James Russell European Business Environment

The economic situation of Poland`s economy during the recession.

History:
'A nation with a proud cultural heritage, Poland can trace its roots back over 1,000 years.
Positioned at the centre oI Europe, it has known turbulent and violent times, (BBC, 2011).
There have been periods oI independence as well as periods oI domination by other countries.
Several million people, halI oI them Jews, died in World War II.
'Population: 38.0 million, Main exports: Machinery and transport equipment, IoodstuIIs,
chemicals, (CIA, 2011).
Post Soviet Union:
AIter the breakup oI the Soviet Union, Poland`s economy was changed Irom a socialist
economy into a market economy. 'The overall rate oI privatisation, while encouraging, has
been slower than that oI Hungary and the Czech Republic, (Simon Mercado, 2001, p.263).
As with all the other post communist countries, Poland did suIIer a temporary decline in
social and economic standards, however it became the Iirst Iormer Soviet Union country to
reach its 1989 Gross Domestic Product levels, which it achieved by 1995, with its Iast
growing economy.
'In 2008, GDP grew an estimated 4.8, based on rising private consumption, a jump
in corporate investment, and European Union Iunds inIlows. Since 2004, EU membership
and access to EU structural Iunds have provided a major boost to the economy, (Trading
Economics, 2011).
Russian Demand:
Despite the current economic climate, Eastern Europe is showing signs oI growth due to an
increase in Russian demand which is having a positive eIIect on both the Baltic and Black
Sea ports. Eastern Europe is dominated by the two sea`s competitive character, 'This energy
is volatile by nature and during the 2008-2010 period, there was strong recovery in some and
sluggish growth in other ports, all accompanied by capacity constraints and Irequent re-
routings by lines, (Eero Vanaale, 2011).
'Poland`s developing local market is enough to bring some kind oI stability to Eastern
Europe, Poland remained the region`s one shining light, with positive GDP growth even in
2009, (Stevie Knight, 2011).
BeneIits oI EU:
Foreign direct investment has increased since 2004 due to EU membership, see appendix,
(Google Public Data, 2011).
Improved inIrastructure, 'The European Investment Bank is lending 120m Euros Ior the
modernisation oI a 58 km section oI the railway linking Malmo to Ostrava, southwest Poland.
James Russell European Business Environment

The completion oI the modernisation will allow the utilisation oI trains operating at a
maximum speed oI 160 km per hour, which is scheduled Ior completion in 2015, (Invest in
EU, 2011). This should increase levels oI employment and make Poland more accessible to
the rest oI Europe.
In addition, by joining the single European Market this shows that Poland is looking to
improve trade with its European neighbours. This is a move that Poland hopes will secure
greater levels oI employment and investment in its emerging economy. 'At its heart, the SEM
is about improving the perIormance oI European enterprises as a precursor to broader
industrial success within international markets. Such success is pivotal in securing the greater
levels oI employment and investment that are increasingly the core Iocus oI policy makers,
(Debra Johnson, 2010, p. 84).
The main issue Iacing Poland`s businesses in the Iuture is how they manage to stay
competitive whilst maintaining high levels oI employment, seen during the Soviet Union
1945-1989, 'The understanding oI how state controlled businesses ran in Iormer planned
economies is little understood and consequently there is little comprehension oI how the old
system oI business operation can be reIormed to sustain employment and generate proIits,
(Phil Harris, 2004, p.7).











James Russell European Business Environment


Bibliography:
Books
Mercado, S, (2001) 'European Business Pearson Education
Johnson, D, (2010) 'European Business Routledge
Harris, P, (2004) 'European Business and Marketing Sage Publications Ltd

nline References
BBC, (2011), Poland Country ProIile`, |Internet|. Available: http:/www.bbc.com~.
|Accessed 3rd November|.
CIA, (2011), The World Fact book, Poland`, |Internet|. Available: https://www.cia.gov~.
|Accessed 4th November|.
Google Public Data, (2010), Foreign direct investment, Poland`, |Internet|. Available:
www.google.com/publicdata~. |Accessed 8
th
November|.
Invest in EU, (2011), Modernisation oI Polish Railways`, |Internet|. Available:
http:/www.investineu.com~. |Accessed 8th November|.
Stevie Knight, (2011), A volatile character`, |Internet|. Available:
http:/www.portstrategy.com~. |Accessed 10th November|.
Trading Economics, (2011), Poland GDP growth rate`, |Internet|. Available:
http:/www.tadingeconomics.com~. |Accessed 6th November|.