An odd couple. This is how Europe, half-fascinated, half-anguished by this strange phenomenon, has been watching the twin duo of the Kaczynskis evolve over the last few months, in a division of roles that leads any slightly inattentive reader astray between Lech 'the tough', the President, and Jaroslaw 'the soft', the Prime Minister. An unprecedented tandem, then, which, with its Red witch-hunts and anti-abortion and anti-gay statements, helps to fuel the folkloric vision of a frustrated, bigoted and deeply backward-looking Poland. Push the conversation a little further and you'll see a peasant woman in a cart, kerchief on her head, carrying a cross and raising her eyes to heaven to celebrate the Black Madonna...
Good economic indicators
For anyone who has set foot in Warsaw in the last ten years, however, this cliché is no longer pure fantasy. Admittedly, the Polish capital lacks the glamour of its European counterparts, owing to the disaster of the Second World War. But it is no less exciting, at the centre of a country that is proving to be the most promising of the new members of the European Union. This is borne out by one global study after another from major consultancies such as AT Keaney and Ernst and Young, who, from 'confidence' index to 'attractiveness' measure, now regularly place Poland in the European top three, well ahead of the other new EU countries.
Behind the curtain of melodramatic operetta lies the brighter scene of an economy that is back on a strong growth track: 5.8 % in 2006 and even more optimistic forecasts for 2007. Better still, all of Poland's economic indicators are now in the green, with investment up by 17 % in 2006, inflation under control, in stark contrast to the situation in Hungary and the Baltic States, domestic demand back on an upward trend, and unemployment plummeting to below 15 %, compared with close to 20 % before the country joined the European Union. In Warsaw itself, the change has been even more radical, as we are now approaching the limits of simple frictional unemployment, with a rate contained below 5 %.
Another piece of good news for the Polish economy is the return of foreign direct investment (FDI), which seemed to have stalled for two years. At €11.9 billion, FDI inflows set a new record in 2006. This result is all the more remarkable given that it comes after the massive privatisation plans that 'naturally' attracted the first wave of foreign investment.
The sectors in which foreign investment is directed in Poland demonstrate a change of gear, a move upmarket for a country whose areas of specialisation are now well identified and, above all, increasingly focused on technological skills. Of course, the automotive industry remains a key sector for foreign investment in Poland, and the new commitments announced by Toyota Motor, AAM, MAN and Bridgestone are a major factor in the record total investment recorded in 2006. But there has also been a spectacular breakthrough in electronics, particularly in television manufacturing. "According to the Warsaw Economic Mission, "By 2010, almost 50 % of the flat screens marketed in Europe will be manufactured in the Wroclaw region alone! In this race eastwards, the major players in the sector have been following in their footsteps for the past two years. In March 2006, Sharp announced the construction of an LCD television factory in the Pomorze special economic zone. Then Toshiba and Funai followed suit in Kobierzyce and Nowa Sol. Finally, six months later, Dell announced the opening of a state-of-the-art server manufacturing plant in Lodz.
Another major sector for foreign investors in Poland is outsourcing. IBM, Microsoft, Accenture, Glaxo Smith Kline, Intel, Motorola, Siemens, Samsung... countless multinationals are flocking to Poland to set up outsourcing centres, whether in finance and accounting or research and development. Although the sectors in which these companies operate do not always fit in with this new model, France is no exception. With a stock of FDI worth €16 billion, France is still the leading foreign investor in Poland, with a presence symbolised by the success of a number of major companies such as Bouygues - which bought the Karmar construction company in June 2007 - and above all the hegemony of French supermarkets. While the Casino group has withdrawn from the game, Leclerc, Décathlon and above all Carrefour continue to plant their banners in the Polish suburbs.
Foreign investment incentives
Of course, this success is no accident. In the cocktail of Poland's attractiveness, the good old ingredients - low wages and low fixed costs - continue to play an important role. But the Polish government has managed to add a little spice to the recipe by creating fourteen special economic zones and other technoparks where foreign investors benefit from privileged conditions: tax exemptions, competitive land prices, assistance with administrative formalities, job creation bonuses...
For foreign investors, there is now another fine promise, and it comes from Europe. With more than €67 billion spread over the 2007-2013 period, Poland will be the biggest recipient of Community aid over the next six years, which clearly offers it financing facilities to encourage foreign investors to take part in its major infrastructure projects.
