Golden Era for Polish Exports?
January 30, 2014
Polish businesses are increasingly eager to invest abroad. In response, the Foreign Ministry and the Economy Ministry have joined forces to develop a master plan to support the expansion of Polish companies on international markets.
Last year Poland’s exports grew at an unprecedented rate. At a time of crisis Polish exporters have fared better than their counterparts in other countries in the European Union. Poland’s current-account deficit has shrunk to 0.9 billion euros from nearly 8 billion euros a year earlier, according to the National Bank of Poland, and the country could close 2013 with a current-account surplus for the first time since the mid-1990s.
“This is due to the fact that Polish companies are increasingly expanding abroad, a trend we’ve been seeing for several years now,” says Paweł Rabiej, managing partner at the Warsaw-based ThinkTank analytical center, which together with the Economy Ministry and the Nicolaus Copernicus University in Toruń, organized the International Expansion of Polish Companies in 2014 conference in December last year.
Rabiej adds, “The search for opportunities on markets other than the domestic market results from factors including the organizational maturing of companies, the improving quality of Polish products in relation to their price, and decreasing barriers to foreign expansion. The good export figures are also a cumulative effect of business diplomacy and comprehensive support for companies from the Economy Ministry.”
Reaping the benefits
In the first three quarters of 2013, Poland’s exports to African countries increased by 28 percent, shipments to developing countries increased by 17.6 percent, sales in South America grew by 18 percent, and exports to China rose by 12 percent, according to the Central Statistical Office (GUS). The growth was boosted by a flurry of foreign trips made by Polish officials recently, combined with measures taken by the economy and foreign ministries. New windows of opportunity have been opened by President Bronisław Komorowski’s visits to the Unites States, France, Israel, Mongolia and South Korea, as well as by trips made by Prime Minister Donald Tusk to Nigeria, South Africa and Zambia.
Last year saw a number of important initiatives by the economy and foreign ministries, including the Go China and Go Africa projects and measures targeted at five especially promising markets and 15 sector markets identified by the Economy Ministry. Export expansion has also been driven by the Made in Poland promotional campaign launched in the fall of last year.
According to Deputy Economy Minister Dariusz Bogdan, the growing internationalization of the Polish economy, especially in terms of exports, is one of the key conditions for growth and prosperity. “This translates into a steady increase in trade as a percentage of GDP—from 19 percent in 2001 to over 37 percent in 2012,” said Bogdan.
The European Union as a whole is the main market for Polish exports, accounting for about 76 percent of the total. Polish exporters particularly focus on countries that are close culturally and economically, such as Germany, the Czech Republic, Hungary, Slovakia and Lithuania. Poland also has intense trade ties with France, Italy and Sweden, which are the most important foreign investors in this country and strategic partners for many industrial projects in Poland.
At this time of an economic downturn affecting their European partners, Polish businesses are increasingly open to doing business with countries outside Europe. Katarzyna Kacperczyk, Undersecretary of State at the Ministry of Foreign Affairs, said, “We have selected seven especially promising markets. These are Canada, Brazil, Algeria, Kazakhstan, Turkey, the United Arab Emirates, and Mexico. We want to open them for Polish exports and investment.” The foreign and economy ministries are working on a joint plan for promoting Polish products on strategic foreign markets and those offering the best prospects for the future.
According to Bogdan, it is equally important to build a network of ties in China and African countries.
“We can already see the first results of the Go China and Go Africa programs launched by the Economy Ministry and specifically targeted at these markets. In the first nine months of 2013, Polish exports to China increased by over 12 percent,” said Bogdan. “More Polish businesses from different sectors are also interested in investing in African countries.”
ThinkTank says its studies show Polish companies will be increasingly interested in expanding abroad. Interest in non-European markets, including sub-Saharan Africa, Thailand, Indonesia and Vietnam as well as Persian Gulf countries, will also grow. There will also be more small and medium-sized companies with good, niche products that will be winning foreign markets through online sales.
The cumulative effect of government efforts in recent years is likely to be especially visible in 2014. This could mean the beginning of a golden era for Polish exports.