Open the gates
What a year this has been for foreign investors who have every right to wonder if Poland will ever become a dyed-in-the-wool honorable place in which to do business.
From the European Union's (EU) push to rescind tax breaks for firms in Poland's 17 special economic zones, through to former Treasury Minister Andrzej Chronowski's failed threat to abolish the Eureko/Powszechny Zakład Ubezpieczeń (PZU) deal, to current Treasury Minister Wiesław Kaczmarek's call to bring the country's privatization schedule to a halt - Poland has appeared anything but a reliable destination for millions of dollars of external seed money.
On top of this, the country has argued for an 18-year transition period for land purchases by foreigners once Poland joins the EU. It's an argument not exactly welcoming to multinationals interested in buying the land beneath their factories while providing thousands of jobs to locals. And they're jobs not to be scoffed at either, with unemployment raging at more than 16% nationally and double that in the worst-hit areas.
Granted, some sensitive historical issues are at work here. But, fortunately, with the changing of the guard in Parliament last month, the new government appears to be hell bent on joining the EU and getting the country's stuttering economy back on the fast-growth track.
With those aims in mind, the Democratic Left Alliance (SLD)-led government last week informed the EU that it would forego the ban on EU citizens buying land for industrial purposes. An admirable step in the right direction if Prime Minister Leszek Miller can pull it off. After all, unless he sells the idea of EU accession to his fellow parlimentarians, particularly those with rural leanings, the concessions could return to haunt him come referendum time.
But while the decision to lift the blockade on land purchases for industrial use is a positive sign, the government should do far more to persuade investors that Poland is a worthwhile market to plow money into - something that won't be easy. Aside from the mixed signals flying left and right as a result of this year's internal wranglings, the grim state of the world economy is only expected to grow worse, further hemming in this country's chances of drumming up fresh outside investment. Already in the first half of this year the number of investment projects in Poland sank by 62% compared to last year, according to a recent report by Ernst & Young. That figure is nearly twice the drop in Western Europe.
So what should the new government do? For starters, treat external investment as a good thing, not with contempt. There are numerous ideas and opportunities, let alone ailing state-owned enterprises, that stand to gain by the right combination of cash and management skills. As Jacek Siwicki of Enterprise Investors put it in this week's interview, "the investment opportunities are getting even more attractive."
And they are. SLD has a chance to transform Poland's image in the minds of foreign investors, we can only hope that unlike the previous government it makes the most of it.
