Global Perspectives
National Economic Profiles from IIC Partners
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POLAND
With nearly 39 million people, Poland is the largest of the Eastern European countries that joined the European Union in May, 2004.
First to shake off the Soviet satellite system, Poland is now benefiting from nearly 20 years of determined economic and political transition. Massive economic and structural reforms following the collapse of communism have played an important role in attracting significant foreign investments to Poland. In 2007 foreign direct investment (FDI) reached ∉12.8 billion and is expected to hit the level of ∉13 billion in 2008.
In recent years the country has been marked by a spectacular rise in trade and commerce, as well as the emergence of a large and vibrant services sector. In the face of a world economic slowdown, Poland stands out an attractive investment destination and a comparatively stable financial arena. says Agnieszka Jabłońska, managing director of the IIC Partners affiliate in Warsaw, Bigram Management and Investment.
Polish GDP growth is expected to reach 3.5 per cent in 2008 and four per cent in 2009. This positive outlook was recently confirmed by international reports, among others, by the Ernst &Young investment attractiveness report, where Poland is ranked first among European foreign investment destinations and also by the preliminary data on FDI inflow for 2008.
Spectacular growth in 2007 (six per cent in GDP) placed Poland second among the OECD countries. Poles have seen progress in the creation of new workplaces and recorded an impressive drop in unemployment, from 19.1 per cent in 2004 to 8.9 per cent in September 2008.
The pro-business agenda of the current government, under Prime Minister Donald Tusk, includes reductions in public spending, lower taxes and increased privatization. But lacking a two-thirds majority in parliament, Tusk’s government is generally expected to take a go-slow approach. Demographically, Poland is one of the youngest countries in Europe , with half its population below age 35. Consequently, the country holds second place in terms of the number of students and in 2007 the number of graduates rose from 394,000 to 410,100.
Favourable geographic location and demographic structure, an educated workforce, an efficient financial system and existing industrial infrastructure are key factors contributing to Poland’s economic performance.
“Poland offers many advantages for investment,” Jabłońska says. “We’ve already attracted many foreign investors and this continues. Poland has become a success story in Eastern Europe. Polish managers are sought after as top executives on the regional (CEE, EMEA) and local level. Some multinational corporations have already discovered the strength and variety of assets here. That’s why some sectors have already become recognized as Polish specialties on the European and global level.” She says these include:
1. Domestic Appliances (White and Brown Goods) – a great number of worldwide players already have their operations here: Bosch, Whirpool, LG, Fagor Group, Indesit, Electrolux, Philips. Total number of refrigerators (2.3 Millions in 207), washing machines and kitchen ovens produced in Poland equal 15 per cent of total production of such goods in Europe. Today Poland is the leader in production of TV sets in Europe (about 80 per cent of TV sets on European market). Manufacturing sights of such companies as LG Display, Toshiba, Sharp, Orion, Jabil, TTV and others produce around 30 Million LCD and PDP units. There are also some investors operating in fine electronics and IT, such as DELL.
2. Rubber & Plastic – foreign investors who already operate in Poland are increasing their production capacity and other foreign firms are coming.
3. Business Process Offshoring (BPO) – McKinsey & Company estimates that in 2008 alone, 7-8 mld PLN might be invested in this area of business. Poland is already recognized as the European leader in BPO with shared service facilities of such companies as VOLVO, Shell, HP, Philips, Accenture, Cap Gemini, Ernst & Young, Atos Orygin, Philip Morris and others.
4. Automotive – a number of international key players are already here, among them: General Motors, Volkswagen, Toyota, Delphi, Faurecia, ISUZU Motors, Hutchinson and Sylea, Valeo. There are also a large number of local sub-contractors.
5. Food Manufacturing & Processing – big population, agricultural resources and industrial infrastructure have attracted a lot of investors in food processing, such as Kraft, Mars, Nestle, Smithfield Foods, Lactalis and others.
“The favorable economic picture of Poland is also influenced by the beauty of its nature and landscapes,” says Jabłońska. “Besides the woodlands, lakes, sea and mountains, there are many historical sights, with over a thousand years of history. Warsaw, Wrocław and Poznan are not only the cities of history but also the centers of business. The tourist roadmap should also include Krakow, Gdańsk and Częstochowa.” “The team of IIC Partners invites you to feel the power and the beauty of our country,” Jabłońska says. |
