28 December 2007

Interview to the Trade Consul of Poland by Pietro Stroppa

We met the general Consul of Poland in Italy, Dott. Adam Szymczyk, who talked to us about the Polish economic situation and his view on the European Community.

“The Polish economy has recently been characterized by an ongoing improvement of macro-economic indices, in particular, thanks to the growth of exports, investments and the industrial production level. An additionally positive sign for the economy has been the slight decrease in unemployment over the last few months. 2004 was an extremely important year for Poland, for a number of reasons. The most important, undoubtedly being becoming a member state of the EU, a historic event whose benefits will be noticeable over the next few years. But some results are already apparent including the considerable growth of GDP +5,4% and inflation, 4.30%, both of which were determined, above all, by the other results of becoming a member state, such as the strong increase in Polish exports, Polish agriculture, the appreciation of our local currency, the zloty, vis-a-vis both the Euro and the dollar, as well as the growth of gross monthly salaries.
The fact that unemployment in our country, determined by the progressive rationalization of production processes on account of being subject to a government intervention plan for the re-launch of PMI and employment, is likely to attract foreign investors. According to the World Bank’s “Economic Report”, Poland’s overall economic situation is more than positive. Our country has benefited from its new membership position by considerably increasing exports, even to strongly competitive markets, but it has also put community funding to good use. Poland is positioned in second place, after Slovakia, as one of the member countries offering the best conditions for foreign investment. In 2004, foreign investment was equal to 12.9 billion dollars and, in 2005, to 7.7 million dollars. The overall value of foreign investment corresponds to 91.7 billion dollars. GDP. Starting in the mid-nineties, Poland has undergone a dynamic economic development. Over the last ten years, average GDP has been equal to 4.4%. Over the last two years, inflation has decreased by 1.5%. In 2005 (2004), exports accounted for 88.61 billion Euros (73.8) while imports accounted for 100.03 billion Euros (87.9). 2005 (2004) balance 11.42 (-14.1) billion Euros.
The most positive result of being a part of the EU has been the considerable growth in exports and the ensuing beneficial results on Polish agriculture, with Polish transport companies also benefitting strongly. But we cannot forget the rapid economic development of the past ten years with the privatization of Polish industries resulting in the influx of considerable capital, accompanied by the opening of new markets plus an increase in services and investments.
Until now, exports have represented the mainstay of Polish economic growth. Over the years, exports have continued to increase, peaking in 2004, following EU membershio and favouring an improvement in the Polish trade deficit. The strong increase in Polish imports and exports continued in 2005 and 2006, thus lowering our negative foreign trade balance. In 2004, exports increased by 24.8 while imports increased by 18% compared to the previous year, with a particularly well developed exchange of goods and services, above all, with industrialized countries which, during the period mentioned, absorbed 85.4% of Polish exports and accounted for 75.9% of imports.
The incidence of Poland’s main partners on its foreign trade has not shown any significant changes. The EU is our number one market both in terms of supply as well as outlet, for Polish trade. In 2004, the EU absorbed as much as 79.4% of all Polish exports while satisfying 68.1% of Polish imports. In the meantime, Poland has also improved its deficit with the EU which now accounts for about one tenth of its overall debt, 1,1 billion, compared with a deficit of 10.6 billion euros in 2004). Furthermore, as regards the short-list of its main partners, its largest trade deficit, after that with Russia, determined, for the most part by its “energy bill”, is with Italy, which is Poland’s number two trade partner.
This would appear to confirm that the increase of Polish exports has not been too badly affected by the fluctuation in its own currency. The positive trend of Polish exports is attributable to the restructuring of its production processes ( a cut-back in production costs, a considerable improvement in quality) which began in the ‘90’s and whose benefits are only now beginning to be apparent as confirmed by the growing interest, on the part of foreign consumers, in Polish products. Its new EU membership status in 2004 created favourable conditions for investments in Poland:
• access to a market of 500 million consumers (UE, Norway, Iceland and Lichtenstein); • Poland will be the main beneficiary of EU funds, regardless of the priorities of its structural policy; • Polish regulations have been adapated and harmonized with those of the EU (acquis communautaire) meaning our legal status is fully compliant with European standards. Poland’s entrance into the EU can be seen as a further guarantee not only of political stability but also of dynamic economic growth. The examples of Ireland and Spain show how being a member state of the EU can influence foreign investment trends. In fact, in 2004, foreign investment exceeded 12.9 billion dollars, thus bringing overall foreign investment to 84.5 billion dollars. In 2005, foreign investment accounted for 7.7 billion dollars. Poland is located at the heart of Europe, at the crossroads of important transit routes from the West to the East, from the South to the North, with easy access to the Baltic Sea. An ideal geographic position in terms of access to the markets of Russia, Germany and Scandinavia. Poland has been subject not only to a phenomenon of delocalization (its companies manufacture goods outside the country and then import them back) but also to one of internationalization (investments are made abroad on account of its proximity to outlet markets).
According to the EU’s 2007-2013 funding programme, Poland has been earmarked as the main beneficiary of the funds designed to put Poland on a par with other member states as far as development is concerned. In fact, the Warsaw government will receive over 80 billion Euros from the EU which it will be able to spend between now and 2013 on roads, highways, purification plants and urban waste disposal centres. And, then again on new machinery for companies, on training and on the development of agriculture and fishing.”

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