Can Poland Really Become The Next Economic Powerhouse of Europe ?

The Polish economy is the eighth largest economy of the European Union, and it is also the largest among the former Eastern Bloc members of the European Union. Ever since 1990, Poland has followed a policy of economic liberalization, and Poland's economy was the only one in the European Union that managed to avoid a recession through the period of 2007-2008 economic decline. World Bank has classified the Polish economy as a high-income economy. Nevertheless, besides Poland's economic gigantic take-off, there are other problems that are generating a lot of apprehension in Brussels. Poland keeps a more and more authoritarian trend. The far right, which has entered Poland's Parliament for the first time, is trying to push an illiberal agenda. And the government tries to control justice, and its molestation of the minorities has set alarm bells ringing all around the EU. Recent opinion polls have suggested that far-right parties could double their seats in the forthcoming European Elections - and Poland is one country where that movement has become increasingly visible in recent years. Welcome to The Atlantis Report. Poland has 40 million (half of Germany). It has a naturally declining and aging population and also has emigration that further decreases the amount of human capital. It is still poorer than in Western Europe, but it is now Eastern Europe’s richest country. Poland will become poor if it adopts the euro as a currency. Due to the low wages that Polish companies are paying, lots of Poles are leaving the country. The Polish government welcomed more than a million of Ukrainians who are fine to work for a minimal wage. Ukrainians make the majority of foreigners in Poland. Poland has made decent progress almost entirely on the back of its gigantic EU subventions that were pumped into its system for the past 14 years. The opening of western borders has also generated an unprecedented exodus, making more than 3 million people leave the country. By 2016 Poland had developed into a country with a pretty high standard of life. The roads are generally well developed and are being modernized at an incredible rate. Modern shopping malls and modern city streets everywhere. International companies, everything from IT providers to retail chains, all over. More and more people are speaking English. Polish GDP per capita peaked in 2008. Further advancement has been hindered by a combination of the economic crisis and the threat of political instability from the East, which has slowed down investment. Although Poland was the only country in Europe unaffected by the crisis of 2008. There are countries in the post-Soviet block that are performing better, such as the Czech Republic, but there are also ones that are performing much worse, such as Romania and Bulgaria (not to mention Ukraine). According to the FTSE, a London based financial news service, Poland officially became a developed country. It is no longer an emerging economy. Poland has made extraordinary progress. It only freed itself from centuries of oppression by Germans, Austrians, and Russians in 1918. Then the catastrophe of World War II was followed by 44 years of Communist mismanagement. Back in 1989, Poland was a wreck, environmentally, and economically. Making it to the ranks of developed countries in just 29 short years of frantic reform is a miracle. Poland was one of the fastest-growing economies worldwide pre-crisis and the fastest growing economy in post-crisis Europe. Poland is a lot less poor than it was before it joined the EU. Poland has shown a fair amount of resilience and has the potential to grow in the future. Like Germany, it has a position on the Northern European Plain that can be economically exploited as a crossroads for trade between Eastern and Western Europe. This would be more easily leveraged if Russia played nice. Poland is doing well economically and has benefited enormously from EU membership, but it still has a long way to go before its economy approached the size of Germany, France, Britain, or Italy. Because of its size, population, and geopolitically important location. It is a very important EU member-state, so in many ways, it is able to punch above its economic weight. The fact that German/Polish political relations have become so good and there is a lot of trade between the two countries is impressive really given what Germany inflicted on Poland in WWII, but that is what the EU is all about I guess. But The belief that Poland has a strong economy is a bit of a fallacy. Because of practically all infrastructural projects, all of its urbanization projects, practically all that is public investment, is still financed a minimum of 30% from an EU budget. (not a loan, but funded). The question will become more relevant after 2020 when this changes. I believe the Polish to be a very dedicated people with very good mentality when it comes to working. But as an economy they will have a really hard time even coming anywhere close to Germany and the UK, but even Italy and France are likely to stay ahead for the coming decades. Poland is now going through a very positive and lifting economic period mainly , thanks to it's cheap and engaged labor force and positive EU centered commodity boom. However, as much as anybody can hate this, the country is still a very poor level. Particularly in the light of centuries of waisted potentials and tragically run international politics - or better said - no politics at all. Poland always stays as a cheap and educated workforce reservoir, selling market for western corporations and banks. There is only one hope for Poland to become a rich country - develop a market and become a leader of it - like Japanese and Koreans developed electronics. 2019 was the 27th year of undisturbed GDP growth in Poland. During these years, Poland increased its nominal GDP almost seven times (from 92 billion to 614 billion dollars). It continues to be one of the fastest-growing economies in the EU and remains the biggest economy of the Central Europe region (if we count Germany as western, not central Europe). At the end of 2017, the FTSE Russel report announced Poland stopped to be an emerging market and became a developed market. It means that according to the FTSE group, officially on 01.09.2018, Poland joins a group of 25 most developed countries in the world. The unemployment rate in Poland is at 6%. Rates at such a level usually mean that everyone who wants to work can find a job, and often, it’s more problematic for an employer to find an employee than the other way round. Poland's national debt crossed the line of 1 trillion PLN (290 billion US Dollars), but it’s still only 56% of GDP (for example ,Germany's debt is 61% of GDP, UK, 84%, Spain 108%, Italy 139%, and Greece 181%). Every year tens of billions of Euros flow from the EU’s richer regions to its poorer regions. Although anti-EU feeling has been on the rise in Europe over the past decade, countries like Italy, Poland, Hungary, and others have elected folks who campaigned on Euroskepticism. But when these folks make it into power, they all change their tune pretty damn quickly. Viktor Orban of Hungary, in particular, loves to outrage the bureaucrats of Brussels. But he’ll never dare to take Hungary out of the EU. As his government would lose billions. Let’s take Poland as an example. In 2017, Poland contributed around 3 billion Euros to the EU budget. But the EU spent almost 12 billion Euros in Poland. That’s 9 billion Euros of what I think it is very fair to call development aid. Now in the United States, where we can spend a billion dollars on a single building, that may not seem like much, but compared to most foreign aid, it’s an extraordinary amount of money. AND TO GIVE YOU AN EXAMPLE OF FOREIGN AID. Israel gets a third as much from the United States as Poland gets from the EU every year. And put simply, EU structural funds are awesome. Like most developing countries, corruption is a problem in Eastern Europe. EU funds tend to be well administered. Unlike aid from the United States, that mostly goes to paying professionals from the United States, EU structural funds tend to go more or less directly to useful stuff. According to the Guardian, 56 billion Euros spent in Poland between 2007 and 2013 built a modern road system, schools, and tons of other key factors in Poland’s economic miracle. After World War II, the US embarked on the Marshall Plan to rebuild Western Europe. It’s seen as a great success, and one of the best things the US has ever done. The Guardian, adjusting for inflation, reckons that between 2007 and 2020 Poland, will have received the value of two personal Marshall plans from the European Union. Considering Poland’s nightmarish history with Europe, the Poles deserve every penny of aid they got. Poland has almost everything needed to be a powerful country, almost. Poland has almost everything to be the next powerhouse in Europe. A lot of big companies are opening their offices here (Amazon, PWC, State Street, Intel, etc. etc. etc.) and the reason is not only the cheaper salaries but much more important the IT knowledge base in Poland is very very good. The American companies are setting up there to do business in Russia without the cost of Berlin and the corruption of Moscow. The job market is booming, there are more positions open then persons to fill them, salaries are growing, competition is high, and facilities are being built. Where can Poland lose this battle? From my point of view, there are three big challenges facing Poland in order to keep growing and compete with big countries like Germany. #1. - Right-wing has a lot of power here, and they clearly lack strategy and are very closed-minded. For me, this is crazy, so much potential, and they have the right-wing in power. This is giving more power to racism, that some people are afraid to move here. I had some friends attacked in Warsaw just because they were speaking English on a bus. #2. - Lack of leaders. Poles are, in general, amazing at getting things done, but they lack good leaders. This is probably something cultural, but with good leadership in any company, things start to move faster. #3. - The Communist mentality is still very strong in Poland, and that doesn’t help much to grow a country. You can see it in the small day to day things but also in some laws. This is something that is changing slowly though. Can Poland overcome these issues and become a great country and have power in Europe? Well, that’s what we will have to wait to see. Lousy government aside, Poles have every reason to think that things will get better economically. This Was The Atlantis Report. Please Like. Share. And Subscribe. Thank You.









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