Poland's achievements and aims

Jerzy Buzek
Prime Minister, Republic of Poland

Ten years have passed since the collapse of the communist system and the disappearance of the Iron Curtain which divided Europe into two parts. Thanks to the introduction of a democratic system to Poland, the restoration of a free market, and the consistent implementation of economic reforms, Poland bears no resemblance to its former appearance as a grey and dismal country of the so-called socialist camp.

Poland's success is illustrated by basic economic figures. In the first quarter of 1999, inflation fell to about seven per cent per annum, whereas ten years ago it was over 600 per cent per annum. In recent years, Poland has enjoyed one of the highest growths in Gross Domestic Product (GDP) in Europe - six per cent. This figure deserves attention in light of the crisis in Russia. It means that the Polish economy has, to a considerable extent, liberated itself from the eastern market and geared itself to co-operation with the stable European market.

These economic achievements were possible thanks to the stable political situation in Poland. Every government of independent Poland set itself the same strategic goal - integration with both European and North Atlantic structures of Europe. The orientation of Polish foreign policy was never questioned, not even when parties descendent from the old system came to power. The culmination of these achievements occurred on 12 March 1999, when Poland, together with Hungary and the Czech Republic, became a member of the North Atlantic Pact. Apart from its geopolitical significance - the gaining of long term guarantees of secure development for Poland - this event was also an expression of the west's appreciation of the changes that have already occurred and the stability which Poland has already achieved.

Previous governments involved themselves mainly in adapting the Polish economy to the principles of a free market economy, the privatisation of state enterprises, and the modernisation of the nation's infrastructure. The Polish Government's task was to help prepare the most important public institutions to the challenges facing Poland at the threshold of the 21st century. The programme of modernisation included four social reforms: reform to the administration, pension system, health service and education.

The first reform to be introduced was administrative reform. By altering the principles of financing public institutions, it provided the basis on which to introduce subsequent reforms. The basic feature of the administrative changes is the decentralisation of authority, so that it is now closer to citizens. The method of distributing budget funds is also changing. Local communities will have a much greater say in how to distribute these funds than they had before, which will make spending more rational. Also, savings will occur thanks to the reduced cost of managing state finances.

A concern for state finances also necessitated a reform to the pension system. Previously, pensions were financed by the taxpayers on a continuous basis. The national budget would not have withstood this burden indefinitely. The budget has now been eased of this burden by the formation of private pension funds and the creation, within the state pension structure, of individual pension accounts into which each citizen can deposit money for his/her own pension.

Generally speaking, the reform to the health service and education also involved changes to the method of financing, a better position for citizens, and a plurality of institutions which, in the case of education, also means a better quality of education. The purpose remains the same: modernisation and an improvement to the quality of services.

All the reforms in Poland, the economic growth, and the development which the people are now enjoying, would not have been possible without foreign investors, their capital, and the modern management methods which they introduced. For the second year running, Poland is the target of over half of all foreign investments in Central and Eastern Europe. At the end of 1998, the country had attracted 30 billion dollars worth of direct foreign investment. What particularly attracts foreign investors to Poland is the size of its market and the stable political and economic situation. The formation of 17 special economic zones has turned out to be an effective way of boosting investment. The legal and financial conditions in these zones, especially the tax concessions, have resulted in over 5.5 billion dollars worth of investment.

Hopefully, foreign investment in Poland will develop even more dynamically for the sake of mutual interest. The next ambitious goal set by the Poles is membership of the European Union (EU). This is a social challenge for Poland; it may also provide an opportunity for those who wish to link the future of their companies with Poland.