No confidence

Though Treasury Minister Wiesław Kaczmarek managed to hang onto his job last week, if foreign investors had held a no-confidence vote on Poland's commitment to economic growth and job creation they would have had little choice but to bellow a resounding "no." First there was the letter to the government from multinational mainstays such as Microsoft Polska and Procter & Gamble as well as Sejm speaker Marek Borowski and U.S. Senator Joseph Lieberman recommending that the government speed up privatization - Kaczmarek's turf - and modernization of a host of sectors. That's bad enough; three months after the Democratic Left Alliance (SLD)-led coalition has taken office and investors, let alone fellow ministers, are already starting to get more than a little bit nervous about whether this government has what it takes to turn things around. For them it's become a necessity to take matters into their own hands. Kaczmarek, after all, has not exactly inspired confidence in his ability to map out a coherent, honorable plan for state sell-offs despite his years of experience as privatization minister back in the mid-1990s. No wellspring of confidence himself is Infrastructure Minister Marek Pol. Last week he told a clutch of anxious foreign investors that while his government was indeed committed to labor law reform, now was not the time to make sweeping changes with employment raging in the high teens. First, we have to bring down interest rates, he said. Hmmm … While the Business Journal strongly believes that interest rates, at almost 800 basis points above inflation, are too high and should be slashed, we also maintain that the government should be fighting its economic battle on a number of fronts - simultaneously. Overhauling labor law so that businesses can immediately operate more effectively is one of those fronts. Let's face it: there's never a good time to unload unproductive employees, but what better time to modernize the law than three years before the next general election. While investors solicited the government for changes last week, in this issue's cover story the auto industry asks the SLD for its strategy on luring investment. And as the government prepares to unveil its blueprint for jump-starting the sector this week - new car sales have tumbled some 50% in the past three years - it will be interesting to see what it comes up with. Does it realize the slipshod way this country has gone about trying to attract investment in the past will no longer fly - and has serious consequences? The failure to secure the E1.5 billion PSA-Toyota deal last month should be evidence of that. Even Prime Minister Leszek Miller had to admit that the Czechs created far better investment conditions than Poland, even though Toyota already had a plant here and seemed like a shoo-in last fall. Hard to blame that blunder on the last government, which unfortunately, makes it all the harder to have confidence in the new one.