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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: 111 - (25/08/06)

Premier hits back
Polish Prime Minister Jaroslaw Kaczynski and his twin brother, Lech, who is president of the country, attract a lot of criticism, and indeed ridicule in Poland from educated people for their 'mindless populism,' as one acerbic commentator put it. 'Kaczynski' means 'duck' in Polish; and they are derided by what they would no doubt brand as 'the chattering classes' as a pair of silly ducks.
One thing that they are not, unlike say Tony Blair and his deputy, John Prescott, is a pair of lame ducks. They came to power only late last year (although Jaroslaw to the premiership only in July) and are firmly in charge, quite prepared to take on their critics. Kaczynski replaced Kazimierz Marcinkiewicz then as head of a PiS-led coalition government with the smaller populist Samoobrona farmers' party and the Catholic-nationalist League of Polish Families (LPR). 
The new prime minister on August 4th made the most important speech of his premiership so far at a press conference. He slammed criticism that his right-wing Law and Justice (PiS) coalition was undermining democracy and the free market and dismissed it as 'completely divorced from realistic facts.' 
PiS' radical coalition partners and the fact that Premier Kaczynski is also the identical twin brother of President Lech Kaczynski, stirred concern that Poland was in the grip of a volatile 'twinocracy,' which could damage the country's young democracy and undermine its commitment to Western institutions. 
Moves to disband military intelligence services, the creation of an anti-corruption agency with wide-ranging powers and moves to create a centralized agency supervising Poland's banking sector have sparked concern and criticism both at home and abroad. 
Speaking to the foreign press in Warsaw on August 4th, Kaczynski denied Poland was in any danger of changing its chosen Western, democratic and capitalist course. Poland had not and will not 'stray from the road of democracy,' the market economy, the European Union or NATO, Kaczynski said. 
Public comments by both Kaczynskis voicing support for the death penalty have also stirred controversy. While he reiterated that both he and his brother were advocates of capital punishment, Kaczynski insisted 'it is not the case we will reintroduce the death penalty. This is not a real or practical issue.'

The Fourth Republic; De Gaulle returns 
For anyone interested in politics, the phrase, 'The Fourth Republic,' conjures up France and the events of 1958-59, when De Gaulle replaced the Third Republic, that had presided over the debacle of 1940 and then the disastrous Algerian War, with a new constitution and the Fourth Republic.
The Poles are very Francophile; it was Weygand and De Gaulle no less as a young officer who went to their assistance in 1920 when they were attacked by the Bolsheviks, who were duly repulsed. One remembers friends who helped one out in need. French is still widely spoken in Poland.
Everybody in Poland knows what Kaczynski has in mind when he says that his party's promise to build a fourth Polish republic replacing the third established after the collapse of communism in 1989 was advancing full steam ahead. 'If we are changing something in Poland it is the real shape of our public life, our society,' he said. A Gaullist revolution is in the offing for Poland no less. 
When his greatest friend, the writer and man of action, Andre Malraux, asked De Gaulle after his resignation in January 1969 when he would return, De Gaulle, never at a loss for a good riposte, answered; "Always." 

So it turns out in Poland.
Kaczynski maintains that despite the post-1989 reforms of economy and political mechanisms, there was little, if any, reform of state and social structures. This permitted former communists to retain power and influence in key sectors, leading to endemic corruption and the 'degeneration' of public life in Poland, he argues. 'Not so long ago gangsters used to come to this building,' Kaczynski told journalists at the meeting in the prime minister's chancellery in Warsaw. 
'We are doing away with these problems and this creates huge resistance and sparks fears, but it serves Poles,' Kaczynski insisted. 'Nothing wrong is happening in our country.'
He was obviously referring to the process of lustration, whereby former collaborators and informants with the previous communist regime are to be flushed out of offices and perks. He should be reminded that De Gaulle for his part, a towering statesman in every sense, did not approve of the reprisals against collaborators with the Germans in 1944-45 and did his best to curb them, not instigate them. Quite a few had been double agents after all.
In an indication that he might realize this himself, Kaczynski confirmed he had invited deposed finance minister Zyta Gilowska back into the government. 'I think I'll manage to convince her,' said Kaczynski. 
Gilowska was forced out of office a month previously when allegations surfaced that she had been a communist-era informant, but had failed to admit this in a special vetting declaration mandatory for all senior politicians. She flatly denied the allegations. 
A special vetting court currently hearing her case is expected to clear her of any wrongdoing, opening the way for her re-entry into government. 

'A second wave of capitalism' needed
Gilowska is regarded highly by economists as a fiscal disciplinarian bent on keeping Poland's deficit in check and revamping public spending. 
With global financial analysts Merrill Lynch predicting Poland can expect near 7-per-cent growth in GDP in the coming years, Kaczynski was quick to point out that economic growth was driven by the country's 'human capital.' 
The first wave of Polish capitalism after the 1989 demise of communism crashed by 1995 because entrepreneurs lacked skills and knowledge, the prime minister said, who believes a new well-educated generation of Poles can create a 'second wave of capitalism.' 
But in order to encourage a new generation of Poles to set up shop at home instead of seeking jobs in other EU states, reforms aimed at slashing red tape for young entrepreneurs must be pushed through, he said. 

The international scene
On the international front, Kaczynski focused on energy security, emphasizing Poland's opposition to a joint Russian-German project to construct a natural gas pipeline across the Baltic Sea floor and bypassing Poland and the Baltic states of Latvia, Lithuania and Estonia. 
All four countries have criticised the project and fellow EU member Germany for compromising their vital energy security interests and threatening environmental damage to the Baltic Sea. 
Poland was considering its own foray into nuclear energy, Kaczynski admitted. It was also reviewing an offer from Lithuania to partake in a project to build a new nuclear reactor at the Ignalina facility in a joint project with Estonia and Latvia. 'Now we are studying whether this is a mutually exclusive alternative - if we have to decide on one or the other, we'll go for the Polish alternative,' he told the assembled journalists. 
Poland was also re-examining a deal first struck with Norway in 2001 for additional natural gas deliveries. Part of an energy diversification plan, the deal was shelved by an ex-communist government but Kaczynski's cabinet have now reopened talks with the Norwegians. A decision on natural gas deliveries could come in October, he said. 
Recent diplomatic contacts with Russia showed 'an element of hope' for a meeting between the Polish and Russian heads of state, Kaczynski said, although strained relations over the historical conflict between the two countries demanded 'patience.'

On a personal note
At the end of his discourse Kaczynski began to unbutton. He admitted to being a night owl and to spending a whopping 80 hours a week on the job. 'I don't know how long I'll manage, I'm not a young person,' the 57-year-old prime minister quipped. 
Once labelled by the media as the worst-dressed party leader in Poland, Kaczynski has undergone a startling image makeover since becoming prime minister. Worn-out shoes and too-tight clothing has given way to elegantly- tailored dark suits and fancy footwear. He has even neatly tamed an unruly lock of hair, which regularly drew media attention by famously standing on end. 
Not all observers are embracing the premier's new look, however. Some pundits in Warsaw complain it is even more difficult now to tell him apart from his identical twin brother, President Lech Kaczynski. 

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AUTOMOBILES

Toyota invests 145 million Euro in gearbox factory 


Japanese carmaker Toyota is investing 145 million Euro in a new factory to produce gearboxes in Poland, a company spokesman said at a groundbreaking ceremony recently.
Production of modern six-speed gearboxes is expected to commence in the summer of 2008 when the plant is due to come onstream at Walbrzych in the province of Lower Silesia. Poland has designated the region as a special economic zone in order to attract foreign investors. Toyota, which has two other plants in Lower Silesia that turn out diesel engines, has invested 600 million Euro in Poland, creating 3,000 jobs, the news agency PAP reported.

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BANKING

Pekao to be more active in retail market 

Pekao and BPH are the largest banks of Poland. Pekao intends to be even more active in the retail market and on July 17 the company revealed which areas it would develop, in particular, following its merger with BPH, New Europe reported.
"We want to be one of the most serious players in the field of mortgage loans. Moreover we will develop consumption loans and credit cards as, according to forecasts, they will be developing quickest. We also intend to be a leading player in the investment fund market," Paolo Iannone of Pekao's managing board said.
Analysts are not enthusiastic about this announcement, as all market players now employ a similar strategy. Pekao also hopes to become the leader of mortgage loans denominated in zloty. Iannone said "I think that I can cope the task of running a business as large as retail banking will be in Pekao following its merger with BPH. I would like to stay, but this depends on the owners," commenting on the information that he would be transferred to another branch of Unicredit.

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ENERGY

Premier wants Poland to build nuclear reactor 

Lithuania's new Prime Minister, Gediminas Kirkilas, has invited Poland to participate in the construction of a strategic third nuclear power reactor at Lithuania's existing Soviet-era Ignalina facility. Although no concrete decisions were announced, energy policy dominated talks between the visiting Kirkilas and Poland's new Prime Minister, Jaroslaw Kaczynski, in Warsaw, New Europe reported.
Lithuania, Latvia and Estonia have initially agreed to push ahead with the construction of a third reactor at the Ignalina station. Should Poland join, it would be its first involvement with nuclear energy. 
Kirkilas reiterated the need for a so-called "energy bridge" to link electrical power grids between Lithuania and Poland, thus hooking the Baltic state into Western European electrical power grids. 
Both leaders expressed opposition to German-Russian plans for the construction of a natural gas pipeline across the Baltic Sea floor. The leaders of the two EU newcomer states concurred the project should not receive funding from the European Union. 
The Baltic states and Poland have condemned EU partner Germany for striking the energy deal over their heads with Russia and allege that it poses a threat to their energy security. Such important decisions concerning energy strategy should be made in consultations between EU partners, the four states insist. 
In a move which recently strengthened economic and energy ties between the two states, the Lithuanian state recently permitted Poland's largest oil refiner PKN Orlen to buy a controlling stake in Lithuania's only oil refinery, Mazeikiu Nafta. 
Poland's status as a fellow-member of NATO and the EU is thought to have been a significant factor in the decision to sell to Orlen. The trip to Warsaw was the first foreign visit of Kirkilas. There are 3300 workers at the Ignalina power plant and the Japanese ambassador visited there recently. Ignalina NPP has produced 966 million kWh and has sold 894 million kWh of electricity. 

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TELECOMMUNICATIONS

Polish telecom TPSA profit 25 per cent 

Poland's largest telecommunications operator, Telekomunikacja Polska SA (TPSA), said that its second-quarter net profit rose 25.5 per cent on the year, due to lower costs and a strong performance in its mobile telephony operations. The company also reiterated its guidance for a decline in group revenues of one per cent to 1.5 per cent for the full year.
Group net profit at the company, which is 47.5 per cent owned by France Telecom SA (FTE), rose to 571 million zloty in the second quarter from PLN 455 million a year ago. It has been mentioned by the website www.wbj.pl that the figure beat analysts' forecasts for second-quarter net profit of PLN560 million.
Second-quarter sales rose 0.9 per cent to PLN4.64 billion, also ahead of the PLN4.61 billion average analyst forecast. TPSA earnings were driven by the rapid growth of its mobile arm Centertel and its data-transmission business, which outpaced erosion at its core fixed-line business. In addition, costs fell 76 per cent to PLN81 million in the second quarter. Fixed-line revenues fell 11 percent to PLN2.21 billion, while mobile revenues jumped 18 per cent to PLN1.69 billion. Centertel had 11.13 million subscribers at the end of June, up 30 per cent on the year and almost meeting the company's full-year target of 11.5 million customers.
Revenue in the data-transmission business increased to 5.3 per cent in the second quarter to PLN557 million and broadband revenues surged 18 per cent to PLN292 million. But TPSA shares were weaker early on the Warsaw Stock Exchange as investors looked to the longer-term picture at the company. Pawel Puchalski, an equities analyst at BZ WBK brokerage house in Warsaw said that "TPSA delivered, but that could be the last good quarter for the company. The strong bottom line resulted from hedging policy and subsequently lower financial costs." Other analysts added that TPSA did not address the most important issue, the group's long-term strategy for dealing with the market's deregulation, rising competition across all business segments, and the spread of new technologies such as Voice over internet Protocol.
In the statement following the release, TPSA only said that its main goal was "to maintain the leading position on the telecommunications market by focusing on the most prospective areas, like broadband internet access and mobile telephony, while sustaining profitability."

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