Branding Poland

"Attracting investors and promoting exports are two different things requiring different tools."

By Karol Chlipalski

The government will likely abandon the creation of Pro Polonia, a new company to promote the country's economy abroad, a source close to the matter told the Business Journal.

The government recently submitted a draft of a law to create the Agency for Export and Foreign Investments Promotion "Pro Polonia," in order to to boost the country's exports and attract foreign investors. The presentation of the draft of the law at the Sejm lasted only until the deputy who was presenting it reached the fourth paragraph. It was then unanimously decided that the draft was to be sent to the commission to be reconsidered.

Government opposition parties argue that the bill's presenters lack a strategic concept of how to promote the country and its products abroad, something that is seen as vital for the economy. At present, at least 20 separate bodies are devoted to promoting the country, all of them funded by taxpayers. Opposition deputies say that the bill is one of the biggest legislative failures of the Miller administration.

"Now the government, which has no idea what to do with the bill, prefers to back out rather than show its lack of vision," said the source, who requested anonymity.

Antoni Styrczula, the president of the Polish Foreign Investment Agency (PAIZ), one of the organizations charged with promoting Poland, says the draft is a step in the right direction, but on one condition: there must be a general strategy developed to combine all the redundant activities undertaken to date by domestic institutions.

Plans for the creation of Pro Polonia resulted from the merger of PAIZ and the Polish Information Agency (PAI) - organizations that were both charged with promoting Poland abroad - under legislation that went into effect last year.

"The government, being conscious of the role to be played by the new agency, decided to raise its importance by making it the subject of a specific law," said Jerzy Dzikowicki, managing director of PAIZ.

Critics, however, have a different view.

"The law's aim was to liquidate some governmental bodies and bring others into existence, in order to create the impression that the government is using taxpayer money wisely," said Adam Pawłowicz, a former president of PAIZ.

PAIZ was established in 1992 to promote foreign direct investment inflow to the country and to facilitate company contacts with both central and local administrations, as well as to help firms set up operations by providing information on the country's economic and legal environments. PAIZ's services for foreign investors are free as the agency is heavily subsidized by the government and its own publishing activities. Its net profit for the past couple of years has ranged from zł. 100,000-zł. 200,000.

PAI, formed 35 years ago under the name Interpress, was originally set up to serve foreign correspondents here. A PAI employee refers to it as "the informal ministry of propaganda," explaining that during the communist era, Interpress maintained close connections with the secret services that monitored foreign journalists. After 1989, the organization had problems defining its raison d'etre, and served as a press center, public relations company and publishing house. PAI has organized media services for large events such as Pope John Paul II's visits. The agency recently set up its own business promotion center.

The creation of Pro Polonia would not result in any positive changes, Pawłowicz said. "Attracting investors and promoting exports are two different things requiring different tools," he said, adding that the synergy that could result from this merger would be very limited.

Styrczula said that discussions on whether such agencies should be combined are underway in other countries in the region. He said that Hungary, which created an agency similar to Pro Polonia, "got burned" in the process, so for Poland this is a cautionary example.

"We cannot afford to create an organization that takes care of everything - meaning nothing," he said.

Pawłowicz added that the government's real reasons for the merger were to "pretend" that it was reducing governmental bureaucracy and operational costs, while in reality it was creating "jobs for the boys."

Adam Szejnfeld, a deputy who chairs the Sejm's economy commission, argues that the merger concept lacks strategic credibility.

"The body in charge should be a governmental institution, rather than a company," he said. Such an organization would be seen as a more trustworthy potential partner and, unlike a company, it would have the ability to coordinate the activities of the 20 or so institutions that promote the country's economy and culture abroad, he added.

"And last but not least, a (government) institution is more easy to control," Szejnfeld said.

Styrczula echoed his sentiments.

"This company would have to focus on two goals: executing its mission and creating revenue, which could often be contradictory." He believes only a public institution could accomplish the necessary tasks.

"If we do not clarify the structure here, we cannot expect external results," said Andrzej Diakonow, a PiS deputy. He is also convinced that there is need for a body that would coordinate the activities of numerous institutions in order to avoid overlapping duties, since to date the money for promotional activities has been spent inefficiently.

"Some time ago certain items like Krakus Polish ham, vodka, crystal or pickled cucumbers were immediately identified abroad as Polish products," Szejnfeld said. Now after 14 years of building a free market, there are no products or services that would be identified with the country, he added, blaming this on the failure of promotional activities.

Organizations that promote

the country abroad:

- Ministry of Foreign Affairs with diplomatic offices

- Offices of commercial advisers

- Economy Ministry's Center for Promotion

- Ministry of Culture's Department of International Cooperation and European Integration

- Polish Tourism Organization

- Polish Information Agency

- Polish Foreign Investment Agency

- Adam Mickiewicz Institute

- National Center of Culture

- Polish Agency for Entrepreneurial Development

- Export Credit Insurance Corporation

- Regional governments speakers offices

- Chambers of commerce