Home appliances and home pride
According to Mike Todman, head of Whirlpool Europe, a decision will be made within 30 days. Though the Polish Investment Agency (PAIiIZ) believes this country has the more competitive offer, it is not concrete figures that could clinch the deal, but psychological perceptions. And these increasingly favor Slovakia.
Todman stressed that the company, which already has plants in both Poland and Slovakia, is content with both investments and that both countries offer the same conditions. He went on to say, however, that the choice of location for Whirlpool's new cooker plant and technical and production development center, "...will depend on which [country] can offer the best infrastructure and business environment."
Since infrastructure was cited as one of Poland's key drawbacks in the case of Hyundai which, like Whirlpool, was considering an investment near Wrocław, Todman's singling out of this issue might well be cause for alarm. Though PAIiIZ has announced, as a consequence of the Hyundai negotiations, plans to initiate new road and rail infrastructure projects, the question remains when and whether such plans will become reality.
As regards the business environment, press spokesman for the Wrocław City Management Board, Marcin Garcaż, insisted that Wrocław, which is ranked as the fourth most attractive city for investment in this country, has, "a very good investment climate in terms of co-operation between the authorities and investors."
He went on to point out, however, that key areas where this country lost points to Slovakia in the Hyundai case were issues beyond the control of the local authorities, such as the stability and international standards of the fiscal and legal systems as well as the transparency of administrative procedures. PAIiIZ press spokeswoman, Kazimiera Wojczik, didn't repond to messages asking for comment.
It's precisely these issues, that will carry the day, claims Michał Gruzinski, a CASE Foundation economist, who also stresses that though Poland and Slovakia may be considered broadly equal in terms of the investment climate they can offer, "There is a clear perception that while the situation in Slovakia is getting better, in Poland it's going downhill."
"If you listen to PAIiIZ," says another economist at the CASE Foundation, Rafał Antczak, "nothing is wrong. Poland has a more competitive offer for investors than Slovakia does on every count, yet we are losing contracts one by one."
Hyundai turned Poland down despite Deputy Economy Minister Jacek Piechota's insistance that this country had offered the Korean concern an incentive package that included all the public assistance permitted by EU standards, adding up to 15 percent of the value of the investment project, which may seem to lend some weight to this view.
According to Rafał Antczak, the problem lies in a general perception, which is very hard to measure. "It's not that any one thing is wrong. It's that everything is wrong," he says.
This view is confirmed by research done by Chang-Jin Wej, fellow at the Harvard University Centre for International Development, which finds that the levels of corruption in any country are inversely proportional to levels of FDI. Transparency International's most recent global corruption rankings drop Poland's score to 3.6 (neck and neck with Mexico) and raise that of Slovakia to 3.7. In 2000, Slovakia, by contrast, had 3.5 points for transparency, while Poland had 4.1 points;
Nevertheless, no official choice has yet been made, while the announcement last week that USA-based Gilette has chosen Łódź as the location of its warehouse in an investment worth zł.566 million (€120 million), may be cause for domestic optimism. Two of Whirlpool's competitors, Italian-based Merloni Indesit and Spanish-based Fagor, have also recently begun investments in Łódź and Wrocław, respectively. According to country manager Giuseppe Parma, Merloni Indesit has no complaints regarding this country's political, economic, fiscal or logistical frameworks, adding, "We are very happy with the support we've had from the local authorities." The fact that negotiations with Polish authorities are ongoing while, according to the Slovak press, negotiations with the Slovak investment authorities have yet to begin, may be another indication that, despite the general pessimism, Whirlpool's choice of Slovakia is not yet a foregone conclusion.
Todman stressed that the company, which already has plants in both Poland and Slovakia, is content with both investments and that both countries offer the same conditions. He went on to say, however, that the choice of location for Whirlpool's new cooker plant and technical and production development center, "...will depend on which [country] can offer the best infrastructure and business environment."
Since infrastructure was cited as one of Poland's key drawbacks in the case of Hyundai which, like Whirlpool, was considering an investment near Wrocław, Todman's singling out of this issue might well be cause for alarm. Though PAIiIZ has announced, as a consequence of the Hyundai negotiations, plans to initiate new road and rail infrastructure projects, the question remains when and whether such plans will become reality.
As regards the business environment, press spokesman for the Wrocław City Management Board, Marcin Garcaż, insisted that Wrocław, which is ranked as the fourth most attractive city for investment in this country, has, "a very good investment climate in terms of co-operation between the authorities and investors."
He went on to point out, however, that key areas where this country lost points to Slovakia in the Hyundai case were issues beyond the control of the local authorities, such as the stability and international standards of the fiscal and legal systems as well as the transparency of administrative procedures. PAIiIZ press spokeswoman, Kazimiera Wojczik, didn't repond to messages asking for comment.
It's precisely these issues, that will carry the day, claims Michał Gruzinski, a CASE Foundation economist, who also stresses that though Poland and Slovakia may be considered broadly equal in terms of the investment climate they can offer, "There is a clear perception that while the situation in Slovakia is getting better, in Poland it's going downhill."
"If you listen to PAIiIZ," says another economist at the CASE Foundation, Rafał Antczak, "nothing is wrong. Poland has a more competitive offer for investors than Slovakia does on every count, yet we are losing contracts one by one."
Hyundai turned Poland down despite Deputy Economy Minister Jacek Piechota's insistance that this country had offered the Korean concern an incentive package that included all the public assistance permitted by EU standards, adding up to 15 percent of the value of the investment project, which may seem to lend some weight to this view.
According to Rafał Antczak, the problem lies in a general perception, which is very hard to measure. "It's not that any one thing is wrong. It's that everything is wrong," he says.
This view is confirmed by research done by Chang-Jin Wej, fellow at the Harvard University Centre for International Development, which finds that the levels of corruption in any country are inversely proportional to levels of FDI. Transparency International's most recent global corruption rankings drop Poland's score to 3.6 (neck and neck with Mexico) and raise that of Slovakia to 3.7. In 2000, Slovakia, by contrast, had 3.5 points for transparency, while Poland had 4.1 points;
Nevertheless, no official choice has yet been made, while the announcement last week that USA-based Gilette has chosen Łódź as the location of its warehouse in an investment worth zł.566 million (€120 million), may be cause for domestic optimism. Two of Whirlpool's competitors, Italian-based Merloni Indesit and Spanish-based Fagor, have also recently begun investments in Łódź and Wrocław, respectively. According to country manager Giuseppe Parma, Merloni Indesit has no complaints regarding this country's political, economic, fiscal or logistical frameworks, adding, "We are very happy with the support we've had from the local authorities." The fact that negotiations with Polish authorities are ongoing while, according to the Slovak press, negotiations with the Slovak investment authorities have yet to begin, may be another indication that, despite the general pessimism, Whirlpool's choice of Slovakia is not yet a foregone conclusion.
