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The Warsaw Voice » Business » June 27, 2013
Business & Economy
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Poland Most Attractive in the Region
June 27, 2013   
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Poland is by far the most attractive destination for new foreign investment projects in Central and Eastern Europe, according to the 2013 European Attractiveness survey by consulting firm Ernst & Young.

According to 37 percent of more than 800 international decision makers surveyed, Poland is the most attractive destination for investment in the region, ahead of the Czech Republic, with only 15 percent of those polled voting for it. In Western Europe, Germany is still seen as the most attractive (38 percent), followed by France (17 percent).

These ratings from investors are confirmed by data on foreign direct investment (FDI) in individual countries in 2012. Poland recorded Europe’s highest increase in the number of investment projects and jobs created due to foreign direct investment.

“The report confirms that Poland is in fashion globally. The world understands that Poland can be a good business partner,” said Poland’s Deputy Prime Minister and Economy Minister Janusz Piechociński, commenting on the report’s findings. “However, the country’s success story needs to maintain momentum. We are making sure this happens through changes in the regulatory environment of the economy.”

According to the Ernst & Young report, 13,111 jobs were created in Poland in 2012 thanks to foreign investors, ranking the country in third place in Europe on this count, behind Britain and Russia, and ahead of Germany and France. A total of 148 foreign investment projects were carried out across the country, ranking Poland seventh in Europe.

In 2012, about 67 percent more jobs were created by foreign investors in Poland than in 2011. The number of new investment projects, in turn, increased by about 22 percent. This was the highest growth in Europe on both counts.

This data should come as no surprise. “In last year’s European Attractiveness survey, investors said that Poland would be the second most attractive destination for FDI in Europe over the next three years. It was only ranked behind Germany at the time. Today the numbers of new projects and jobs created through FDI confirm the investors’ declarations from last year,” said Jacek Kędzior, a managing partner at Ernst & Young. “These results mean that Poland still has tremendous potential to attract large investment projects, not only in the shared services sector, but also in production. Investment projects in industry are becoming a rare thing in the European economy and are therefore very valuable. On today’s highly competitive market, they translate into a huge value and an advantage for Poland in the battle for foreign capital.”

The Ernst & Young report is positive for not only Poland but Central and Eastern Europe as a whole—the region fared the best in years in the study. According to international investors, the region is more attractive to FDI than countries such as Brazil, Russia and India. Globally, China is still the most attractive, ahead of Western Europe and North America, while Central and Eastern Europe is in fourth place.

The data on the number of jobs created by FDI, however, does not fully match the attractiveness ratings. Last year, for the first time since 2009, investors created more jobs in Central and Eastern Europe than in Western Europe. “Despite a difficult environment, our region is doing well, and Poland is the decided leader,” said Paweł Tynel, a senior executive at Ernst & Young. “The industrial projects launched in Poland, combined with the extremely strong position of cities such as Cracow, Wrocław and ŁódĽ as destinations for [business] services centers, explain why we have not been affected by the fallout of the global crisis in the same way as many other European countries. However, we cannot take this situation for granted as something given to us once and for all. Efforts are needed to support investment projects in terms of improving Poland’s competitiveness and promoting the country on other markets. The lack of a strong rebound in the eurozone economy can easily translate into worse results in 2013. In addition, we still need a competitive package in terms of incentives for investors similar to those available in neighboring countries.”

The Ernst & Young report is not the only study that shows that Poland is highly attractive to foreign investors. In a recent business climate survey conducted by the Polish-German Chamber of Industry and Commerce (AHK Polska) together with seven bilateral chambers of commerce, Poland outclassed all other countries in Central and Eastern Europe in terms of investment attractiveness. The study ranked countries according to 21 factors determining the inflow of foreign capital and its findings were published in April. Poland scored 4.87 out of a maximum 6 points, ahead of the Czech Republic with 4.17 points and Slovakia with 3.99 points.

Its European Union membership is still Poland’s greatest strength. However, the vast majority of respondents gave high ratings to Polish workers for their qualifications, education, productivity and motivation. Poland fared just as well in Deloitte Touche Tohmatsu Limited’s 2013 Global Manufacturing Competitiveness Index a few months earlier. In this global study, Poland was ranked 14th and was the runner-up in Europe after Germany.

Now the challenge is to make sure that the country’s investment attractiveness leads to concrete investment projects, analysts say. Sławomir Majman, head of the Polish Information and Foreign Investment Agency (PAIiIZ), says the battle for investment at a time of crisis is getting fierce. “Paradoxically, studies confirm that, in this time of crisis, Poland has clearly become more appealing in the eyes of those making decisions on the flow of investment worldwide,” Majman said. A good sign is that, so far this year, 20 percent more jobs have been created nationwide thanks to foreign investment projects handled by the PAIiIZ than in the same period last year.
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