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POLAND


 

 

In-depth Business Intelligence

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: 114 - (28/11/06)

Poland's Kaczynski government unpopular after 100 days in office 
The Law and Justice (PiS) scored a surprise victory in the September 2005 general elections, but party leader Jaroslaw Kaczynski only took office in July 2006. His initial hesitation to take office is believed to have been rooted in the fact that his identical twin brother Lech Kaczynski won the October 2005 presidential race.
Prime Minister Kaczynski on October 20th marked 100 days since taking power, as an opinion survey showed a majority of Poles were unhappy with him and his rocky, conflict-prone administration. The head of the turbulent on-again, off-again trilateral coalition including the PiS, the populist Samoobrona farmers' party and the Catholic nationalist League of Polish Families (LPR), praised his government's spending plans for 2007. 
Parliament has yet to pass the budget which the government insists will carry a deficit of some 3 per cent of GDP, but which critics have termed "unrealistic." 
Kaczynski called it both fiscally responsible and "pro-social." He stressed his government was pushing ahead with promises to build 3 million residential units. The premier also insisted his first 100 days in office were marked by a fair distribution of EU structural funds to Poland's poorer regions. 
Administrative reforms saw the communist-era Military Intelligence Service (WSI) replaced by freshly constituted military intelligence and counter-intelligence agencies. The PiS government also set up an anti-corruption bureau with wide-ranging powers. 
The Kaczynski government was criticised in many quarters both at home and abroad for attacking the independence of financial market regulators by creating a centralised Commission for Financial Supervision to replace Poland's Securities and Exchange Commission among others. 
The prime minister also pointed to Poland's robust GDP growth, expected to surpass 5 per cent this year, and a drop in unemployment. 
But the opposition liberal Civic Platform, left-wing ex-communist SLD parties and centrist Polish Peasants' Party (PSL) agreed the first 100 days of Premier Kaczynski's government were above all marred by high-pitched political rows among the coalition partners. 
PO, SLD and PSL leaders also said the conflict-prone and self-absorbed PiS-led coalition could not take credit for Poland's impressive economic growth or lower unemployment. 
The economy was blooming despite the unstable PiS government, while the jobless rate had dropped due to the exodus of up to 2 million Poles since Poland's accession to the EU in 2004, opposition politicians charged. 
"The prime minister, the government and the ruling parties did not spend even one hour or one day talking about what to do to make people's lives better in Poland," PO leader Donald Tusk said. "Talks were only about who will hit who harder, who will cheat who, who will beat who. This is what people will remember," he said. 
Some 69 per cent of respondents to an opinion poll released by the independent TNS OBOP pollsters this week said Prime Minister Kaczynski was not doing a good job. Twenty-seven per cent approved his work. 
Meanwhile 76 per cent of respondents were unhappy with the work of the PiS-Samoobrona-LPR governing coalition. 

Local elections: despite some setbacks, the conservatives' position not threatened
Actual elections took place on November 12th. They were local elections, from which everyone can take some comfort.
Local government elections, in which close on 47 thousand councillors' posts and 2,500 mayorships from village to city level were contested, have brought no major change to Poland's political landscape which continues to be dominated by two blocs - the conservatives and the pro-business liberals. Most analysts say, however, that it is the opposition which has more cause for celebration. 
Local elections are usually seen as opinion polls on the performance of the government rather than a vote on local issues. They were therefore the first major test for the conservative Law and Justice since its victory in both the parliamentary and presidential elections in the autumn of 2005. The vote was also a verdict on the ruling coalition between the conservatives and two small parties, the leftist Self-Defence and the rightist League of Polish Families. The still inconclusive results show that the Law and Justice has lost some urban voters but did reasonably well in the smaller towns and rural areas. Its two coalition partners did rather poorly, whereas the opposition Civic Platform managed to grab many councils in large cities. 
According to Matthew Day of Poland Monthly, the coalition should, nevertheless, be fairly content with the outcome. "If they haven't suffered terrible losses the coalition can walk away reasonably content. However, they haven't scored a victory and there are question marks about them. The fact that the opposition don't appear to be revelling in a massive victory as well as, that means there are question marks for them as well. So both sides can take positives and negatives from the result." 
The opposition did not muster enough support to put Jaroslaw Kaczynski's government at risk but its good performance in big cities has given it a psychological boost in the confrontation with the conservatives. 

Indepedenent commentator Robert Strybel makes this comment: 
"It a slight tilt towards the Civic Platform. They looked fresh while PiS [the conservatives] have already done things that upset many people or they haven't done things which they promised to do. So it's a slight tilt in favour of the Civic Platform." 
Can we talk therefore of winners in Poland's local government elections? Marcin Sobczyk of Interfax Central Europe believes there are two. 
"One is the pro-business Civic Platform which managed to grab many councils in large cities which is quite symptomatic. When you look at regional governing bodies this party is also very strong, stronger than the conservative Law and Justice. The other winner is the new centre-left grouping which is emerging; it's not yet fully formed." 
The newly emerging centre-left brings together ex-communists and former anti communist dissidents. Their candidate Marek Borowski did not make it to the second round, but did extremely well, receiving over 22 percent of the vote. Matthew Day explains why this is such a surprisingly good showing 
"Because the centre-left has been so down-trodden in Polish politics for the past year and the fact they have managed to rally together and get a decent amount of the vote is a commendable effort on their part but also a testament of the fact that despite the reputation that the centre-left parties have there are a lot of people out there who vote for them. Quite possibly they are managing to shed this image of corruption which has dogged the left for quite a few years now." 
Another surprising outcome of local elections is a relatively high turnout. The official result exceeds the forty percent mark of four years ago. In Warsaw it was over 52 percent and the nationwide result is slightly below fifty percent. According to Marcin Sobczyk of Interfax Central Europe this is a very positive sign. 
"Major political parties are wrong in saying that the society is tired of politics, that it's not interested. It shows that Polish society is interested in politics, both in central and local politics. Another reason why the turnout is so high is that central politics has become extremely divisive. You have at least two major parties and the third that is quite strong with opinions taken to extremes and definitely people wanted to have their say in what they saw as a very important political battle." 
The battle will continue in the second round of voting on November 26 in all those towns where no candidate for president or mayor received over 50 percent of the vote. Warsaw is one of them. Law and Justice's Former Prime Minister Kazimierz Marcikiewicz defeated Civic Platform's Hanna Gronkiewicz Waltz by a narrow margin and it looks it'll be another close race between them. 

Russia warns the US to stay out of Poland
Russia hit out on October 10th at US plans to deploy an anti-missile shield on Polish soil, saying the move was an attempt to destabilize the balance of power. Washington is investing billions of dollars to develop a missile defence system that intended to use rockets to shoot down hostile missiles.
It is considering placing its biggest anti-missile site outside the United States and is talking to Poland and the Czech Republic about possible locations. 
"We see this as an element of destabilizing the situation, an attempt - and no more than that - to change somewhat the strategic balance," Russian Defence Minister Sergei Ivanov told a news conference.
Russia's Foreign Ministry has already said Moscow would take unspecified measures against Poland if it decides to host the anti-missile shield. Poland has said no decision has yet been taken and Russian protests are premature. 

President in the UK
Polish President Lech Kaczynski and British Prime Minister Tony Blair said energy security was a key focus of their talks at 10 Downing St. during Kaczynski's first visit to Britain since becoming president in December last year. This took place in October.
Kaczynski said his country, part of the Communist bloc for decades, had much experience in dealing with Moscow and accused Russia of not always playing straight. He warned oil-rich Russia's talks with Europe over energy could be difficult.
"Finding our common value set will not be simple, but our starting point must be the facts," he said at a news conference with Blair. "One should talk to Russia (in a way) which is firm, resolved and strong."
Poland is heavily dependent on oil and gas from Russia, and its supplies were hit when Moscow briefly cut gas deliveries to Ukraine in January. Warsaw is seeking to broaden its energy sources and is a strong advocate of a joint European energy security policy, something Blair agreed was important.
"It is massively to our benefit that Europe takes a common line on energy policy," Blair said.
The two leaders said they were also discussing Iraq and Afghanistan, where Poland and Britain both have troops. They acknowledged they faced tough security problems in both countries but said it was crucial to persist with efforts there.
The migration of hundreds of thousands of Poles to Britain since their country joined the EU in 2004 was also at the centre of Blair's talks with Kaczynski.
The Polish leader repeatedly thanked the prime minister for opening Britain's labour market to the ten countries, most of them in eastern Europe, that joined the bloc two years ago. Britain, Sweden and Ireland were the only nations that immediately allowed the free flow of workers from the new member states, although several other countries have since relaxed their rules.
Authorities have estimated that some 600,000 people, half of them from Poland, have come to Britain looking for work since the accessions.
Blair said most of the new arrivals were very hardworking and were well-regarded by Britons." One of the reasons we opened our labour markets is we know it would be of benefit to us as well, and it has been of benefit to us as well," he said. "Although there are difficulties in some areas, of course, when you have significant numbers of people coming in, on the whole I think the Polish delegation here will find a very warm welcome from British people to people from Poland."
Kaczynski said he hoped the migrants would eventually return to Poland with new skills and an improved grasp of English. As his country grows wealthier, fewer Poles will leave and more foreigners may seek to come to Poland, he said.

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AVIATION

US delivery of four F-16 fighters received 


Poland received the US delivery of the first batch of four F-16 fighters on November 9TH, website english.people.com.cn cited Polish media reports as saying. 
A ceremony was held at the Krzesiny air base in western Poland, during which the Polish Air Force officially took over the four multi-task F-16 fighters from the United States. "Poland has made a right decision to buy F-16 fighter jets," Polish President Lech Kaczynski said during the ceremony. The Polish army needed transformation and had to correspond to the "size of our country," its place in Europe and the existing threats, Kaczynski was quoted as saying. Poland has ordered altogether 48 F-16 fighters from the United States, and the first batch of the four was named "Hawks." Because some technical faults were found twice during their trip to Poland, the Polish Defence Ministry requested an explanation from Washington. Piotr Lukaszwicz, director of the bureau in charge of the takeover affairs of F-16 fighters in the defence ministry, said earlier that an expert group from the Air Force would conduct technical inspections on the fighters for one or two weeks after the ceremony. According to reports, Poland will take over another four F-16 fighters this year, and it is anticipated that the first squadron of 16 F-16 fighters will be operational in 2008.

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ENERGY

Aurelian Oil & Gas signs contracts for drilling 

Aurelian Oil & Gas PLC, an exploration and production company working in Central Europe, recently announced that it had signed rig contracts for the drilling of the appraisal well Trzek-1 on the Siekerki structure within the Poznan East concession in Poland and the Golitza-1 well on its B-Golitza licence in Bulgaria, website oilvoice.com reported. 
In Poland, Aurelian's 90 per cent Polish subsidiary, Energia Zachod Sp, has signed the contract with Oil & Gas Drilling "Nafta" Ltd of Pila, Poland for the drilling of the Trzek-1 well. "The location for Trzek-1 has been selected and the necessary local consents are being acquired so that construction of the drill site can take place through December and January," an Aurelian statement said, the website reported. The Siekierki Structure was drilled by the state company Polish Oil & Gas Corporation (POGC) in the 1970s. All four wells drilled on the structure encountered gas shows in the Permian Rotliegendes Formation. "We are very excited by both the Siekerki prospect in Poland, where the presence of gas was established in the 1970s, and by the Golitza prospect in Bulgaria which we believe has the potential for significant reserves in a region which has effectively had no valid drilling to date. We are delighted that the plans for these two wells are moving forward and that commencement dates for both wells have now been set," Aurelian Managing Director Michael Seymour said in the statement.

Merkel vows to link Poland, Baltics to EU energy grid 

Polish Prime Minister, Jaroslav Kaczynski, and German Chancellor, Angela Merkel, gave a joint press conference at the Chancellery in Berlin, October 30th, 2006.
Merkel vowed on October 30th she would push for Poland and also the Baltic states to be linked to European Union natural gas and electricity grids in order to supply energy in case of future cut-offs from countries such as Russia, Deutsche Presse-Agentur (dpa) reported. 
At a news conference with Polish Prime Minister, Jaroslaw Kaczynski, Merkel stood by her country's planned Baltic Sea gas pipeline linking Germany and Russia, which is being routed to avoid crossing Poland and other Eastern European states. 
But in bid to heal the Berlin-Warsaw rift over the pipeline, she vowed to use next year's German presidency of the European Union to integrate Poland, as well as Estonia, Latvia and Lithuania into EU energy grids. 
"We agreed to discuss energy supply ... in the sense that we create a common European energy market in both electricity and natural gas supply, and that naturally Poland and the Baltic states must have access to the European gas markets," Merkel said.
Kaczynski, who has been strongly critical of Germany regarding the Baltic pipeline, welcomed Merkel's initiative due to fears that suppliers could use energy as a weapon. "The idea is that Poland would get deliveries from Western European states in case of danger," he said, adding that Norway was under discussion as a possible source. Earlier this year, Russia briefly cut off gas to Ukraine over a pricing dispute in a move widely seen as Moscow's new policy of using its energy riches as a diplomatic lever. Merkel admitted that fully connecting Poland and the Baltic states to EU energy grids, especially the gas grid, would be "difficult," but that she expected initial decisions to be made at an EU summit hosted by Germany next March. 
Kaczynski again rejected a German proposal to build an offshoot pipeline from the Russian-German Baltic project to supply Poland. "We would become even more dependent on Gazprom than before," he said in reference to Russia's state-owned gas supplier.

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FOOD & DRINK

Carrefour plans to spend a billion in Poland 

Carrefour Polska, the French operator of Carrefour, Champion and Globi markets, has announced plans to develop its Polish network, New Europe reported.
"We want to launch 20 new shops next year and a similar number in 2008. We estimate that the level of investment will amount to one billion zlotys (258 million Euro) in the two years," Alain Souillard, Carrefour Polska CEO said. Today, the company has 177 shops. Besides, Carrefour plans to launch new forms of its shops. "We want to implement three new things: Small hypermarkets with the surface of 2,000-4,000 square metres in towns of 25,000-60,000 inhabitants, Carrefour Express shops with the surface of 800-2,000 square metres and franchise shops," Alain Souillard said. The Carrefour Express network will be based on Globi and Champion shops. In 2007, 45 shops under this brand will be launched. 

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FOREIGN INVESTMENT

Japanese investment reaches new level 

Japanese firms are investing heavily in various special economic zones across Poland. 2005 saw over two dozen massive Japanese investments. Observers say that Japanese ventures this year could double in Poland, New Europe reported.
Global giants Toyota, Sharp, Toshiba and Bridgestone are just a few of the Japanese companies planning to increase their investments in Poland. They are focusing on Special Economic Zones in the central and southern regions of the country. These SEZ's offer tax and land purchasing incentives for foreign companies. Last year Japanese conglomerates invested close to US$300 million. They intend to invest three times more this year. The central city of Lodz has managed to attract Japanese investors to SEZ's in the region. 

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FOREIGN COOPERATION

Call for closer strategic ties with Baltic states 

The Baltic states and Poland should strengthen cooperation on energy security and work towards NATO expansion and a stronger EU policy towards their eastern neighbours, press reports cited the four countries' presidents as saying on November 6th, New Europe reported.
"The presidents emphasise the importance of strengthening and deepening trilateral Baltic cooperation and cooperation with Poland in the EU, NATO and other international fora," a joint communiqué stated. The four heads of state met in Vilnius on November 6. 
The Baltic presidents are representative figures, but are expected to play a lead role in foreign policy. They traditionally meet at least once a year to discuss matters of common interest. On this occasion, Valdas Adamkus of Lithuania, Vaira Vike-Freiberga of Latvia and Toomas Hendrik Ilves of Estonia invited Polish President Lech Kaczynski to join them - the first time a Polish leader has been invited to attend the consultations. "The presidents note that closer cooperation between the three Baltic States and the Visegrad Four (Poland, Slovakia, the Czech Republic and Hungary) would benefit all of the participating countries," the communiqué stated. In a year in which Russia's influence on Eastern European energy policies has become increasingly apparent, energy independence was at the top of the agenda. The four presidents attached "particular significance" to plans to build a nuclear power station in Lithuania, and stressed the need for the EU to create a common internal and external energy policy. In a move likely to draw a sharp reaction from Moscow, they voiced their support for Georgia both in its ongoing dispute with Russia and as a would-be NATO member. "The presidents... welcome (NATO's) Intensified Dialogue with Georgia (and) call on the Russian Federation to lift all of its economic sanctions imposed on Georgia," the communiqué said. And they called on the EU to exercise a more active policy towards its eastern neighbours - an area in which Baltic commentators have often accused Brussels of lacking both clear goals and the will to pursue them. "The presidents... underline the need for renewing and strengthening the Eastern dimension of the European Neighbourhood Policy," the joint communiqué ran. 
The Baltic states and Poland joined the EU and NATO in 2004. They have consistently advocated more active engagement with the countries of the former USSR, and a more robust approach to Russia. However, as four of the EU's poorest members, with only a tenth of its population, their influence is thought to be limited.

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