Investors here to stay

Over 80 percent of foreign investors who started their operations in Poland over the last five years see the results of their investments to date as positive or very positive, and three quarters of them are considering strengthening their presence in the country with further investments. This is according to a KPMG report entitled Why Poland? Strengths and weaknesses of running a business in Poland, from the perspective of foreign investors.

"This is the kind of information that should be communicated to investors looking for a location in the region in the first place. It proves that we are a business-friendly country but we don't use our potential and we are in dire need of a better marketing strategy," said Mirosław Proppe, a director at KPMG.

Asset rich
According to the report, Poland attracts investments with three main assets: relatively low labor costs, a favorable geographic location on transit routes, and a large internal market compared to other CEE countries. Government support and infrastructure didn't play a primary role for respondents.

"The problematic areas confirmed by our survey were the slow judiciary system, poor infrastructure and omnipresent red tape. When it comes to taxes, however, it was not the amount of taxes to be paid that posed the problem to investors, but rather an unclear and overcomplicated system and a lack of stable regulations," explained Mariusz Strojny, a project manager at KPMG.

Manpower
What came as the biggest surprise for foreign investors was the high qualifications of Polish employees, with over 60 percent of those surveyed pointing to the impressive professional competences of Polish staff.

"This is our great strength. While China and India attract investments based on cheap labor and physical work, Europe is now focusing on activities requiring skilled workers," Strojny said. "Also in Poland, the second wave of investments, after that focusing on establishing the presence in Poland and decreasing manufacturing costs, will focus more on knowledge and technology," he said.

Faltering FDI
The report shows that Poland's position in the region when it comes to the value of FDI is very strong as the country occupies second position in CEE after only Russia with $84 (zł.272.5) billion invested since the beginning of 1990s. However, annual FDI per capita at $160 (zł.519) places Poland behind all new EU member states and when it comes to FDI growth (minus four percent) Poland is the very last country in the CEE region.

"The value of FDI per capita in Poland is not impressive and while we don't need to worry much about the small countries such as Slovenia or Estonia, where even relatively small investments boost per capita result. What is really important is that Bulgaria and Romania, countries with a similar number of citizens, already outpaced Poland and they haven't even joined the EU yet," Mirosław Proppe said.

In 2005 Poland attracted $9.4 (zł.30.46) billion in FDI.