Support your local sheriff
Lech Kaczyński, Warsaw's new mayor, earned his reputation as a crime-fighter.
But will his attitude toward business bring Warsaw out of the doldrums? Aleksander Nowacki interviews the man who says Warsaw's future depends on bringing back manufacturing jobs and avoiding private capital in infrastructure projects.
For Lech Kaczyński, bringing law and order to the city is the primary objective of his term as Warsaw's mayor. The agenda embraces various notions, ranging from fighting street crime and corruption to reorganizing the city's administration. To this job he brought his reputation, earned as justice minister and general public prosecutor, epitomized in his nickname "the sheriff."
Along with the reputation and the nickname come some pretty strong opinions. "You can't live on financial services alone," the mayor asserts. "You will always need material goods ... things people can eat."
Some financial investors might take issue with that, but Kaczyński, one of the strongmen of the Law and Justice (PiS) party, counters by framing his argument in a global perspective. "I'm not at all sure that the trend to move (low-skill manufacturing) jobs outside the sphere of our civilization is a good thing," he said. "You have to find a balance in these things." Some countries, he thinks, are more successful in this than others.
"Germany has a much greater share of GDP coming from the manufacturing sector than, say, the U.K.," he explains. "You have to ask yourself which economic structure is healthier." He leaves no doubt that he considers the German economy to be healthier than the British one. That is why he has been an outspoken proponent of the view that this city needs to invest more in its industrial sector.
"We are always talking with investors, asking them if they are interested," he says. "So far, however, we have not enjoyed much success. Warsaw does not inspire that kind of imagination in people."
The one project that has aroused some response from investors is a high-technology park.
"But that's not what I mean," Kaczyński grumbles. "This would involve students, while I'd like to see jobs created for lower-skilled people. The sort of people who, once upon a time, were known as workers," he reflects, perhaps with a trace of nostalgia. Kaczyński would certainly like Warsaw to recapture some of its perceived past glory as an industrial powerhouse. It is not the plight of heavy industry that weighs on his mind. Rather, the mayor wants to see the electronics sector, once thriving in the city, make a comeback and take those people formerly employed in manufacturing off the streets.
"What's the point of keeping these people on unemployment benefits and sinking further into demoralization? They could be gainfully employed," the mayor muses. He points out that it is unrealistic to expect every former factory worker to re-qualify as an insurance salesman. But there's only so much he can do.
Might it not be, then, that his job requires the skills of a manager rather than a crime fighter?
"There's no way a manager could do the job, there's far too much politics involved," Kaczyński counters. "You need to be adept at all kinds of games." He is convinced that what the city needs is a tough man to put an end to the chaos that once ruled supreme among municipal authorities.
"Ever since I did the sheriff's job (as the head of the public prosecutor's office) I believe that things can be done in Poland in the face of adversity. Even though I'm not young anymore I can see sense in trying," he says. Before his spell as justice minister, Kaczyński had stood at the helm of the Supreme Chamber of Inspection (NIK), which earned him very good reviews. That, however, was merely a confirmation that it was possible to set up an effective institution within the existing framework. The justice ministry convinced him that larger things could be accomplished and, by implication, made him willing to run for office.
Nonetheless, some say that his experiences as investigator and chief prosecutor have exposed the current mayor to so much corruption as to make him overcautious. His concerns to prevent such crimes under his jurisdiction have led to a paralysis in decision-making, as officials refuse to make any decisions for fear of accusations, critics claim.
Kaczyński seems either unaware or unconcerned about such allegations. "As for corruption, I can say that we've stamped it out at the top level," he says. "Of course, I can't guarantee that it doesn't happen at all at the local level, where the city authorities are not directly involved. There are allegations and we react to each and every one of them by reporting the suspicion of a crime to the police. Even if an allegation seems frivolous, or possibly a provocation, it has to be checked very carefully."
Suspicion lingers that "the sheriff" allows his image to dictate his policies. There's no lack of critics who describe him as "anti-business," since co-operation with the private sector is an area more often exposed to "frivolous allegations, or even provocation." The mayor counters that he wants to encourage public-private partnerships in the area of real estate development, but only on the basis of a "build, use and give back" principle. He gives the example of the Saski and Bruhl Palace projects, which are going ahead with the participation of foreign developers "while the city contributes extremely valuable property."
Such arrangements are nothing new in Warsaw: Both ING's Złote Tarasy multi-purpose commercial complex and Hines' Metropolitan office building were built on this basis, as were many other developments. Traditionally, the city enters into a partnership with the developer, with the city donating the land to the project as its contribution in kind. But Kaczyński adds one new aspect to this method.
"I will always insist, however, on this clause in any contract: The state must have the option to buy the property back at any time, obviously at a fair price. I want to live to see the Saski and Bruhl palaces serve a public function, as the site of the foreign ministry or the prime minister's office." That is not, perhaps, what some people mean by a public-private partnership. But Kaczyński said he is not averse to the idea of a more sophisticated partnership.
"At the moment there is no possibility of working with the private sector on the Metro. The city cannot afford to pay zł. 500 million a month for 30 years, and that's the kind of offer that the EBRD (European Bank for Reconstruction and Development) presented to us. That is not an option." Kaczyński insists, however, that he does not object to the proposition in principle.
"Of course, should we receive a much, much more advantageous offer, we'll gladly accept it. But for now it is not happening."
Alternatively, Kaczyński says, the Metro deal could be assessed on profits. "But then it would take a century and a half," he asserts. "No one would make an investment like that."
As for the charges of a dearth in decision-making brought about by his fear of corruption, Kaczyński freely admits that there may be some truth in them.
"Unfortunately, that was necessary in the initial stages," he claimed. "We had to stop doing certain things if we wanted to create an environment that would make decisions possible in the long term. It was a price worth paying for setting up the proper procedures. Anyway, the situation is now picking up."
Admittedly, Kaczyński came to a very difficult job. The city's administrative structure has recently been completely restructured, with one municipality taking charge where previously there had been 11 local authorities as well as a city council. Kaczyński became the first elected mayor in the city's history and found a mess much worse than even he had anticipated.
"I didn't believe it could be this bad," he says. "The previous city administration made decisions on no legal basis whatsoever. I'm not going to work like that. So at first a legal vehicle had to be put in place to make work possible. That took a while." The mayor named investment decisions, building permits and the City Guard (Straż Miejska) as the areas that had been neglected in particular. If the mayor was serious about his agenda of a crackdown on corruption, something had to be done to introduce proper procedures.
Yet his reaction to the mention of the Warsaw Destination Alliance, and its claims to enjoy a "special relationship" with the mayor's office, goes some way towards vindicating the fears that he is far from comfortable in his attitude towards business. Kaczyński becomes defensive, denying any sort of special relationship with anyone.
"There are no priorities here, no one gets special treatment of any kind," he counters. "I've never even heard of an organization by that name." What the mayor is aware of is a deal signed recently by his deputy, Andrzej Urbański, with the city's major hotels.
"They will promote the city with their own money," he explained. "We've got a common interest here: they want to fill more hotel beds - at the moment the occupancy rate stands at some 50 to 55 percent - while we want people around the world to know that there is such a city as Warsaw. But no priority is given to anyone." If there's a common interest, what's the harm in prioritizing some public-private partnership projects? And what exactly is the city's contribution to the deal?
The mayor shrugs his shoulders. "We're letting them do it. What you've told me shows that there's at least a very dangerous rumor floating around. It is a sign to me that I should have a very serious talk with Urbański. By the way, he is no longer in charge of such issues."
Although no more than a breakdown in communication, this part of the interview is in some way indicative of the Warsaw mayor's discomfort when dealing with the world of business. The modern economy still presents an unsolved conundrum for Lech Kaczyński.
