Credit Management magazine October 2017

COUNTRY FOCUS
AUTHOR – ADAM BERNSTEIN
THE roots of the Polish state go
back more than 1,000 years to
when an area akin to modern-day
Poland, under the rule of Miesko
I, converted to Christianity.
Sitting at the crossroads of
Europe, Poland soon rose in prominence yet
fought many wars and uprisings to maintain
its freedom. Partitioned at the end of the 18th
century, the country became independent
at the conclusion of World War One. But as
history again demonstrated, its location and
resources made it a target – this time for
German occupation in 1939 – before it was
subsumed into the post war Soviet sphere of
influence.
Some say that the fall of communism and
the collapse of the USSR is partly down to one
of its sons, the late Pope John Paul II, whose
visit as pontiff in 1979 indirectly led to the
creation of the trade union Solidarity and the
subsequent break-up of the communist-bloc.
A COUNTRY REBORN
Poland is now politically stable having gained a
new constitution in 1997, joined NATO in 1999
and the EU in 2004. An April 2017 Bloomberg
Business publication says the country is
becoming a regional power as it is now the EU’s
eighth largest economy. In the World Bank’s
ratings, Poland is classed as a high-income
economy with a population of 38.5m that has a
per capita income of around $13,370.
Poland appears, according to a 2017 Ernst
and Young report, Doing business in Poland,
to be ‘making remarkable progress, moving
from a centrally planned to a market economy.
Trade liberalisation, economic restructuring,
privatisation, capital inflows, and gradual
adaptation of legal and administrative
standards suitable for market practices have
improved economic structures dramatically’.
It’s notable that since 1992, the country has
not seen a recession but instead, rapid growth
interspersed with three short periods of
slowdown. The World Bank has estimated that
growth stood at 3.9 percent in 2015, 2.8 percent
in 2016, and will be 3.1 percent in 2017.
Split into 16 regions, the country has strong
relations with the UK as evidenced by the
inflow of Polish nationals into the country
since accession to the EU. Its consumer market
is strong and filled with highly-qualified
workers from the country’s 430 high education
institutions (30 percent of Poles have a
degree). The Polish Information and Foreign
Investment Agency (PAIiIZ) believes that 90
percent of graduates can speak a language
other than Polish.
The country now has expertise in IT
and other (modern) technologies. In a 2015
educational ranking, compiled by the The
Organisation for Economic Co-operation and
Development (OECD), Poland is said to rank
as one of the highest among members of the
European Union – 10th in science, third in
reading and reading comprehension, and sixth
in mathematics.
OPPORTUNITIES
At the start of September (2017), emergingeurope.com
stated that the Polish Deputy
Prime Minister and Minister of Economic
Development and Finance have drawn up a new
plan to attract inward investment. Effectively,
from the start of 2018, the 14 existing special
economic zones (which cover just 0.08 percent
of Poland) will be replaced with one that will
cover the whole of the country. The stated goal
is to make every village, town, and city equally
attractive to investors in an attempt to lower
the general unemployment rate which in some
localities is around 20 percent.
The Government wants to ensure that
going forward, tax incentives will depend on
the number of quality jobs, number of jobs
created in total, and the sustainability of the
project that’s being subsidised. It’s estimated
that within the first decade the new regulations
will result in new investment projects worth
over 117 billion pln złotys (£25 billion), 157,000
new jobs and four billion pln (£855 million) of
corporate income tax.
Of course, different sources suggest different
openings for businesses. According to the US
Government’s export.gov website, ‘investors
represent a wide range of industry sectors
including automotive, aerospace, information
technology: hardware and software, food
products, transportation, pharmaceuticals,
paper production, appliances and financial
services. Poland has also emerged as a
favourable location for business processing
centres, including call centres, shared services
centres and research and development
operations’.
The UK Government sees the opportunities
in a different light as the main UK exports are
electromechanical devices, machinery and
chemicals. It notes that Poland has maintained
its position as a huge recipient of EU funding.
Some 86 billion euros of Structural and
Investment Funds between 2014 and 2020 is
being combined with Poland’s own national
investment of 18.8 billion euros to make a pot of
104.8 billion euros for investment in transport
and energy, SME competitiveness, research
and innovation, the low-carbon economy,
environmental protection as well as social
inclusion and labour market participation.
In terms of market segments, there are many
worth a closer look. In energy, the country is
building new nuclear power plants that are
destined to make up 17 percent of the country’s
energy supply. There are openings here for
R&D, consultancy and project management.
The Recognised Standard / www.cicm.com / November 2017 / PAGE 25 continues on page 26 >