When attempting to predict the economic future of the Soviet Union’s post World War II ex-satellites, Poland was hardly in contention in the parlay of nations due to bring their economies to ongoing central European levels.
Poland, which had been savaged by its powerful neighbors, Germany and Russia in back-to-back tragedies, along with 10% of its 36 million pre-World War II Jewish population, comprising a disproportionately higher percentage of its middle class, totally wiped out by Nazi Germany and even willing indigenous collaborators, seemed to doom that country’s newly-independent status. Poland was given a new lease on life by the breakup of the Soviet Union in 1990.
But against all odds, Poland has experienced an amazing economic rebound. For beginners, it was the only member of the European Union to avoid a recession during the global financial crisis (2008-10). Masterminded by the finance minister, Leszek Balcerowicz, Poland opted for the “shock therapy” of free trade and global capitalism, rather than it its former satellite neighbors who embraced the more moderate transition of Socialist democracy.
Price controls were lifted, markets were fully opened to foreign trade, and the Polish “zloty” was made convertible. State-owned industries were sold off and privatization became the economic order of the day. Although such “extreme medicine” resulted in a two-year 15% slump in the nation’s gross domestic product, right after independence, it rebounded by 1994, and has witnessed a steadily improving domestic economy ever since.
But the biggest single contribution to Poland’s success has been its effective utilization of its hard-earned European Union membership. The Poles were quick to seize the opportunities in the EU’s structural and cohesion funds, as well as the benefits of improving their own governance and transparency. Poland also avoided the temptation of corruption that the switch from state Communism had tempted its fellow post-Soviet beneficiaries like Rumania, Bulgaria, Hungary, and Slovakia. This provided Warsaw’s elected leaders with the opportunity to utilize the EU’s structural funds for internal development. The EU, in turn, rewarded Poland with $139 billion between 2007 and 2013, more than any other recipient.
Because of its impressive use of the European Union’s nation-building award, Poland is on top once again to get the biggest chunk (106 billion euros) in the next multi-year budget from 2014 to 2020.
While realizing that its present status is only the beginning in reaching the developed level of a Germany or France, it must wean itself away from too much dependence on government direction; and developing and investing in the private sector, while pushing more aggressively into technological and high-tech industries. Last, but not least, is the need to persuade the large number of low-income workers that this promising future lies in the Polish homeland, rather than gravitating to Western Europe, or even America, to find a better way of life for their families.
Why Poland has Become the European Union’s Rising Star
Poland, which had been savaged by its powerful neighbors, Germany and Russia in back-to-back tragedies, along with 10% of its 36 million pre-World War II Jewish population, comprising a disproportionately higher percentage of its middle class, totally wiped out by Nazi Germany and even willing indigenous collaborators, seemed to doom that country’s newly-independent status. Poland was given a new lease on life by the breakup of the Soviet Union in 1990.
But against all odds, Poland has experienced an amazing economic rebound. For beginners, it was the only member of the European Union to avoid a recession during the global financial crisis (2008-10). Masterminded by the finance minister, Leszek Balcerowicz, Poland opted for the “shock therapy” of free trade and global capitalism, rather than it its former satellite neighbors who embraced the more moderate transition of Socialist democracy.
Price controls were lifted, markets were fully opened to foreign trade, and the Polish “zloty” was made convertible. State-owned industries were sold off and privatization became the economic order of the day. Although such “extreme medicine” resulted in a two-year 15% slump in the nation’s gross domestic product, right after independence, it rebounded by 1994, and has witnessed a steadily improving domestic economy ever since.
But the biggest single contribution to Poland’s success has been its effective utilization of its hard-earned European Union membership. The Poles were quick to seize the opportunities in the EU’s structural and cohesion funds, as well as the benefits of improving their own governance and transparency. Poland also avoided the temptation of corruption that the switch from state Communism had tempted its fellow post-Soviet beneficiaries like Rumania, Bulgaria, Hungary, and Slovakia. This provided Warsaw’s elected leaders with the opportunity to utilize the EU’s structural funds for internal development. The EU, in turn, rewarded Poland with $139 billion between 2007 and 2013, more than any other recipient.
Because of its impressive use of the European Union’s nation-building award, Poland is on top once again to get the biggest chunk (106 billion euros) in the next multi-year budget from 2014 to 2020.
While realizing that its present status is only the beginning in reaching the developed level of a Germany or France, it must wean itself away from too much dependence on government direction; and developing and investing in the private sector, while pushing more aggressively into technological and high-tech industries. Last, but not least, is the need to persuade the large number of low-income workers that this promising future lies in the Polish homeland, rather than gravitating to Western Europe, or even America, to find a better way of life for their families.
Why Poland has Become the European Union’s Rising Star
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