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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: 112 - (26/09/06)

The twin ducks
In Polish the word, 'Kaczynski,' means 'duck.' The Poles themselves refer to the identical twin brothers they have as president and prime minister by the name of Kaczynski as 'the twin ducks.' They have large ears and puckish looks, standing at five feet four inches tall, small by Polish standards. Their surname is rather unfortunate. 
But one thing nobody could accuse either of them of being is 'a lame duck,' unlike Tony Blair. They are in the first flush of office and are certainly not going to make the mistake of saying when they will leave it. 
It is arguable, however, that they have inherited the chief reason for Blair's unpopularity, over-identification with every twist and turn of Washington's policy. For Warsaw has always stood stalwartly behind the US, whatever its vagaries in foreign affairs, since Polish independence from the Soviet empire.

Loyal to the US, but not host to its prisoners
Poland, for example, has been among the strongest European supporters of the US-led invasion and occupation of Iraq and has deployed troops in the ongoing stabilisation mission there. It has the third largest force there, after the US and the UK, leading contingents from Central and Eastern Europe, including Ukraine. Former president, Aleksander Kwasniewski, was a close Bush loyalist.
Nevertheless, Poland's President Lech Kaczynski on September 8th denied the presence of US Central Intelligence Agency (CIA) prisons on Polish territory in response to recent revelations by US President George W Bush that the CIA has held terrorism suspects in facilities outside the US. 
Kaczynski, who took office in December 2005, said he had received full assurance from his predecessor Aleksander Kwasniewski that no CIA prison facilities had been authorised in EU and NATO member Poland. 
A spokesman for Kaczynski said the president would decide in the near future whether to launch a formal investigation into the matter. 
Bush on September 7th had acknowledged for the first time that the CIA was running secret prisons for holding and interrogating high level al- Qaeda figures captured since the September 11th 2001 terrorist attacks. 
Since the CIA operation was revealed by the Washington Post in a November article, Bush and other members of his administration have refused to publicly discuss the programme, but it is in the eye of the storm in current US political debate.

Commitment to EU values needed
European Union lawmakers in June warned of a 'general rise in racist, xenophobic, anti-Semitic and homophobic intolerance' in member country, Poland. The country was witnessing rising support for extremist parties 'with a clear xenophobic, racist, anti-Semitic and homophobic agenda, some of which have recently acceded to government,' they said. 
Polish Prime Minister Jaroslaw Kaczynski's governing coalition, formed then, includes populists and ultraconservative Catholics who have condemned homosexuality. Some Polish cities recently banned gay pride parades. 
Ties between the EU and Poland have become strained in recent months with the two sides embroiled over a number of high profile disputes with Brussels. EU officials are concerned about what they see as Warsaw's lack of commitment to European values.

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On his first official trip to the European Union headquarters, Premier Kaczynski on August 31st denied allegations that his government was tough on homosexuals and that there was rising anti-Semitism in the country. 
As EU commission president Jose Manuel Barroso prodded Kaczynski to step up Warsaw's commitment to EU values, Kaczynski said he had managed to set the record straight about 'a number of misunderstandings and doubts' about Poland's Europeanness. 
Homosexuality was widely accepted in Polish politics and society and 'has never been a problem at all,' the prime minister said, adding that Poland's gay community 'functions normally and nobody is suppressing it.' He also said charges of anti-Semitism in Poland were a 'myth' that had been created by the European media. 
'We in the EU are a community of values, and the first value above all is that of the human being,' Barroso told reporters after a meeting with Kaczynski. 'Human rights are the basis of our common values,' the commission chief added. 
There was 'increased support' in Poland for the EU, Barroso said, referring to recent surveys which had shown that Poles have a greater confidence in the bloc's institutions than in their own government. 
'The Polish people understand the great value of the European project and the EU's importance for peace, prosperity and stability in their country,' the commission chief said. 
He said that the EU was confident to establish a good working relationship with the current Polish government. 
'Poland is a very active and central (EU) member state...and we will not have any kind of prejudice against any kind of government,' the commission chief said, adding: 'We will not base our decisions on comments but on facts.' 
Talks with Kaczynski had also touched on the hot issue of Warsaw's recent call for reinstatement of the death penalty, Barroso said but did not give any details. 
After meeting with the Polish prime minister, European Parliament President Josep Borrell said that Kazcynski had given a convincing reassurance of Warsaw's commitment to the EU. He had 'clarified issues of serious concern' including Poland's recent call for reinstating the death penalty as well as the rights of homosexuals. 
Kaczynski said Poland would step up its efforts to become a free market democracy, using EU funds more efficiently. 'Our short two-year (EU) membership has been a success...which will be even more visible if we use all the opportunities that we have as an EU member,' he said. 
Kaczynski pledged Warsaw would meet an EU deadline to come up with restructuring plans for three ailing Polish shipyards or otherwise risk losing state subsidies. EU regulators earlier said that if it does not find the plans convincing, it may decide that government and local support given to restructure the struggling shipyards in Gdynia, Gdansk and Szczecin was illegal. 

EU partners Poland, Lithuania reconsider hooking-up power grids at Polish 'Davos'
Poland's 16th annual Krynica Economic Forum took place on September 7-9th. Its aim is to facilitate growth in the emerging economies of Central and Eastern Europe. 
Dubbed the "Polish Davos," the event has regularly drawn political and business leaders from across Central and Eastern Europe and beyond to the Polish mountain resort of Krynica.
Warsaw- European Union partners Poland and Lithuania are considering hooking up their electrical power grids, Poland's Economy Minister Piotr Wozniak said at the commencement on September 7th. Lithuania is also keen to involve non-nuclear Poland in the construction of a new third nuclear reactor at its Soviet-era Ignalina facility, but no concrete decisions have yet been made. 
Fellow EU Baltic states Latvia and Estonia have also been invited to invest in the venture, seen as key to ensuring energy security in a region heavily dependent on Russian energy supplies. 
"There have been big changes in the energy supply market in our region in recent years," Poland's Wozniak said, quoted by the Polish PAP news agency. "Estonia and Latvia have hooked up with a big transit cable, Lithuania have confirmed building a transit cable to Sweden and plan to lay a similar cable to Finland," he said, explaining Poland's decision to reconsider hooking up with north-eastern neighbour Lithuania. 

EU says Poland's economy set to grow by 5 per cent in 2006 
Poland's economy will grow by 5 per cent in 2006 as part of a European Union-wide recovery, the European Commission said on September 6th. Economic forecasts unveiled by the EU's executive body said the new Polish growth estimates were 0.5 per cent higher than initially expected. 
"The ongoing recovery is based on robust gross fixed capital formation, supported by healthy corporate profits and solid external demand," the commission said. It added that construction activity in the country was strong and a recovery in the labour market was supporting growth. In the first half of 2006, the unemployment rate declined by 2 percentage points to 16 per cent and the improvement is expected to continue in the second half of the year, albeit at a somewhat slower pace, the commission said. 
However, the commission cautioned that higher wage demands, fuelled also by emigration, which created bottlenecks in certain segments of the labour market, would put upward pressure on inflation in the second half of 2006. "Thus, inflation for 2006 has been revised to 1.3 per cent, up from 1 per cent," it said. 
The commission's assessment is part of a review of the state of the EU's largest economies which, in addition to Poland, include Germany, Spain, France, Italy and Britain.

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AUTOMOBILES

FSO carmaker does booming business in Ukraine

Poland's once-troubled FSO carmaker is now in the pink thanks to booming exports of its Daewoo Lanos model to neighbouring Ukraine, Poland's Gazeta Wyborcza daily reported.
Thanks to a 2002 deal with Ukraine's AvtoZAZ automotive giant, the FSO plant has bounced back from the verge of collapse after the bankruptcy five years ago of key investor, South Korea's Daewoo Motor. FSO's Daewoo Lanos has become the top-selling model in Ukraine, taking nearly 35 per cent of the new car market. The Warsaw-based plant's production has sky-rocketed. While 47,000 cars rolled off the assembly line in 2005, there were plans for up to 95,000 vehicles this year. US auto giant General Motors is reported to be in talks with AvtoZAZ aimed at using the FSO plant to produce Chevrolet brand cars for export to Ukraine. But it is up to the European Commission to rule whether the Polish government can inject subsidies to the partially state-owned FSO factory which would allow production to go ahead. Poland was the largest of 10 mostly ex-communist states to have joined the European Union in May 2004. Non-EU Ukraine absorbed three per cent of Poland's total exports in 2005, according to Poland's Central Statistical Office (GUS).

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AVIATION

More budget airlines fly in as market soars 

Britain's Jet2 and Denmark's Sterling were recently confirmed to be the newest budget carriers to begin flights to Poland, where the air travel market is soaring, Poland's Rzeczpospolita daily reported. 
In October, Jet2 will begin two flights a week to and from Leeds and Newcastle to Krakow, while Denmark's Sterling will link Copenhagen with the historic and scenic Polish city, which has become a hit with foreign tourists. Budget airlines are flocking to the Polish market, which is projected to grow to 63.8 million passengers by 2030 from the 14.3 million total estimated for 2006, according to the report. Budget carriers operating flights to Poland include Centralwings, Blue1, Easyjet, Germanwings, Jet2, Norwegian, Ryanair, Sterling and Wizzair. The carriers fly into 11 Polish airports scattered across the country. 

Airport update to cost 400m Euro

The Polish Transport Ministry recently agreed on a plan to spend 400m Euro on the development and modernisation of the Polish airport and navigation infrastructure from 2007 to 2013, New Europe reported recently.
The projects would be financed by a European Union fund known as the Infrastructure and Environment, Polish Deputy Transport Minister, Eugeniusz Wrobel said. For this, the Polish Transport Ministry is developing a strategy for infrastructural projects in airports, the national airport grid and necessary changes in legislation, notable the liberalisation of aviation law. "The present regulations on aviation are restrictive beyond the extent required by the EU," Wrobel reportedly explained, "This hampers the development of air traffic, especially with regard to small, private planes that could be the driving force of the aviation business." There are 12 airports in Poland: the Warsaw Okecie International Airport and 11 regional ones. They handled 11.5 million passengers last year and 8.8 million in 2004.

Air-surveillance AWACS radar aircraft arrives

An air-surveillance AWACS radar aircraft, due to begin patrolling Polish skies later this year, arrived at the Powidz military airfield in NATO-member Poland recently, Poland's TVN24 news channel reported.
Airborne Warning and Control System (AWACS) planes carry a huge horizontal black radar disc mounted near the tail of the aircraft.
Flying at around nine kilometres above the earth's surface, they can monitor air traffic in a 400 to 700-kilometre radius. There are currently some 70 AWACS planes in use around the globe.
Many of them monitor airspace during major events. Poland first rented a AWACS aircraft in late May in a bid to beef-up security during the visit of Pope Benedict XVI.
A former Soviet satellite state, Poland has been a member of the NATO Western defence alliance since March 1999. It is currently in talks with the United States over the possibility of locating bases which would constitute the European arm of the US planned National Missile Defence (NMD) programme, more commonly known as "Star Wars." NMD is designed to pre-empt inter-continental missile attacks by so-called rogue states.

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ENERGY

France is Poland's top investor in telecommunications, energy 

French companies have invested a total 1.3 billion Euro in Central and Eastern Europe (CEE) since the demise of communism there 17 years ago, a French diplomat accredited to Warsaw revealed on September 15th. With a population of nearly 40 million, Poland, the largest country in the region, has drawn 60 percent of the sum, diplomat Edouard Sicat said, quoted by the Polish PAP news agency. 
France ranks as a top foreign investor in Poland in the areas of telecommunications, trade, hotels and energy. French companies also reinvest some 65 per cent of profits in Poland, he said. The 1.3 billion Euro total in CEE countries accounts for some six to seven per cent of all French foreign direct investment (FDI) around the globe. 
Sicat was speaking at Poland's 16th annual Krynica Economic Forum. It aims to facilitate growth in the emerging economies of Central and Eastern Europe. Dubbed the "Polish Davos," the event has drawn political and business leaders from across Central and Eastern Europe and beyond to the Polish mountain resort of Krynica. 
The May 2004 EU entry of eight CEE states into the European Union boosted their attractiveness as an investment destination. Effective use of EU structural funds to improve transport and energy infrastructure and the adoption of the Euro will serve to do so even more, according to other expert economic analysts in Krynica. 

Poland can use EU funds for pipeline, says premier 

European Union member Poland can use EU structural funds to finance part of a planned pipeline which would pump oil from the Ukrainian Black Sea port of Odessa to Poland's major PKN Orlen refinery in the central city of Plock, Prime Minister Jaroslaw Kaczynski told Deutsche-Presse-Agentur (dpa) recently.
Kaczynski made the comment following talks with new Ukraine Prime Minister Viktor Yanukovich at the 16th Annual Krynica Economic Forum, in the Polish southern mountain resort of Krynica.
Kaczynski said some 400 million Euro in EU funds could be spent on the planned Brody-Plock leg of the pipeline, which Poland considers strategic infrastructure able to improve its energy security by easing heavy reliance on Russian natural gas supplies. He confirmed he would discuss the matter in Washington during his first visit to the United States next week. 
A 600-kilometre pipeline from Odessa across Ukraine to the western Ukrainian city of Brody near the Polish border was completed in 2002. Poland has consistently supported Ukraine's ambition to join both the European Union and the NATO Western defence alliance.
Following talks with Kaczynski, Yanukovich officially invited him to Ukraine and confirmed bilateral relations were positive and dynamic. The once Moscow-backed Yanukovich confirmed Ukraine would continue its pro-Western course. The visit to Krynica was Yanukovich's first foreign trip since taking office as prime minister in August.
The annual Krynica Economic Forum is tailored specifically for business in Central and Eastern Europe and modelled on the annual Davos World Economic Forum in the swish mountain resort.
PKN Orlen oil refiner will later this month ask the European Commission to approve its plans for the purchase of Lithuania's Mazeikiu oil refinery, PKN Orlen CEO Igor Chalupiec said. "We're in the process, in the second half of September we'll be ready to forward the request to the commission," Chalupiec told the Polish PAP news agency.
The Orlen head also said the company had not yet made a final decision on bidding for Latvia's Ventspils Nafta Terminals Ltd, a key ice-free oil transit port. "We are still analysing, collecting information, but there is no decision on the issue. The auction is to take place in early October, so we still have a month's time to make the decision," Chalupiec said. 
A portion of Russian crude oil supplies for Lithuania's Mazeikiu Nafta refinery have recently been stopped due to a rupture in the Russian state-operated Druzhba (Friendship) oil pipeline. Pipeline operator, the Russian state-run Transneft, has insisted the problem is strictly technical in nature. 
Some commentators both in Lithuania and Poland have suggested the stoppage is aimed at undermining PKN Orlen's bid to purchase Mazeikiu. Bankrupt Russian oil giant YUKOS has been forced to sell off its stake in the key Baltic refiner, also partially owned by the Lithuanian state. Analysts also suggest that with a current government drive to ensure energy security in the Baltic and Central European region, Lithuania is keen to see Mazeikiu in the hands of a company based in a fellow EU and NATO state such as Poland. Central Europe's largest oil refiner and distributor, PKN Orlen is partially held by the Polish State Treasury. 

Petrolinvest to invest US$800m in Kazak fields

Polish firm Petrolinvest acquired four companies with licences to develop oil fields in Kazakstan with reserves estimated at two billion barrels for US$400m, the daily Gazeta Wyborcza reported recently.
Petrolinvest purchased a 50 per cent stake in three companies and a 35 per cent stake in the fourth one for US$400m. Another US$400m will be invested in drilling and oil wells.
Ryszard Krauze, the Polish businessman who owns Petrolinvest, plans to find the necessary funds in its own resources gained from sales of its biotechnology firm, Bioton, and loans. Krauze is also planning initial public offering of Petrolinvest on the Warsaw stock Exchange in 9-12 months.
Krauze controls Petrolinvest through his investment vehicle, Prokom Investments, which also holds majority stakes in listed Prokom Software, Poland's top home-grown IT company, as well as the Warsaw Stock Exchange's biotechnology pioneer, Bioton.
Petrolinvest's main partner in the Kazak investment is CentreCredit bank from AlmaAta. According to GW, two billion barrels of oil could be sufficient to cover demand of the Polish refineries for 13 years. Kazakstna's oil resources are estimated at 29 billion barrels.

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INFORMATION TECHNOLOGY

Computer giant Dell plans mega-investment

US-based computer giant, Dell, recently revealed plants to invest 120m Euro in a factory in Lodz, central Poland, making the company of the largest employers in the country, Poland's liberal Gazeta Wyborcza daily reported.
European Union newcomers Poland and Slovakia were both in the fray for the choice investment which was tipped to create some 12,000 new jobs both in-house and in related sectors.
Lodz at the end of July had some 48,000 residents looking for work. Low labour costs and the fact that the city has a student population of 106,000 with solid technology sector programmes, were among the major factors favouring Lodz, according to Gazeta Wyborcza.

Toshiba to investment in Wroclaw LCD monitor factory 

Japan's global electronics titan Toshiba signed a letter of intent with Poland on September 13th regarding plans to build a 167 zloty (US$55 million) LCD TV monitor factory near Wroclaw, south-western Poland, New Europe reported. 
The investment deal was inked in Warsaw by Toshiba Corporation President, Toshio Yonezawa, and Poland's Economy Minister, Piotr Wozniak. The plant is due to begin operation in August 2007 and will directly create some 1,006 jobs while some other 2000 jobs are expected to be created in sectors linked to the investment, according to a statement issued by Poland's Economy Ministry. Production is targeted to reach two million units destined for sale in Europe. The Wroclaw facility is designed to help Toshiba to increase production of flat-screen TV's to three million in Europe by 2009. Toshiba already has production facilities in the UK. The nearby Dutch-Korean LG Philips plant producing "back end" flat-screen TV modules will supply Toshiba. LG Philips is also expected to begin production in mid-2007, making it the first global LCD industry producer to start production of this type in Europe.

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