In my previous reports on Malta and Singapore, I had highlighted how these small countries had achieved impressive economic growth ahead of their neighbors and, largely based on this performance had become a magnet for foreign investors. The current report on Poland examines a country in the European Union which appears to have insulated itself from the EU’s economic woes which are of global concern and which according to some analysts could lead to the unraveling of the European Union.
Wedged between two powerful neighbors, Poland not unlike Afghanistan has had to ward off
the unwelcome attentions of both Germany and France, which in the political upheavals that Europe has been periodically subjected to, led to the partition of Poland three times. Its travails did not end after the Second World War as the country came under Soviet domination and had to adopt the communist political and economic system. By the early 1980s, the Solidarity Movement had mobilized large scale protests against communist authoritarianism in the aftermath of which the Polish government did offer some concessions. The dismantling of the Soviet Union allowed Poland to adopt free market economics from which it has benefited enormously in the past two decades. Admission to the European Union in 2004 gave a further fillip to Polish economic indicators.
Poland is now the 6th largest European economy. Privatization of several state owned enterprises has turned the tide in favor of Poland, allowing it to boast of a gross domestic product ($479 billion) which represents an expansion of 3.8 percent in 2010, as opposed to the meager 1.7 percent of 2009. Currently, Poland maintains a UN Human Development Index of 0.813, which is an indicator of significant human development and security. The latest annual human development report of the UNDP ranks Poland 39th among 184 countries, thus placing it in the group of highly developed countries.
Poland offers several exceptional opportunities for foreign investment. Firstly, the geopolitical positioning of Poland has crucial significance, allowing it to spread its reach easilyto economically stronger Germany and France.Secondly, given its past history in Comecon, it is well placed to continue to develop economic and trade relations with the newly independent Eastern bloc nations. Thirdly, the Polish government has initiated several reforms that have made the economic scenario fertile for prospects of investment and economic opportunities. Foreign Direct Investment in Poland today is $12.87 billion, which makes it the 6th most attractive FDI host country in the world. Fourthly, Poland offers one of the lowest labor cost rates within Europe. Finally, an importantadvantage that Poland enjoys is access to European Union funds in lieu of its strong economic indices.
Poland, which has managed through prudent fiscal and monetary policies to avoid the pitfalls currently shaking the economies of Greece, Portugal, Spain and Italy et al, thus provides attractive investment opportunities for foreign investors. Current indications are that the magnitude of FDI will continue to increase in Poland.