WBJ/PKPP Lewiatan press breakfast: Business sounds off

Marek Zuber, chief economist at IDM

Export is the main force behind Poland's economic growth and it is mainly due to foreign investment, particularly in the automotive industry. Approximately two-thirds of our export is generated by this industry. So this proves that attracting foreign investments can be very beneficial.

An important question arises: Should we support foreign investments with direct grants or by creating favorable conditions for economic activity for everyone in the country?

In my opinion we should go for the second option. We see that those investors who are already present in Poland are investing very little.

Marek Kukuryka, president of Sanitec Koło

With the new government and new conditions it would be worth underlining that foreign investments are welcome in Poland. This is even more important when we consider the fact that many pre-election comments from Law and Justice (PiS) politicians created doubts whether this climate will be positive.

The changes in VAT for construction materials is of great concern for my industry. The raising of this VAT from seven percent to 22 percent resulted in a fall of sales in the segments where the difference between the old and new tax rate is not refunded. We expect that soon some plans for what will happen after 2007 will be presented.

With regards to PIS' plan to build three million flats - I personally doubt whether its possible. Even if there are concrete concepts and plans there is the barrier of supply and demand. We have to keep in mind that local special development plans would have to be prepared and the potential of the construction industry is inadequate. Perhaps we should think about opening the market to workers from the East.

Cezary Mech, Law and Justice's financial expert  

As far as the next five years are concerned we have a lot of resources to put to use. There are 2.7 million unemployed, a lot of hidden unemployment in the countryside and two million students. Plus the labor cost in Poland is 20-30 percent of that in France or Germany and 44 percent of the labor cost in Greece.

On opening Polish labor market to workers from the East: I'm afraid of this approach, I don't think we should import human resources before we manage to use our own correctly. We want to increase the level of employment in Poland, so that Poles won't have to go abroad to find jobs and pay taxes there. If we fail to do so, we will face huge problems with the pension and health care systems once the baby boomers of the 1950s retire in about ten years' time.

Foreign investors are asking for cash grants, for direct subsidies. We are for the creation of new workplaces, but we want the rules to be the same for both foreign and domestic investors.

The need for funds for Research and Development, which could strengthen Poland's position on the global market and draw investments permanently, is still underestimated in Poland. Cooperation between entrepreneurs and scientists is non-existent. Investments in Poland should be built on an advantage in know-how, and not on the labor-cost advantage.

Local governments also have an important role to play in drawing foreign investments. On one side there are the special development plans. But it is also important to increase the regions' attractiveness to investors. A lot of local governments do not consider promoting themselves. Perhaps they should help local small enterprises which could cooperate with potential large investors.

Andrzej Blikle, president of A.Blikle

On tax breaks for entrepreneurs: I don't think tax breaks are the right direction. The only real motivation for entrepreneurs  is the market - it motivates people to increase employment. Stop helping us, stop disturbing us - let the government deal with the market!