Tuesday 10 October 2023

Why Poland can no longer afford PiS

I won't be voting for PiS - I want this party out of government. It is bad for Poland. Kaczyński's party is modelled on the one political system, the one political party that he knew from his younger days - the Polish United Workers Party - PZPR - the communist party. A one-party system, where the party ran the state and all its institutions. From the judiciary to the media, from the economy to the organs of internal and external security.

PiS has blurred the crucial line between state and party to the detriment of Poland.

Here's the Kaczyński model: put your party's loyalists into key positions in state-controlled enterprises, state regulators and media and use these to further the party's power.

Example:

Rhetoric: "PiS cares about the cost of living - under a PiS government, petrol prices will be lower."

Practice: A week before the election, state-owned PKN Orlen is instructed to cut the retail price of fuel at the pumps, leading to shortages, and photos on social media of military tanker trucks at PKN Orlen stations bringing fuel from army stockpiles to fill up the empty reservoirs.

Response: Private-sector competitors (BP, Shell etc) would expect the state monopoly regulator, UOKiK, to intervene at such blatant infringement of competition law. But UOKiK is run by party placemen - so no reaction.

These interventions cost money. Buying the electorate costs money. Pensioners are being bribed with 13th and 14th monthly payments. "Oh hooray!" they all cheer as they receive their bonuses. But the result is that Poland's inflation is now 8.2% (in the Eurozone, it is 4.3%). Remember, inflation acts exactly like a tax, but one that hurts the poorest in society the most. Economists forecast that it will stick around 6% for most of next year, as a result of all of the ill-judged spending (or electoral bribes as they can also be called). 

Rhetoric: "PiS cares about the cost of mortgage loans - under a PiS government, interest rates will be lower"

Practice: Six weeks before the election, the central bank cuts the base rate by 0.75%, then gets another one (of 0.25%) in two weeks before the election.

Comment: Monetary policy steered by party-placemen on the monetary policy committee meant that Poland started raising rates too late in the cycle and is now cutting them too soon. 

Result: As mentioned above, Poland will have 6% inflation well into 2024, hurting the poorest.

The PiS government's flagship project, 500+, was aimed at boosting Polish demographics; universal child support. In that respect it has failed dismally. In 2014, 391,000 Poles were born - last year, despite the handouts, that number had fallen to 304,000. Over a fifth less children born each year during the time PiS has been in power. So if it's not working - shovel more money at it - in the election year, so now it's 800+. 

The EU is far from perfect. It's still dominated by Germany and France, and it has long been losing competitiveness to the US and China. But as we can see from the UK's dismal fall from grace - leaving the EU is a disastrous policy. What Poland should be doing is professional-level diplomacy, pulling together a coalition of Baltic and Scandinavian nations, the Netherlands and Ireland, to act as a counterbalance to the Paris-Berlin axis. But no. Carping, obstructing and heckling is what 'awkward Poland' is seen to be doing. The EU won't throw Poland out, but it is currently blocking funds earmarked for Polish energy and transport infrastructure projects. 

With a full-scale war going on across borders, many foreign investors looking at Poland have backed off after doing some risk assessment. Another risk is that, with all the euro-sceptic rhetoric coming from the government, Poland will one day vote to leave. Those who remember the UK between 2010 and 2016 will have a comparison to draw upon. Poland needs a stable and predictable environment for business, which leads me to my next big gripe with the PiS government - the way laws are formulated and passed. In a hurry, without consultations and sloppily, requiring amendments as soon as they enter force. 

Using the mechanism of the ustawa poselska (parliamentarians' bill), PiS deputies cobble together legislation and push it through Sejm in a matter of hours if necessary. This is hated by business, especially when these laws concern taxes, the labour code, or other regulations, because not enough time is given to prepare for the changes, and the changes themselves are messy and often incoherent. 

By messing up the business environment, entrepreneurs are thinking twice about investing in their own businesses. The investment-to-GDP ratio has fallen to 16% from 20% at the end of the last government's term of office. And then we had PiS criticising the government that the ratio was 20% and not 25%! [It had once nearly touched 25% in 2006, as a result of the massive influx of foreign direct investment in the wake of Poland's EU accession.]

My biggest gripe with PiS also applies to the Tories in the UK and the Republicans in the US - parties  now operating on the 'closed' end of the spectrum - 'closed' as opposed to 'open'. Hierarchical decision-making rather than building broad consensus. Looking for groups of scapegoats to drive wedges into society over. Erasing nuance. Generating fear and loathing instead. This is no way to do politics.

Like the EU, Donald Tusk & Co are not perfect. But they will be better than a stale, eight-year-old government merely run for the sake of remaining in power, using public money and the public media to retain that power. It is time for Kaczyński & Co to go.

This time last year:
A slower, drabber, greener, more local way of life might yet save us all

This time two years ago:
Warka's bi-weekly market

This time three years ago:
How's your samopoczucie?

This time four years ago:
Pavement for Karczunkowska? What's next?
[Still scheduled for 2025-26]

This time seven years ago
On relevance and irrelevance

This time nine years ago:
Poland gets anglicised as Britain gets polonised

This time ten years ago:
Ale, architecture and city politics

This time 11 years ago:
The pros and cons of roadside acoustic screens

This time 12 years ago:
Moaning about trains again
[have you noticed how rare such moans are today?]

This time 14 years ago:
Warsaw street names - Dolna, Polna, Rolna, Wolna, Smolna. Lost?

This time 15 years ago:
Ditches, landscapes, autumn

This time 16 years ago:
Golden autumn in Łazienki park

1 comment:

Michal Karski said...

Interesting and revealing analysis.

Every now and again I come across a Western commentary about Polish politics which basically says that Poland 'doesn't have a tradition of democracy', as if the country only came into existence in 1918. It sometimes appears to me that even some of today's Polish politicians can't seem to imagine a Poland before that time. Yet history demonstrates that Poland was probably one of the most progressive, outward-looking and tolerant states in Europe at a time when many western nations were either consumed by religious wars or were summarily getting rid of their monarchs, often in quite brutal ways.

When Old Europe stuck with the model of absolute monarchy, Polish kings came to be elected (even if only by the landed gentry, the Szlachta, and not by the entire population). So it could also be argued that Poland had a kind of rudimentary democracy, thereby most probably avoiding bloody upheavals and revolutions from within.

Today's Polish politicians may want to look beyond short-term political point-scoring and see the big historical picture. Poland has always been a part of Europe and the country's leaders need to make sure that it remains at the heart of European decision-making.