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The Warsaw Voice » Other » November 18, 2009
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An Investor-Friendly City
November 18, 2009   
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Hanna Gronkiewicz-Waltz, mayor of Warsaw, talks to Andrzej Ratajczyk.

Is Warsaw an investor-friendly city? What makes the city attractive? How, compared with other cities in Europe, is Warsaw doing in terms of investment appeal?
To begin with, Warsaw is the economic and business center of Poland and one of the most important and largest metropolitan areas in Central and Eastern Europe. For that reason alone, one in four newly established Polish companies is located in Warsaw and 30 percent of all companies with foreign capital which operate in Poland are based in Warsaw.

The city has big potential with never-ending, immense investment opportunities. Our greatest assets include low costs of hiring qualified staff and renting high-end office space. We keep improving the municipal transportation system and roads in the city, with hundreds of kilometers of roads under renovation and the Północny Bridge under construction. We have just signed a contract on the second metro line that will link the western and eastern parts of Warsaw.

Our efforts are reflected in this year's European Cities Monitor report from Cushman & Wakefield, in which Warsaw advanced from 24th to 23rd place among European cities and is described as an investor- and resident-friendly city. This league table indicates that Warsaw is where most Western European businesses want to set up shop in the coming five years.

What are Warsaw's ways of attracting foreign investors? How is the city promoted abroad?
Like other cities in Central and Eastern Europe, Warsaw is still a market where a lot remains to be done. A national capital, Warsaw is a trustworthy and stable partner for long-term investment, as shown by ratings. The Moody's Investors Services agency gave Warsaw an A2 international credit rating with a stable outlook and from Fitch Polska SA agency, Warsaw received an AAA long-term national rating with a stable outlook this year.

We use investment incentives such as exemptions from real estate tax for investment in the tourist sector. We provide quick access to information about investment conditions in Warsaw and forms of economic and legal support for investors. We facilitate contacts with companies and institutions that bring together potential investors. Warsaw takes part in international fairs, conferences and other investment-related events where we show investment opportunities in Warsaw, mainly urban lots for sale, projects involving public-private partnerships and planned urban investment projects. Every year, Warsaw attends the MIPIM fair in Cannes and Real Expo in Munich. Wherever Warsaw is absent, we try to make our mark with advertisements. We also invite investors, members of chambers of commerce and foreign delegations and tell them about investment opportunities in Warsaw.

What are the main targets of Warsaw's economic development strategy when it comes to investment? What role do EU funds play in the development of Warsaw?
My colleagues and I have compiled the Long-Term City Investment Plan for 2010-2014, which is the fundamental document outlining the investment plans of Warsaw. Under this plan, Warsaw will carry out over zl.11 billion worth of projects. These huge needs are a consequence of underinvestment in the past decades, especially in terms of road construction and public transportation. It all necessitates appropriate resources, and in order to gather those, we have developed a long-term strategy for Warsaw to obtain financing for many years to come. The strategy involves municipal bonds to be issued on the national and international markets combined with entry into the new Catalyst market. This is a new approach in Poland that is based on immediate access to international capital markets. This will provide Warsaw with fast and more flexible financing compared with traditional forms of borrowing used by Poland's local governments, such as bank loans.

EU funds play a special role in financing city projects. Let me just say that EU funds will be spent on some major projects in Warsaw such as the city's second metro line, which will obtain the highest subsidy of zl.2.97 billion, and the Północny Bridge with EU co-financing totaling zl.255 million. In total, Warsaw has obtained zl.8 billion so far, which is a record amount in Poland. Of this, zl.3.5 billion is assigned for public transportation, zl.2.3 billion for environmental protection, and zl.1 billion for roads.

Is Warsaw prepared for new investment projects as far as legal provisions, infrastructure and land status are concerned?
Warsaw was particularly strongly affected by World War II and still suffers from the consequences of a decree issued by former communist leader Bolesław Bierut over 60 years ago. When we plan projects, we stumble across properties with unregulated legal status and others that belong to people who have been missing since the war. Cases in point include the projected underground parking facilities in the city center and the redevelopment of Defilad Square. Cities are also bound by many more procedures than commercial entities on the free market when they carry out projects. Legal restrictions sadly translate into longer preparations. On average, a single project can be in the preparation phase for more than two years.

Can Warsaw become the financial hub of Central and Eastern Europe? How do the city authorities want to achieve this goal?
According to the latest Global Financial Centers Index, Warsaw is the 69th largest financial center in the world. We have outperformed Budapest and Tallinn, but we are still behind Prague and Vienna. Our financial market is still at an early development phase, and when I think of the factors which influence the market, I believe there is a lot of work ahead of us before Warsaw can become the financial hub of Central and Eastern Europe. We use innovative financial tools provided by the market and we carry out programs to foster enterprise through education in setting up and running businesses. We also grant non-refundable subsidies to help people start their own businesses.

Warsaw has a great asset in the Warsaw Stock Exchange where a large part of the regional stock turnover takes place. We need to keep investing in promoting Warsaw's capital market and the city itself. There are still people out there who are unaware of Warsaw's assets.
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