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The Warsaw Voice » Business » December 30, 2014
Business & Economy
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Brainstorming the Future
December 30, 2014   
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More than 100 prominent politicians, businesspeople, financiers and academics discussed the role of Poland in its region, Europe and globally during the Warsaw Economic Hub international conference held at the Warsaw Stock Exchange building Dec. 10.

This year’s meeting of investors, entrepreneurs and economic experts as well as central and local government officials in Warsaw was organized for the seventh time by the Warsaw Stock Exchange, the International New York Times and The Warsaw Voice. The debates focused on the role of Poland in its region, Europe and globally and on the country’s burgeoning economy, as well as on the situation on financial and capital markets in other countries in the region. Conference participants also discussed medium- and long-term forecasts for the Polish economy and Europe as a whole.

Marek Sawicki, minister of agriculture and rural development, said at the opening of the conference that 2015 will be a year of considerable uncertainty, but also of big opportunity. “Certainly, a lot will depend on how the Russian-Ukrainian conflict evolves,” Sawicki said. Agriculture is the sector of the Polish economy that has been particularly affected by the turbulence across Poland’s eastern border, he added. The imposition by Russia of an embargo on the importation of many agri-food products from Poland has created many problems for Polish food exporters. “If these markets had remained open, our exports could have increased by up to 30 percent,” Sawicki said. Agriculture has become the third biggest sector of the Polish economy in terms of the value of exports, according to Sawicki. And most likely in 2014, much as a year earlier, the value of Polish food product exports exceeded 20 billion euros, he said.

Despite the uncertain situation caused by the Russia-Ukraine conflict, Sawicki said he believes Polish agriculture will develop in the future due to factors such as growing global demand for food. According to Sawicki, Poland will be part of this growth—not just quantitatively but also qualitatively. Therefore, one of the objectives of the Polish Ministry of Agriculture in the coming years will be to come up with a new agricultural offering for the more demanding consumer, Sawicki said. “We will be strongly supporting organic production, production of high quality food, production based on groups of farms, not just small individual businesses,” Sawicki said.

Funds from the EU’s new budget for 2014-2020 are expected to contribute to the development of Polish agriculture and the economy as a whole. Former Polish prime minister Jan Krzysztof Bielecki said that Poland has good medium-term prospects. “I believe the Polish economy will thrive in the next five to seven years,” Bielecki said. “Besides, a new generation is growing up in Poland that will contribute new quality.”

Deputy economy minister Jerzy Witold Pietrewicz said the future of the Polish economy will largely be shaped by EU funds available under the bloc’s new budget. “It seems that until 2020 we have a chance to remain a green island in Europe in terms of growth,” Pietrewicz said. “But it is necessary to develop entrepreneurship, and to fight bureaucracy throughout the EU because this inhibits investment.”

Pawe³ Tamborski, president of the Warsaw Stock Exchange, was also optimistic. “I look forward to an upturn on the Warsaw trading floor in 2015. Poland is beginning to be viewed as a safe haven and I think investors and funds will increasingly think highly of companies listed on the WSE,” Tamborski said. He added that last year many investors waited for the situation to clarify when it comes to open pension funds (OFE). Their approach was also influenced by anxieties over the Russia-Ukraine conflict.

A few months ago the WSE signed an agreement with Warsaw City Hall on taking action to support start-ups. The aim of these efforts is to increase the innovativeness of the Polish economy, create a positive image of the city as one supporting innovative projects, and to attract foreign entrepreneurs and investors to Warsaw. “The aim is not to have as many companies as possible based in Warsaw, but to make sure that these companies are competitive on international markets,” said Micha³ Olszewski, deputy mayor of Warsaw. Another priority of the city authorities in the coming years is to improve the quality of life for residents, Olszewski said. This will require significant investment in infrastructure, environmental protection and security, he added.

Warsaw and Poland as a whole rank high in terms of investment attractiveness. Marcin Olszewski, managing director of Fujitsu Poland, said, “For investors, stability, predictability of changes, and business security as well as infrastructure are important. Also very important is the level of education. And Poland is in a good position in this area.”

Janusz Steinhoff, a former deputy prime minister, said that investment is rational when the government guarantees a stable policy. Meanwhile, deputy finance minister Artur Radziwi³³ said the stability of public finances is a key factor because it is “a buffer that helps react flexibly to different situations, both internal and external.”

However, to be successful in the future Poland needs to make its economy more innovative. According to Witold Or³owski, chief economist at consulting firm PwC, money is not the only factor that determines whether or not an economy is innovative. Ideas are also important, Or³owski said. That’s why, it is necessary to think carefully about how EU funds should be used to make sure Poland can enter a new stage of economic development.

The defense industry, meanwhile, is a sector of the economy that could become a showcase for Poland. “This is an important element of the country’s economic development,” said Ryszard Kardasz, president of PCO S.A, a producer of optical equipment for customers including the military. The future of this sector lies in the hands of the Defense Ministry and largely depends on programs for the modernization of the Polish army currently under way, Kardasz added. “In the future we will develop exports of our own technology. But today we cannot cut ourselves off from foreign technology if we want to modernize ourselves quickly,” he said.

One of the fastest growing sectors of the Polish economy is the business services sector, which has more than 130,000 employees. Krystian Bestry, VP & head of BPO services (EMEA) at Infosys BPO Ltd, said, “The development of the business services sector (BPO) entails an increase in employment, but also the development of the commercial real estate market. Moreover, job creation in this sector does not require substantial capital investment, while it makes a huge contribution to education and know-how.”

Katarzyna Zawodna, CEO of Skanska Property Poland, said, “We are constructing many buildings for the business services sector on regional markets.” She added that bricks and mortar is not the only factor that matters. The most important factor of success in the BPO sector is human capital—and young, talented employees want to work in environmentally-friendly and well-functioning buildings, according to Zawodna. “It is important to find out about the expectations of the industry. What matters is the location, flexibility in terms of office space, as well as whether or not the building is certified,” said Zawodna.

Participants of this year’s Warsaw Economic Hub conference also discussed energy security, nuclear power, instruments for financing investment projects and other issues related to the economic future of Poland and the world. The conference was held under the auspices of President Bronis³aw Komorowski.
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