Poland Improving Amid Crisis
Mid-September marked two years since the Lehman Brothers bank filed
for bankruptcy, an event that had triggered the worst financial crisis
around the world since the Great Depression. The turbulence on global
financial markets led to the spectacular collapse of a string of
high-profile financial institutions and large companies. Some countries
found themselves in serious trouble. Greece even faced a threat of
bankruptcy.
Poland, meanwhile, avoided most of these problems and was one of the
few developed countries that did not plunge into recession.
Paradoxically, Poland’s international profile improved thanks to the
crisis. Financial markets started to perceive Poland as a large and
growing European economy rather than merely a part of Central and
Eastern Europe.
The improvement in Poland’s ratings abroad is coupled with an increased
interest in the country among investors. According to the Polish
Information and Foreign Investment Agency (PAIiIZ), in the first half
of this year, foreign direct investment in the country was more than 80
percent higher than in the same period of 2009, even though 2009 was
quite a good year in terms of FDI.
What attracts investors to Poland is that its economy is growing
despite the global crisis. But the fact that the Polish economy is
increasingly open and competitive is also an important factor. In a
league table compiled by the World Economic Forum, Poland is ranked
39th among 139 economies in terms of competitiveness, ahead of Italy,
Spain and Portugal, but behind the Czech Republic and Estonia. Although
this 39th place does not seem to measure up to Poland’s potential and
aspirations, the country has made significant progress compared with
the previous league table in which it ranked 46th.
In producing its tables, the World Economic Forum takes into account
economic statistics and views expressed by business executives. It uses
criteria such as the quality of the institutional environment, the
legal and administrative framework in which businesses operate, the
quality of infrastructure, education and the health service, technology
and innovation. Poland traditionally receives poor marks for the state
of its infrastructure. Innovation is not a strong point of the Polish
economy, either. In this year’s league table, Poland ranks 53rd in
terms of innovation. The reason is that there is no tradition of
collaboration between business and science in Poland. In developed
economies, a third of the money spent on innovation comes from the
state budget and two-thirds from private companies. The size of
spending on innovation is another important factor. In Poland, this
spending accounts for 0.6 percent of GDP, compared with around 3
percent of GDP in Switzerland and Japan. This shows that Poland still
has a long way to go to become an innovative country.
Blog by Michael Clay
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