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The Warsaw Voice » Other » April 16, 2008
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Our Chance to Raise Poland's Profile Internationally
April 16, 2008   
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The Economic Forum is a conference renowned both in Poland and abroad. The main goal of this event is to create a friendly climate for the exchange of views and experiences among businesspeople, politicians, academics and people from the world of culture. We want our discussion and seminars to provide space for discussion on where Europe is heading at the beginning of the third millennium.

Picking Up the Pace of Privatization
Treasury Minister Aleksander Grad:

The 2008-2011 privatization agenda is an ambitious one, but the absolute priority is the country's energy security.

The main goal I set for myself when I took the post of Treasury minister was to have the government withdraw from the corporate sector, and consequently liberate business from any political influences. I am deeply convinced that by 2011, a vast majority of enterprises in which the Treasury still holds some stock will find investors, thus making privatization complete.

After almost 18 years of privatization, the list of companies in which the Treasury holds stock is still a long one. With a dozen or so exceptions, the government's involvement in companies has no economic or business justification and therefore privatization absolutely needs to gain momentum. In order to make this happen, we have to come up with new rules and a new approach to privatization. First, we seek to liberate companies from any political influences and remove barriers that so far have hindered the withdrawal of state capital from enterprises. From now on, privatization should be open and transparent.

[In companies where the Treasury holds stock] we have launched the public recruitment of staff for supervisory boards, making the process transparent and providing the companies with personnel independent of any political influence. Another step will be to abolish the law which limits excessive pay growth in the public sector. Today, the law makes it really difficult for enterprises to hire qualified people for their management boards; it also hinders corporate development and privatization. Moreover, we need to remove all unjustified procedural and legal restrictions in privatization, such as limitations and delays that result from long-winded analyses that precede privatization. We want to make a wider use of regulated-market instruments in privatization deals, and in certain cases abolish the requirement for enterprises to ask the government for permission to sell shares in ways other than public offerings. We are working to change the law so that whole companies can be sold through a bidding process.

Another important change in the approach to privatization is the new requirement to compile and publish a "privatization card," or a record of the entire privatization process. The point is to ensure transparency in the work of administrative bodies at all levels.

The 2008-2011 privatization agenda is a very ambitious one, and the list of businesses that we want to privatize is very long. It contains 740 companies overseen by the Treasury minister, from companies in which we only hold minority stakes to ones in which the Treasury is the main stockholder. There are also 19 companies overseen by other ministers. We want to focus on companies that were somewhat forgotten for many years, particularly in sectors such as agriculture, furniture, tourism and many other industries in which the Treasury should not be involved at all. We have also decided to look at companies that are not in a good financial shape and need capital for projects to enable them to compete on the market. The methods with which we will be looking for investors for these companies will be adapted to every business on an individual basis, depending on its potential, profile and financial needs.

The Treasury will only keep control over strategic sectors of the economy. Most notably these are infrastructure networks and selected enterprises in the fuel, natural gas and electrical power sectors, because the top priority is to maintain the country's energy security. There will be no privatization in facilities that are part of Poland's national heritage, such as the Wieliczka Salt Mine, which should remain a common good. The Treasury will also retain seaports, state forests, the public media, companies that deal with radioactive waste and those through which the state exercises its monopoly on games of chance and pari-mutuel betting.

I am convinced that the withdrawal of state ownership from enterprises will make them much more efficient as they compete with businesses in well-developed countries across the European Union. Businesses, however, are not the only beneficiaries of the process, as privatization will bring about notable benefits to the budget by boosting revenues and reducing the deficit. This will also benefit Polish citizens, who will be able to keep their jobs, and larger financial resources will go toward purposes such as research and development.

Protecting Food to Protect Ourselves
Marek Sawicki, minister of agriculture and rural development:

The dynamic development of the global economy today is not evenly spread. The focus has moved to Asian markets in recent years. At the same time many countries, especially in Africa, remain on the sidelines of the growth trend. Though the world has "shrunk", among other things thanks to speedier information flow, many problems remain to be solved.

Negotiations in the World Trade Organization (WTO) are tough. To be competitive, the European community has to use experience and a lot of caution.

The emerging economic links in postwar Europe excluded agricultural issues from purely market regulations from the very start. This should be upheld. The experience of the past decade in particular has clearly shown that this is necessary. Especially the past five years brought a series of natural disasters caused by weather anomalies. Nobody doubts any more that obvious climatic changes are occurring before our very eyes. We are as yet insufficiently prepared for them, hence the difficult situation on the pork market. This is no longer just our problem. That is why I have applied to European Union bodies to recognize pork as a sensitive product in WTO negotiations and guarantee a bigger reduction of customs duties than the basic reduction level proposed in the WTO, and also to consider including pork in additional protective mechanisms such as special safeguards (SSG). Based on this example alone, it is clear just how difficult and complicated talks and negotiations within the WTO can be.

It is also difficult to counteract natural disasters effectively. We have to change our approach to food production. It cannot be subject to free trade rules. Appropriate market regulation mechanisms need to be introduced, and an effective crisis fund has to be created. I would like to point out straight away that these solutions would serve everyone, not just farmers.

We must not forget that one of the foundations of the Common Agricultural Policy is to guarantee consumers good food at reasonable prices. It is thanks to the CAP that consumers across the EU are guaranteed relative stability of food prices. With regard to feeding the population, we cannot take only economic considerations into account. First and foremost, the necessary amount of food has to be secured; this should be food produced in harmony with the natural environment, preferably at sustainable farms that produce raw materials of the proper quality and do not cause degradation of the environment. Though this kind of operation is more costly, it does produce food that consumers increasingly seek and buy.

Progress is not just about profit. Progress cannot be identified exclusively with maximization of profits and minimization of costs understood in a very primitive way as the direct costs of production. Other costs worth remembering include money spent on reclamation of terrain damaged by large-scale farms and over-intensive farming. We must not forget this because these are costs we all bear.

It is high time we substantially increased the use of renewable energy in the overall energy balance. Such an approach will not only allow us to preserve the natural environment as unchanged as possible, but will also offer opportunities for alternative sources of income to rural residents who would not have to seek work in farming alone.

Will Euro 2012 be an opportunity for Polish cities and why?
Mirosław Drzewiecki, minister for sports and tourism:

I regard the UEFA Euro 2012 soccer championships as not only a sporting event but above all a social and civil challenge and opportunity. It is a huge economic undertaking for Polish cities in that it places a time limit for the completion of infrastructure projects that they would be undertaking sooner or later anyway, and forces them to meet challenges that also need to be met sooner or later. The result will be 100,000 new jobs, freeways, expressways and modernized railways, train stations, airports and hotel and tourism infrastructure. This is the only chance of its kind to globally promote Polish cities. But Euro 2012 is a catalyst for the development of not only the largest cities that are hosting matches. Local governments across the whole of Poland are looking at opportunities to benefit by preparing training and hospitality facilities, organizing additional events and tourist attractions. How we meet this challenge and whether we will be able to benefit from the opportunity in the long term depends only on us. We will all benefit if we carefully analyze the dangers and take advantage of the opportunities, because the only people who can lose out are those who do not grab the chance offered by organizing Euro 2012.
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