2nd. SLD member Marek Belka was appointed as acting prime minister by President Aleksander Kwasniewski.
Other main opposition parties are the free-marketeering Civic Platform, the Eurosceptic PSL, and on the far right Samoobrona (Selfdefence), the League of Polish Families, and the crime-bashing Law and Justice. 
If the SLD fails as a minority government, new elections could unsettle the political system. The next parliamentary election is tentatively scheduled for September.

Civic Platform is in first place in polls
Opinion polls indicate that a change of government is in the offing. The opposition Civic Platform (PO) is the top political party in Poland, according to a poll by PBS Sopot published in Rzeczpospolita. 25 per cent of respondents would vote for the PO-led by Donald Tusk-in the next general election.
The Law and Justice Party (PiS) and the Self-Defence of the Polish Republic (SRP) are tied for second place with 14 per cent, followed by the League of Polish Families (LPR) with 12 per cent.
The governing SLD is only fifth with 11 per cent, followed by the Peasant's Party (PSL) and the Labour Union (UP). 

Economy recovering
Poles, who were sceptical about the benefits of European Union membership, have seen their economy thrive since the country joined on May 1st 2004. Poland posted year-on-year GDP growth of 4.7 per cent in the year to November, the latest figures available.
According to analysts from American investment bank Merrill Lynch, Poland's ratings by international agencies will be heightened in 2005. At the moment Poland has the lowest rating in credit credibility among main Central and Eastern European countries. However, the economic indicators are much better than country's ratings would indicate. Merrill Lynch suggests the three major agencies, Standard&Poor's, Moody's and Fitch Ratings, are bound to raise ratings during this year. 
Outside of Poland, Hungary enjoys high marks from agencies while its economy stands on risky ground, mainly because of a high budget deficit. Analysts claim that the unstable situation will continue throughout 2005 and Hungarians must expect lower rankings. Slovakia, as in Poland's case, was previously underestimated in ratings, which was corrected by Moody's recnelty. A similar correction is expected for Poland soon. 

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AUTOMOBILES

Poles favour used cars


Some 830,000 used cars were imported during 2004, which reportedly is a world record, Warsaw Business Journal reported recently.
This was stimulated by Poland's accession to the EU which lifted the ban on imports of pre-1997 cars, as well as abolishing value-added tax (VAT) on imported cars. Importers still have to pay excise tax of up to 65% of the car's value, but with old cars being imported and lower than actual values reported for tax purposes, this has proven not to be a significant obstacle. As a result, despite the economic recovery, new car sales fell by 10% year-on-year and were almost 50% lower than in 1999. Used car imports were additionally boosted by the finance ministry's plans to introduce a new tax on such vehicles in 2005, which would be charged depending on engine capacity and emission standards, meaning that imported jalopies would carry a heavy price tag.

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BANKING

Banking sector mood turns positive: Pentor report

Poland's banking sector widely expects 2005 to be a better year than 2004 despite a fall in January from December, according to the monthly Pengab Index, which tracks bankers' views, released by research agency Pentor in Warsaw recently. "Optimism among bankers are improving and liquidity is unlikely to be a problem in 2005," Pentor President Eugeniusz Smilowski, said recently, New Europe reported.
The positive longer term outlook comes as cash from EU structural and cohesion funds is absorbed in Poland and on expected growth in retail banking services and as consumers' "faith in the Polish economy" returns, he said. Despite the optimism for 2005 in general, the January Pengab index fell month-on-month 0.6 points to 28.8 points from 29.4 points in December. This is the fourth consecutive monthly drop. But these were the highest recorded index levels since January 2001 and had increased by 3.7 points year-on-year signalling a positive trend, he said.
While in 2004 Poland's 5% economic growth served to bolster the banking sector, continued high unemployment (still at a rate of 18.7% in December) and a cabinet reshuffle (led by the appointment of Marek Nelka to the post of prime minister last May to replace Leszek Miller) were factors with a decidedly detrimental effect on the sector, he said. "Any changes on the country's political scene are bad news for the banking sector," Smilowski said.
This year will be busy on the political stage as both presidential and parliamentary elections due in 2005. A general election is likely in June and the presidential election in autumn. According to the Pentor report, other big issues facing the banking sector in 2005 are the lack of tax regulations that encourage Poles to save and the efficiency of EU structural funding absorption.

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ENERGY

Poland to access Libya's oil fields

Polish Prime Minister, Marek Belka, recently headed a delegation that met with Libyan leader, Muammar Gaddafi in Tripoli. Bleka was accompanied by businessmen, which included the head of PKN Orlen, Igor Chalupec, Warsaw Business Journal reported.
Oil was the topic of discussion, with PKN Orlen and Lotos teaming up with other state-owned energy firms to negotiate over access to Libya's oil fields. Treasury Minister, Jacek Socha, said the project was worth considering both in terms of economic gains and national energy security, by diversifying oil supplies away from Russia. Nafta Polska chief, Krzysztof Zyndul, told Daily Gazeta Wyborcza: "We want to prepare a joint offer for the Libyans by the end of April … but it is too early to talk about the creation of a formal consortium of Polish petrochemicals firms." Nafta Polska owns 17 per cent of PKN and a controlling stake in Lotos. Several Polish companies would also seek licences for oil exploration in Libya.

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FOREIGN INVESTMENT

Bridgestone invests in new Polish plant

The Japanese-owned Bridgestone Corporation, one of the world's largest tyre and rubber manufacturers, plans to invest 12m Euro in a new factory in Poland producing industrial rubber piping, PAP News Agency reported recently.
Production with an initial workforce of 50 employees was expected to begin in July 2006, a Bridgestone representative said.
Poland is among the countries the world-renowned auto tyre manufacturer is considering for a US$500m factory in Europe. A decision is expected in April at the earliest, a company representative said.
Bridgestone ahs already invested about US$148m in a Poznan-based factory.

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INDUSTRY

Industrial production rises by disappointing 6.4%

Poland's industrial production rose by 6.4% year-on-year in December, falling significantly below the market expectations of 12.4% and 11.4% year-on-year in November, according to a report from the Central Statistics Office (GUS), Interfax News Agency reported recently. 
Industrial production was down by 2.7% month-on-month in December. Seasonally adjusted industrial output grew by 6.2% year-on-year, but was down by 2.7% month-on-month. "The presented data is a big disappointment, especially that also the seasonally adjusted figure is significantly lower, what did not happen earlier," Societe Generale economist, Marcin Mroz, was quoted as saying. Analysts are divided whether the fall in the industrial output marks a beginning of a negative trend or is it just a hiccup in Poland's ongoing growth. The pessimists would assign the fall to the strengthening zloty and its negative impact on competitiveness of Polish exporters, which drive the growth. "The data is a continuation in the trend that started around mid-year, as we are witnessing a stable decrease in the growth dynamics," Deutsche Bank's Arkadiusz Krzesniak said.

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TELECOMMUNICATIONS

IBM Polska-Polkomtel JV

As part of it plan to expand the scope of its Polish business, IBM Polska signed a US$11.7m contract with Polkomtel, Poland's third largest mobile telephony, for the maintenance and development of SAP business applications over 5 years, IBM and Polkomtel announced recently, Interfax News Agency reported. 
This contract is part of larger IBM strategy to branch out into this kind of business in Poland. The contract, 18 months in the making, was signed on December 22nd and is the first outsourcing contract for IBM based solely on IT application versus infrastructure (telecommunications, IT operation and technology) servicing. "IBM Polska has also signed outsourcing contracts with motor manufacturer Fiat Polska, Citigroup life insurer Primerica and a financial institution," IBM strategic outsourcing manager Anna Sienko said.

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