Poland on the rise, but for how long?

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The communist Polish regime was about to introduce Martial Law, which would leave the hapless trio effectively stranded in a foreign country. But although few knew it at the time, communism, with its geriatric leaders and its heavy-handed repression, had had its day. Martial Law only endured until mid-1983, and within ten years the iron curtain had fallen. Or maybe it would be more appropriate to say it had simply rusted away. From then on, Poland, with the rest of Eastern Europe began a brand-new journey of living in freedom and hope.<br />
However, no country can live under the dead hand of communism for over four decades without suffering a serious degree of atrophy. As one strange example of what this meant, when I lived in France, the father of one of my friends had done some business with Poland in the communist era. The Poles needed some engineering products which his company could supply. However, because of exchange controls at the time, and due to a lack of Western currency, they could not pay for these products with cash. So, instead of payment by cash, they offered to send him some goods which he could then use in his factory. It was arranged that they would send him some screws, measured by weight.<br />
Unfortunately for the Frenchman, when the screws arrived, the Poles had sent him boxes of giant screws which were of absolutely no use to him. The Poles had been told the type of screws which he would be able to use, but they sent him these instead. However, he had no redress because the weight of these screws was correct and that was what he had agreed to accept in exchange. This was the way communist factories went about their business. They produced goods which no one wanted, but if anyone were to ask, they could state with a straight face that they had fulfilled their exact production quota.<br />
It took Poland a while to recover from this sort of mentality and to move on from those dark days. It had started slowly in the 1990s, with Poland, along with other newly liberated countries, embarking on its capitalist journey as a simple subcontractor. Ready parts would be parachuted in to be assembled by a cheap and docile workforce that simply followed the instructions before exporting the completed products with low added value to richer countries. At this stage, the low cost of labour drove the foreign investment. Essentially, Poland was building capitalism without any capital. But it was a necessary step at the time, even if it did appear to be a form of dependency.<br />
But this whole process of economic development was later helped by joining the EU in 2004. Apart from the free movement of goods to and from the biggest economies of the EU, Poles have been able to go and work in those countries, with the huge benefit of being able to send earnings home and explore different and more developed educational opportunities.<br />
The result is that now, after some 34 years, the country is thriving on its new path. In 2022, Poland had a Gross Domestic Product of $720 billion, putting it in 23rd place in the world, and 6th place in the EU. In fact, World Bank data shows that Poland’s economy has been growing consistently at an annual rate of 3.6 per cent since 2010.<br />
How have the Poles managed to achieve this fast growth, especially when many countries in the West have not come anywhere close to this figure? For example, across the same period the United Kingdom (UK) has only managed an annual growth rate of 0.5 percent.<br />
Probably the most important driver has been the release of the pent-up initiative of a creative, but downtrodden, people. One can see their potential in the story of those three workmen refurbishing the London flat. It was in their basic nature to travel abroad and seek out any economic opportunities which they could exploit. Whereas, if they simply stayed at home, the prevailing laws and rules would have held them back. So now that they had the chance to do the same thing at home, the Poles began to work with a purpose.<br />
An equally important feature is that Poland has embraced free market reforms. This is not surprising after living for so long with a controlled economy. Following the collapse of the Soviet bloc, Poland had been one of the poorer eastern European nations, but now letting people work without holding them back has been just the thing they needed.<br />
For example, tax rates have been kept low to encourage growth, and this has incentivised the working population. In Poland the highest rate of tax on personal earnings is currently 32 per cent. By way of comparison, in the UK it can sometimes rise as high as 60 per cent in the upper wage brackets, which is a great way to put people off doing extra work. Poland has also been relatively frugal in terms of deficit-spending. Its national debt as a proportion of GDP is 46 per cent. Here in the UK, it’s about twice that amount. This means that the Poles don’t have such a large amount of interest to pay on government borrowing.<br />
As a result, there has been an increase in the standards of living in Poland. This can be seen by a glimpse of the Warsaw skyline. After the German Luftwaffe knocked the city flat in 1939, and then the German Schutzstaffel (SS) did an even more thorough job by razing the Warsaw ghetto in 1943, there had really been nothing much to see in Warsaw.<br />
And then Stalin decided to give the Poles a gift of a Palace of Culture and Science, but this was not completed until 1955, two years after his death. So, as it was, he never got to see it. One can imagine that many Poles would also have wished that they never had to look at it either. Because it is a monstrosity of ugly modern communist architecture, typical of what became called “Stalinist” architecture. For which, read “Awful, Ugly” architecture.<br />
Over the years the Poles have given it several nicknames such as the “Syringe”, “the Russian Wedding Cake”, and “Stalin’s Rocket.” However, the interesting thing is that although it is still just as ugly as ever, the blessing these days is that no one can really see this so clearly because of all the modern high-rise office blocks which have been cunningly located nearby to hide it. Thus, Poland’s new capitalist prosperity is hiding the bad memories of its communist past, both physically and metaphorically. And these new corporate offices, rather than Stalin’s Syringe, are the statement of what Warsaw is all about in the 2020s.<br />
In fact, it is a great thing for Poland to be able to put the past behind it and to enjoy the present. As one sees what modern day Poland is capable of, maybe the only downside is to think of what might have been achieved in the past if it were not for the subjugation of rapacious foreign powers. Thus, for example, the famous Marie Salomea Skłodowska-Curie (Marie Curie) was born in Warsaw at a time when Tsarist Russia was the Imperial power in charge. Marie went on to conduct pioneering research on radioactivity, but she could only do so after emigrating to France. To this day she is the only individual to have won two Nobel prizes in two separate fields, namely Physics and Chemistry. But many people only think of her as a French scientist.<br />
And then it was a group of Poles who first broke the codes used by the German Enigma cipher machines used in World War II. This was under the leadership of mathematician Marian Rejewski in the early 1930s. In 1939, with the growing likelihood of a German invasion, the Poles turned their information over to the British, who set up a secret code-breaking group known as Ultra which was instrumental in helping win the Battle of the Atlantic from 1941 to 1943.<br />
However, these days, being a free and powerful member of the EU has meant that this aptitude for science is now being harnessed for Poland’s own benefit. For example, she is fast becoming a hub for Information Technology (IT). American IT giant Intel has just announced that it is planning to build a $4.6 billion semiconductor assembly and test facility in Poland, bringing its entire supply chain within the European continent for the first time.<br />
This announcement fits in with the EU’s strategy of making at least 20 per cent of the world’s microchips by 2030, and the new plant complements the chip giant’s existing European investments. Under Intel’s new plan, wafers, or sheets of components made in Germany and Ireland, will be sent to Poland to be cut into individual chips and then be made into final products.<br />
Design and planning for the site in Wroclaw, in the southwest of Poland, have already started, and the construction is expected to create several thousand jobs, according to the company. Mateusz Morawiecki, prime minister of Poland, said: “Chips and semiconductors are critical technologies in the 21st century and we are excited to expand Poland’s role in the global semiconductor supply chain and help to establish the country as an economic trendsetter.” Intel has a 30-year history of operating in Poland, where its largest research and development centre is based.<br />
“This is the golden age for the region,” says Marcin Piatkowski, a Polish economist who recently authored a book called Europe’s Growth Champion, about the meteoric rise of Poland’s economy over the past three decades. “The whole region has been successful, as reflected in the fact that on average, no Pole has ever lived better than they do now, both in absolute terms and in relative terms compared to the west.”<br />
While communism left the region an economic basket case, it did also provide some of the seeds for future growth. Namely, a well-educated society with low levels of inequality. And crucially, unlike in Russia, Poland largely avoided a situation where a few people walked off with the majority of the prized former state assets. In fact, the transition led to a class of entrepreneurs starting businesses, rather than a small group of oligarchs creaming off the best assets. How did Poland avoid having a similar disaster? They had the Solidarity Trades Union movement in the factories, and they were able to function as a watchdog. As a result, directors could not go into shabby deals like happened in Russia.<br />
However, the pattern of Polish development since the 1990s has been mixed. The World Bank says that 36 of the 50 most polluted European cities are in Poland, while there is an unequal economic growth in society, that is, the gains are not being shared equally. All income groups gained from the post-1989 transition, but the top 1% has taken almost a quarter of all the benefits while the bottom half of society only netted roughly an eighth.<br />
And there are also other divisions which are apparent. Poland is one of Europe’s least urban societies, so Poland’s rural communities can feel cut off from the growth opportunities that the cities offer. Another problem is that Poland has built some of its success on unfair, cheap, zero-hour labour contracts, which is not a good look and is probably not sustainable. Some economists have suggested that the rise of this unstable, temporary work has contributed to a fall in the birthrate as it leaves many Polish citizens feeling insecure about the future. This unequal development is one of the causes behind the rise to power of the right-wing populist Law and Justice Party (PiS).<br />
Now their rise to power has brought its own set of problems. For years Poland has tussled with the EU and the European Commission in Brussels which has attacked it and its policies for flouting the norms of liberal democracy; Poland is in the dock for letting politicians pick and sack judges and for attempting to muzzle the media. It has also attracted criticism for its restrictive abortion laws. Terminations are banned in Poland, except in cases of rape or a threat to the mother’s life. However, one can maybe empathise with the government’s point of view, given that they are struggling with that very low birthrate. All this criticism has riled the conservative-nationalist government headed by the Law and Justice Party (PiS) which has been in power since 2015. It accuses Brussels of seeking to impose its politically correct views on a population wedded to tradition. PiS leaders have even gone so far as to compare the EU to Poland’s former Soviet overlords. They have also raised doubts as to whether its laws ought to apply to Poland. In turn, the EU held back some of the aid and subsidies which were due to be paid to the Poles.<br />
However, that was in the past. Much of the thinking about Poland has had to undergo a sea change ever since the invasion of its close neighbour Ukraine in February 2022. Some 500 days into the ongoing war, Poland is probably the most affected of all the nearby countries as the consequences of the war have spilled over the borders. For example, Rzeszow is a city in south-eastern Poland, and it is one hour by train from the Ukrainian border. Its airport used to handle only a few flights a day, but now it has been transformed into one of the main hubs for dealing with all the traffic this war has brought.<br />
From a military point of view, it is the main supply depot for Western weapons destined for Ukraine. On the other hand, from a humanitarian point of view, the city has been transformed by the streams of refugees, mainly women and children, making their way west out of danger. Rzeszow used to have a population of just under 200,000. However, the war has brought it over 100,000 refugees. Some have moved on, but many have also stayed, thinking that they don’t want to be too far from home. And Ukrainians are not the only newcomers. There are also many foreign diplomats, troops bringing in supplies, not to mention a multitude of aid workers of various descriptions.<br />
In fact, Volodymyr Zelensky, Ukraine’s president, declared Rzeszow Ukraine’s “saviour city”. The warmth of this statement has even surprised some local people there. Relations in these border areas have often been haunted by memories of atrocities during the World War II, such as massacres of Poles by Ukrainian nationalists, ethnic cleansing of Ukrainians by Polish partisans, not to even mention all the many problems of the communist regime. However, these former grudges appear to have been wiped away by Russia’s invasion. After all, many people in Poland now believe that the Ukrainians are not only fighting for their own country, but also for Poland. As they would say it, “they are fighting the Russians so that they don’t get any stupid ideas about coming over here again.”<br />
As Poland confronts this latest threat from the East, it is very helpful that she now possesses a healthy and vibrant economy. Without this it would not be able to extend a helping hand so easily to Ukraine. Also, without a strong economy, she would also find it difficult to be such a powerful and committed member of the North Atlantic Treaty Organisation (NATO). But as things stand, Poland contributes 2.42% of its Gross Domestic Product (GDP) to the NATO budget. As such, it ranks third in the list of NATO nations contributing a percentage of their GDP, after Greece which contributes 3.76% and the United States (US) which contributes 3.47%. Poland has come a long way after being that controlled and downtrodden communist satellite.`);

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<h1>Poland on the rise, but for how long?</h1>
<p>In the Polish film Moonlighting, director Jerzy Skowlimowski described a small group of three Polish construction workers who were hired to renovate a London flat in the early 1980s. This was back in the days of communism, long before Poland would join the European Union (EU).<br />
For the owner of the flat, the cost of hiring the Poles was much less than hiring a similar group of English workers. And for the Poles, struggling with the dysfunctional centrally controlled communist economy back home, it was the chance to earn some welcome Western currency and gain access to some sought-after Western goods.<span> In other words, everyone was a winner. But trouble was on its way.</span></p>

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