In May 2004, Poland joined the EU along with 9 other eastern European countries. It was the single largest EU enlargement in terms of people and countries. The EU then had 25 members (now 28). Poland now has a GDP of $516 Bn (>20% than in 2008), and income levels have doubled for the 38 million citizens who have enjoyed average annual GDP growth >4%, since 2004. It has been a good recession. All this has ensured that Poland is now firmly one of the “Big EU 6”, in with Germany, UK, France, Italy and Spain.
So back 25 years ago, at the fall of the Iron Curtain, 1989, Poland was a basket case. I know, I was there with the Red Cross delivering medicines in Krakow, when GDP per person was just 33% of that across the border in the EU.
A lot has changed. Poland’s leadership made and implemented some tough business friendly, market orientated decisions. By the early 90s the economy was growing again and has not stopped. More recently there have been two main funding drivers, EU funds and FDI. Upon EU entry, Poland started receiving EU structural funding of >$139 Bn (another >$144 Bn is due over the next 6 years), as well as serious EU Foreign Direct Investment (FDI), see the Bank of Poland table below, note post 2004:
So who is behind this? The list of major foreign investors is long and essentially European. This is led by Germany, of course, with >6000 companies, the Netherlands has >2400 companies and France >1300 companies. This combined trio accounts for >57% of FDI. If you want to know more there is a great website http://www.paiz.gov.pl/publications/foreign_investors_in_poland
But the take-away is that Poland has made a good use of these investments and the accompanying GDP growth. Today presents political and economic stability, with some calling this a new Golden Age. Poland has made itself easy to do business in, as demonstrated by the 14 Special Economic Zones and ranking given by Bloomberg, as Best for Business CEE country. The Organisation for Economic Co-operation and Development (OECD) Poland country report endorses this, nevertheless advocates continued reform (notably bureaucracy, public enterprises, infrastructure and education are highlighted) and points out the risks to the East, Ukraine and Russia who consume >20% of Polish exports. It is noteworthy that >600,000 Ukrainians work in Poland commuting from home, even a similar number of Poles do the same in Germany. Well, this is the EU in the making. Other EU countries new, and not so new, entrants should watch, learn and emulate. For those of you seeking further reliable information, the OECD report is the best I found, so here's the link: http://www.oecd.org/poland/
If you are interested in the latests updates from the EU, read our blogs from the July's newsletter:
TTIP: Waning EU support, led by Germany
The European Small Business Portal - an overview
Gain international business knowledge from entertaining videos to in-depth analytical whitepapers. Visit ibt partners resources page.