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Poland Country Brief

Overview

Poland, also called the Republic of Poland, has a population of approximately 38.6 million, the 6th largest in the European Union. Poland is bordered by Germany to the West, the Czech Republic and the Slovak Republic in the South, by Ukraine and Belarus to the East; Lithuania, the Russian enclave of Kaliningrad, and the Baltic Sea lie to the North. The principal centres of population are Warsaw, Krakow, Wroclaw, Lodz and Poznan.

Poland celebrates its National Day on 3 May.

Political Overview

Under the Polish Constitution, the legislative authority of the Republic is vested in the Parliament, composed of the Sejm (lower house, 460 members) and the Senate (upper house, 100 members).Executive authority is shared between the President (elected for five years) and Prime Minister.Three new tiers of regionally-based local administration were introduced in 1999: 16 voivodship, 308 poviats (and 65 cities with the legal status of a poviat), and over 2000 gminas (counties).

Lech Kaczynski, a Law and Justice Party (PiS) candidate and the former Mayor of Warsaw, won the presidential elections in the second round on 23 October 2005 (he ran against current Prime Minister Donald Tusk). He took office as President on 23 December 2005.President Kaczynski opposes rapid free market reforms and is an advocate for strong social welfare programs.He co-founded the centre-right PiS with his identical twin brother, Jaroslaw Kaczynski (Prime Minister of Poland 2005-2007).

Parliamentary elections on 21 October 2007 were won by the centre-left Civic Platform Party (PO), which received 41.4 per cent of the vote (209 seats). PiS, which led the previous government, received 32.2 per cent of the vote (164 seats), the Liberals and Democrats alliance (LiD) and the Polish Peasants Party (PSL) were the only other parties making it into the Parliament with 13.2 per cent (53 seats) and 8.9 per cent (31 seats) of the votes respectively. 

Following the elections, PO leader Donald Tusk announced that his party would form a coalition government with PSL. On 16 November, the cabinet of Prime Minister Tusk was sworn in. An official coalition agreement was signed by Prime Minister Tusk and PSL leader Waldemar Pawlak on 23 November 2007. As part of the agreement, PSL holds 3 portfolios out of 18, including economy and agriculture. 

Prime Minister Tusk outlined the priorities of his government in an address to Parliament on 23 November 2007. These included: reducing the budget deficit, accelerating infrastructure development, reducing barriers hindering business, fighting corruption and reducing unemployment.

Poland became a member of the Organisation for Economic Cooperation and Development in 1996, following the success of a radical economic reform program. It joined the North Atlantic Treaty Organisation (NATO) in 1999, and, following finalisation of negotiations with the European Union (EU) in December 2002, Poland joined the EU in May 2004. Poland was a founding member of the World Trade Organisation (WTO) in 1995 and has been a member of the Organisation for Security and Cooperation in Europe (OSCE) since 1996.

Economic Overview

So far, the global economic crisis has not affected Poland as seriously as its neighbours. After a long period of growth, the Economist Intelligence Unit (EIU) now forecasts GDP to contract by 1 per cent in 2009. Inflation is forecast at 2.5 per cent for 2009 and 2 per cent for 2010. Poland is one of the few emerging economies to still enjoy stable credit ratings.

Although the flow of foreign direct investment (FDI) into Poland rose steadily in the years preceding 2007, it has now slowed somewhat, totalling €11.1 billion (A$19.6 billion) in 2008.

Poland still plans to introduce the exchange rate mechanism (ERM2) in mid-2009, one of the final steps in preparation for transition to the Euro. Despite the economic crisis, Poland is on its way to meeting the criteria set out under the Maastricht Treaty, and could adopt the Euro as early as 2012.

Bilateral relationship

Australia maintains an Embassy in Warsaw. Visa and migration issues are handled by the Department of Immigration and Citizenship’s office in Warsaw. Austrade is also represented in the Australian Embassy in Warsaw.Poland is represented in Australia by the Polish Embassy in Canberra.Poland has also established a Consulate General in New South Wales and Consulates in Queensland, Victoria and the Northern Territory.

The former Minister for Defence, the Hon Joel Fitzgibbon MP, visited Poland in December 2008 to participate in NATO talks on Afghanistan hosted by Poland. The Minister for Climate Change and Water, Senator the Hon Penny Wong MP, also visited Poland in December 2008 to lead the Australian delegation to United Nations Climate Change negotiations. South Australian Premier, the Hon Mike Rann MP, attended the associated Climate Leaders summit in Poland at the same time.

The last Australian foreign minister to visit Poland was Alexander Downer in 2002. Then Polish Foreign Minister, Włodzimierz Cimoszewicz, visited Australia in 2003.

Bilateral agreements between Australia and Poland include: Investment and Promotion and Protection Agreement (1991); Double Taxation Agreement (1991); Extradition Treaty (1999); Air Services Agreement (2005); and a Joint Communiqué on Cooperation in Environmental Technologies, Goods and Services (2006).

The Polish community in Australia plays an important and active role in the overall relationship. According to 2006 census figures, about 164,000 people of Polish ancestry live in Australia, nearly half of them born in Poland.The Polish community is active in promoting people-to-people contact and commercial and academic ties through a number of community organisations, bilateral business councils and institutes. Several famous Australian landmarks, including Mt Kosciuszko, were named by Polish explorer, Paul Edmond Strzelecki.

Bilateral economic and trade relationship

Australia's commercial interests in Poland are relatively modest. Direct merchandise exports to Poland in 2008 were around A$40 million, whileimports from Poland were worth A$374 million.Australia’s major export items to Poland in 2008 were coking coal (around A$10.5 million) and medicaments (around A$5.3 million). In 2008, Australia’s major imports from Poland included goods vehicles (A$54.5 million), furniture (A$38.9 million), vehicle parts (A$34.8 million) and household equipment (A$33 million).

There are increasing opportunities for Australian wine, foodstuffs, meat, sheepskins, education, IT, environmental and waste-management technologies in Poland.

The total value of Australian investment in Poland is roughly estimated in excess of $2 billion. The number of major Australian investors in Poland has risen from just two in 2005 to more than a dozen in 2008.Amcor Polska (the Polish operation of the Australian packaging company Amcor) represents Australia's biggest commercial operation in Poland.Australian companies have made promising inroads in less traditional (non-commodities) areas such as packaging, food handling and processing, beverages, building and construction, education and environmental technologies and mining equipment. Macquarie Bank is currently managing a global infrastructure fund that has invested in DCT Gdansk, a deep sea container port under construction in Gdansk, Poland. The total investment is valued at about 180 million Euros (A$311 million) and is the largest greenfields investment in Poland for some time.There is potential for growth in Australian investment in these and other areas as the Polish economy further expands, incomes rise and demand diversifies.

For advice on doing business in Poland, see  Austrade's website.

Export Opportunities

Education and Training

In 2007, there were 2181enrolments by Polish nationalsin education institutions in Australia, with preference forvocational training andEnglish languagecoursesand the numbers growing in 2007. Hospitality,tourism,business andITare also popular.This makes Poland our sixth largest educationmarket in Europe. Growing demand for post-graduate studies and vocational courses should ensure continued interest in Australian education and training services. Increased collaboration on science and technology and joint research initiatives between institutions is a priority for Austrade’s development of this sector. Austrade, in conjunction with Australia Education International (AEI) organise marketing activities, such as fairs, missions and seminars to assist Australianeducation institutions to build strong market presence.

Infrastructure

There are opportunities for governmentand privately funded projects to improve road, rail and environmental facilities. Poland is planning a majorexpansion of its highway network, which is in poor condition and almost entirely lacking in modern tollways. Opportunities existfor Australian investors and experts in PPPs (Public PrivatePartnerships) as this business model has just been fully legislated for.  At a seminar organised at the Warsaw Embassy, Macquarie Bank made presentations to relevant Polish authorities on Australian PPP best practice models.

Poland as well as Ukraine will be hosting the European Soccer championships in 2012 (Euro 2012). This will boost investments and infrastructure projects in Poland.  Spending associated with Euro 2012 is said to drive economic growth by 1 % annually.

Sporting facilities infrastructure

Construction and modernisation is planned for 6 stadia in Poland with an estimated investment of €30 - 100 million each and seating capacity for 45,000. The projects will including new roofing, enlarged car parks in addition to infrastructure developments in surrounding areas both residential and commercial. The estimated value of these projects and investment in sporting facilities alone is €1.2 billion.

These projects will include ICT and transport solutions:

ICT

Security (access control, monitoring, etc)
Ticket sales management
Transport management (public transport, parking etc)
Safety (road safety, health etc)
Events management

Transport

Information and Communication Technology

The PolishIT market is in a long-termuptrend, developing at a stable andsustained pace. In 2007 it expanded by25% (in US$ terms), making it the fifth consecutive year of double-digit growth. Austrade is currently promoting Australian IT expertise in such areas as road safety (RedflexPly Ltd), intelligent mapping (Aerometrex) and VoIP technology (Freshtel), but also in niche segments (mining, governance risk and compliance management, multimedia and content management solutions) where Australian companies compete successfullywith international players.

Environment Products and Services

The Joint Communique on Cooperation in Environmental Technologies, Goods and Services, signed by the then Minister for Industry, Tourism and Resources, the Hon Ian Macfarlane MP, and the Polish Minister for Environment, JanSzyszko, came into effect on 17 March 2006.

The Communiqué provides for the development of cooperation between Australia and Polandin the field ofenvironmental technologies, goods and services. When Poland acceded to theEuropean Union in 2004, it became eligible to receive substantial assistancefrom the EU Cohesion Fund to upgrade its environmental infrastructure, practices and technologies. Poland sees Australia as an alternative source ofthese technologies from itstraditional suppliers in the EU and the United States.

Thearrangement facilitates theacceptance of Australian environmental technologies, goods and services by Polish purchasing authorities. As aresult Australian exporters will be ableto assist local Polish authorities in improving their environmental infrastructure, practices and technologies to meet EUrequirements. Areas of collaboration covered by the arrangement include:

Aerospace and Defence

There is scope for Australia to supply defence equipment to Poland as it sets about meeting its NATO obligations.  Austrade is working with the Defence Materiel Organisation based London on a strategic approach for several Australian companies.

Mining and Minerals Coalmine Rehabilitation

According to UK Invest, Poland is one of top three mining opportunity markets in the world after China and India. With the imminent privatisation of a number of mining enterprises in Poland, Austrade commenced opportunity-scoping work with several Australian companies.  A comprehensive Mining Sector Report was prepared by Warsaw Post for the Queensland Government outlining specific areas of opportunity, potential partner enterprises/ mines and tenders.

Oil and Gas

Poland intends to find and document resources of 6 billion tonnes of oil and about 40 billion cubic meters of natural gas. Currently, there are about 90 active exploration sites. This is part of an aggressive policy by the Polish Government to rebuild its domestic oil and gas industry and could open up some potential new business matches for Australian companies.  

The support of government bodies and the ramping up within the oil and gas industry in Poland could create partnering opportunities for Australian businesses with the relevant know-how and technologies, interested in linking up with Polish businesses seeking international partners.

Textile, Clothing and Footwear

Leather, coarse wool tops, skins and hides offer opportunities.

Wine

Australian wine exports to Poland have increased on average by 41% over each of the past five years.  This is from a low base and there is still significant growth potential in the market.   

“Taste of Australia”, is an annual event in Poland organised by Austrade to raise awareness of the quality and value of Australian wines and to promote Australian wines already available in Poland along with new Australian wines and new exporters.    

Trade Successes

Australian company Entech continues to win contracts in Poland for its technology in thermal treatment of hazardous wastes.

SUBARU IMPORT POLSKA Sp. z o.o -  an exclusive  Polish importer of Subaru cars, has signed a contract to implement  the DNA  PROGRAM (DataDotDNA VIN product) - developed entirely by Australian Company DATADOT Technology Ltd. - throughout their entire range  of cars commencing March 2006. Subaru Import Polska Sp. z o o is the first importer in Europe to adopt across the board marking of their vehicles with DataDotDNA.

Macquarie Bank has made 11 significant investments in Poland including the development and management of a deep sea container port at Gdansk.

The Macquarie Group Property Fund (MGPA) holds a 70 per cent interest in the luxury apartment project in Warsaw valued at around A$390 million. MGPA also has a joint venture with London and Regional Properties Ltd to purchase a prime 40 storey office building in Warsaw.

Macquarie Countrywide Trust is purchasing 5 shopping malls in Poland with a total value of around A$377 million.

Macquarie Goodman is developing a logistics centre and warehouse in the Pomeranian free economic zone at Torun.

Macquarie Capital Alliance Group (MCAG) in conjunction with other Macquarie related entities, have taken a 53 per cent stake in the Netherlands-based European Directories which has 50 per cent ownership of Polskie Ksiazki Telefoniczne (PKT).

Australian Opal Property Development (The Meydan Group) acquired post industrial areas in the city of Lodz, to be converted to trendy residential warehouse style living and luxury apartments. This investment also involves export of Australian services and capabilities in architecture, design, property development and sales.  

Sydney based Beach House Films produced the internationally acclaimed commercial for Zywiec beer, Poland’s flagship brand.

Bovis Lend Lease is currently managing nine projects for companies in Poland including Apsys, Electrolux, LG electronics, Neinver, and Parkridge CE Retail.

Amcor will build its third factory in Poland, costing around A$36 million, to manufacture packaging from foil for the food market. Amcor’s workforce in Poland is to increase to around 600 and its total investments include new storage facilities for raw materials and ready goods as well as a new office building. 

Redflex announced it has been awarded the tender for supply of enforcement traffic management system in Trynczn which should pave the way for more municipalities implementing the technology.

More examples of successes are posted on the Austrade website.

TradeWatch Contacts

If you would like more information on trade and economic conditions in Poland, please e-mail the Department of Foreign Affairs and Trade: Tradewatch@dfat.gov.au. If you would like more information on specific export opportunities in Poland, or more information on export assistance, follow the link to the Austrade website. 

Last updated 3/06/2009