I first visited Poland 10 years after the fall of the Berlin Wall. I found a country still making the transition from central planning to the free market, but ambitious about its future, and committed to integrating into the global economy.
The country continues to enjoy the benefits of that commitment. With two decades of unbroken growth, Poland is one of the only European countries to have avoided contraction during the past five years.
International trade and investment have played an important role in Poland’s progress. Exports today are equivalent to 40 per cent of GDP and cover a range of sectors. Poland has a well-developed manufacturing base and is a market-leading producer of industrial transport and machinery such as mining equipment. The agricultural sector is also very successful: Poland is Europe’s biggest exporter of apples, growing around 20 varieties.
The country has also developed an important role as a supplier and assembler of industrial components. European production of white goods, consumer goods and electronics is increasingly based in Poland. Inward investment from major multinationals based in countries including Korea, Germany, Sweden and the United States underpins this success. Poland’s labour costs are not the lowest in the world, but the levels of education and technical skills are high.
The country has also developed an important role as a supplier and assembler of industrial components
Historically, Poland has sent the majority of its exports to the European Union. In recent years, however, as European growth has slowed, many local companies have diversified. The Polish government is encouraging firms to sell overseas in higher-growth countries including Brazil, Turkey, India and China. Under the “Go China” initiative, for example, the government advises Polish firms on doing business with the world’s second largest economy, and supports trade fairs to help entrepreneurs find business partners.
Research carried out by Oxford Economics for HSBC and published in February 2013 suggests that Poland’s fastest-growing trade relationships in the coming years will be with emerging markets, especially in Asia. The report also says that exports to countries such as India and China will grow by 10 per cent or more each year up to 2030. These broadening trade relationships will go hand-in-hand with the Polish economy’s expansion into sophisticated sectors, with computer equipment likely to overtake low-technology textiles and wood manufacturing as the third-biggest export by 2030.
HSBC Global Research forecasts that Poland will grow 1 per cent this year, the slowest rate since the early 1990s, partly because of the slowdown in Europe and emerging markets. Growth is forecast to rise to 2.3 per cent in 2014, however.
I remain confident that Poland is well positioned for the long term. Its transformation over the past 20 years into a growing, skilled, and increasingly outward-looking economy is one of Europe’s success stories.