Development & Education

Polish economy is booming, bucking international trends

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There's no credit crunch in Poland. Local banks are still giving out mortgages and loans, even enlisting Hollywood actors like Antonio Banderas, above, to lure in customers. (Photo by Dave McGuire.)

 

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Story from PRI's The World. Listen to the above audio for a complete report.

In the 20 years since the end of communism, Poland has not been in recession – not once.

Projections indicate it could ride out the current crisis as well.

How do they do it? Warsaw University economist Grzegorz Gorzelak said there are several answers.

“One is, it’s a miracle," he said. "You don’t interpret miracles, they just happen.”

More seriously, Gorzelak says there’s too many things going right in Poland to pick just one reason for the strong economy.

By European standards, Poland is a big country with a strong demand for domestic goods. That keeps the economy humming. And when domestic demand has faltered, exports to the rest of Europe pick up the slack.

Having a free floating currency – the zloty, not the euro – has also helped to keep exports competitive.

Another factor is good banking regulations. Gorzelak said Polish law prevents foreign banks from taking capital from Polish subsidiaries in order to cover losses elsewhere. While other countries struggle with a lack of credit, Poland still has money to lend individuals and businesses.

Gorzelak also gave the country’s leaders credit for using positive thinking.

“They were saying, What crisis? We don’t have a crisis. Poland is safe, which was very fortunate because the economy is a psychological sphere and if you are being told that you’re going to have a crisis, you save money and you don’t spend and then you have a crisis.”

The Polish economy also benefits from a young and tech-savvy workforce that, with the rest of the world in the doldrums, doesn’t go abroad for jobs.

They work for companies like Polcode – a web development firm that builds databases for small websites in the U.S. and Canada. Wojciech Hyzopski is the company’s vice-president.

“When I came to Polcode, there were eight people four years ago. Now, we hire 64,” he said.

His company has benefited from the global downturn.

“We are doing well. The recession isn’t very harmful for us, because we are cheaper for West Europe or USA clients so they are more likely decide to outsource their job to Poland,” he explained.

But it’s not all computers. The economic boom in Poland even reaches down to what people eat.

Tucked among the Communist-era apartment blocks in Warsaw, Ola Turkiewicz owns a small shop selling organic vegetables, high-quality meats, and artisan cheeses — all from small Polish farms.

“My mission is to make people aware they can make informed choices when it comes to food," she said. "They don’t have to buy crap. For me, that mission is also to support the local economy – local meaning the Polish economy.”

It’s the kind of boutique philosophy that wouldn’t be out of place in gentrified Portland or San Francisco. But it’s unique for gritty Warsaw — and the store has quite a following.

“I don’t think this store would exist if we had more economical problems,” she said. “It is definitely the indication that Poland is doing not so bad.”

No Pole will argue that the country is a finished product but there is an idea here that Poland is a green island in Europe. Credit agencies are considering improving Poland’s debt rating, a stark contrast to their neighbors in the west.

Whether the Polish miracle can resist Europe’s troubles remains to be seen – especially if the country joins the eurozone.

 

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PRI's "The World" is a one-hour, weekday radio news magazine offering a mix of news, features, interviews, and music from around the globe. "The World" is a co-production of the BBC World Service, PRI and WGBH Boston. More about The World.