Rays of light from the land of the rising sun

Polish-Japanese diplomatic discussions in Warsaw last week addressed the problems that Japanese companies have faced when investing in Poland.

By Kamil Tchorek

From abroad, Poland is beginning to look like a country that will be among the most influential in Europe, a diplomatic channel to the United States and certainly one worth doing business with.

Jiro Okuyama, spokesman for Japan's Ministry of Foreign Affairs - and an insider at last week's talks that led to the Joint Statement Towards Strategic Partnership Between Japan and the Republic of Poland - says that it is precisely Poland's new global role that inspired Japanese Prime Minister Junichiro Koizumi's visit to Poland. "The reason Mr. Koizumi chose to come to this country is that next year Poland will be one of the six major voting nations of the EU," Okuyama says. "And of these, Poland will be the one with the least economic ties with Japan. The Japanese administration wants to make up for lost time. We have to redress the imbalance."

Poland's place at the table of nations is held in increasingly high regard by the Japanese. Starting next year, Poland will have 27 votes in the European Parliament, the same number as Spain, giving the country political weight that Japan would like to have on its side.

Japanese business and diplomacy has displayed a cautious approach towards Poland over the last 13 years, and, despite the worst economic slowdown since the end of communism and a five-year low for foreign direct investment, the Koizumi administration is adamant that there is a window of opportunity for Japanese investment into Poland "before EU enlargement in May 2004."

"There are two aspects that the Japanese government particularly feels bars its companies from investing in Poland," Okuyama says. "One is the inconsistency around the issue of corporate taxes, customs duties and land purchase, which seems to put off our businesses. The other is the lack of an effective 'one-stop shop' in Poland, an agency that could service Japanese firms when they scout here."

Last week's summit addressed this problem. In the words of the Joint Statement, "The Japanese side expressed its commitment to extend assistance to the Polish Agency for Information and Foreign Investment (PAIiIZ) in attracting foreign investment by dispatching a Japanese expert for a period of one year."

Okuyama says that there were some complications in the recent history of Japanese business in Poland that needed to be ironed out by the two administrations. Over the past few years, Japanese firms in Poland have "complained to central Polish government" about what they feel is local governments' "inconsistency" with regard to corporate taxation. But Okuyama is positive, saying "hopefully our meetings and our joint strategy will stop these complications in the future." As a result of last week's talks, Prime Minister Miller has proposed that the Japanese and Polish economy ministries maintain dialogue.

"We can only ask Poland to improve its own standing," concludes Okuyama. "Not necessarily more incentives in Special Economic Zones, which are now somewhat discredited, but its standing." Education, quality of labor, labor relations and language ability are factors that are frequently considered by Japanese investors when they scout in Poland. In Okuyama's words, "Poland needs to market itself; its interface with foreign business needs to think about what Poland's relative strengths are - and then sell (those strengths)."

Koizumi has also chosen to get to Poland ahead of the Conference for the Reconstruction of Iraq in two months' time, when Poland will chair the Committee for International Coordination. Also the current Polish government supports Japan's bid to become a permanent member of the UN Security Council.

So for Poland, Japan is a potential investor, and for Japan, Poland is a potential diplomatic ally. As Okuyama says, "The common ground is wide, and is equally important to Japan as it is to Poland."