Sunday

22nd Sep 2019

Opinion

Poland is a global player - It should start behaving like one

Around this time last year, with Europe still in recession, Poland's average per capita income grew to more than $12,196. Without fuss or fanfare, Poland had joined the group of countries classified as high-income economies by the World Bank.

At the time, though, what made the headlines was the fact that Poland was the only member state of the European Union that had avoided a recession in 2009. This is no mean achievement. What is even more impressive is that Poland has the longest record of uninterrupted economic growth among the formerly Communist countries of Europe and central Asia. 2011 will mark its 20th consecutive year of economic expansion, from an average income of about $2,000 in 1990 to more than $12,500 today.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

  • The only EU nation not to fall into recession in the crisis (Photo: European Commission Audiovisual Library)

What is perhaps most remarkable is that Poland has escaped the formidable "middle-income trap". A few years ago, report by the World Bank, An East Asian Renaissance, observed that while many countries have crossed the income threshold of $1,000 per capita to become "middle-income economies", only a handful of countries have sustained growth long enough to become developed economies. Poland is now a member of this select class.

Poland's success raises two questions. What did Poland do to get here? And what should it do now? Policymakers in the formerly Communist economies - indeed all middle-income countries - would profit greatly if they knew the answer to the first. And Polish citizens and statesmen may benefit from getting clues about the second. These are questions to consider with care. What follows are some points to ponder.

Poland's prosperity owes much to three old fashioned ingredients: sound money, economic freedom, and a modern education system. The early years of transition were plagued by high inflation in all formerly Communist countries: many had triple-digit rates of inflation. But Poland brought down inflation in every year in the first decade of transition—from more than 500 percent in 1990 to less than 10 percent in 1999. And inflation has been kept below five percent since 2000. Poland's National Bank has been a bastion of stability.

Second, step by step, Poland liberalised its economy. A slew of reforms - some unpopular at the time - made it easier to do business, and forced harder budget constraints on state-owned enterprises. Polish producers became competitive abroad. About $100 billion of foreign direct investment flowed in since 2000. Poland is now a part of a close-knit production network of European enterprises. In 2009, when Germany provided a fiscal stimulus to the auto industry through its cash-for-clunkers scheme, Fiat, Opel, and Volkswagen factories in Poland supplied many of the cars. Last year, Polish exports to Germany grew by 25 percent. Poland has taken advantage of being in a good neighborhood.

Third, Poland made education a top priority. Thanks to reforms begun in the late 1990s, Poland has greatly reduced the number of students doing poorly in school. In 1990, half of all secondary school students were streamed into a dead-end vocational track. Poland had one of the lowest education levels in Europe, and only one Pole out of ten aged 25-34 years had university education. Reforms led to increased secondary and higher education qualifications, made educational opportunities more equal, and improved the quality of schooling. Today, Polish 15-year olds read as well as those in the US Midwest, three out of every ten 25-34 year olds have attended university, and young Poles are valued as workers by businesses in Britain, Germany, and other countries.

To be sure, a lot still remains to be done. The fiscal deficit needs reining in. Labour-force participation rates should be higher, and labor markets more flexible. Regional differences in access to education and health services can be made smaller. And Poland can make its business environment much better: it ranked an unimpressive 70th in the World Bank's 2011 Doing Business ratings - several spots behind Turkey and the Czech Republic, and even further behind Slovenia and Slovak Republic. This is a daunting policy agenda of structural reforms at home.

But Poland has already earned the right to voice its views about regional and global imperatives, and to be listened to. It has provided a great example of a successful transition from plan to market, and it has been showing the way to a responsible and effective accession to the EU.

Poland is already active in supporting development efforts in Africa and Asia. The time is ripe to scale up its role in development finance for poor and fragile countries. But it is not just their wealth that Poles should share. Even more valuable is their knowledge. It is time for others to learn more from Poland's development experience so they better understand the challenges that must be met and the choices that have to be made to become a developed economy.

When it assumes the presidency of the Council of the European Union later this year, Poland will take center stage. It will have the responsibility for the stewardship of the most powerful association of nations. And it will have the opportunity to shape the future of millions around the world.

Ngozi Okonjo-Iweala is the Managing Director of the World Bank, and the former Finance Minister of Nigeria and later Foreign Affairs Minister.

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

Dismiss Italy's Salvini at your peril

Matteo Salvini's recent gambit may have failed, but, in his own words: "From today you will find me even more pissed off and determined. I will go from town to town and we will take this country back."

Brexit raises questions for EU defence integration

Brussels' current vision for cooperation on defence, where third countries can contribute but have no say in decision-making and in the guidance of operations, is unlikely to be attractive to the UK.

Europe's refugee policy is test of its true 'way of life'

As ex-national leaders, we know it's not easy to withstand public pressures and put collective interests ahead of domestic concerns. But without strong institutional leadership, EU values themselves risk ringing hollow, not least to those seeking protection on Europe's shores.

A new Commission for the one percent

We are only baffled by how nakedly Ursula von der Leyen's commission represents the very crisis affecting the EU. These commission nominees can expect their toughest questioning yet, they must be held accountable to those they should be representing.

How EU trains discriminate against the disabled

EU law requires us to give two days' notice to get the assistance we need, even for our daily commutes. We can't travel like everyone else. It is frustrating, annoying and time-consuming. In short, it is unacceptable.

Column

These are the crunch issues for the 2019-2024 EU commission

These developments will largely determine who will be running the world in the coming decades and perhaps generations. If the Europeans can't find an answer over the five years, they will be toast. And we haven't even mentioned climate change.

News in Brief

  1. Ireland: right Brexit deal is 'not yet close'
  2. UK secrecy on Brexit holds back wider EU talks
  3. Feminist mass protest in Spain after 19 murders this summer
  4. Global climate strike starts ahead of UN summit
  5. UK Brexit minister to meet Barnier on Friday
  6. Russia-Ukraine gas deal talks show 'progress'
  7. Nobel economist: Ireland 'not good EU citizen' on taxes
  8. Germany takes carbon border tax on board

Defending the defenders: ombudsmen need support

Ombudsmen are often coming under attack or facing different kinds of challenges. These can include threats, legal action, reprisals, budget cuts or a limitation of their mandate.

Column

The benefits of being unpopular

Paradoxically, the lack of popularity may be part of the strength of the European project. Citizens may not be super-enthusiastic about the EU, but when emotions run too high in politics, hotheads may take over.

Stakeholders' Highlights

  1. Nordic Council of MinistersNew programme studies infectious diseases and antibiotic resistance
  2. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  3. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  4. Nordic Council of MinistersNo evidence that social media are harmful to young people
  5. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  6. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  7. Nordic Council of MinistersEducation gets refugees into work
  8. Counter BalanceSign the petition to help reform the EU’s Bank
  9. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  10. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  11. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  12. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat

Latest News

  1. Europe goes to New York This WEEK
  2. Nine EU 'commissioners' asked to clarify declarations
  3. Dismiss Italy's Salvini at your peril
  4. Malta PM accused of 'blackmail' over slain reporter
  5. Diplomats back Romania's Kovesi for EU top prosecutor
  6. Brexit raises questions for EU defence integration
  7. Low-carbon cities can unlock €21tn by 2050, report finds
  8. France, Italy want 'automatic' distribution of migrants

Stakeholders' Highlights

  1. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  2. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  3. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  4. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  5. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  6. Nordic Council of MinistersNordic commitment to driving global gender equality
  7. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan
  8. UNICEFUNICEF Hosts MEPs in Jordan Ahead of Brussels Conference on the Future of Syria
  9. Nordic Council of MinistersNordic talks on parental leave at the UN
  10. International Partnership for Human RightsTrial of Chechen prisoner of conscience and human rights activist Oyub Titiev continues.
  11. Nordic Council of MinistersNordic food policy inspires India to be a sustainable superpower
  12. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID

Join EUobserver

Support quality EU news

Join us