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Improved living standards and a disciplined workforce are just two factors in Poland’s strong FDI growth, says Paweł Chorąży, Poland’s undersecretary of state in the Ministry of Investment and Economic Development. He spoke to Courtney Fingar during a central European investment forum in London in June 2018.

Q: According to our data service fDi Markets, Poland saw strong FDI growth in 2017 and was among the best performing countries in Europe.  To what do you attribute this?

A: There are a few elements that should be mentioned: the size of the market and the labour force – there is a certain discipline in the work attitude, the skills and competence and also the attitude of the Polish workforce. The location is good and is seeing improving connectivity. One of the elements indicated by most investors as a burden [in the past] was connectivity but this has been improved in the last year significantly. Also, improving living standards: for many, the quality of life for those living in Krakow or Warsaw is very good, which is also very important for those who want to invest. The diversity of our universities and the quality of teaching in Poland also [has driven investment] in business process outsourcing and service centres in Poland, for example.

Of course, the EU membership is very important because it indicates a certain level of stability, which is quite important. But what I think is the most important is this attitude, enthusiasm and perspective. We have been growing for many years. There was no one year of recession in Poland since 1991 – that was after the collapse of Communism. After that there was two years of recession, but after that it has been constant growth in Poland. It’s a combination of different factors.

Q: How can you keep the momentum going?

A: We do not see major elements that could hamper our growth in the future. One of the main dangers for future growth was the demographic situation in Poland, but we see now a big influx of migrants from outside Poland [such as the one million who have come from Ukraine]. I think we see that we have achieved a certain level where we are not able to compete as much with cost of labour, so what we are trying to do is to rediscover our focus on the more skills-demanding sectors, more advanced sectors. And it is also an intrinsic part of the recent reform in supporting FDI, the new law on special economic zones…

Q: Is that in effect now?

A: The law has been endorsed by the president so we are in the process of issuing two executive regulations within the law. So everything that is connected with legal aspects should be ready within two months. The idea behind it was to make things more flexible – because in the past there were some limitations. It was always the government who extended economic zones. Now all of Poland is considered as one economic zone.

We also created incentives for investors. They have incentivised more those investors to develop research and development [R&D] centres in these centres in Poland who invest in the regions that are economically less developed, and who create the biggest employment opportunities. So these elements are very much highlighted in the law.

Also we have changed the role... because in the previous system there were ‘boards for economic zones’. We have changed them because they were old. They were responsible for connecting the government to aspects concerning regulations. Now we want to make them responsible for linking investors with vocational and educational training. Also, to cooperate with investors on the larger scale because I think the flexibility is much bigger in looking for locations (the availability for space, etc). The biggest change is just making it the R&D investment the top priority – connected with production investment in Poland.

Q: The reputation of the government externally – especially in some parts of Europe – is that it’s populist, and populism often goes hand-in-hand with protectionism but the FDI performance is at odds with that. What would you say to that?

A: I think the most difficult thing you can argue with is the label you get or the reputation you get. It is something that is the most important. The reality is, I can see that there were some errors especially in our foreign policies, which were mainly used as a tool of communicating with our citizens instead of with our external environment but when we look at economic policy, Poland is very open. So we are in this part of the EU that thinks the single market and abolishing borders within the EU are the top priority and that we should really pursue this goal.

We are also very open to FDI so I think the numbers prove our prime minister is very determined to support FDI in Poland. So I would say in this case we should separate politics from the economy.

This article is sourced from fDi Magazine
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