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The Warsaw Voice » Business » December 21, 2011
Business & Economy
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International Conference of Investors and Issuers - Warsaw—CEE Financial Hub
December 21, 2011   
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Compared with other economies in Europe, the Polish economy is “simply in sensational shape,” said Poland’s central bank chief and ex-prime minister Marek Belka at the Warsaw—CEE Financial Hub conference held by The Warsaw Voice in association with the International Herald Tribune and the Warsaw Stock Exchange company in Warsaw Nov. 30.

This was the fourth conference in the series and it attracted a host of central government and Warsaw city officials, in addition to bankers, financial experts, investors and share issuers.

According to Belka, the Polish economy will decelerate slightly in 2012, but its growth will still be faster than that of most other economies in Europe. “We hope that Poland’s GDP will expand by 3 or 3.1 percent, and its growth should chiefly be driven by investment spending by companies, with a greater contribution of exports and weaker demand,” said Belka. “The expected increased contribution of exports to the GDP is due to the depreciating zloty. The volatile exchange rate of the zloty complicates many things; it makes life difficult for the central bank and it complicates the fight against inflation, but it is a factor that keeps unit labor costs from growing, and Poland is becoming more competitive internationally as a result.”

Sławomir Majman, head of the Polish Information and Foreign Investment Agency, said Poland has a stable and predictable economy, making it an attractive country for investors. “Paradoxically, the global crisis has contributed to improving the country’s image in the eyes of investors,” Majman said. “Poland has become trendy and sexy.”

According to Henryka Bochniarz, head of the Lewiatan Polish Confederation of Private Employers (PKPP), Poland leads the way among the countries of Central and Eastern Europe and should strengthen its position as a regional financial hub. “However, this will not be possible without financial stability and economic growth,” Bochniarz said, adding that the current model of development based on catching up with the “old” EU countries, has come to an end.

“It makes no sense to look for the reasons why—it is necessary to urgently develop a new model,” Bochniarz said. “It will only be made possible by a rigorous budget policy, accompanied by the strengthening of internal financial resources and constant dialogue with leading euro-zone countries.”

Poland’s relatively fast economic growth is one of the key factors attracting investors to this country. Another draw is the increasingly strong position of the Warsaw Stock Exchange, which is already one of the most developed markets in Central Europe in terms of capitalization of listed companies, volume of trading, number and types of listed instruments as well as organizational and technological solutions adopted. The WSE has long been more than just a local market. The appearance of new foreign companies and foreign brokerages has strengthened its status as an international market.

Tom Attenborough, Managing Director, Head of CEE, CMO, Citigroup Global Markets Limited, said that Poland is now a very attractive market among emerging markets. According to Attenborough, investors are drawn to Poland and the WSE by the performance of the economy and interesting privatization projects. No less significant is the country’s political stability. But the strength of the WSE is determined by the market’s liquidity and the continued development of new products for investors and issuers, he said.

Andrzej Szerszeń, deputy director of the WSE’s market development department, said that “the broad and varied range of derivatives and debt instruments allows investors to make money even in a time of crisis.”

The strength of the Polish economy and the growing position of the WSE are the factors that will help turn the Polish capital into the most important financial center in this part of Europe in the near future, investors and issuers said. Addressing conference participants, Warsaw Mayor Hanna Gronkiewicz-Waltz said, “My ambition is for Warsaw to become a city more attractive than Prague and Budapest. And I think that today, without much exaggeration, we could call Warsaw the capital of 21st-century Central and Eastern Europe. Still, we are aware that a fully-fledged regional hub cannot be created without investing to improve the transport infrastructure and the mass transit system. We have also been making many efforts to improve the quality of life for residents, expand the range of cultural attractions and so on.”

Jacek Wojciechowicz, deputy mayor of Warsaw, mentioned the biggest investment projects in the city, such as the construction of the Północny (North) Bridge, construction of the central section of the second metro line, modernization and expansion of the Czajka sewage treatment plant, and construction of the S8 and S2expressways. “Since 2007, the city and its companies have invested about zl.18 billion,” Wojciechowicz said. “Including investment by state-owned companies, the total figure comes to around zl.33 billion. In no other period since the founding of Warsaw has investment been so intense. Much of the credit goes to EU funds.”

Andrzej Bogucki, board member at the PL2012 company, which coordinates Poland’s preparations for Euro2012, said that Poland has “gained positive momentum for development” thanks to having been selected to host Euro 2012. “Sports facilities, such as the National Stadium, account for just a small portion of Euro2012-related investment projects; huge infrastructure projects prevail,” Bogucki said. “With Euro 2012, some much-needed projects in cities including Warsaw will be carried out a few years earlier than originally planned.”


The Last Healthy Economy in Europe?
Is Poland the last healthy economy in Europe? asks The New York Times in a wide-ranging article that highlights this country’s solid economic performance, competitively-priced exports, political stability and an impressive number of new listings on the Warsaw Stock Exchange.

“With robust economic growth, rising foreign investment and a new luxury high-rise, designed by Daniel Libeskind, redefining the Warsaw skyline, it certainly feels like a different world from most of its neighbors, troubled by the debt crisis and recession fears,” the article penned by correspondent Jack Ewing says.

Not being part of the euro zone has proved a blessing for Poland and a lesson in how a national currency can help a country absorb international shocks, Ewing argues. But he adds that business executives and government leaders are “rightly nervous about how long this country can again escape the euro area’s pain.”

He adds, “For now, though, Warsaw seems to be one of the few boomtowns left in the European Union.”

Jack Ewing was one of the moderators at the Warsaw—CEE Financial Hub conference.
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