Today is the first day of Poland's six-month presidency of the Council of the European Union, and is an opportunity to look at the country's recent progress and future prospects. This blog post will be a purely subjective big-picture view (after all, if it's macroeconomic data you want, you can look it up online).
My views are based on observations, anecdotes, countless discussions with people in business, gut feeling (or instinct), as well as something metaphysical – intuition.
You can look at Poland from close up and point to the negatives – stubbornly high inflation, deteriorating current account, demographic collapse, geopolitical threat, and the precarious economic situation of its major export markets. Yet I remain optimistic – as do the analysts. The OECD's latest forecast for Poland's GDP in 2025, published last month, points to a likely outcome of 3.2%, up from the 3.0% expected by economists for the whole of 2024. This puts Poland into the group of best-performing EU economies, and far outstrips the UK, currently struggling to avoid falling into recession (again). Unemployment is historically the lowest it's been since the end of communism (when in effect it was hidden). Poles are wealthier than ever, which is reflected in their tendency to buy new cars and travel on exotic holidays.
Thirty-five years ago, when finance minister Leszek Balcerowicz unveiled his plan to transform Poland's collapsing command economy, there was a joke going around: "There are only two ways in which Poland's economy can be fixed: the normal way, and the miraculous way. In one, the Blessed Virgin Mary descends from the heavens, raises up Her arms – and the economy is working. In the miraculous way, the Poles do it for themselves."
Looking around Poland today, I see a country growing in self-confidence, increasingly at ease with itself. The new roads and railways, the new office developments, the logistics centres, the data centres, the refurbished buildings, the countless restaurants, cafés and bars, do not fail to impress.
So how did all this happen? Miracle or Poles' own efforts? A bit of both. Strokes of luck, good macroeconomic judgment and above all, the determination of a people wanting to better themselves through hard work.
Believing strongly in behavioural economics, I sense that determination is a key factor. It is not controversial to rank populations in terms of their height or body-mass index or (more controversially), IQ. But I'd suggest something more radical – ranking countries by the determination of its entrepreneurial and managerial classes. And here, observing two groups, two nations, from close-up, I'd say that Poles tend to show greater determination, more fire-in-the-belly, more get-up-and-go, than contemporary Britons.
This is purely a subjective view. But seeing the ease with which British companies and British shareholders sell up to foreign bidders makes me think that as a nation, Britons are more content to sit on bags of money than to manage businesses. Tesco, Aviva, Sage, W.S. Atkins, Cadbury's, Pilkington, BOC – a few of the UK firms that came to Poland and sold their business units here to their foreign competitors. The collapse of the UK-owned motor industry is another case. Rolls-Royce, Bentley and Mini are now German-owned; Land Rover and Jaguar Indian-owned; MG is now a Chinese car brand.
Poland, on the other hand, started from a different position. One (miraculous?) reason why Poland's economic transformation – tough as it was at the outset – has largely been successful is the way the state-owned industries were privatised. These did not end up in the hands of thuggish oligarchs who corralled enough share certificates from workers to become owners of factories, mines and refineries, but were sold to foreign investors, most often corporations. The new owners brought in new technologies and new management methods, and while not always successful, new value was created for the Polish economy as a whole.
One that I visited before Christmas was the Reckitt factory in Nowy Dwór Mazowiecki, which had been a state-owned Pollena soap factory. Today, the plant is five times bigger, and produces detergents for domestic and export markets, while still employing the same number of people (2,250). Reckitt produces several billion dishwasher tablets there, which are sold in 34 countries around the world. Another factory I have visited in Twining's tea factory near Poznań; a marvel of automation that exports tea to over 90 markets. The Polish head of the factory is also responsible for running Twining's tea factory in the UK. Twining's' owner, Associated British Foods, also has its world-foods factory in Poland, near Zielona Góra,, making Patak's, Rajah and Blue Dragon sauces there, again, mainly for export.
My observation on foreign direct investment is that in most cases, the investor is so happy with the way things are working out in Poland that profits are reinvested here, and new jobs are created. The list of companies that keep growing their global-services hubs in Poland includes Shell, HSBC, Standard Chartered Bank, GlaxoSmithKline and AstraZeneca. Managers visiting from London are amazed by what their Polish employees can do. "Can you do this?" "Yes we can!" "Quantitative analysis?" "Yes!" "Can you find another 50 maths PhDs?" "Yes!" And so it grows from year to year. "Can you jump this high?" "Yes we can!" "Can you jump this high?" "Again – we can!"
And here's my fundamental question: Can Poles jump for themselves?
Can Poles set up their own companies and grow them, rather than merely manage them (well) for someone else? I believe that as Polish businesses mature, they will be increasingly set on foreign expansion. The UK is a target-rich environment for them. Last year saw the acquisition of Thomas Cook (the world's oldest travel agent) by Polish firm eSky, a start-up 20 years ago; fresh-fish distributor Copernus from Hull by Suempol, Andover Trailers by EmTech, and John Menzies News Distribution by InPost. These come on the heels of the acquisition of JDR Cables (factories in Hartlepool, Littleport and now Blyth) by TeleFonika Kable, and of Rawlplug by Koelner.
The further acquisition of British businesses by Polish ones will be a litmus test of the condition of both economies' level of determination. Poland is increasingly seen by the UK media as an economic success story, and its political influence in Europe is growing.
May's presidential election will be one to watch.
This time last year:
Time, memory and consciousness
This time two years ago:
Hottest New Year's Day in Warsaw ever
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