Investors rightly seek to understand the economic, political and social climate in any market before committing capital. In the interest of correcting a number of misperceptions of Poland, the following facts and data should be considered:
Poland’s economic growth since its liberation from communism in 1989 has been remarkably consistent and characterized by sound monetary and fiscal management. Since 1989, real GDP per capita has increased by over 2.5x. In 2019, GDP per capita stood at US $33,685, which nevertheless is still only some 70% of the EU median. This compares to 41% of the median when Poland joined the EU in 2004. The table below illustrates the ongoing consistency of GDP growth in recent years:
Due to the COVID pandemic, GDP declined by 2.5% in 2020. However, in 2021, notwithstanding ongoing COVID related challenges, GDP rebounded robustly, growing by 5.7%.
Today, Poland has a stable economy with a well-established macroeconomic position worldwide and favorable conditions for opening and running a business. Poland is the largest country in Central and Eastern Europe and the 5th largest in European Union.
The Polish economy is characterized by high cost competitiveness expressed, inter alia, in a very favorable ratio of salaries to labor productivity. Poland is also recognized for its quality of education, especially in technical and IT sciences. A large percentage of the population is well educated in foreign languages.
The economy is well diversified across the production, service and agricultural sectors. Finding able and willing partners in various industrial and service sectors such as automotive, aviation, IT, food processing, electronics, and finance among others does not pose a problem.
According to E&Y’s European Attractiveness Survey 2019 report, Poland was recognized as the most attractive destination for FDI in Central Eastern Europe.
In addition to a sizeable internal market of over 38 million consumers, Poland offers easy access to the European common market of some 500 million consumers.
Business opportunities are also created by the modernization and expansion of infrastructure at an unprecedented level in Europe, including road and railway transport, as well as energy infrastructure.
Access to the EU common market, highly-qualified human capital, well-developed infrastructure, airport accessibility, convenient communication between cities, and lower business costs in comparison to Western Europe or the United States remain the main factors that attract foreign investors to Poland.
Poland introduced the strongest anti-crisis measures, based on quantitative easing, in the region. Aid initiatives implemented by the Government account for 11.3 percent of GDP.
In the last 30 years, Poland successfully managed to overcome challenges like the 2008-2009 financial crisis, being the only country in the EU to grow GDP during this period. That same resiliency and relative performance is being demonstrated now during the Covid crisis. Projections from the European Commission indicate that Poland will have the smallest decrease in GDP of all EU countries as it emerges from the pandemic.
Democracy: Vibrant and Robust
The Polish people are a politically active and vociferous polity, characterized by free and open public debate.
According to a Pew Research Center survey conducted 2019, more than 65% of people in Poland are satisfied with the state of democracy. This is the third highest result in Europe and the highest among Central Eastern European countries. Satisfaction with democracy is also significantly higher than in 2009.
Poland’s painful experience with years of foreign and communist oppression guarantees that Poles will not surrender their hard fought victory for self-rule, free expression and a full-fledged participatory democracy.
The Courts and the Rule of Law
Poland has some of the strongest IP and data protection standards in the EU as manifested by an active embrace of the GPDR directive. EU commercial law fully applies and is enforced. Government watchdog agencies aggressively pursue any indication of corruption whether in the public or private sectors.
The Polish judicial system guarantees that business can be conducted in accordance with transparent and predictable legal norms. However, a majority of the society is dissatisfied with the judiciary, especially in terms of the quality of criminal justice and the excessive length of proceedings in everyday legal cases. In polls conducted in 2017 and 2018, over 80% of Polish citizens were in favor of reforming the judicial system. Such sentiment has been at a consistent level for many years.
Reforms undertaken by the government are in line with democratic standards and are intended to bring accountability and transparency to a system which does not enjoy enough public trust and support.
Media and the Press
Poland has an active and vibrant free press. In Freedom House’s annual report “Freedom in the World 2020”, Poland achieved the highest score on the “Political Pluralism and Participation” issue and 14 out of 16 points on the “Freedom of Expression and Belief” issue. As the report notes: “Poland’s media are pluralistic and mostly privately owned.”
The majority of domestic media, including leading Polish internet portals and the largest newspapers, are owned by foreign capital.
It is estimated that some 2 million immigrants, primarily from neighboring countries such as Ukraine and Belarus have entered Poland in recent years. These migrants fled to Poland for economic and political reasons. In 2017, Poland accepted over 1.1 million migrants in less than twelve months. This influx, coupled with the overall number of migrants, compares more than favorably with the 1 million people taken in by Germany since 2015. At the end of August 2020, over 658,000 foreigners were registered with and insured by the Polish Social Security Institution, up from 185,000 at the end of 2015.
Assimilation and integration into Polish society is an important criterion of government policy.