Books on Poland
% of GDP
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
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
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
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
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).
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.
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.
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.
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
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.
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.
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.
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.