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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: 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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