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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%
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Update No: 105 - (30/01/06)
Energy crisis
The New Year, 2006, opened with a bang. Gazprom assured that by cutting off gas
supplies to Ukraine for two days on January 1-2. Everybody began to reconsider
their energy options, the biggest winner being Kazakstan. Russia is not the only
energy giant on the Eurasian continent.
President Nursultan Nazarbayev of Kazakstan was re-elected in December and was
re-inaugurated on January10th in his capital. He held a number of meetings on
the same day in Astana. He could not have been given a better send-off than by
Gazprom.
"New Polish authorities wish to support well-established Polish-Kazakstan
relations. We talked to the president of Kazakstan about economic cooperation,
including the pipeline Odessa-Brody-Gdansk project," the Senate chairman of
Poland, Bogdan Borusevich, said after the meeting with Nazarbayev.
Kazakstan is a key energy state, all the countries of the North European region,
including Poland, are interested in its energy supplies. In future it seems that
Kazakstan and Latvia and others would work more productively on construction
projects, such as of a traffic road from China, through Kazakstan and to the
Baltic Sea. Discussions in Astana also touched upon supplies of Kazakstani oil
to North Europe.
Russia is of exceptional importance to Poland-President Kaczynski
Poland's relations with Russia remain immensely important of course. President
Lech Kaczynski has described Russia as a country of exceptional importance to
Poland and "a state with which we would like to have the best relationship
possible." He was speaking at a meeting with members of the foreign
diplomatic corps.
The Polish leader said he hoped "2006 will be a year when these relations
see a fundamental improvement." Gazprom did not exactly start the ball
rolling here.
Kaczynski expressed the intention to pool efforts with Prime Minister Kazimierz
Marcinkiewicz in shaping the country's foreign policy, both new to their jobs
after recent presidential and parliamentary elections. In his opinion foreign
policy is not only the diplomats' job, but also a vast field for cooperation in
the economy, culture and sports, youth exchanges and the activity of
non-governmental organizations.
Poland's conservatives appoint liberal finance minister
The new government has yet to settle in. Liberal professor of economics Zyta
Gilowska, 56, has been named to succeed Tereza Lubinska as Poland's finance
minister.
The appointment of Zyta Gilowska, a former deputy leader of the opposition Civic
Platform (PO) party, came hard on the heels of the resignation of Treasury
Minister Andrzej Mikosz amid allegations of shady financial dealings. No
successor to Mikosz has been named.
Lubinska, 53, was ousted from the country's three-month-old minority government
after her calls for higher fuel taxes and a higher budget deficit.
Under Prime Minister Marcinkiewicz, the Polish government agreed in December
2005 to reduce the 2006 deficit to 30.5 billion zloty from 32.6 billion zloty
set by the previous government. She was also criticised for her attacks on some
multinational retailers present in Poland.
"It has been my firm determination to establish order in public finances
and I have always fought against any waste of money," Gilowska told a press
conference in Warsaw. "Public spending has to be disciplined and
rational." She favours quick eruozone accession and has also vowed to fight
unemployment, which stands at 17.6%.
Poland's next general election is scheduled for 2009. However, if the 2006
budget is rejected in parliament, early elections may be held this spring.
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ENERGY
Poland opens talks with new potential gas suppliers
Deliveries of Russian natural gas from Ukraine to Poland returned to normal
recently at the Drozdowicze border point which had seen a 50 per cent drop on
January 1st on the heels of Russia's decision to cut gas supplies to Ukraine.
Poland's PGNiG fuels distribution company confirmed that pressure in Poland's
natural gas pipelines had returned to normal levels. Overall Poland saw a
relatively small eight per cent decline in Russian natural gas deliveries from
Ukraine during the crisis.
According to a senior government minister Poland has an ample 1.1 billion cubic
metre reserves of natural gas.
The day-long crisis which saw Russian gas supplies plummet to Ukraine and some
Western European Union states by up 30 per cent has prompted renewed debate in
Poland about the need to diversify natural gas suppliers.
The European Union newcomer has moved fast to open talks with Norway and other
new potential suppliers, conservative Law and Justice (PiS) Prime Minister,
Kazimierz Marcinkiewicz, told Polish Radio. Poland would build a new sea port
capable of receiving shipments of liquefied natural gas, increase domestic
natural gas extraction and find suppliers other than Russia in order to boost
its energy security by diversifying suppliers, Marcinkiewicz said.
Poland's Justice Minister, Zbigniew Ziobro, also announced a criminal probe into
the decision of the ex-communist SLD government of former Prime Minister, Leszek
Miller, to drop a gas contract with Norway designed to ease Poland's heavy
dependence on Russian gas supplies.
Concerned about the negative impact it is likely to have on its energy security,
last year Poland also raised vehement opposition to a Russian-German plan to
build a natural gas pipeline across the Baltic Sea floor, thus bypassing Poland.
The Russian-German project means it is unlikely that a second line of Russia's
Yamal gas pipeline, which pumps natural gas from the Russian Far East across
Poland to Western Europe, will be built in the near future.
Poland wants the so-called Yamal II project to go ahead, both so as to boost its
own energy security by gaining greater direct access to natural gas supplies and
earn more income from transit fees.
Naftobazy plans major investments and profit increase
The largest operator of fuel depots Naftobazy plans to increase its profits,
investments outlays of 100 million zloty and plans major investments, New Europe
reported.
In 2005 the firm will post a profit of 40.8 million zloty, which is twice as
much as that recorded in 2004. 2006 will be a year of development in which the
company plans to boost profits to over 54 million zloty and increase revenues by
10 per cent to 233 million zloty. "And these will be achieved without
changing the rates for our services, which have remained at the same level since
2001," said Jerzy Malyska, president of Naftobazy.
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FOREIGN INVESTMENT
Russia invites Polish companies to invest
The Russians are inviting Polish exporters to invest, modernise old factories
and move their assembly lines to their country. A trade representative from the
Russian Embassy to Poland emphasised that Russia is expecting investors from the
food industry, New Europe reported.
Vladimir Nazarow from the Russian embassy says that Russian companies are not
able to satisfy the market demand, forcing Russia to import almost 50 per cent
of its food. "The government is creating a special industrial zone to offer
better investment conditions," he adds.
Marek Ociepka, minister at the trade and economy department at the Polish
Embassy to the Russian Federation, is very enthusiastic about the presence of
Polish companies in the East.
"There are great chances for investors from Poland. The growing demand,
purchase power and an unlimited market prove that whatever we produce can be
sold in Russia," he said.
Macroeconomic conditions are favourable in Russia. Their foreign exchange
reserves exceed US$150bn (321bn zloty) while Russia's balance of trade in 2005
will reach US$100bn (482bn zloty). "Production costs are much lower in
Russia that in Poland. The so called social tax, fees, the costs of energy and
transport, land tenancy, registration fees and taxes only favour
investors," said Ociepka.
Not everything is as easy as it seems. Russia is still a difficult market. Lech
Grabielczak, director of the export department of Atlas says that bureaucracy
and frequently amended regulations are a big problem. Despite the initial
hardships, Forte, a furniture producer, has just opened a new factory in
Vladimir. "Russia is a strategic market for us. We have sold our products
for many years there but now we can talk about our expansion," says Maciej
Formanowicz, president of Forte. According to the Federal State Statistics
Service the level of Polish investments on the Russian market within the first
six months of 2005 amounted to US$111.3m (357m zloty).
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TELECOMMUNICATIONS
TDC to sell its stake in mobile operator Polkomtel
Danish daily, Boersen paper, revealed that TDC has begun negotiations for the
sale of its 19.6 per cent stake in domestic mobile phone operator, Polkomtel,
owner of the Plus GSM and Sami Swoi brand.
TDC has assets worth some 950m Euro. The sale of the shares is being carried out
by investment bank Goldman Sachs. TDS is said to be negotiating the deal with
Vodafone Group, which holds a 19.61 per cent stake in Polkomtel, as well as the
remaining shareholders. Several investment funds and strategic investors are
interested in the deal.
TP's plans 2006 launch for its triple-play services
At the beginning of this year Telekomunikacja Polska (TP) will be introducing
triple-play services for the group's strategy for 2006-2008. The TP offer will
be a threat to cable operators that just began to introduce their triple-play
services. TP has already started to prepare VoIP services in cooperation with
Italtel and Cisco, New Europe reported.
"The introduction of the services will allow TP to maintain its market
position," stated Krzysztof Kaczmarczyk from DS Securities. Kaczmarczyk
estimates that new services may generate around 100 million zloty for TP within
a year. TP also began to lease so-called liveboxes modems that provide fast
access to Internet in wireless WiFi technology to its customers. According to
Puls Biznesu TP is in talks with largest domestic TV stations on the supply of
TV content.
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