POLAND TODAY magazine #12

The aims and implications of Deputy Prime Minister Morawiecki’s plan. page 24

Poland’s exporters and their success despite challenges in trade with Russia and the EU. page 30

MIPIM 2016: (sun, sea and) the world’s largest international property exhibition. page 49

How the country has fared since the election, and what lies ahead

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page 16

Magazine • Portal • Conferences • find out more at www.poland-today.pl

q1 2016 issue No. 12

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photo: Karolina Hrynek

The Roman Czernecki Educational Foundation EFC Giving Talented Youth A Chance To Shine

The Foundation’s main aim is to overcome the obstacles that stand in the way of equal access to top-class education in Poland and to enable the development of talented individuals. EFC’s High School Scholarship Program finances the education of exceptionally talented youth from rural areas and small towns across the country. Every year EFC awards 80 scholarships for middle school graduates to study at Poland’s best high schools and funds numerous extracurricular activities, including foreign language courses and vacation camps. Our annual University-level seminars allow our scholars to interact with the country’s best minds and help guide them in their post-High School education. EFC also acts as an important voice in promoting debate on educational reform in Poland. Driven by a deep sense of mission, we hope to achieve significant change in the education system and create conditions where talented young individuals can develop and thrive.

To learn more about how you could support our mission and change the life of a child please visit www.efc.edu.pl/en or contact us directly at info@efc.edu.pl

In each issue of Poland Today we give space to a charity for free.

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table of contents

editorial

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in focus

10-14 LEADER

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The ‘remodelling’ of Poland Andrew Kureth looks at how the new government’s attempts to remake Polish democracy has triggered a backlash both domestically and abroad

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Morawiecki’s plan

The Polish government adopted the Responsible Development Plan on | 16 February. What is it trying to achieve and what are its implications?

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Collective defence

What lies ahead for Poland in its increasingly complex and changing relationship with NATO?

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Legend under fire

Lech Wałęsa faces fresh allegations.

Matthew Day explains how the story has as much to do with the present as it does the past

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Matthew Day asks Professor Witold Orłowski whether the question marks hanging over the Polish economy are justified and if Poland is still a good market for investors

Despite Russian bans and a troubled Eurozone, Polish exports have surged ahead. Poland Today looks at some of the exporters leading this charge

Question marks

Exports rising

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New business leaders

The elite of Poland’s state-owned industries have changed wholesale. We give you the lowdown on the new batch of leaders.

Table of contents

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Round table discussion: education

Some of the most passionate minds in Polish education discuss the current state of the education system and what the future holds

BUSINESS

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Putting down roots

How Poland’s timber industry is continuing to branch out and strengthen

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Reaching for the stars

Liam Frahm profiles CreoTech Instruments, a fast growing Polish company with its eyes firmly fixed on space exploration and expansion

REAL ESTATE

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Urban Issues: MIPIM 2016

Just over 21,000 participants are attending MIPIM, the world's largest property real estate event, in Cannes this March. The participation of Minister Mateusz Morawiecki and Hanna Gronkiewicz-Waltz, Mayor of Warsaw, in the Poland & CEE Day, organised by Poland Today, will be a real highlight.

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Real estate 2016 overview

Adam Zdrodowski explains why the Polish property market has continued its strong performance

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Poland’s outsourcing future Wiktor Doktór, CEO of Pro Progressio, looks at how far the business service sector in Poland can go

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Embracing failure, to succeed

What does the future have in store for Poland’s budding entrepreneurs and what role do international organisations have in it?

Legend under fire. page 28

Reaching for the stars. page 46

The ‘remodelling’ of Poland. page 16

Developing a new approach

Troubled by the past and struggling to plan for the future – urban development isn’t coming easily to Polish cities

CONFERENCES

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Primetime Poland in London

The future of Poland’s real estate market and its changing political situation were the highlights of the day in London

NATURE

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The most beautiful mountains in the world

Bogusław Chrabota gives a personal account of the magnetic charm and mesmerising beauty of the Pieniny

LITERATURE

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CULTURE

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table of contents

The language puzzle Julia Zagdrozka explains why Polish has remained Poland’s dominant language while Irish Gaelic has declined

SPORT

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Going for gold

The ones to watch in Rio of Poland’s Olympic hopefuls

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A new generation of safe hands The line of great Polish goalkeepers has exciting new talent

IMPRESSIONS

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A path for transformation

Mahan Charmshir, originally from Iran, talks about his personal experience as a foreigner living in Poland

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Literary giants

Philip Boyes gives his essential guide to Polish authors that anyone who wants to understand Poland should read

HISTORY

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Eyewitness: Smolensk

A personal recollection of the days after the tragedy and a friend who was on board

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It happened in… April

14 April, 966. Mieszko I of Poland converts to Christianity

Collective defence. page 26

Literary giants. page 72

Urban Issues: MIPIM2016. page 49

photos: Łukasz Dejnarowicz (Forum) European Space Agency, Bartosz Bera (Forum), Aleksander Jałosiński (Forum), Jakub Szymczuk (Gość Niedzielny / Forum)

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editorial

Richard Stephens

Editor’s Note

Founder & Editor, Poland Today

Polish companies are venturing farther afield in greater numbers and growing confidence. Poland’s schoolchildren consistently outperform their peers in international rankings.

Poland’s last transformation took 25 years. The one that has just taken place – and in fact continues now – has taken just a matter of months.

The effects, however, have been no less transformative. Poland feels like a different country than it did a year ago, and in some ways it is.

A political and societal overhaul has been undertaken with far more ambition and determination, and much more quickly, than most people expected.

Led by Jarosław Kaczyński, the very foundation of the country’s modern democracy is being challenged, and this is reverberating not just at home, but internationally as well. Poland’s many true friends – and they are friends – are concerned.

Yet behind the headlines and the political mud-slinging, Poland hasn’t changed. Rather, it continues on its impressive development trajectory. The start-up scene, never short on ideas and energy, is beginning to organise itself and could soon be a major force in Poland’s economy. Polish companies are venturing farther afield in greater numbers and growing confidence. Poland’s schoolchildren consistently outperform their peers in international rankings.

And the Deputy Prime Minister Mateusz Morawiecki – who is speaking on Poland Today’s panel at MIPIM international real estate fair – has a plan to tackle the underlying weaknesses in Poland’s economic growth strategy. The proof will be in the pudding of course, but his plan has been cautiously welcomed by economic experts. There are reasons to be optimistic, and we cover many of these in this issue of the magazine.

This is not to dismiss current political and economic concerns, but a balanced sense of perspective needs to be maintained. Poland Today endeavours to do just that.

Poland Today Sp. z o. o.

ul. Złota 61 lok. 100, 00–819 Warsaw, Poland tel/fax: +48 224648269 mobile: +48 694922898, +48 602214603 www.poland-today.pl

Founder & Editor Financial Director Business Development Director Creative Director New Business Consultant International Client Director Business Strategist

Richard Stephens Arkadiusz Jamski James Anderson-Hanney Bartosz Stefaniak Tomasz Andryszczyk Toby Hancock Ana Hermoso

Marketing & Communications Director

Sylwia Ziemacka

Real Estate Editor Editorial Co-Ordinator

Adam Zdrodowski Liam Frahm

Contributing Journalists

Philip Boyes Bogusław Chrabota Matthew Day Wiktor Doktór Andrew Kureth Piotr Rusin Bartosz Węglarczyk Julia Zagrodzka

Photographs

Polska Agencja Fotografów Forum

Magazine layout

Bartosz Stefaniak (www.madeinPolska.eu)

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IN FOCUS

compiled by Julia Zagrodzka

The Budapest Times Poland can count on Hungary

Polish Prime Minister Beata Szydło and her counterpart Viktor Orbán met for talks in Budapest on February 8. Speaking at a joint press conference after the meeting, Orban said that Poland can count on Hungary’s solidarity over any use of “double standards” against it. The two leaders agreed on the need to strengthen the Visegrád Group. They also agreed on strengthening direct rail services and flights and connecting Polish and Hungarian eastern industrial regions with a four-lane highway.

Szydło said Poland will always support Hungary in political and economic matters and is “thankful” for Hungary’s solidarity.

The Independent (UK) The Imitation Game: Polish contribution reduced to one line

The Polish government adopted the Responsible Development Plan on 16 Febru-

Global news review

ary. In an exclusive comment for Poland Today, Minister Morawiecki outlines his aspirations for his plan and what the possible implications will be. see page 24

The Oscar-winning film focuses on the successful efforts of English mathematician Alan Turing to break the Enigma code. However, the film fails to acknowledge that Polish research played a key role in the process. Polish mathematicians Marian Rejewski, Jerzy Różycki and Henryk Zygalski succeeded in breaking Enigma codes in 1932, passed their findings to British counterparts and taught Turing to build machines that simulated the Enigma. Grażyna Żebrowska, science and technology advisor at the Polish Embassy in Washington, told The Independent that “there was an audible sigh in Polish cinemas when [Poland's] contribution was reduced to just one line”.

The Telegraph (UK) Poland to ‘de-communise’ its street names

Around 1,500 names of streets, squares and bridges across Poland could be changed, if a new bill banning the promotion of totalitarian systems is adopted. Although many Polish communist-inspired street names were changed in 1989, some managed to survive. “It’s unacceptable that there are still street names celebrating criminals,” said Michał Dworczyk, a Law and Justice MP. However, further decommunisation may put increased pressure on the fraught relations between Poland and Russia.

The Polish Foreign Ministry issued a formal protest over a January BBC report entitled “Is Poland being Putinised?” The programme featured interviews with members of the government as well as Poles expressing their views on the latest administration reforms in the media and the judiciary that caused controversy.

A Foreign Ministry letter to a top BBC executive said the report was biased and inaccurate and criticized it for subjective framing. The BBC spokesperson refuted the accusations.

Daily Mail (UK) Beetles attack Poland’s ancient forest, leaving humans divided

After meeting British Prime Minister David Cameron in Warsaw, Jarosław Kaczyński declared he was “satisfied” with the proposal announced on 5 February which would let Britain cut welfare benefits for new migrants.

He said that the interests of Poles already living in the UK are secured. The talks also considered Poland’s security in NATO and recent EU debates over changes under the new government in Poland.

africa

Leadership Newspaper (Nigeria) Nigeria, look towards Poland

Białowieża Forest, sprawling across the border between Poland and Belarus, is home to bison, boars, beavers - and bark beetles, which eat spruce trees. Since they make up a fair amount of the forest, Polish foresters want to cut down more spruce trees than usual, in order to save the rest. While the environment minister is likely to support the project, environmental campaigners, the European Commission and UNESCO are strongly opposed to cutting down the trees. They say that any interference with nature in Białowieża will do irreparable damage.

At the Polish-Africa Economic Forum in Abuja, Polish Ambassador to Nigeria, Andrzej Dycha, said that there were many Polish investors eager to invest in the Nigerian economy and share their scientific and technological knowledge.

He stressed that agriculture could be an engine for further cooperation between the two countries. “Nigeria has citizens with unique agricultural skills who, with the technological experience of Poland, can be the source of further growth and economic diversification,” said the ambassador.

The Guardian (UK) Use of the phrase “Polish death camps” to be punished

asia

At the International Railway Summit 2016 in Vienna, CEO of Warsaw Metro Jerzy Lejk announced that a general contractor would soon be appointed to construct the first part of planned extensions to the M2 Line. The first phase will consist of adding a three-station section at the eastern end and a three-station extension in the west. Starting in June or July, the works will take 38 months to complete.

Russia Today Moscow and Warsaw to work out transportation deal

Kent and Sussex Courier (UK) Polish art hints at dark days of European war

When an agreement allowing trucks to move cargo between Russia and Poland expired on 31 January, Russian and Polish truck drivers found themselves stuck at border crossings.

Both parties agreed that lorries could return to their home countries before 15 February.

According to the Polish Ministry of Infrastructure, Russia and Poland say they are ready to work out a new transit agreement to avoid such problems in the future.

Bloomberg Business (USA) Poles ‘satisfied’ with UK plan

Letters held at the Polish National Library and published by the BBC show the closeness of the relationship between former Pope St. John Paul II and Anna-Teresa Tymieniecka.

In 1970, the Polish-American philosopher assisted Karol Wojtyła with editing his book and they began to correspond frequently. Their correspondence continued for years, even after he became pope. Anna Tymieniecka was married and there is no allegation that the pair were romantically involved.

Poland is drawing up new regulations to punish use of the phrase “Polish death camps” in reference to wartime Nazi concentration camps on Polish soil. Poland has long sought to eliminate the misleading phrase from historical and newspaper accounts as it suggests the country was responsible for concentration camps on its territory. "This will be a project that meets the expectations of Poles, who are blasphemed in the world, in Europe, even in Germany, that they are the Holocaust perpetrators, that in Poland there were Polish concentration camps, Polish gas chambers," Justice Minister Zbigniew Ziobro said.

International Railway Journal Warsaw metro starts next expanding phase

america

Newsweek (USA) John Paul II's letters reveal close friendship

photo: Marek Kosiński (Forum)

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New Europe (Belgium) Poland protests over ‘Putinisation’ BBC report

Europe

Elizabeth Lester, a retired teacher from Tunbridge Wells in the UK, decided to present her Polish family’s wartime experiences as a part of the current exhibition Wycinanki, The Art of Polish Paper Cuts at Tunbridge Wells Museum.

Using illustrations by artist Orly Orbach, photographs and fragments of letters, the exhibit tells the story of her mother and older brother’s journey from Poland to Britain, across Asia and the Middle East. "My parents went through so much and survived that I'm happy to try and give something back," Mrs Lester said.

The Daily Star (Lebanon) Poland could send F-16s to fight ISIS

After NATO recently signalled that it was considering joining the US-led coalition fighting the ISIS in Syria and Iraq, Poland declared that it is ready to take part in patrols and send four F-16 warplanes to fight the jihadists. Paweł Soloch, a security adviser to President Duda, said that the Polish offer was "an expression of solidarity with our allies", adding that "Poland expects the same solidarity" from NATO regarding security along its eastern flank.

The Japan Times The last Treblinka concentration camp survivor dies

The death of 93-year-old Samuel Willenberg marks the passing of the last link to the notorious death camp of Treblinka. One of just 67 men known to have survived Treblinka after a revolt, he was a frequent public speaker and author. He also sculpted to describe his experiences and led dozens of youth missions to the remnants of the destroyed camp in Poland.

His final years were devoted to preserving the memory of the victims of the Holocaust.

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in focus

Supporters in Gdańsk. A crowd,

several thousand strong, gathered on 28 February to show their support for Lech Wałęsa after files recently surfaced alleging that he was an informer in the 1970s. Matthew Day discusses the findings in greater detail in ‘Wałęsa under fire’. see page 28

Photo by

Snapshot

Michał Fludra (NurPhoto, ZUMA Press )

photos: Marek Szczepański (Przekrój / Forum), Museum Of Polish Jews, Fiveapp.mobi

Artist Frank Stella’s abstract synagogues on display in Poland

Rebel film maker Żuławski dies

Polish teenager creates texting app for hard of hearing

‘Frank Stella and the Synagogues of Andzrej Żuławski, a Polish director Five, an app that lets you send hand Historic Poland’ opened on 19 February famous for blending surrealism and signals, started out as joke: a way to and will be on display at the POLIN horror, died of cancer on Wednesday in emulate hand signals used by popular Museum of the History of Polish Jews Warsaw aged 75. Born in Lviv in 1940, he artists. Mateusz Mach, 18 year old Polish until 20 June. The exhibition features studied film direction at the Institut des CEO of Five and dedicated hip hop fan, abstract works by the prominent Hautes Études Cinématographiques designed the programme and hired American painter, who was inspired by in Paris before studying philosophy freelance coders to build it.

However, Five has reached an unexthe painted wooden synagogues that at both Warsaw University and the were common in Poland before the Université de Paris. pected audience: the hard of hearPopular with film festival audiences, ing. According to Mach, texting is not Second World War. According to museum officials, it is Żuławski refused to give ‘concessions’ a natural mode of communication for the first time that the highly geometri- to logic, human motivations or the around 80% of the deaf community cal and abstract works of Stella have audience’s squeamishness in directing because they lack an ‘internal’ voice. been shown alongside the sources his emotionally savage and excessive So, Mach integrated an International that inspired him, including photo- films, so much so that French crit- Sign Language (ISL) dictionary into his graphs and architectural drawings of ics created the adjective: Żuławskien, app and began to search for funding.

On 1 February 2016, he announced the synagogues pre-war, and his own meaning over the top. models and drawings.

His only film to be released com- that the company had raised the equivThe works on display, produced in mercially in the Unites States was alent of $150,000 and, in an interview the 1970s, are part of his Polish Village ‘Possession’ (1981), where a woman with Business Insider, he said that the series which was inspired by a 1959 indulges in an affair with a squidlike ‘world’s first messenger for deaf peoPoland’s Law and Justice party book called ‘Wooden Synagogues’ by creature as her marriage disintegrates. ple’ would be going to the United States swept to victory last Polish architects Maria and Kazimierz He is also known for directing films such over the summer. This looks promising October, becoming the Piechotka. Photographs of syna- as The Third Part of the Night (1971), because, according to research from first party to gain an outright majority in gogues by Szymon Zajczyk, a Jewish L’Important C’est d’Aimer (1975) and Gallaudet University, there are over one parliament since the photographer and art historian L’Amour Braque (1985). million deaf people currently in the US. transition. Andrew His rebellious style tended to divide With funding secure, Five will focus killed in the Holocaust, are also featured Kureth analyses why audiences, but Żuławski remained indifin the display. on expanding the app’s features, includthe new government’s attempts to remake Announcement of the exhibition ferent to the criticism that his work drew. ing the addition of a comprehensive Polish democracy have came as the museum held two days of In response to criticism of ‘Possession’, American Sign Language (ASL) dictriggered a backlash events celebrating Stella’s works. The he said: “To please the majority is the tionary to help it tap into the American domestically and 79-year-old, who is based in New York requirement of the Planet Cinema. market. To do this, Five will be hiring abroad. see page 16 and has worked for more than 60 years, As far as I’m concerned, I don’t make ASL experts and has secured a parttravelled to Warsaw for the opening. a concession to viewers, these victims nership with the United Nations, includHis works are on display in museums of life, who think that a film is made ing the employment of a New-York across the world, including the Museum only for their enjoyment, and who know based ASL interpreter.

Through all this, Mach plans to conof Modern Art in New York. nothing about their own existence.”

His most recent effort was ‘Cosmos’ tinue his studies at high school and to (2015), based on a novella by Witold enrol as an economics major at the Abu Gombrowicz, which tells the story Dhabi campus of New York University of two friends who become fixated on later this year. a young woman and a maid at a country inn run by a retired couple.

by Liam Frahm

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The ‘remodelling’ of Poland

A New Poland

The new government’s attempts to remake Polish democracy has triggered a backlash both domestically and abroad

For the better part of the past decade, the conventional 3.5%, and unemployment was falling. The country had wisdom in Poland is that its transformation from commu- gained unprecedented sway in international politics, with nism and authoritarianism to a market economy and democ- the former prime minister, Donald Tusk, becoming President racy has been an overwhelming success. The country had of the European Council. achieved continuous economic growth for more than 20 But these factors hid deeper imbalances that rankled years, joined Western political and security institutions such many Poles. While the lives of middle-class, educated cityas the European Union and NATO, and became the only dwellers had improved, people living in rural areas and discountry on the continent to pass through the global financial tant suburbs saw their fortunes stall. As for Poland’s say crisis without going into recession. One World Bank econo- in the EU, it seemed to many Poles that Germany – whose World War II crimes against the country still leave a bitter mist dubbed the period ‘Poland’s New Golden Age’.

That narrative is now being challenged. 2015 brought taste – was calling the shots and impinging on Polish sova sea-change to Poland’s political landereignty. “The truth is that Poland’s scape, in which the conservative oppofast development left out a large part sition party, Law and Justice (PiS), Election results of Polish society,” said Filip Pazderski, swept the centre-right Civic Platform a policy analyst for democracy and civil Parliamentary elections, 25 October, 2015 (PO) from power. PiS and its supporters society at the Institute for Public Affairs. believe that the ‘success’ of the past 25 – Law and Justice (PiS): 37.58% / 235 seats “These include the people who had years has mostly been a sham, in which – Civic Platform (PO): 24.09% / 138 seats already been left behind by the reforms – Kukiz’15: 8.81% / 42 seats the rich and well connected have colof the 1990s when state-run factories – Nowoczesna (Modern): 7.60% / 28 seats laborated with former communists to – Polish People’s Party (PSL): 5.13% / 16 seats were shut down, or when state-owned companies were sold off.” enrich themselves at the expense of – German Minority: 0.18% / 1 seat regular Poles. According to Jarosław Much of this occurred because Kaczyński, the leader of the party, investment, though robust throughout “Poland needs remodelling. This is the transformation period, was mainly about whether democracy is able to make decisions instead concentrated in the country’s largest metropolises. Older of a handful of people bought by foreigners and internal and middle-aged Poles who lived in remote towns were forces that don’t serve Polish interests.” forced to commute hours to low-skilled jobs in the big cities, often for salaries a third of the national average.

Deep imbalances Such Poles also tend to be more conservative, and the In two elections just six months apart, the previously pop- elections in Poland coincided with the height of the refuular, PO-backed Bronisław Komorowski was turned out of gee crisis in Europe. Though few migrants were interested in the Presidential Palace, while PiS became the first party coming to Poland, with its GDP per capita only about a third since the country’s transition to gain an outright majority of the EU average, conservative Poles worried about an influx in parliament. The results puzzled international observers. of culturally dissimilar immigrants changing the social fabric At the time, Poland’s economy was growing at a healthy of the country. PiS staunchly opposed EU-mandated quotas

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Prawo i Sprawiedliwość (PiS),

translated as Law and Justice, was formed by the Kaczyński twins from part of the Solidarity Electoral Action in 2001. PiS first won power in 2005. President Andrzej Duda's victory in 2015 marked a return to power for PiS, after losing the general election in 2007 and President Lech Kaczyński's death in 2010.

for the number of refugees each member state had to take in. This played well with the disaffected electorate.

Young and restless It wasn’t just older, conservative Poles who supported PiS. Young Poles voted in droves for the party. Mr Kaczyński, who is one of the most controversial and least-trusted politicians in the country, realised that he needed to put a new face on his party. He tapped younger protégées – Andrzej Duda and Beata Szydło – to run for president and prime minister respectively. This gave many the impression that PiS, whose two years in power between 2005 and 2007 was characterized by controversy and a deterioration in Poland’s reputation abroad, had changed its ways.

Young people also had reason to be dissatisfied economically. Joining the EU opened up the borders of Western Europe to young Poles studying or deciding to emigrate for work.

What they found were economies far more prosperous than theirs at home.

Young Poles with Masters degrees and PhDs found the salaries in their fields at home were far lower than those for unskilled labour in places such as Germany, the UK and Scandinavia. Hardly able to afford single-bedroom apartments and wanting to start families, graduates felt forced to leave their homeland for better opportunities abroad.

Enter Law and Justice, with campaign promises to reassert Polish sovereignty in the EU, protect cultural values, increase government assistance and roll back many of the pro-market reforms instituted during the previous government. The party’s plan to bring the retirement age back to 60 years old for women and 65 for men (Civic Platform had raised it to 67 for

both sexes) appealed to older Poles. A programme to hand out 500 złoty per child per month (later clarified to exclude the first child) struck a chord with young families. Law and Justice had found a winning formula.

The party won in parliamentary elections held on 25 October, 2015, with 37.6% of the vote. Rules for apportioning seats in the Sejm, the lower house of Poland’s parliament, meant that was enough to give PiS a majority. It took 235 out of the 460 seats. PiS took its victory not only as a mandate for legislative change, but for deep, systemic transformation.

Courting controversy

‘The truth is that Poland’s fast development left out a large part of Polish society’

The new government set to the task with gusto. It set out to revamp Poland’s Constitutional Tribunal, which judges the constitutionality of legislation, as its first ‘remodelling’ project. The outgoing parliament had elected five new judges to the court just as its term was ending. However, President Duda refused to swear them in, and instead waited for the new parliament chose five of its own. The Constitutional Tribunal finally ruled that three of the judges who had been selected under the PO-dominated parliament should be allowed to join the court.

The new government resisted, insisting that the tribunal was already packed with judges biased against it. Instead of following the court’s ruling, it rushed through legislation that required the court to come to a two-thirds majority for decisions, and allowed the president and justice minister to bring disciplinary proceedings against its judges. A series of street protests ensued throughout the country. These were sometimes met with counter-protests by government supporters. While the socially conservative, economically

Andrew Kureth

is editor at Geopolitical Information Service AG and a former editor of Poland Today. Originally from the United States, Andrew has been reporting on Poland for 10 years, specialising in topics related to business and economics. He has written for numerous international publications, including the Financial Times. He was editor in chief of Warsaw Business Journal for seven years. He has a degree in English from Kenyon College in Ohio.

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Article 7 of the European Union Treaty contains two

A New Poland

mechanisms: the preventative mechanism, which allows the Council to warn a country before a 'serious breach' and a sanctioning mechanism, which allows the Council to suspend certain rights, including voting.

nationalistic PiS had been butting heads with the economically liberal and socially centrist PO for over a decade, it had been years since Poland’s political landscape was so highly charged and divisive.

Other controversial moves brought more strong reactions. Despite promises to the contrary during the election campaign, new Prime Minister Beata Szydło tapped Antoni Macierewicz as defence minister. Mr Macierewicz believes that the 2010 plane crash near Smolensk, Russia, which killed then-President Lech Kaczyński (Jarosław’s twin brother) and 95 others was not an accident, as both international and Polish investigators have found. Instead, he says, it was a planned attack, potentially resulting from a bomb on board the plane. The government has opened a new inquiry into the crash, with the investigators appointed by Mr Macierewicz himself. “I am deeply convinced that this decision and the work of the [investigators will lead to] a final decision,” Mr Macierewicz said, adding that the new probe would “allow us to find out what happened, but also who is responsible”.

Changing the channel Another incident that raised eyebrows occurred in November, when Culture Minister Piotr Gliński ordered the Marshal of the Lower Silesia voivodeship to halt the production of a play by a Nobel Prize-winning author in the city of Wrocław, claiming its sexually explicit scenes were “pornographic”. The play was being performed in a theatre that received nearly half its funding from the state. The marshal, Cezary Przybylski, however, refused to shut down the play.

Later, Minister Gliński took part in an interview on public television station TVP INFO where he was questioned about the incident. During the tense discussion, the interviewer demanded that Mr Gliński answer her questions, frequently interrupting him. The latter insisted on giving a long explanation of his position. Mr Gliński finally told the jour-

‘No matter how much the opposition tries to interfere, they will not break us’

PiS’s economic initiatives Apart from its political moves, PiS’s economic

Beata Szydło has

been Prime Minister since last November and a member of the Sejm for PiS, of which she is vice-chairman, since 2005. Having studied in both Warsaw and Kraków, she served as Mayor of Brzeszcze - alongside other council positions - from 1998 to 2005.

proposals have also received strong pushback.

Its signature initiative is the ‘500+’ child allowance programme. Every family in Poland with two children or more will receive PLN 500 per month tax free for their second and subsequent children. The government says the goal is to aid low-income families and to combat Poland's declining population. Critics say the cost of the programme, at PLN 17.2 billion according to the Ministry of Family, Labour and Social Policy, would ruin Polish finances.

The government aims to pay for the pro-

gramme, at least in part, through new taxes, particularly on banks and large supermarkets.

Banks will likely see a new tax assets of 0.39 percent, while supermarkets with more than €70m in monthly revenue will be taxed 1.9 percent.

Unsurprisingly, representatives of these sectors oppose the moves, while others say consumers will end up having to pay more in interest rates and at the counter. The new proposals have not yet been passed by parliament.

One less controversial initiative is

a development plan recently proposed

by Minister Mateusz Morawiecki. The programme is based on re-industrialization, innovation, international expansion, sustainable social and regional development, and increased savings. The programme aims to plough PLN 1 trillion into the economy so that, by 2020, Poland’s GDP per capita PPP will stand at 79% of the EU average, up from 68% in 2012; investment will reach 25% of GDP from 20% of GDP in 2014; the number of medium and large-sized companies will rise to 22,000, while foreign direct investment by Polish companies will increase by 70%.

Jarosław Kaczyński is the chairman

of PiS, which he co-founded with his twin brother Lech in 2001. He was a member of Lech Wałęsa's cabinet during the 1990s and served as Prime Minister in 2006-2007.

Following the death of his brother in 2010, he unsuccessfully ran against Bronisław Komorowski in the presidential election, losing by a six percent margin. He has been leader of PiS since 2003.

nalist, Karolina Lewicka, that her stafears over the PiS government’s actions tion was “broadcasting propaganda, different polls, than to their own political initiatives,” said Norbert Maliszewski, an expert and that will soon be over”. Ms Lewicka different stories was suspended from her position only 16 February, 2016 in political marketing at the University of Warsaw. hours later, though she was eventu- Source: pollster IBRiS The rise of the opposition in the opinally cleared of any wrongdoing by an – Law and Justice (PiS): 31% ethics commission. ion polls did not stop the government – Nowoczesna (Modern): 25% from pushing through more controverSuch controversial political moves – Civic Platform (PO): 14% boosted the standing of the opposition, – Kukiz’15: 9% sial legislation. Mr Gliński’s statements especially the new party Nowoczesna – Democratic Left Alliance (SLD): 4% during his interview were prescient, – Polish People’s Party (PSL): 4% as in late December the government (“Modern”) founded by economist – KORWiN: 3% moved to take much greater control Ryszard Petru. The economically lib- – Razem (Together): 2% eral party, backed by the architect over state media. A new law effectively of Poland’s economic transforma- 15 February, 2016 dismissed the management of all pubSource: pollster TNS Polska tion, Leszek Balcerowicz, was formed lic television and radio broadcasters, and allowed the Treasury Ministry to in the summer of 2015, after Andrzej – Law and Justice (PiS): 40% appoint their replacements. The govDuda won the presidency. Mr Duda’s – Civic Platform (PO): 15% decisive win, viewed against the back- – Nowoczesna (Modern): 13% ernment argued the move was neces– Kukiz’15: 9% drop of Bronisław Komorowski’s lacksary to correct biases and “deal with – Polish People’s Party (PSL): 5% the extremely unreliable work of the lustre campaign and the uninspiring – KORWiN: 3% public media,” according to Ryszard leadership of then-Prime Minister Ewa – Democratic Left Alliance (SLD): 2% Terlecki, the head of PiS’s parliamenKopacz of PO, Donald Tusk’s succes- – Razem (Together): 2% sor, made clear to many that the rultary caucus. “If the media criticises our changes . . . we have to stop it,” ing party was due to lose the October parliamentary elections.

Mr Terlecki added. “Public media are not involved in party politMr Petru’s party attracted many educated, middle- and ical disputes, they should just accurately inform the public.” upper-class voters that had previously formed PO’s core Opponents said the government was working to turn public constituency. Though it had only received 7.6% of the vote media into a propaganda arm. in the parliamentary elections, by January it was leading in opinion polls. PiS has since regained the lead, but some sur- International reaction veys still put Nowoczesna in a close second. The question PiS’s initiatives – especially its changes to the Constitutional now is whether PO, which still holds far more seats in parlia- Tribunal and public media – began to cause a stir internationment (138 to Nowoczesna’s 28), will be able to regain traction ally as well. In January, the EU’s executive arm, the European and work together with Nowoczesna to offer a clear alter- Commission, held a debate over whether to sanction Poland native. “The opposition owes its big rise in the polls more to under Article 7 of the Treaty of the European Union, which

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The Polish government adopted the Responsible Development Plan on 16 Febru-

ary. In an exclusive comment for Poland Today, Minister Morawiecki outlines his aspirations for his plan and what the possible implications will be. see page 24

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Poland's Constitutional Tribunal is made

up of 15 judges, chosen by the Sejm and sworn in by the President. Judges serve a single nine year term and supervise the compliance of statutory law with Poland's consitution.

The current president is Professor Andrzej Rzepliński, holder of the post since 2010.

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Andrzej Duda, the

The opposition owes its big rise in the polls more to fears over the PiS government’s actions than to their own political initiatives

photos: Adam Chełstowski (Forum), Krystian Maj (Forum)

A New Poland

current President of Poland, was first elected to the Sejm for PiS in 2005. In 2015, Duda defeated the incumbent Bronisław Komorowski for the presidency. As Poland's president is formally independent, he resigned his party membership on 26 May 2015.

aims to protect human rights and democracy. Had the Commission voted against Poland, it would have lost its voting rights at the European Council (which comprises member states’ heads of government) – the first time such a punishment had ever been issued. Ultimately, the Commission decided not to take any action against Poland, though western European politicians continue to express concern.

Also in January, rating agency Standard and Poor’s downgraded Poland’s long term foreign currency sovereign credit rating from A- to BBB+, with a negative outlook. “The downgrade reflects our view that Poland’s system of institutional checks and balances has been eroded significantly,” the agency said in a statement.

The Finance Ministry countered that the rating did not reflect “economic and financial analysis.”

“This decision is contradictory to assessments presented by other rating agencies, the biggest international financial institutions and financial-market participants,” the ministry added in a statement. Nevertheless, the złoty tumbled on the news. Since the downgrade the złoty has regained some of its value against the euro, but still remains around 4% weaker than at the end of last year.

There was also reaction from the United States. Three senior senators, including former Republican presidential candidate John McCain, wrote an open letter to Prime Minister Szydło in February urging her government to “recommit to the core principles of the OSCE and the EU, including the

respect for democracy, human rights, and rule of law”. The authors, who also included Democratic Senators Ben Cardin and Richard Durbin, said the legislation on media and the Constitutional Tribunal “could serve to diminish democratic norms in Poland, including the rule of law and independence of the judiciary.” Ms Szydło replied that her administration was only correcting imbalances put in place by the previous government, and that Americans should not be “lecturing” Poland.

Worst behind us

The government has decided to react to the international concern with a charm offensive. Foreign Minister Witold Waszczykowski toured European capitals looking to explain the new government’s position, and penned opinion pieces for international newspapers looking to clarify the reasoning behind the controversial legislation.

At a debate in the European Parliament in January, Szydło told MEPs: “I see no reason to devote so much time to Polish affairs,” adding that “there has been no violation of the constitution.” “Nothing bad is happening,” she concluded.

Whether that is true or not depends on your point of view, but what is certain is that the PiS government plans to continue its path to transform Poland. In an interview with wSieci magazine, Ms Szydło said: “No matter how much the opposition tries to interfere, whether inside the country or outside, they will not break us. We will survive and we will carry out the changes that are vital for Poland.” by Andrew Kureth

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Question marks

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Matthew Day asks Professor Witold Orłowski whether the question marks hanging over the Polish economy are justified and if Poland is still a good market for investors

A New Poland

photo: Witold Orłowski's archive

Do you think since the election Poland is still a good place to invest in?

WItold orłowski Chief economist at PwC in Poland,

Professor Witold Orłowski is one of the country’s leading economists. A graduate of both Łódz and Harvard universities, he has worked for the World Bank, acted as adviser to Leszek Balcerowicz and was head of the Economics Advisory Council during the presidency of Aleksander Kwaśniewski. Over the years he has charted the economics of transformation in Central Europe and has become a popular commentator and columnist on economic affairs.

He has written some nine books and close to 200 scientific papers.

banking tax; however, the problem is in the details of the tax. First of all: why did we introduce this tax? In Poland there You may be surprised by this, but is a feeling that the tax was introduced my answer is that Poland is still a good because of the rather naïve belief that country to invest in. There are advan- the banks belong to foreigners, and tages of investing here, especially in therefore they should pay more tax. long-term investment. Poland may The voters would not be sorry about not be the best country for short-term this, but, as I said, it’s naïve because financial investment, but for anything the banks and big retail chains will avoid longer, it’s obvious that Poland hasn’t paying much of this tax by shifting the cost of it onto customers and suppliers. lost any of its competitive advantage.

The politics here can be bit a crazy It’s part of a political message from the but it is an EU country, with stable government: “We will find the money institutions in a democracy. There are for all these bright and wonderful social problems here that have interested programmes, and nobody in Poland will foreigners but they should not change have to pay more because we will simthe long-term perspective. Some sec- ply force the foreigners to pay more.”

It is not xenophobic. It’s just an idea tors are being specifically targeted by the government, such as banking and how to find money without making the big supermarket chains, but I would say voters unhappy. But I think it does show the majority of Poland’s foreign inves- a certain degree of naïvety within the tors are unaffected, even if the democ- government. racy is bit shakier than it used to be.

All in all, Poland is still an EU coun- And you feel the costs will try and the changes in the government be passed on to customers? do not affect the basic fundamentals And to suppliers. I have no doubt the banks will find a way to pass on of the country and its economy. the costs or find a way to shift money But could negative news to other countries. But what was about Poland damage the striking for me was the initial naïvety country’s image abroad? of the government.

It could be damaging but I wouldn’t say it will have a long-term impact. The government has also attacked When it comes to the stock exchange, another group of foreigners: the I think Poland will pay a price for poli- rating agencies, saying they have cies that are not seen as market friendly undermined monetary policies but it’s not a fundamental change in the and weakened the central bank. development of the country.

First of all, it was only one agency - Standard and Poor - that said it was The Polish government has carefully observing the situation in justified the introduction of a new Poland, and changed the rating. It said it lowered the rating because the govbanking tax by saying other countries have something similar. What ernment is trying to weaken the system impact do you think it will have? of checks and balances by attacking the It is true that Poland is not the only constitutional court. But, there has been country in the world to introduce a no signal from the government that

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it wants to do anything with the central bank. More importantly, the independence of the central bank is secured by EU treaty. So I think Standard and Poor was making far reaching assumptions about what is going to happen, without looking too much into the political context. I’m not saying a move against the central bank might not happen but for the time being it’s a very, very distant risk. Therefore, Standard and Poor’s downgrading can be seen as strange and a bit radical. It, however, should make the government think about the consequences of its actions.

It’s worth comparing Poland to Hungary. Under Viktor Orban, the power of the ruling party was even bigger because it had a constitutional majority, but nothing really happened to the independence of the Hungarian central bank.

There is a risk that Poland will have its rating downgraded by the other agencies in a couple of months but this will be due to public finances and deficit, not institutional changes.

To regain the economic initiative the government has recently rolled out the Morawiecki plan. What are your thoughts about that? Is it brave, ambitious or doomed to failure?

In a sense, it is a brave programme based on the belief that the economy could deliver more and be more innovative. If you listen to what the European Commission is saying about Poland, it is suggesting that the country should be more innovative and the government should make use of EU funds to achieve this. So if you look at the general direction, I don’t think there is anything wrong with the plan. But the problem starts when you ask how the government is going to realise its aims.

To achieve this, they have to build

up domestic capital and that requires encouraging saving; but so far the government has promoted consumption at the expense of saving. Also, firms need to invest more, but how the government is going to change the business sentiment? At the moment the business sentiment is not the best, and firms are rather cautious about investing.

Mr Morawiecki is saying that we have EU funds and that we have to use them more efficiently, especially for knowledge-based growth. But, how are they going to do this without reforming public institutions? You need an efficient government to do this and quite frequently governments are better at losing money than spending it efficiently. Large-scale reforms need to be carried out by the government to ensure the public sector will be more qualified and better at spending the money efficiently.

The problem is that, for the time being, I do not see the slightest hint that the reforms will take place. Actually, they have already weakened the civil service by eliminating obligatory exams.

I can’t exclude the possibility that the Morawiecki plan will be implemented but I would like to see some steps going in that direction. For the time being I see the steps going in the opposite direction.

You’ve touched on the state of public finances. The government has rolled out the 500+ programme. Where is the money for that going to come from?

First of all, I must say Poland was underspending on family-related policies so increasing this expenditure is not a bad thing. On this, Poland is currently spending 3 percent of GDP, which is close to the EU average. There may have been more efficient ways of

‘The politics here can be bit a crazy but it is an EU country, with stable institutions in a democracy’ spending this money and I don’t think the government has chosen the most efficient way.

How to finance it? It’s true the government has managed to put together a budget for this year with a small deficit, but they will have problems financing in the years after. The whole programme costs around 1 percent of GDP, and as the Polish budget deficit last year was slightly below 3 percent, it is not a dramatic situation. You can imagine an increase in the deficit without it causing a catastrophe, although it won’t be welcomed by the markets. The problem is what to do in the longer term. Poland cannot have a high deficit because the EU Commission will open initiatives against it, and this makes it likely the government will have to consider a significant increase in taxes. The government promised no more taxes - except for foreigners - and more expenditure, and it is impossible to deliver this.

But Poland will not go into a large deficit: the government will have to increase taxes to close the deficit gap and that may slow the economy down. You can ask what foreign investors feel and whether they will worry about a slowing economy but you have to remember that a lot of investment, especially manufacturing, is not for the Polish market but the EU market.

Interview by Matthew Day

On 15 January,

Standard & Poor's cut Poland's long term foreign currency sovereign credit rating from A minus to BBB+. This marks the first change since 2007 and S&P's warned that further cuts could follow.

Following the downgrade, the złoty fell to a four year low of 4.48 to the Euro.

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Morawiecki’s Plan The Polish government adopted the Responsible Development Plan on 16 February. What is it trying to achieve and what are its implications?

What is the Responsible Development Plan trying to achieve and what are its implications?

Problems and solutions The report states that the current growth

model was based on cheap labour relative to other countries which, in combination with highly skilled workers, attracted foreign investment, fuelled exports and growth. But this model of growth has gradually become exhausted and Poland is falling into a 'middle income trap' which has caused further development to hit a glass ceiling, reinforced by four additional, mutually-connected ‘traps’:

First, Poland is trapped with a foreign capital imbalance, especially in the banking sector, where foreign capital holds a dominant 65% share of the market.

Second, innovation is also restricted, with

R&D expenditure amounting to less than 1% of GDP and only 5% of exports originating from high-tech sectors.

Third, there is a risk that Poland could fall

into a demographic trap, where the number of working-aged Poles continuously drops.

‘To free the economy’s potential

with a lack of coordination in public policy as well as poor tax collection revenues

These traps prevent Polish companies from ‘moving up a gear’, so the government’s response is to focus investment on more dynamic and harmonious development and the balancing of economic and social objectives. Over the next few years, investment will be focused in five key areas, highlighted in the plan as the five pillars of economic development:

– Reindustrialisation – Development of innovative companies – Capital for development – Foreign expansion, including promotion of exports, foreign investment and economic diplomacy – Social and regional development

Mateusz Morawiecki, born in 1968, is a

photo: Jerzy Dudek (Forum)

A New Poland

to develop responsibly and improve Poles’ quality of life’ is the tagline of the ‘Responsible Development Plan’ (Plan na rzecz Odpowiedzialnego Rozwoju), created by Mateusz Morawiecki, Deputy Prime Minister and Minister of Development. It aims to solidify the foundations for GDP growth in Poland as, despite having one of the highest levels of average annual economic growth in the EU with 3.8% of GDP, there are indications that the driving forces behind the expansion are weakening.

Finally, Poland faces institutional challenges,

graduate of the University of Wrocław, Wrocław University of Technology, the Central Connecticut State University, Wrocław University of Economics, the University of Basel and the Kellogg School of Management. He was a Member of the Lower Silesian Regional Assembly from 1998 to 2002 and, from 2007 to 2015, he was Chairman of Bank Zachodni WBK. In 2013, Morawiecki was awarded the Cross of Freedom and Solidarity. Morawiecki has been Deputy Prime Minister and Minister of Development in the cabinet of Beata Szydło since November 2015.

Mateusz Morawiecki Deputy Prime Minister and Minister of Development In an exclusive comment for Poland Today, the Deputy Prime Minister has said ‘Our goal is to build a business-friendly environment that will help to foster entrepreneurship and enable Polish people to accumulate sufficient capital to fuel further growth, and thus create a robust and resilient economy. This requires a systemic and comprehensive approach in such issues as, for example, income disparity, institutional inefficiency, weak demographics, increasing public debt, low investments and savings and insufficient R&D investments. Our Plan for Responsible Growth provides the solutions to these challenges. We want to lay solid foundations for the Polish economy through enhancing productivity in strategic branches of the industry (thanks to already identified "intelligent specialisations"), creating new "Business Constitution" with streamlined rules and leaner regulations for entrepreneurial activity, increasing investment in R&D and innovation, as well as strengthening our export capacity. Additionally, we would like to encourage Polish people to increase their savings, which could also be used to spur further investment.

Against this backdrop, broader developmental challenges will be addressed, such as regional disparities, improving demographic and educational capacity, as well as taking a strategic approach towards rural areas, to fully harness its potential for the Polish economy.

As a result, as the business environment becomes more accommodating for fostering entrepreneurial and innovative activity, mutual interests of Poland and foreign investors obviously dovetail. On the one hand, there's plenty of relatively cheap capital abroad, whereas Poland will provide attractive investment opportunities. The influx of foreign direct investments especially into knowledge-intensive industries will create incentives for more engagement with our brightest innovators and best and most reliable cooperatives.

This way, foreign investors will benefit from being a crucial part of business activities that are of increasingly higher value, and Poland will benefit from know-how transfer and will be able to offer more high-quality jobs.

That is why Poland welcomes foreign investments with open arms.’

Marina Wes Country Manager for Poland, World Bank

Aleksander Łaszek Chief Economist, Forum Obywatelskiego Rozwoju

Andrzej Malinowski President, Employers of Poland (Pracodawcy RP)

We share the view of the new Polish government that Poland, despite being among the fastest-growing EU countries in recent years, still faces challenges in its efforts to continue to converge to the average EU income level. More needs to be done to make economic growth more inclusive.

According to the Central Statistical Office (GUS), in recent years Poland has witnessed a moderate increase in the extreme poverty rate, which is particularly high in families with three or more children and among the unemployed.

Mateusz Morawiecki rightly points to a low investment rate, overrepresentation of small and micro-enterprises and large external debt as serious challenges for Poland. Some recommendations are right: there's no doubt that a better business environment, less regulatory uncertainty and efficient, digitalized administration would encourage companies to invest more. But some of these recommendations stand in contrast to recent government actions, in particular the unpredictable new sector taxes. Similar contradictions can be found in calling for smaller dependence on foreign financing. On one hand the government rightly points to the dangers of a large, negative net international investment position, but it doesn’t stop them from running permanent deficits and borrowing both internally and abroad. While the main declared goal is to increase investment, the government is currently focused on increasing consumption through the new child benefit, financed with growing public debt.

Minister Morawiecki’s “Responsible growth plan” appropriately identifies the shortcomings which cause a loss of pace for the Polish economy. It rightly points out the state’s institutional weakness, with the number of institutions and unclear departmental roles leading to a blurring of responsibilities and lack of coordination between government departments. The importance of clearly delineating these roles cannot be stressed enough. Integrating existing development institutions into one strong entity focused on export and promotion will also be very important.

We are ready to support items on the policy agenda of our new counterparts in Poland that are core to our mandate to promote long-term economic development and poverty reduction.

The diagnosis made in the Morawiecki plan is largely consistent with our views. Equitable growth, a better investment climate, focus on innovation, more efficient public finance and fiscal discipline are those items on the agenda that we particularly like. The plan’s objectives are ambitious but can be within reach. Poland will continue to converge to the EU average income levels if the authorities undertake concerted policy efforts and follow the strategic plan in a coherent manner. One of Poland’s successes has been strong public institutions, and safeguarding those will help achieve the ambitious goals of the new government.

Jakub Wojnarowski Deputy Director General, Polish Confederation Lewiatan During the general election, we were afraid that the proposed policies would somehow harm the economy. We were scared of the plans to lower the retirement age, the 500zł grant programme and other proposals on the agenda and we still think that these projects will have a negative impact on entrepreneurs, the labour market and the economy in the long run.

Having analysed the programme for responsible development put forward by Deputy Prime Minister Mateusz Morawiecki, we find the project quite reasonable and we more or less agree with its diagnosis. Most of the programme’s proposals are quite ambitious and it is a good starting point. But - and there’s always a ‘but’ - there is a lack of focus on many important issues. There is no information on how to deal with the stability of the energy sector, which might be crucial for the Polish economy in the longer perspective. Also, there is a sentence about the solidarity of generations, which says that every decision made by this generation and current government should take into account its future impact. In our opinion, the decisions that are being taken by the government are not taking into account the future impact.

So, on one hand, we support the implementation of the programme and we are focused on issues related to innovation, modern technologies, and the investment of EU money. On the other hand, we are quite critical of the issues relating to the social policy.

Prof. Elżbieta Mączyńska President, Polish Economic Society In its current approach, the Morawiecki plan is a vision for development, rather than a fully operational strategy. However, it’s definitely heading in the right direction: it’s focused on harmonious social and economic development, where GDP growth goes hand in hand with social progress and improvements to people’s quality of life. Improving domestic production potential should help to prevent social exclusion as well as socio-economic marginalisation of regions in the country.

The plan is critically - and in instances maliciously - evaluated by the opposition and some economists. There is a general agreement that there needs to be an increase in investment and innovation, but the plan’s ambiguity and other limitations, especially budgetary constraints, are highlighted and criticised. The plan indicates that the tax system could provide additional funds, especially through increased efficiency in tax collection. This is all the more important as Poland is characterised by annual inflow gaps in its VAT and CIT revenues, estimated at 95 billion PLN in the worst case scenario.

Most of the concerns raised, however, relate to the first pillar of the programme: ‘Reindustrialisation’. It is a misleading name because it doesn’t fully portray the intent of the plan.

Poland is certainly an industrialised country, with over 22% of the country’s GDP in industry, and industrial production growing faster than GDP growth for the last few years. Instead, the focus on ‘reindustrialisation’ is to ‘support existing, and develop new, competitive advantages or specialisations in the Polish economy’.

And it is certainly justified, especially when combined with the creation of a favourable environment for innovation.

Plans in the field of entrepreneurship are certainly praiseworthy. Today, Polish companies are overwhelmed with administrative obligations and strong pressure from tax authorities. A completely new approach to entrepreneurship is needed and the starting point for this should be a new Economic Activity Act, based on the presumption of entrepreneurs’ honesty. Apart from that, we agree that deregulation and de-bureaucratization of the economy is necessary, as is addressing the issue of administrative fines.

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Employers of Poland is an asso-

ciation of about 10,000 companies employing around 5 million people. Their chief objective is to support the creation of an employer-friendly state.

We build our position on the principles of professionalism, objectivity, reliability and effectiveness.

We agree with Mr. Morawiecki’s assessment and support for a public procurement system that promotes innovative solutions while taking social factors and employment stability into account. So far, low prices and saving have been promoted, which has led to the construction of thousands of kilometres of new roads, but also a detrimental impact on the construction sector that has forced employees to work different contracts to standard contracts of employment. This has to change.

State support for re-industrialisation is a pivotal element of the plan. Support has to be directed to sectors with the biggest growth potential and this requires cooperation with employers’ organizations and entrepreneurs themselves, something the government recognises in their plan.

We have to express our appreciation for the focus on improving the quality of legislation.

There are far too many regulations that are amended too frequently and, as a result, are often incoherent. As members of the Social Dialogue Council, we support the government in a systemic improvement of the legislation process. Mateusz Morawiecki’s plan, however, may only be fully assessed when more details are revealed. Previous development plans have failed precisely because of specifics, which is why we eagerly await them.

The Polish Economic Society

(Polskie Towarzystwo Ekonomiczne, PTE) is an independent national association of economists established in 1945. At present the Society has 6000 ordinary members and about 220 supporting members (firms, financial institutions, banks).

Fundacja Forum Obywatelskiego Rozwoju (The Foundation Forum for Development of the State) was founded in 2007 by professor Leszek Balcerowicz, Poland’s most famous economist and architect of ‘shock therapy’ in the early 90s.

The Polish Confederation Lewiatan, with of-

fices in Warsaw and Brussels, is a nationwide representation of employers to the state and trade unions representing about 3900 companies employing over 900,000 people.

The development plan can certainly be criticised for vagueness, however, and the lack of detail makes it impossible to assess the extent to which planned investments will lead to sustainable economic, social and ecological development.

prepared by Liam Frahm

26 Collective defence leader

Poland’s complex and changing relationship with the Alliance

Speaking at

What has changed are Poland’s expectations: of itself as well of its allies.

Poland’s NATO accesIt was against this backdrop that sion ceremony in March 1999, the Polish the Polish leadership in the early 1990s Foreign Minister Bronisław Geremek decided that joining NATO should be said that by joining the alliance Poland the top priority of the country’s forhad returned to where she had always eign policy. Many Poles saw NATO as belonged: the free world. During his the ultimate security guarantee against speech he alluded to a 1950s American external threats, not least Russia. The Western film starring Gary Cooper, say- famous Polish journalist and World ing that for the people of Poland, “High War II partisan, Jan Nowak-Jeziorański, Noon comes today”. The message symbolically compared joining NATO was clear: Poland’s accession to NATO to a life-long insurance policy. meant it was now secure.

Despite this, Poland’s membership But 17 years on, with a volatile secu- in NATO was not a foregone conclu- entation of Poland’s foreign policy rity situation in Europe and the Ukrainian sion. Democratic elections in 1989 and agenda. In recent years we have seen conflict simmering on Poland’s door- the creation of a non-communist gov- the evolution of a more self-confident step, was Geremek premature in declar- ernment allowed Poland to develop an Poland, buoyed by the security guaring that Poland had reached its ultimate independent foreign policy and start antee encompassed in Article 5 of goal? Poland’s newly elected Law and setting its sights – however distant – The Washington Treaty. The collective Justice government seems to think so on NATO membership. What followed defence provision of the article helped and the sentiment is echoed by other the watershed year of 1989 were years transform the country from a net conCentral Eastern Europe countries. of confusion and uncertainty. sumer of security to a security provider.

In the run up to the 2016 NATO Some 58,000 Soviet troops were still However, NATO membership has not Summit in Warsaw, the Polish govern- stationed in Poland and the country’s put all of Poland’s security concerns to ment is making the case for a more political leadership was divided as to rest. The new Law and Justice governpronounced and permanent NATO what security system was most desir- ment does not share the rosy outlook Philip Boyes, who is half Polish and half presence in Central Europe. Only this, able. By 1993 a new political consensus displayed by its predecessors. “When British, has written they say, guarantees Poland’s long-term across party lines allowed for the crys- we joined NATO, it seemed that we speeches, sometimes security. Does this mean that Poland tallisation of Poland’s pro-NATO foreign stood on solid ground and could foron the back of restaurant napkins, for pres- is less safe now than it was in 1999? policy. Despite numerous changes of get the difficult dilemmas of a counidents, prime minisOr can Poland’s new priorities be government – within a decade Poland try situated between East and West. ters and congressmen. reduced to political posturing and held four parliamentary elections, had Today, more than ever, we feel that A former Reuters heightened mistrust? The answer to eight prime ministers and five foreign this assessment we had of our position journalist, his work these questions is rooted in the histori- ministers – Poland’s pro-NATO stance was too optimistic,” Foreign Minister has been published in the New York Times, cal context of Poland’s membership stood firm. Part of NATO’s appeal was Waszczykowski told the Polish parliaWall Street Journal in NATO as well as its long journey to its potential to promote stability and ment earlier this year. and Financial Times. accession: from subjugated satellite democracy. By 1998, Poland had sucSpeaking at the 2016 Munich Philip is a gradustate to fully-fledged member of the cessfully met the minimum member- Security Conference in February, ate of the London School of Economics Alliance playing host to the high-profile ship requirements and ratified the Waszczykowski said that “Poland wants and King‘s College NATO summit this year.

Treaty of Washington and on 12 March, an equal security status for all NATO London.

1999 – “high noon” – Poland became a members.” Poland’s political estabRoad to accession member of the NATO Alliance. Many lishment feels that a strong Western The history of modern Poland is a story Poles saw entry to NATO as the defini- European centrism continues to domiof perennial partitions and a subjugated tive end to the Cold War. nate debates about NATO and, in the nation that time and again fell prey to words of one Warsaw-based political its powerful neighbours. These experi- Security concerns analyst, that Poland is being treated as ences went a long way to mould Polish One of the key changes brought about “second class cousins”. This view was national identity and its national con- by NATO accession has been the pres- also expressed publicly – albeit often science. The horrors of World War II – cloaked in more ambiguous terms – by members of the Donald Tusk and one in five Polish citizens died in the war Ewa Kopacz governments. Since – and the events directly following the Article five Law and Justice regained power last conflict had a lasting impact on the colCollective defence is a key policy of the October, this sentiment has become lective Polish psyche. Held in the dying North Atlantic Treaty Organisation, brought days of the war, the Yalta Conference in into existence on 4 April, 1949. Since its adopmuch more pronounced.

February 1945 effectively saw Churchill tion, NATO membership has expanded from Despite these discrepancies, Poland 12 original signatories to 28 states including and Roosevelt concede Poland to continues to take its Alliance obligaPoland, which has been a member since 1999.

Stalin’s sphere of influence. To Poles, Based in Brussels, the Alliance rivalled the tions seriously, having recently raised Yalta symbolised the betrayal of Poland Warsaw Pact during the Cold War and military spending to the NATO benchby its Western allies at a time when the underwent its first military engagement mark of 2% of GDP. In doing so, it is only in Bosnia in 1994. country was at its most vulnerable. one of five NATO members to meet the

Poland's ageing fleet of Mi-8/17 transport helicopters were set to be

replaced last year by 50 Caracal EC725 helicopters from Eurocopter, after their producer (EADS) won the tender. But the new government has canceled the deal and plans to fix a new tender.

alliance’s spending goal. At the same time, Russia has significantly increased its own military spending as President Vladimir Putin seeks to modernise the country’s armed forces.

Since coming to power in October, the Law and Justice party has made it a priority to cement Poland’s regional influence in CEE. Although Poland’s eastern ambitions are not new, the nature of Poland‘s relationship with its eastern neighbours has changed since accession, along with NATO forums and the resources at its disposal.

Prime Minister Beata Szydło’s government has recently sought to reaffirm its role as Ukraine’s strongest EU ally by pledging more diplomatic and financial support. It is an effort on Poland’s part to reassure Ukraine that the West has not forgotten about the country in the face of increasing challenges stemming from the escalation of the refugee crisis and the fight against ISIS in the Middle East. When Germany, France, Ukraine and Russia agreed to a new format of peace talks in mid-2014, Poland felt that it was being elbowed out of the diplomatic process. By pushing the Ukraine crisis higher up the NATO agenda, the Law and Justice government is hoping to get back into the political mix.

Since coming back to power, Law and Justice has also placed a much stronger emphasis on co-operation with the United States compared to its political predecessors.

Polish Minister of National Defence

Antoni Macierewicz with a group of volunteer paramilitary soldiers training in the Warsaw area on 30 January, 2016. The Ministry of National Defence plans to establish a national guard based on the existing network of civilian volunteers.

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of Poland depends on NATO’s ability to strengthen its eastern flank and its capacity to repel Russian aggression.

Does this mean that Poland’s security situation is weaker now than it was the day that it joined the Alliance in 1999?

Not necessarily. Military, economically and even politically, Poland is far stronger now than it has ever been.

What has changed are Poland’s expectations: of itself as well of its allies.

The NATO Alliance today also finds itself within a different geopolitical reality, faced with a wider spectrum of security threats, including the Syrian conflict, and an unpredictably fluid political situation in Europe. As a result, Poland’s success in convincing its allies to show solidarity by strengthening NATO’s eastern flank might in fact depend on its willingness to help tackle threats in the south, including the fight against the Islamic State. by Philip Boyes

It is within this context that the Polish leadership sees the NATO Summit in Warsaw as a chance for NATO member states to redefine the alliance’s key strategic missions and take practical decisions to boost security in the region. According to the Polish government, only a substantial NATO presence in both infrastructure and military units on the ground can give Poland - and its neighbours - the security they need.

In the lead up to the July summit, Poland will continue to make the case that a NATO presence needs to be reinforced by regular joint military drills and precise contingency plans in the event of attack. The message that President Duda, Foreign Minister Waszczykowski and Prime Minister Szydło are sending is clear and consistent: the security

photos: Krystian Dobuszynski (NurPhoto via Zuma Press), Bartosz Bera (Forum)

Changing expectations

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He is credited with playing a funda-

Lech Wałęsa faces fresh allegations but the story has as much to do with the present as it does the past

photos: Ania Pietuszko (Forum), Adam Chełstowski (Forum)

LEADER

Legend under fire

The beginning

of Round Table Talks held in Warsaw in February 1989.

Pictured is Lech Wałęsa, the leader of Solidarność, shaking hands with Czesław Kiszczak, the communist Minister of Internal Affairs. The talks paved the way for the first democratic elections in the Eastern Bloc.

For years, there have been rumours in Poland that the former Solidarity leader was Bolek but until now there had been no direct evidence of collaboration.

Recently revealed

by the widow of the late General Czesław Kiszczak, these files, from a communist secret police informant codenamed "Bolek", are alleged to contain Wałęsa's signature.

They have recently been sent to experts to determine their authenticity.

mental role in ending communist rule in Central and Eastern Europe. A man prepared to challenge the power of Poland’s one-party state, and who in the end brought it crashing down.

A place in the history books, however, has not protected the reputation of Lech Wałęsa. New and seemingly compelling evidence has emerged suggesting he was a paid secret-police informant in the early 1970s. The discovery of this evidence has not only triggered huge debate in Poland over Wałęsa’s possible innocence or guilt but also thrown up questions about the whole legitimacy of the country’s postcommunist order.

The evidence in question was contained in a series of files taken from the widow of General Czesław Kiszczak, a former communist interior minister, who played a key role in the imposition of martial law in 1981. Why the general, who died late last year, kept the files secret remains unclear and has provided an extra twist to the story: one document is a handwritten letter from 1970, apparently bearing Wałęsa’s signature, agreeing to work as an informant for the secret police under the codename Bolek. For years, there have been rumours in Poland that the former Solidarity leader was Bolek but until now there had been nothing that could be used as direct evidence of collaboration.

In response Wałęsa has issued a string of strenuous denials. Taking to his blog, he wrote, “I declare I did not co-operate with the secret police, never reported on anybody, did not take money.” Going on the offensive, he has also dismissed the alleged documents as forgeries designed to destroy his reputation, and he might have a point.

During communism, the secret police were known to manufacture information implicating someone as a spy in order to discredit them. So, by declaring the letter and other Bolek documents bogus, Wałęsa could be telling the truth. He has also said that, if he had had access to the files, he could easily have proved that they were forged.

In his defence From a distance it looks as if Wałęsa is damned. His name is on a letter crediting him as a communist agent and unless the signature is proved to be a forgery, it will be hard for him to prove his innocence. In stark black-and-white moral terms, it looks as if his reputation could be irrevocably tarnished. But it is not as simple as that. Poland in 1970 was a difficult place to live in and its moral waters were muddied by thousands upon thousands of Poles who had to compromise their principles by interacting with the communist regime

Shipyard electrician who became president Born in 1943, Lech Wałęsa became a shipyard electrician in Gdansk in 1967. Involved in the worker unrest of 1970, he would later be fired.

As protests gripped Polish shipyards in 1980, he emerged as leader of Solidarity, which became the first free trade union in the communist bloc. Detained during martial law he went on to become the first president of a free Poland in 1990.

comment Andrzej Stankiewicz, Rzeczpospolita journalist covering the Bolek story: ‘I try to be moderate on this issue. I’m not supporting the Law and Justice line that Wałęsa was Bolek and a communist spy. But I’m also not on the other side - Civic Platform and the liberal opposition - who claim there was nothing between Wałęsa and the communist security services.

For me looking at the evidence and the witness testimony, the story of Wałęsa is clear. From 1970-72 the co-operation with the security services was quite close, then he was more reluctant, and from ‘73 the security services were not happy with that. In ‘76 he was withdrawn from the staff of spies. In the 1980s he was quite independent.

This is my opinion, and sooner or later the whole story will be quite clear.

You have to remember that the quarrel about Wałęsa is not just about Wałęsa himself, it is more about the political situation in Poland.

The ruling Law and Justice party strongly criticise the situation in Poland: Poland as a country, the system of institutions, the workings of the democratic system. All of this is attacked.

For them, the quarrel over Wałęsa is a criticism of the country as it is now. But the liberal opposition, the people who support Wałęsa, they also support Poland as it is today. So it is less about Wałęsa, and more about today’s Poland’.

in one way or another in order just to The deterioration has been exacerget by. People would go on pro-party bated by Kaczyński’s insistence that marches just to keep their jobs, or join Wałęsa was not only a communist the party to ensure that their children agent but that he also sold Poland out got access to a better education. They to the communists during negotiadid not have the luxury of being able tions to end one-party rule. Kaczyński to step back and view their decisions and his fellow supporters allege that in clear moral terms and historical per- a secret deal was struck that allowed spective. Compromises and sacrifices members of the old apparatus to stay had to be made, and often people had in positions of influence and grow rich through privileged access to the privalittle choice in the matter.

Defenders of Wałęsa also point out tisation process when the new Poland that even if he actually was operating began to sell off its state-controlled as 'Bolek', he only co-operated from assets. For them, the Solidarity revo1970 to 1976 and that he was clear of lution and the people who led it were the secret police by the time Solidarity betrayed and the third Polish republic burst onto the political scene in 1980. was built on lies and deception.

It was also before the opposition developed a code of conduct in the late The road ahead 1970s banning co-operation with the This belief has been reflected in reacsecret police. And even if someone tions of the Law and Justice ranks to the was suspected of once working as an Bolek revelations. “President Wałęsa informant, it appears that it was often may have been a controlled puppet and not held against them. Speaking about that needs to be cleared up,” Witold Wałęsa, Zbigniew Bujak, a hero of the Waszczykowski, the Polish foreign minfight against communist rule, said ister, said in a television interview. “This he and his fellow fighters for democ- is a matter that could show the conracy respected those who had broken struction of a free Poland was actually off collaboration. controlled.” Although he left the answer Just who exactly was an agent and as to who was in control unanswered, why people worked with the secret the fact that Waszczykowski used the police is a vague area. Along with Bolek scandal to cast doubt over the forging documents, the secret police legitimacy of Poland’s post-commuwould sometimes list a person as an nist democratic order has significant informant even though they were only implications for the country. If - as they passing on information unwittingly to allege - the state is illegitimate, then a true informant. Some people became they say - it needs to be swept aside, or, agents of the state because of black- at the very least, cleaned and purged of mail or intimidation, not out of avarice its unsavoury elements. The Law and or love for the system, while others Justice government could use the files signed up but provided the secret to justify policies aimed at cracking police with useless information in order down on alleged corruption and cronyto keep them off their backs. Wałęsa ism in Poland and wheedling out those himself, has spoken of “playing games” it regards as tainted by the old regime. with the secret police, although he has These policies have the added benefit never fully elaborated. He has also said for their instigators that any opposition that he was interviewed by authorities can be immediately labelled as someon more than one occasion. one of suspicion, perhaps with a skeleton or two in their closet. In the past, In the hands of his enemies Law and Justice, in particular Kaczyński, Whether they are real or not, the Bolek spoke of building a “fourth repubdocuments have been seized upon by lic”. The term has been absent from Wałęsa’s enemies. While the mousta- the party lexicon for some time but chioed Nobel Peace Prize winner enjoys the evidence against Wałęsa may a revered reputation abroad as a cham- usher in its return. pion of freedom, there are many bitter For now, however, Poland is waitand powerful enemies in Poland who ing to see what happens next and if would like to see him, and his reputa- the story takes another twist. Experts tion, crash to the ground. Topping the will examine the documents to deterlist of Wałęsa 's opponents is Jarosław mine their authenticity, while, no doubt, Kaczyński, president and leader of arguments over the past will continue. the governing Law and Justice party, It appears, though, that a large chunk elected last October. Kaczyński, along of Polish society will stand by Wałęsa with his twin brother Lech, cut his politi- come what may. At the end of February, cal teeth in the Solidarity days, but the demonstrators all across Poland took two of them fell out with Wałęsa in the to the streets to voice their support early 1990s, especially after Lech was for the former president. These peosacked from Wałęsa’s cabinet. Since ple, it appears, are prepared to focus then the relationship between Jarosław on his achievements with Solidarity, and Wałęsa has deteriorated into a poi- rather than what might have hapsonous personal dispute. pened in the 1970s. by Matthew Day

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65% of Poles consider Lech

Wałęsa a national hero, even after the recent discovery of the so-called Bolek files, according to a survey conducted by IBRiS for Rzeczpospolita at the end of February. More than half of respondents, 58%, believed that the documents are irrelevant, while 35% suggested that the files were important.

Around 63% said that their opinion of the former President had not changed, while 20% said it had.

Matthew Day

covers Central Europe for the UK’s The Telegraph, while also writing on Central and Eastern European affairs for The Scotsman.

He has reported on major events such as the 2010 Smolensk disaster and Poland’s recent presidency of the EU. He first came to Central Europe in 1992 as an English and history teacher.

Leader

In 2015, Polish

companies exported nearly €179 billion in goods and services, 7.8 percent more than in 2014. Almost 2/3 of Poland's export value is generated by companies with foreign capital.

Poland's trade deficit in 2014

was worth around €2.7 billion. However, last year, the country achieved a trade surplus, for the first time in its history, of €3.7 billion. Over the last decade, exports have increased by an astonishing 150.3 percent.

MIT Economic Forum’s first ac-

celerator programme in Poland MIT is underway, providing mentorship and workshops for Poland’s start-up community. Why are large international firms interested in Poland’s budding entrepreneurs and what can they do to improve even further? see page 40

Exports rising Polish exports have surged ahead despite Russian bans and a troubled euro-zone

Polish exports are on something of a roll. Figures from GUS, Poland’s central statistics office, recorded that for last year the country clocked up a trade surplus of EUR 3.6 billion, while exports grew by 7.8 percent on 2014. In contrast, imports managed an increase of only 3.9 percent. The surplus is the country’s first this century and has contributed to the robust economic news surrounding the Polish economy of late. The export growth was achieved despite a Russian ban on Polish food imports and the economic woes of neighbouring Ukraine, caused by war. It has also managed to keep exports on the rise despite problems in the euro-zone and talk of another economic slump around the corner. According to GUS figures, exports are now worth some EUR 178 billion to the economy. Germany remained Poland’s number one export market, accounting for 27 percent of all exports.

Although it is unlikely that Germany will ever be unseated from the top spot, other Western European markets have become growing destinations for Polish exports. Last year, exports to Spain increased by 16.5 percent while those to the UK and Holland both grew by 14.4 percent. The surge in Polish exports last year was caused by a number of factors, say economists. The weakening złoty played its part by reducing the cost of Polish products but the sector was also boosted by low oil prices.

Polish exports have also benefited from a helpful change of image. For a long time, Polish products struggled to shed the cheap-and-shoddy image instilled in them by the years of communism, but that is now changing as a new generation of Polish companies bring highquality products to the market place, while exploiting Poland’s low-cost base.

by Matthew Day

photos: Orbitvu, CI Games, Ursus

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URSUS

CI Games

A producer of tractors and agricultural machinery, Ursus was founded in Warsaw in 1893.

Last year the company established a production facility in Ethiopia and signed a $30 million contract to supply tractors to the Ethiopian Sugar Corporation. Continuing into Africa, it penned an agreement to supply tractors to Tanzania. “The contract in Tanzania is the result of broad expansion of Ursus in Africa,” said Karol Zarajczyk, the Ursus president.

“Our products are highly valued there because of the quality of its components as well as their simplicity.”

Established in 2002, CI Games is

a publisher, developer and distributor of computer and video games, distributing to more than 40 countries worldwide.

Based in Warsaw, it operates publishing and distribution offices in Germany, Romania, Canada and the USA. In June 2010, CI Games put out its biggest production – “Sniper: Ghost Warrior”, which has been a tremendous success, selling more than 3 million copies worldwide. The company has been awarded the"Solidna Firma" (Reliable Company) certificate three times in the Polish nationwide programme for the promotion of fair and reliable businesses.

Orbitvu On the market for 15 years, the company

specialises in technological innovations in the field of automated 2D, 3D and 360° product photography. Orbitvu has helped reposition the image of Polish tech products. It designs, manufactures and markets its own products, selling them to over 40 countries and has showrooms located in several European capitals including London, Paris and Berlin.

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Intenson Founded in 2007, the company produces and sells products for the health-food market.

“The Polish market is very small so I wanted to expand to more developed markets like the UK,” said Michał Lasocki, the company’s founder. “Two years ago, I began to expand into other parts of Europe, especially the UK and Germany. Our Polish market is still growing but the prospects are better in other countries.”

Around 20 percent of Intenson’s production is now exported but Lasocki expects that to grow.

Bartek shoes Emerging from the ruins of the old state-

owned businesses in the early 1990s, Bartek Shoes has become one of the biggest names in the Polish footwear industry, employing 800 people. It now produces around 800,000 pairs a year, 40 percent of which are destined for export. The company originally began its export drive in 1997 and now sells its footwear to a host of markets including the United States, Ukraine, Australia and Germany.

are in the EU, taking 79.3 percent of Poland's export share in 2015. Germany is the number one trading partner, with 27.1 percent of the share in exports. However, trade with emerging markets has been increasing, accounting for 9 percent of export share in 2015.

BioMed-Lublin

PESA

Sera and Vaccines Manufacturing Company BioMed-Lublin dates back to 1944.

A producer of railway rolling stock and

trams, the Bydgoszcz-based company is well known in Poland but also has a strong reputation abroad. This year, it signed a deal to supply trains to Belarus and Pesa has spread its net into Europe and central Asia. Along with working in Ukraine and Lithuania, Pesa’s trains serve passengers in Italy, Germany and Kazakhstan. It has also supplied trams for the Moscow urban transport system, and its Swing trains are in service in Romania and Hungary.

Today, the Polish pharmaceutical company is present on the domestic market, and in countries such as Ukraine, Belarus, Kazakhstan, Mongolia and Uzbekistan. In 2015 the company successfully registered one of its products in Georgia and Azerbaijan. Apart from manufacturing, the company carries out scientific work and cooperates with many research centres and independent institutes in Poland and abroad.

photos: Zortrax, Best Foods Poland, Delphia Yachts, Pesa

Poland's primary trading partners

Delphia Yachts Founded 25 years ago by Piotr and

Zortrax Founded in 2011 by Rafał Tomasiak and Mar-

cin Olchanowski, Zortrax provides 3D printing solutions. The company now has 123 resellers in 53 countries spread across every continent.

The company has 150 partners across the globe, including four in Africa, 12 in South America and 50 in Asia. Adding emphasis to Zortrax’s focus on international expansion, the company is continually increasing its reach to make Zortrax products available all over the world.

Wojciech Kot, the company is one of the largest producers of luxury yachts in Poland.

“Around 95 percent of our production is exported,” said Delphia’s Ewa Kot. “We are selling to Europe, Russia, the US, Turkey and Australia. Each year, we sell around 250 yachts and 1,250 motor boats. Germany and Holland are our key markets, along with France and Russia. We also have great co-operation in Japan.” Kot added the company now had designs on moving in the “huge” Chinese market.

Best Foods Poland Tapping into Poland’s rich agricultural and farming resources, Best Foods Poland is a supplier of frozen fruit and vegetables to retail chains and food manufacturing companies. For example, it supplies 40 percent of the onions used in the UK ready-meal market. Radomir Szwed, the firm’s CEO, runs a UK branch, employing 12 people, as well as a Polish office. Best Foods has also branched out of Europe into the Chinese and American markets.

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leader

Out with the old, in with the new

Law and Justice (PiS) swept to victory in the parliamentary elections last October, but it was not only the government that changed wholesale: the elite of Poland's state owned companies also have a new batch of leaders.

Poland Today gives a lowdown on who exactly the new crop are.

Wojciech Jasiński, PKN Orlen

Wojciech Jasiński was appointed CEO of PKN Orlen, the oil refiner and petrol retailer, on 16 December. Former CEO Jacek Krawiec was dismissed after seven years at the helm of Poland’s largest oil company. Jasiński, a law graduate from the University of Warsaw, is a former minister of State Treasury and member of the Sejm, where he sat from 2001-2015 for PiS. He also chaired the Committee on Public Finance.

Wojciech Jasiński

is the new CEO of Poland's biggest company, PKN Orlen.

In 1990, at the beginning

of Poland's transformation, there were 8453 state-owned companies employing c. 8 million people.

At the end of 2014 the number had fallen to 579 companies under the ownership or influence of the state treasury.

Rafał Milczarski, LOT airlines

Rafał Milczarski was appointed as chairman of the board of LOT Polish Airlines after previous CEO Marcin Celejewski was dismissed.

He graduated from the University of Cambridge and worked at UBS Bank in Zurich and JP Morgan in London during his studies. After graduation, he worked in the Maritime and Railway Logistics Department at Foster Yeoman Limited in Great Britain. He co-founded Baltic Rail, one of the first private railway carriers of goods in Poland and in 2005, together with UK-based industry investor Freightliner Group, he founded Freightliner PL, a freight rail carrier. As president and co-owner, he led the company from start-up to achieving a significant share of the Polish freight market. He is also the founder and former CEO of Freightliner DE, a German subsidiary of Freightliner PL, and the Association of Independent Railways.

Michał Krupiński, PZU Group

An economist by trade, Krupiński became the new boss of PZU on 19 January, replacing Andrzej Klesyk, who resigned in December after nearly 8 years as a head of the company.

Born in 1981, Krupiński is the youngest CEO in the insurance firm's history. Having graduated from the Warsaw School of Economics, he worked for the Secretary-General of the European Parliament before becoming the youngest ever deputy minister of State Treasury in 2006, working alongside the last PiS government on corporate governance and the programme for consolidation of the energy sector. In 2008 he became deputy executive director at the World Bank before becoming CEO of Merrill Lynch Polska in 2011. He also worked as executive director of investment banking for CEE at Bank of America Merrill Lynch.

Małgorzata Zaleska has

recently replaced Paweł Tamborski as CEO of Warsaw Stock Exchange.

photos: Krystian Maj (Forum), Jerzy Dudek (Forum)

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New business leaders

Małgorzata Zaleska, Warsaw Stock Exchange

Małgorzata Zaleska was appointed as CEO of Warsaw Stock Exchange on 12 January, replacing Paweł Tamborski, who stood down in December. A graduate of the Warsaw School of Economics, where she is professor of Economic Sciences and Professor Ordinarius, she is the first woman to head the WSE. Since 1998 she has held various positions including CEO of the Banking Guarantee Fund, membership of the WSE Supervisory Board and membership of the International Association of Deposit Insurers (AIDI) Management Board.

In 2009 she was appointed a member of the National Bank of Poland Management Board

by President Lech Kaczyński, a position she held for six years.

Mirosław Pawłowski, PKP

Pawłowski is currently the acting CEO of PKP, the dominant railway operator in Poland. He was appointed following the resignation of Bogusław Kowalski, who himself had been appointed not long before. Pawłowski has a degree in economics and was appointed as chief financial officer of PKP in 2001, where he worked as a board member for eight years.

He has also held positions in the Association of Railway Employers, the Siedlce Development Agency and Pile Elbud Kraków.

Sławomir Zawada, PGE

Former CEO Marek Woczczyk was replaced

by Zawada as head of Poland’s largest power producing company on 23 December. Born in 1977, he graduated from Wrocław University of Technology having studied electrical engineering, specialising in power systems.

Between 2002 and 2007 he worked at the Turów power station before spending a year as assistant chief engineer at Kopex-Famago in Zgorzelec. In 2010 he started work as a board member of Bogatynia Waste Management Company. He is a well-known activist Law & Justice activist.

Piotr Woźniak, PGNiG

Woźniak was appointed CEO of PGNiG, an oil and natural gas company, replacing Mariusz Zawisza. Woźniak graduated from the University of Warsaw, and in 1990 he was made adviser to the Minister of Agriculture and Minister of Industry. From 1992 to 1996 he was commercial adviser for the Polish Embassy in Canada and then the Prime Minister’s infrastructure adviser in 1998-2000. From 2000 to 2002 he was a member of Supervisory Board and a vice president at PGNiG. Between 2002 and 2006, he was a member of the City of Warsaw Council and under PiS in 2005-2007, Minister of Economy. Woźniak was Deputy Minister of the Environment and the Chief National Geologist under Civic Platform in 2011-2013. He became president of the Administrative Council of Agency for the Cooperation of Energy Regulators in 2009, and then vicepresident in 2014.

compiled by Julia Zagrodzka and Liam Frahm

Dariusz Kaśków, ENERGA

Dariusz Kaśków is the new leader of Energa, an energy producer and supplier, replacing Roman Piątkowski on 4 January. Piątkowski was temporarily in charge after Andrzej Tersa, a member of the Civic Platform party, was dismissed at the beginning of December. Kaśków graduated from The University of Silesia, where he studied law and is a member of the Law & Justice party. From 2000, he was Głubczyce County Governor for six years and in 2007 he was appointed vice-president of pre-eminent Polish mining concern KGHM Polska Miedź.

He has also been vice-president of EnergaOperator and, between 2010 and 2014, he was member of Głubczyce County Council.

Jacek Kurski, TVP

Deputy Minister of Culture Jacek Kurski replaced Janusz Daszczyński as the new head of public TV broadcaster TVP. A native of Gdańsk and a Solidarity activist there in the 80's, Kurski is a journalist and a politician. A controversial figure, not least because of his attack-dog tactics against the PO leadership, in particular former prime minister Donald Tusk, he served as a PiS MP between 2005 and 2009 and was elected as a MEP in 2009. His brother Jarosław is a senior editor at daily newspaper Gazeta Wyborcza.

Mirosław Kowalik, ENEA

Kowalik is the new CEO of energy provider Enea since replacing Krzysztof Zamasz on 7 December. Kowalik is a veteran of the energy sector, having been sales and marketing manager for Alstom Power in Poland for many years.

He has also worked at SNC-Lavalin Polska as business development director and vice-president of the Management Board.

Remigiusz Nowakowski, Tauron Group

Remigiusz Nowakowski replaced Jerzy Kurella as CEO of Tauron, an energy holding company.

Nowakowski is a graduate of both Wrocław University of Economics and the University of Wrocław. He was vice-president and member of the board with Tauron from 2006 to 2008, when he joined Fortum Power and Heat Polska. Between 2012 and 2015 he was head of production optimisation and fuel management and member of the heat Poland management team. He was appointed as a member of ORLEN Supervisory Board in November 2015.

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36 Leader

Education: Round Table Discussion Some of the most passionate minds in Polish education discuss the current state of the education system and what the future holds

Education has long been

Poland's public expenditure on

education in 2011 amounted to $25.69 billion. This equalled 4.9 percent of GDP and 11.4 of total public expenditure. By 2011, public spending on educational services was worth $6,420 per student (from primary to tertiary education).

Source: OECD.

a cornerstone of Polish culture. Kraków’s Jagiellonian University, established in 1364 by Casimir III the Great, is the second oldest university in Central Europe and the oldest in Poland. In 1773, King Stanisław II August established the Commission of National Education (Komisja Edukacji Narodowej), the world’s first state ministry of education.

Today, Polish education is taught to a high quality, with Poland in the top 5 countries in Europe for education according to the 2012 Pisa rankings, and has a large societal emphasis on obtaining university-level education.

However, it is by no means perfect.

The new generation of students is putting a strain on the current system because of their growing expectations of the employment sector and different attitudes towards education and social factors. This is exacerbated by the rapid growth of technology, which is pressuring teachers to adapt their methods to fit the demand of their technologicallyadept students.

There is also a disconnect between Poland’s education system and the business world, with a lack of decent practical and soft skills making it harder for firms to find students that are ready to be employed.

participants Poland Today brought together a diverse group of people in Polish education for a round table discussion, hosted by founder & editor Richard Stephens. The attendees were:

A nna Wicha, country manager Poland of Adecco and president of the Polish HR Forum T omasz Bratek, deputy director of the Foundation for the Development of the Education System D orota Fiett, school director and biology teacher at Bednarska Szkoła Realna J olanta Jakóbczyk, director of the Human Resources Development Office at PKO Bank Polski P aweł Bochniarz, president of MIT Enterprise Forum Poland

‘There’s also something to be said about generation change.

The new generation has completely different attitudes and dreams to ours.’

37 Leader

What are the main issues facing Poland’s education system today?

Anna Wicha: There’s a lack of practical skills. Since the fall of communism, vocational schools have been closing and practical education has declined.

Not only has this reduced the practical skillset of employees in the market, it’s destroyed cooperation between business and education. Previously, there was a close relationship, with special lectures, training and classes run by the industry.

Do you think it’s necessary for these types of schools to return?

Bratek: Absolutely. They closed because there were perceived to provide poor education, and as far as I know, the government is bringing them back. They had good links to business because of central planning: schools were attached to state-owned companies because of their long-term plans for production and they had a certain number of students that they needed in order to do this. But, in the free market, these schools didn’t know how to respond to the demands of the local labour market.

Wicha: It’s had a real effect on the market: Poland has the jobs for people with technical skills, but we just don’t have the workers available. On the other hand, we have high numbers of graduates, but we cannot offer them the same opportunities as we had before.

Bratek: Europe is still focused on higher education when it should be reviewing its strategy. In Poland, we are trying to reverse this and we are investing twice as much as other European countries to promote areas like vocational education. The Ministry of Regional Development is using more money from the European social fund on schemes like the Leonardo da Vinci programme, which provides vocational tuition for students.

Dorota Fiett: I agree with Tomasz: secondary school in Poland only prepares its students for further studies, not work. At our school, we wanted to offer the standard curriculum, while teaching more practical skills, so we asked universities and entrepreneurs what skills they thought were important in students. Because we have an agreement with the ministry of education, our

‘I think the world as a whole has a problem with education, it’s not Poland-specific.’ education lasts for four years, instead of three, and for the first two years, our students study the same topics as they would in other schools. But, they then choose from one of three specialisations: multimedia and design, IT and business and economics.

Paweł Bochniarz: I think the world as a whole has a problem with education, it’s not Poland-specific. If you look at PISA results across the world, Poland is doing relatively well compared to places like the United States, the United Kingdom or Germany, where results have stalled or fallen for years. A bigger problem is that, internationally, there is no correlation between the amount of money funnelled into the education system and the results it produces.

Bratek: I agree - when you look at the results that our youngsters are achieving in the PISA rankings, they’re very successful relative to the rest of the world and this is a massive improvement. People say that these results only show that students are good at taking tests and don’t accurately measure how well equipped they are for real life, but I disagree. This is the system that we use to test the progress of all children in the world, so it’s a good comparative result.

Bochniarz: The problem is more general: education has lost its sense of purpose. It’s become extremely utilitarian and is trying to catch up with changes in technology and the labour market, and we’re ending up in a situation where we always have a new trend to follow.

A good example is eLearning: there has been a huge push towards using technology for education across the world, but the results are pretty bad. It’s clear that while it can be useful in some cases, it’s absolutely not a substitute for classroom teaching. A sense of purpose is extremely important because it drives effectiveness. If you have a corpora-

tion that’s lost its sense of purpose, it won’t be able to attract the right people.

I don’t think a lot of people in the education sector have this sense of mission anymore. Administration and bureaucracy takes up a lot of their time and it frustrates them. We have to rediscover what the purpose of education is, and this will be the starting point for everything else. If the role of the educational system is to discover and nurture talent in society, then schools have to work harder to get parents involved because both have a common purpose to develop talent. It should drive cooperation between them in the future and it’s also a huge opportunity because the school infrastructure can educate parents as well. A lot of things that children are learning in schools, parents don’t know.

Bratek: There’s also something to be said about generation change.

The new generation has completely different attitudes and dreams to ours.

They don’t remember communism, have a completely different approach to communication and are very familiar with new technologies. Importantly, they also have totally different expectations of the labour market. They are looking for a balance between work and private life.

Jakóbczyk: I don’t think they are. We employ 700 young students and graduates, and a lot of them are very focused on their development and enhancing their career path. They don’t have to be hard-workers, we just want people who are engaged and focused.

Fiett: I think that normal school kills students’ ability to be engaged. Our school is named ‘Bednarska Realna’ after the street in Warsaw where the first school was built following the fall of communism. Because it was Poland’s first non-public school, it had its own democratic system of governance so it could decide how it should be run and we’ve used this to really encourage students to develop their personality and soft skills.

Jakóbczyk: From a recruitment perspective, soft skills - like communication, logic and presentation - are very important. Several years ago, when you employed younger people, education was all that mattered on their CV. Now we look for additional activi-

90 percent of adults in Poland

aged 25-64 have finished high school, compared to the OECD average of 75 percent. Also, in the 2012-3 school year, 70 percent of children aged from 3 to 5 received various forms of preschool education.

38 Leader

ties like volunteering or extra jobs, because it shows us that this person is very engaged and motivated. Our recruitment process lets us analyse their soft skills: we set up workshops where they’re given cases to solve in teams. We want to see how they cooperate and communicate with each other and how they behave, especially in a conflict.

Do you think Polish people have a stronger work ethic than other people from other countries?

By 2011, Poland had 2 million students in higher education, the fourth largest number of students in the EU, after the UK, France and Germany. Each year, around 500,000 young people begin their education at Polish universities and colleges.

Wicha: Yes, you can see it in the amount of hours that they work abroad as well as how quickly they can adapt.

Poles are well-known for their mobility and their work-ethic.

Bratek: But Poland has one of the lowest levels of adult learning in Europe - our life learning isn’t actually that good.

There’s lots of people in higher education, but a low level of adult learners and this is a social problem: people don’t see the need to improve their skills once they’ve completed their education. It’s a challenge for the government to reach out to people and, for example, help parents who have children struggling with maths to improve their own ability in maths.

Bochniarz: To promote adult life learning, there needs to be a change in attitude. People have to realise that learning never stops and this is a challenge for employers because of the volatility of professions. Jobs that exist today will not be the same in 10 years’ time and, even if they exist then, they will be very different. It’s difficult to know how to prepare for this change, but I think adaptability is a key element.

I also think the education sector has to answer why it exists, what its role is and what it is trying to do. I like the ecological approach to innovation, theorised by Urie Bronfenbrenner, who said that the purpose of education is to make human beings more human.

Schools should exist to enable children to explore their talents and develop their own potential. The McKinsey report in 2007 said that ‘the quality of an education system cannot exceed the quality of its teachers’ and this is the root of the success in countries like Finland or Singapore. To teach in these countries is one of the most prestigious

to spend it wisely. We are not paying our teachers insignificant salaries and the problem is that a teacher’s salary is PISA rankings are used by the OECD to comdecided by years of service and extrapare the test results in maths and reading of curricular teaching, not by performance.

15-year-olds from education systems across the world. In the results from 2012, Poland was the All educational research that I’ve come 10th best in the world for reading and 14th for across shows that years of service is not maths, ahead of countries such as the United a good predictor for quality of teaching.

States, United Kingdom, and Germany. ShangA young, talented teacher can achieve hai was top rated in both categories, finishing ahead of Hong Kong and Singapore very good results. in the top three.

Wicha: One really interesting point was brought up at the Youth jobs you can have: people compete for Employment Forum in Brussels a few teaching positions like they compete months ago. In Germany, there is an for jobs in investment banking else- institution acting as the platform where. It is, of course, connected to between business expectations and salary, but teachers also have a very the education system but in Poland, we credible status within society and a don’t have anyone to take responsibilstrong sense of purpose. They are given ity for this. So, whatever is produced a lot of freedom and, unlike in Poland, by the education system is used by they are not treated as administra- the employment market but expectative workers. They are well-prepared tions from both sides don’t match at for what they do and they are trusted all. We have to improve communicato do a good job. Once, I interviewed tion between the education system a Finnish parliamentarian - the head and the business world. Adaptability of the parliamentary commission on and soft skills are only partially taught education at the time - and asked her at school and are not properly tested. why Finnish education was so good. They’re only properly assessed later She said that because they are such a when employers are trying to find peosmall country, they simply can’t afford ple to hire, but there are difficulties with to lose even one talent. We should take definitions. It’s very difficult to define this approach; teachers should not be what good or bad communication or allowed to forego even one talent. adaptability is, because opinions will Fiett: At our school, we have 25 differ. Something should be put on teachers for 40 students, and they the table to help broadly outline what have two or three other jobs. It’s good if is good and what is bad. they have other hobbies or interests but Bratek: The main priority for me is when they work like this, they just don’t that we focus on links between busihave time for school. The system would ness and education. We have to find a be better if there were fewer, better- way to shorten the time between gradpaid and better-qualified teachers. uation and when students are actually able to undertake tasks effectively.

Even though there is a There needs to be time for practice financial challenge, do you when they study, through internships, think that teachers could attain volunteering, or any form of practical a higher social status in Poland? work. This should start in high school Bochniarz: I think it can become and continue throughout university so our strength. I’m happy with the progress that we’ve made, but we still have a long way to go. Remember, during the Second World War, the Nazis implemented capital punishment for education in Poland. Despite this, so many schools existed, so many children earned their school diplomas and there were even underground universities. This shows how important education is in our country. But you’re right, money is always limited and we have

international rankings

‘The problem is more general: education has lost its sense of purpose.’

39 Leader

that, when they complete their education, they don’t need to spend two years adapting. Businesses everywhere want this, it’s not just in Poland. A study by the University of Phoenix’s Institute for the Future shows that businesses look for critical analysis, problem solving, social and emotional intelligence, adaptability - these key soft skills that we keep mentioning. Students should know what the purpose of their education is and they should be able to adapt to the changing world around them.

Fiett: I don’t think that my graduates need to go to university, it’s much more important that they make their own company and go later, when they know what they want to study. My graduates often tell me that they get lost in their studies and that they aren’t ready for university. To add to the point about business: at our school, we’ve recently asked 50 businesses to provide scholarships and only two agreed. Now, four of my students have scholarships, but I would like all of my students to have scholarships from business.

Jakóbczyk: I’m glad you’re saying this because this year we organised traineeships that start at the age of 18.

We want to target high school students because we found that young people are choosing their speciality at the age of 15 or 16, when they decide that, for example, they want to study medicine, so they choose to study biology and chemistry at school. We are trying to catch them at this age and convince them that they should start working before or while they study. It’s a good trend that companies and universities are developing dual-studies because it means that the employer is engaged at the very early stage of the university programme, and they can influence the programme and help prepare people to work in the industry.

Bochniarz: It’s only fair that big corporations give back to education, because they benefit from the people passing through the system. Employers have to get engaged and links between education and industry have to be stronger, but schools shouldn’t act like islands. They have to reach out and involve other organisations to develop their curriculum to make their programme more attractive for students.

by Liam Frahm

‘There needs to be time for practice during studying, through internships, volunteering, or any form of practical work.’

By December 2014, there were 518

institutions of tertiary education operating in Poland. The most highly rated are the University of Warsaw and Jagiellonian University in Kraków which were both ranked in the top 400 for education institutions by the 2014 Academic Ranking of World Universities.

40 leader

Embracing failure, to succeed What the future has in store for Poland’s budding entrepreneurs

unite the start-up community under one umbrella has not been a deterrent, says Paweł Bochniarz, head of MITEF Poland, because such fragmentation allows firms to ‘leverage the strengths of the different ecosystems’. He points to the United States: “Silicon Valley, which focuses predominantly on internet technologies, has a different community to Cambridge, Massachusetts, which is currently developing a biotech cluster.”

photos: Krystian Maj (Forum)

Moving forward

Campus Warsaw

is the fifth site established by Google in their start-up programme, following operations in London, Tel Aviv, Seoul and Madrid. A sixth, based in São Paulo, Brazil, launched earlier this year.

often help on a pro bono basis. Winners of the competition, which finishes in the second half of the year, will earn the support of MIT Enterprise Forum Global and the MIT Technology Review.

The competition comes after Poland’s first entry into the MIT Innovators Under 35 competition last year.

So, in a world of opportunity, what makes Polish start-ups especially attractive to large international firms? According to Matt Brittin, A new lease of life has been given Google President of EMEA Business to the former Koneser vodka distillery, & Operations, Google decided that which has housed Google’s Campus Warsaw was the prime location for their Warsaw, a start-up hub, since late 2015. fifth Campus worldwide because of its Deep in Warsaw’s Praga district, the world-class software programmers, Campus is a space for budding entre- its extremely vibrant start-up commupreneurs to learn and share, build a net- nity and its Google presence. Polish work of contacts and find inspiration for education, with its talent for mathematnew business ideas. ics and engineering, certainly seems to But it is only part of a wider trend of be a factor behind the steady stream major international organisations show- of high-quality IT graduates joining the ing interest in Poland’s start-up com- workforce every year.

The general ‘ecosystem’ of the startmunity. MIT Enterprise Forum (MITEF) Poland recently launched its first start- up market is helping to attract forup accelerator, a programme where eign investors to Poland, according to start-ups are given mentorship and Mateusz Nowak from PwC. The fact funding in return for part of their equity. that firms are establishing a presence Competing teams are given workshop in Poland means they see ‘a sustainsessions that focus on areas such as law, able market’ and this has “validated taxation, funding and investor relations. the Polish market. Up till now, we’ve These are run by large organisations, been seen as just one of the CEE counsuch as PwC, that are part of MIT’s tries, but we are now starting to stand wider international community and out and be recognised.” The failure to

However, the Polish start-up community does have areas where it can improve.

One such area is mentorship, according to John Beauchamp, Communications Manager at HardGamma Ventures - a Polish VC fund - who said that start-ups need to “increase their business acumen” in order to “fight in the competition of the real world”. He suggested this could be improved by a greater presence of corporate firms to help drive mentorship in the community through ‘vertical accelerators’ - programmes dedicated to one specific industry.

Another weakness in the Polish startup community, he said, is that some start-ups have yet to reach the stage where they can benefit from accelerators, so pre-accelerator courses - where firms are mentored without giving up equity - are becoming more common.

However, some question the quality of these programmes because they have fewer funds than larger schemes to attract experienced mentors. For Paweł Bochniarz, a change in mentality is the most important hurdle that the young community has to overcome. “In such a competitive market, failure is a distinct probability and you just have to accept that you might fail a lot before you succeed. It’s a difficult thing to change because failure is a stigma in many cases and people who have failed are often treated with less trust”. He also suggests that legislative change could help to foster growth in high-tech industries, like robotics or 3D printing, which are heavily dependent on specific regulations to be able to thrive. Despite the challenges that Polish start-uppers face, with such interest, it is clear that Google and MITEF see a bright future ahead for Poland’s budding entrepreneurs. by Liam Frahm

The fact that firms are establishing a presence, means they see a sustainable market

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42 business

Putting down roots

Matthew Day

covers Central Europe for the UK’s The Telegraph, while also writing on Central and Eastern European affairs for The Scotsman.

He has reported on major events such as the 2010 Smolensk disaster and Poland’s recent presidency of the EU. He first came to Central Europe in 1992 as an English and history teacher.

photos: Andrzej Sidor (Forum), Wojciech Paleczny

Poland’s timber industry continues to branch out and strengthen

For many people, Poland’s forests represent a place where they can get back to nature and relax in the silence of the trees. But, aside from being a place to explore and unwind, the forests that carpet the country are a source for Poland’s vibrant, if little thought about, timber industry. The wood trade and its associated industries - paper, furniture manufacturing and flooring - have managed to establish themselves in the leading pack internationally while steadily contributing to the Polish econ- growing steadily over the years,” the chamber writes in a report, “almost omy at the same time.

Figures from the Polish Chamber of doubling from PLN 16 billion in 2005 Commerce show that the industry now to PLN 30 billion in 2013.” Poland contributes around 3 percent to Polish is also now the world’s sixth largGDP, and forms 11 percent of the coun- est furniture producer and can claim try’s manufacturing industry. It also to be Europe’s number one producer provides 333,000 jobs, 14 percent of of parquet flooring. total employment in manufacturing.

“In terms of money, the share of the A new leaf sector in the Polish economy has been “Our production is in full swing and we are securing big contracts, which are a continuation of our co-operation with clients from previous years,” said Małgorzata Kubiak, sales director for Poltarex, a timber company based near Gdańsk. “And every year we are beginning co-operation with new customers, and so, step by step, we are enlarging the volume produced.” She added that the company now exports 40 percent of its product and that sales have been boosted by the firm’s strong internet

A forestry depot in Paska,

north-eastern Poland, near the border with Belarus. Different types of high quality timber, cut in the Augustów Primeval Forest, are on display for potential clients.

Spruces in the

Augustów Primeval Forest (photo above).

The forest covers about 1,600 km², 1,140 km² of which is in Poland while the rest is on the other side of the Belarussian border. Around 30 percent of Poland's land area is covered in forest.

Going global As part of a drive to discover new export

markets, 20 representatives of the Polish timber industry will be attending the Dubai WoodShow Fair in April, which brings in representatives from the wood processing and timber industries from all over the world. Along with the desire to find new export markets, the Poles travel to the Gulf in order to promote the Polish timber industry ahead of an expected building boom linked to Dubai hosting the Expo 2020 exhibition.

presence. Poltarex is also appearing at international trade fairs, in order to get its name out. The timber industry has benefited from Poland’s proximity to major European markets, a relatively low cost base and increased investment in production facilities. “Polish-capital companies are investing in new technologies to improve production processes in order to meet the high demand of clients, especially when it comes to quality,” said Rafał Gruszczyński from the Polska Izba Gospodarcza Przemysłu Drzewnego (Polish Economic Chamber for the Wood Industry). “They are investing in new machinery, and even smaller companies can invest by purchasing second-hand machinery.”

The optimism is a far cry from the sorry state of affairs in the early 1990s, when the big state-owned firms were in the death-throws of bankruptcy and bleak clouds of uncertainty hung low

43

Just one of the lumber mills that

help Poland remain dominant in the international furniture market. This mill, belonging to a firm that produces furniture for gardens, is situated in Zdroje village, deep in the Kuyavian-Pomeranian Voivodeship in northern Poland.

over the industry. The demise of the old enterprises, however, led to thousands of small sawmills and production plants taking their place. At the end of 2014 there were some 40,000 companies, most of them family owned, operating in the timber industry. That number, says Gruszczyński, has its advantages.

“Because there are many of them and they are not so big, it means that they can adapt faster to changes in the market,” he explained. Kubiak agrees, saying the firms “can adjust production quickly to take advantage of changes in the market” with a flexibility the big international concerns can only dream of.

The small-is-beautiful-maxim has its limitations, however. The large companies bring with them enough economic clout to lower market prices for timber products, adding further, unwanted complications to a long-standing prob-

lem with the wood trade. “Our weaknesses come from a lack of stability in the purchase of roundwood [the basic wood commodity] and its unpredictable volumes and prices,” added Kubiak. “That very often forces us to base our plans not on black and white figures but on what we feel the market is going to be like.”

Supply and demand Fluctuations in wood supply and prices are not unique to the Polish market, with all countries subject to the whims of fashion and Mother Nature. But, there is definitely a shortage of supply in Poland. Forests cover 9,177,200 hectares of Poland, around 29.4 percent of the whole country and slightly below the European average of 30 percent.

Polish foresters cut down on average around 35 million cubic metres of wood a year but despite their efforts they

The Tuchola Pinewoods, located in

the Kuyavian-Pomeranian Voivodeship in northern Poland.

Situated between the Brda and Wda rivers, the Tuchola Forest National Park is at the core of the Tuchola Forest Biosphere Reserve, designated by UNESCO in 2010.

Poland exported over EUR 8 billion

worth of furniture in 2014, according to the Polish Chamber of Commerce of Furniture Manufacturers.

According to 2013 figures, there are 24,000 furniture companies operational in Poland, 100 of which employ more than 250 people.

photos: Wojciech Wójcik (Forum), Andrzej Zalewski (Bordo), Anna Kowalik

Polish foresters cut down around 35 million cubic m annually but still struggle to meet the growing demands of the timber industry

struggle to meet the growing demands of the wood industry. The market can take heart from expectations that coverage will grow to 33 percent by 2050 but until then, just how to deal with the shortfall has prompted intense debate in Poland and even sparked fears that trees standing in protected forests lying in national parks could succumb to the demands of the chainsaw. Just how to increase felling would involve the input of both the industry and state because, as in many countries, trees in Poland start and end their lives in state owned forests. With the majority of Poland’s forests in public ownership, over 95 percent of harvested wood comes from state land. While problems of supply and price cause a certain amount of anxiety in the wood industry, the sector remains optimistic about the future.

Wood, it appears, is putting down the roots of success. by Matthew Day

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46 Business

Reaching for the stars Poland Today profiles CreoTech Instruments, a fast growing Polish company focused on space exploration

As a huge fan

Liam Frahm

is Poland Today’s editorial co-ordinator.

From the United Kingdom, he is interested in international affairs, politics and economics. Next year, he is studying politics at Oxford University.

What can be done to improve the quality of the

Polish education system and what does the future hold for students?

Poland Today brought together some of the most passionate minds in Polish education to discuss the current situation of the education system. see page 36

of science fiction books as a child, it’s hardly surprising that Grzegorz Brona pursued his childhood dreams of a career in the space industry. After a school teacher pushed him to develop his interest in physics, he forged a career as an elemental particle physicist and co-founded CreoTech Instruments with two friends in 2008. CreoTech cut its teeth in the space industry with the development of the K20 ‘Pi of the Sky’ camera telescope, designed to search the cosmos for Gamma Ray Bursts: large bursts of gamma radiation with the potential to destroy life.

Since Pi of the Sky, the company has been an active member of the international space industry, earning certification from the European Space Agency (ESA) to assemble electronics for space flights. This puts CreoTech in a unique position as the only Polish company to have passed the ESA’s strict requirements for component assembly, in part due to the construction of an air-locked clean room, completed in 2013 and designed to minimise product contamination. The experience gained from the ‘Pi of the Sky’ project has also helped the construction of cameras for the wide-view NEOSTEL telescope, used in the hunt for near-earth objects.

The firm has also recently completed work on a power converter module for the CaSSIS stereo imager, part of the instrumentational payload of the joint Russo-European ExoMars mission to investigate signs of life on Mars.

But CreoTech doesn’t appear content to rest on its laurels and is constantly working on new projects and research. With the Space Research Centre in Warsaw, it is developing a coronagraph control box for use on the ESA’s PROBA 3 project, launching in 2018, and the world’s first precision

CreoTech Instruments CreoTech Instruments was formed in 2011,

having existed as CreoTech Ltd. since 2008.

Since the K20 Pi of the Sky telescope, the company has expanded their camera production, while also moving into component production and other research areas. After Poland joined the European Space Agency, CreoTech received its first project for space: building the power unit for the Gamma and X-ray monitor used in the ASIM project, carried out by the ISS.

CreoTech wants to expand its production capabilities and begin to assemble complete units to go into space on earth observation missions or even deep space projects.

Grzegorz Brona is President of CreoTech Instruments and, having co-founded the company in 2008, he became a shareholder in 2011.

He is a nuclear physicist by trade, and still lectures at the Faculty of Physics at the University of Warsaw. Before his work with CreoTech, he worked at CERN where he was responsible for the radiation detectors’ software and management of the research team at the Large Hadron Collider. Since 2015, Brona has been a member of the Polish Space Agency after nomination by the Prime Minister.

formation flying mission. It consists of two satellites flying through orbit in formation, with one shadowing the sun and the other – with CreoTech’s control box on board – researching the corona of the sun. Back on terra firma, it is helping to bring the space sector to Poland with the EO Cloud project, a data repository based in Poland collecting, storing and analysing information transmitted

by ESA satellites. Analysis of data of this kind is currently difficult because it is stored in various centres around the world, but the centralised EO Cloud should help to improve accessibility.

for a low cost. Being situated near Warsaw has allowed the company to benefit from the number of universities based in the capital and it works Technological expansion closely with the Warsaw University of Brona has the future clearly mapped out Technology, the University of Warsaw for CreoTech. On one hand, he hopes to and the Space Research Centre. This specialise its research in areas like high close relationship with the universities resolution cameras for space or sub- has also provided the company with liminal cycle synchronisation, devel- talented students and graduates. All oped along with CERN to synchronise of CreoTech’s staff are Polish, although the superconducting magnets of the several have studied or worked abroad Large Hadron Collider. On the other, with scientific centres in the EU. he wants to expand its production This is a very exciting time for the capabilities and begin to assemble space technology market and CreoTech complete units to go into space on is willing and able to supply the services earth observation missions or even and products that will inevitably be deep space projects. desired as the market grows. While the CreoTech is well positioned at the firm’s vital components are in machines forefront of technological progress in hurtling towards the stars, Brona seems the sector. Its headquarters, situated in content to keep his personal space Piaseczno - just south of Warsaw - is a travels in his dreams and his feet firmly flexible and expandable space, rented on the ground. by Liam Frahm

CreoTech's clean room caption was completed

photos: CreoTech, Eurpean Space Agency

in 2013. Featuring a double air lock, air filters and mandatory protective suits, the highly sterile clean room is designed to prevent even the tiniest speck of dust from contaminating equipment, which could cause parts to fail when launched into space.

A graphical representation of

the PROBA 3 satellite flight. The ESA project will observe solar corona and test precision flying techniques of satellites in formation.

CreoTech is responsible for the assembly of the coronagraph control box aboard one satellite and launch is planned for 2018.

48

Urban Issues: MIPIM 2016

49

urban issues

Just over 21,000 participants are attending MIPIM,

the world's largest property real estate event, in Cannes this March. The participation of Minister Mateusz Morawiecki and Hanna Gronkiewicz-Waltz, Mayor of Warsaw, in the Poland & CEE Day, organised by Poland Today, will be a highlight of the event.

Real estate 2016 overview page 52 Poland's outsourcing future page 56

Why Poland? page 58

The missing link in Polish real estate page 60

Developing a new approach page 62

A good year for capital page 64

Potential for the future

photo: Filip Klimaszewski (Forum)

page 66

conference & cocktail party

Poland Today at MIPIM

The world's leading real estate fair | 15-16 March 2016 | Palais des Festivals | Cannes, France

Poland Today is playing

Richard Stephens

founder & editor, Poland Today

a leading role at MIPIM 2016 as organizer of the Poland & CEE Days. Our sessions cover a broad range of key topics, from the macro-economic and political perspective for Poland to city development across the CEE, also taking in the importance of standards and the opinions of the major developers on the Warsaw real estate scene about the CEE region. We are delighted with the participation of Mateusz Morawiecki, the Deputy Prime Minister and Minister for Development in the new Polish government, who is interviewed by Henry Foy of the Financial Times, and with the Mayor of Warsaw, Mrs Hanna Gronkiewicz-Waltz, who is talking about the challenges and opportunities facing Poland’s capital city.

tuesday 15th March 20.00 – 22.00

Poland & CEE Executive Dinner High level social and networking event for business leaders Host: Richard Stephens, Founder & Editor, Poland Today

Short welcome addresses by: rs Hanna Gronkiewicz-Waltz, M Mayor of Warsaw Grzegorz Hajdarowicz, Owner of Gremi Media (owner of Rzeczpospolita, Poland's leading financial daily newspaper, partner of Poland Today) Jeroen van der Toolen, Managing Director CEE, Ghelamco

wednesday 16th March 09:15 - 10:45

Ghelamco is Main Partner of the Poland & CEE Days,

Urban Issues MIPIM 2016

on the occasion of their 25th anniversary in Poland.

Jacek Levernes,

President of ABSL: Economy-wise, Poland is one of the most interesting places in Europe – the scale of investments in the last few years is testament to that. At MIPIM I'm delighted to have an opportunity to outline the opinions of global players regarding the current challenges faced by the Polish economy in front of an international audience. The presence of Deputy Prime Minister Mateusz Morawiecki, who has mapped out a bold project for Poland's development, will undoubtedly make the discussion highly interesting.

Maarten Vermeulen, RICS, RICS Regional Managing Director in Europe, Russia and CIS:

In cooperation with other national and international organisations, RICS is developing global standards in five specific fields: ethics, property measurement, construction measurement, land measurement and valuation. At MIPIM we look forward to an open debate on this important topic with influential players from the region and encouraging them to get involved in the development and adoption of standards in order to improve city management and leverage finance for urban development.

our partners & patrons

CEE Breakfast Discussion Forum.

How CEE markets can reduce risk and attract foreign investors to the region’s cities?

Session co-organized with RICS aarten Vermeulen, M FRICS Regional Managing Director of RICS in Europe, Russia and CIS Remigius ŠIMAŠIUS, Mayor of Vilnius Róbert Ésik, President, HIPA - Hungarian Investment Promotion Noah M. Steinberg FRICS, Chairman & CEO, Wing ZRT Peter Szamely MRICS, Head of Team CEE and SEE at Hypo NOE Gruppe Bank AG Algirdas Vaitiekunas FRICS, Fund Manager at Northern Horizon Capital and Chair of RICS in the Baltics Professor Dr. Jorg Menzer, Head of Bucharest, Bratislava & Budapest Offices, NOERR Jean-Bernard Wurm, Managing Director, Secure Legal Title Moderator: Richard Stephens, Founder & Editor of Poland Today

11:00 - 12:30

Poland Today. How to understand the new investment environment Session co-organized with ABSL ateusz Morawiecki, M Deputy Prime Minister & Minister of Development of the Republic of Poland Jacek Levernes, Entrepreneur in Residence at Oaktree Capital Management/Cornerstone Partners and President of ABSL Prof. Dr. Alexander Goepfert, Partner & Head of Real Estate Investments Europe, Noerr Moderator: Henry Foy, Poland & CE correspondent, Financial Times

12:45 - 14:15

Poland Movers & Shakers Lunch Discussion Forum. Taking the lead – investing in Polish cities Session co-organized with Property EU aweł Zelich, Local Partner, P Noerr Menzer, Member of Noerr Group Bartosz Puzdrowski, Board Member at ICON Real Estate in Poland and Finland Maciej K. Król, CEO, Xcity Investment John Banka, Colliers International and ULI Chair in Poland Adam Konieczny MRICS, Country Head Poland at Christie + Co Moderators: Richard Betts, Publisher, Property EU and Richard Stephens, Founder & Editor, Poland Today

14:30 - 16:00

From Warsaw to CEE with love.

View from the region’s centre Session co-organized with Property EU and fDi Magazine anna Gronkiewicz-Waltz, H Mayor of Warsaw Jeroen van der Toolen, Managing Director CEE, Ghelamco Maciej K. Król, CEO, Xcity Investment Arkadiusz Rudzki, Managing Director, Skanska Poland Stanislav Frnka, Country CEO, HB Reavis Poland Piotr Gromniak, President of the Board, Echo Investment Moderators: Courtney Fingar, Editor, fDi Magazine (part of the FT group) and Richard Betts, Publisher, Property EU

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Urban Issues

Left: Mateusz Morawiecki,

Left: Bartosz Puzdrowski,

Deputy Prime Minister & Minister of Development of the Republic of Poland

Board Member at ICON Real Estate in Poland and Finland

Left: Henry Foy,

Right: Maarten Vermeulen, FRICS

ing Director CEE, Ghelamco

Property EU

dent of the Board, Echo Investment

Left: Alexander Goepfert, Partner &

Xcity Investment

Right: Richard Betts, Publisher,

Residence at Oaktree Capital Management/ Cornerstone Partners and President of ABSL

Below: Piotr Gromniak, Presi-

Regional Managing Director of RICS in Europe, Russia and CIS

Left: Maciej K. Kr贸l, CEO,

fDi Magazine (part of the FT group)

Left: Jacek Levernes, Entrepreneur in

Poland & CE correspondent, Financial Times

Right: Jeroen van der Toolen, Manag-

Left: Courtney Fingar, Editor,

Head of Real Estate Investments Europe, Noerr

Right: Arkadiusz Rudzki, Managing

Director, Skanska Poland

Right: Stanislav Frnka, Country CEO,

HB Reavis Poland

Above: Hanna Gronkiewicz-Waltz, Mayor of Warsaw

52 Real estate 2016 urban issues

overview

The Polish property market continues its strong performance

The real estate market in

Adam Zdrodowski,

Urban Issues MIPIM 2016

Poland Today’s real estate editor, takes a look at the landscape of Poland’s property market.

Poland residential market in 2015,” Mendel said. had a very good year in 2015, with The banking industry strongly supsome sectors recording the best ported growth in the residential marresults in their history. Residential ket in 2015 and while this will still be developers experienced record apart- the case in 2016, lending will decrease, ment sales and demand for commer- he added. cial space reached its highest levels in years. While results achieved in 2015 are Office: regional unlikely to be repeated, property mar- markets growing ket analysts predict that the market will Very high leasing and development continue to grow steadily this year with activity has defined the office property no signs that performance of any of the market. Last year, Warsaw saw the highsectors could be seriously threatened est level of leasing in its history, with in the coming months. more than 836,000 sqm leased in the city, according to Cushman & Wakefield.

Residential: The net absorption was almost 283,000 record-breaking sales sqm, a 56 percent increase on the preLast year was the best year in the Polish vious year. Developers have been busy residential market's history: recorded building new stock: 277,600 sqm was apartment sales were over 20 percent delivered in 2015 and another 460,000 higher than in 2014 and 48 percent sqm should be completed this year.

According to Arkadiusz Rudzki, manhigher than in 2007. According to data by residential consultancy REAS, devel- aging director at Skanska Property opers sold a total of more than 51,800 Poland, Warsaw remains a very stable apartments last year in the six largest office location and the city’s strong residential markets: Warsaw, Kraków, position in the CEE region should Wrocław, Tri-city, Poznań and Łódź. remain unthreatened over the next few In Q4 alone, a combined 14,400 new years. Tenant interest is still high and the homes were sold in these markets. large supply of new space scheduled Demand for new apartments last for delivery in the near future should year was driven by factors including not be a major problem, Rudzki said, increased availability of government- because a quarter of the under-conprovided financial support for first- struction space in Warsaw has already home buyers and rising concern about been leased.

Since the development of an office an increase in the cost of mortgage loans in the coming months. Developers building can be time-consuming, you reacted to the excellent apartment need to look at the issue from a longsales results by boosting activity: in term perspective, said Harald Jeschek, 2015, approximately 51,900 housing managing partner of Karimpol Group. units were made available for sale, only According to Jeschek, “Warsaw still around 2,000 less than in 2007. has an office stock below that of other The large volume of transactions European capitals of comparable size,” in the building land market closed in with the market remaining relatively recent months – especially in plots absorbing when it comes to modern zoned for residential projects - sug- office space. “We believe this trend gests developers are planning to con- will continue in the nearest future,” tinue launching large numbers of new Jeschek said. schemes this year. According to data Rafał Mazurczak, director of the published by Colliers International, the office and hotel department at Echo residential sector accounted for around Investment, said that everyone appears 70 percent of the demand for building to confirm the positive market sentiland in Poland in 2015. ments for the outlook of the Warsaw Maximilian Mendel, partner and head office market this year. Some developof transaction advisory at REAS, sug- ers remain unsure whether they should gested that there is no macroeconomic be launching new projects now, with the reason for drastic changes in funda- lease of space in the particular schemes mental market factors over the next taking longer than previously assumed couple of months. “However, it will be they would. Despite this, last year was tough to repeat the performance of the really very good, Mazurczak said.

Echo Investment's

Q22 office building in central Warsaw, due for completion in the summer of 2016, is 155 metres high, has 47 floors and contains 52 thousand sqm of office space.

‘Warsaw still has an office stock below that of other European capitals of comparable size’ Redefine and Echo sign record-setting investment deal South African Real Estate Investment Trust (REIT) Redefine Properties will acquire a 75% stake in a €1.2 billion commercial platform that comprises a total of 18 office and retail assets across Poland and is owned by Warsaw Stock Exchange-listed developer and investor Echo Investment, part of the Griffin Real EstateOaktree-PIMCO capital group.

The Redefine-Echo agreement, which is still subject to the approval of the European Commission, is the largest investment transaction involving the sale of income-generating assets to have ever been signed in the Central and Eastern Europe region's property market, said Tomasz Trzósło, managing director, Poland, at JLL. As part of the deal, which became possible due to Echo splitting its high-yielding platform from the development and residential business, Redefine will also acquire a right of first offer on over €500 million worth of assets from the retail and office development pipeline of Echo, with the vast majority of those properties expected to be completed within the next two years.

The transaction is significant for the Polish real estate market in that it gives rise to the first large-scale REIT entity in Poland and could, hopefully, help develop the REIT market in the country, Trzósło said. Echo Investment will retain a 25% stake in the new joint-venture which will be managed by Griffin Real Estate.

Urban Issues MIPIM 2016

urban issues

petition, new retail concepts are now better suited to market expectations, Cushman & Wakefield said in a report.

Maciej Król, CEO of Xcity Investment, said developers will remain active this year despite the fact that many locations have been saturated. The needs of consumers are changing, generating demand for projects that many cities do not have.

For example, the share of convenience shopping centre schemes in the total volume of new retail space supply will grow in the near future. According to Król, even in Warsaw, the largest and most competitive retail market in Poland, there is still room for new retail developments.

Maciej Kiełbicki, managing director at Mayland RE, said that although the retail property market is Poland is becoming increasingly saturated, it is not coming to an end. The profile of modern retail facilities is changing – traditional shopping centres are increasingly being transformed into shopping and entertainment centres, he said.

According to Kiełbicki, the trend will be visible for the next few years, concerning both new investments and existing facilities that need refurbishment and redevelopment. More and more existing, well-located facilities will be going through this process because of the difficulty obtaining land for new retail projects in the most attractive cities, Kiełbicki said.

Fabrice Bansay, CEO and President at Apsys Poland, agreed that the retail market is in a good condition and suggested that there were decent prospects ahead. “When it comes to the key trends, I think that this year will be marked by new big openings,” he said.

Retail: increasing “The largest opening slated for 2016 is market competition Posnania in Poznań, which will have a The retail property market has been total letting area of 100,000 sqm and growing steadily, but faces intense com- will be occupied by 300 recognized petition between retail projects. Colliers brands.” He suggested that this would International predicts that the supply of “underline a leading position” for Apsys new retail space will decrease this year. as an investor and developer in the Approximately 600,000 sqm of retail retail market. Given the fierce competiarea is under construction across the tion in the sector, it’s probable that we country, with around 400,000 sqm of will see more attempts to advance the GLA scheduled for completion in 2016. quality of retail space and new fashion By comparison, approximately brands making their debuts in the coun623,000 sqm of retail space was deliv- try, he said. This year, Poland will mainered in Poland last year, and extensions tain its position as the most attractive of existing schemes accounted for as retail market in the CEE. much as 25 percent of that figure. The most new space (38.5 percent of the Logistics: total supply) was delivered in the eight speculative projects returning largest agglomerations. However, urban Last year, the logistics property market centres with populations of less than had its best performance since 2008.

100,000 continued to attract developer Gross and net take-up volumes respecattention – ten new shopping centres tively stood at over 2.2 million sqm and were completed in such cities last year. almost 1.5 million sqm, according to JLL Medium-sized shopping centre pro- data. The most space (527,000 sqm) jects, comprising less than 20,000 sqm was leased in the central Poland region of GLA, have dominated the new sup- while most demand was generated ply. Because of increasing market com- by logistics operators (34.7 percent

‘Last year, the logistics property market had its best performance since 2008. Gross and net take-up volumes respectively stood at over 2.2 million sqm and almost 1.5 million sqm’

photo: Marian Zubrzycki (Forum)

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According to Stanislav Frnka, CEO at HB Reavis Poland, high development activity will have an impact on the vacancy rate in Warsaw - by December 2016, it could increase from 12.3 percent to 17 percent. The Warsaw market will remain tenant-led and will become increasingly challenging for developers and landlords, but the general outlook remains positive: “With more and more SMEs and public institutions moving to A-class office buildings, Warsaw becoming a significant BPO/SSC hub and many companies understanding the strong HR potential of a modern office, there will be no shortage of clients looking for the right office space,” Frnka argued.

Meanwhile, the largest regional office markets across Poland have also recently experienced a boom, with 56 percent (366,000 sqm) of all new office space delivered last year being located outside of Warsaw, according to Cushman & Wakefield data. The office space take-up in those cities rose by 44 percent y/y and amounted to 580,000 sqm. Kraków (184,000 sqm) and Wrocław (113,000 sqm) saw the most demand for office space outside Warsaw in 2015.

Rudzki suggested that the largest regional cities in Poland will continue to grow in significance throughout 2016 and cities like Kraków and Łódź may not have enough new office space this year to meet demand. He added that office assets in CEE still offer better returns in general than similar-class assets located in Western European countries. Yields in Warsaw and Prague have decreased, but remain among first-choice locations for investors.

of the leased space) and retailers (17.9 percent). Due to the very high leasing activity, the vacancy rate across Poland dropped throughout the year and hit 6.2 percent at the end of December.

In supply, the market grew by nearly one million sqm, with most new stock being delivered in Poznań (278,000 sqm) and Silesia (140,000 sqm). Smaller locations - including Szczecin, Rzeszów and Lublin – also saw more development activity in 2015. At the end of the year, 774,000 sqm of warehouse space was under construction in Poland and significantly, 35 percent of that space was speculative, suggesting developers remain very optimistic about prospects for further growth in the market for the near future.

The increased activity in the logistics property market, notable for the last few years and especially visible last year, should also continue in 2016, said Robert Dobrzycki, CEO Europe at Panattoni Europe. He said that intensive leasing and development activity in the market has been caused by factors including growth in the e-commerce sector, servicing both Polish and Western European markets, and the healthy condition of the production sector.

Magdalena Szulc, business unit director for Central Europe with SEGRO, agreed and said that Poland is currently “the market leader in the CEE region and we are sure that this will continue in 2016.” In the near future, the market will still be driven by built-to-suit and pre-let schemes but developers will be increasingly encouraged to launch speculative developments. Most tenants will still come from the logistics, retail, automotive and e-commerce sectors, Szulc said.

Locations that will witness the strongest growth in the coming months include central Poland, Silesia and eastern Poland. According to Dobrzycki, growth in those locations will be driven by, among other things, the demand for qualified labour force. The challenge that the fast-growing logistics property market may face in the near future is ensuring stable growth in the long-term, striking the right balance between supply and demand.

Paweł Sapek, senior vice president and country manager for Poland at Prologis, said that speculative projects will continue to develop this year, but when at least 30 percent of the space has been pre-leased, allowing the developer to avoid risk. Agreeing with Dobrzycki about the increasing significance of the e-commerce sector for the logistics property market, he claimed that by 2020 the transactions signed with e-commerce market companies could account for the lease of 700,000 sqm of space.

Hospitality: stable growth ahead

International report says. According to Hotel Professionals experts, the strong BPO business growth in locations such as Łódź, Kraków, Wrocław, Szczecin and Poznań has been a major driver in the growth of domestic travel, helping generate demand for new hotel space in the regional cities.

The share of globally branded hotels in the combined hotel stock in Poland has been very low and currently amounts to only 6 percent (8.7 percent including domestic operators). However, the expectation is that this will change in the coming years.

STR Global data shows that Poland now ranks fifth in Europe - after Great Britain, Turkey, Russia and Germany - in terms of the number of branded hotel investments under construction and in the pipeline.

Supply of new hotel space in Poland grew by 37.6 percent over the last five years, with the market expected to continue with stable growth in the coming years. Almost 150 hotels, offering a total of nearly 11,850 beds, were categorised in the country last year, only slightly less than in 2014. Developers and investors alike seem to have re-discovered the sector, with development and investment activity on the rise.

“Poland’s popularity among tourists, both foreign and domestic, has been growing and there seems to be no end in sight to this positive trend.

Demand and occupancy rates have been on the rise for several years,” said Adam Konieczny, country head Poland at Christie & Co. He added that this is especially true for Warsaw, the Tri-city area and Kraków and that Kraków is Positive property still probably the best city for new hotel market outlook developments because the market can Prospects for the property market in absorb new supply relatively easily.

Poland are very positive for the year Gonçalo Duarte Silva, area man- ahead. The turnover in the commerager for Poland at Starwood, said cial property market in Poland last 2016 will be exciting for the hotel busi- year amounted to more than €4 billion, ness, because of the NATO summit noted Paweł Żelich, local partner at the in Warsaw and World Youth Day in Noerr Menzer law firm. “2016 should Kraków. “This means great promotion be characterised by continued intenfor the country and international aware- sive activity of international investors ness which is so much needed,” Silva in Poland, especially in the office and said. He pointed out that such events retail property sectors,” Żelich said.

Some banks may have difficulties in usually create interest in the destination, which might, in future, increase leisure increasing their real estate portfolios, travel to Poland. and lending in the property market will According to Konieczny, there has remain available in the coming months. been a rising interest in hotel acquisi- Marek Koziarek, commercial real estate tions from German, French, British and finance department director at Bank American investors. “In general, inves- Pekao, said “We will try to finance the tors are mainly looking for branded, projects in which we believe.” well-established business hotels,” he Investors are also optimistic about said. Poland’s market is still dominated the prospects for the market. “Thanks by the upscale segment but there to the steady economic growth of the has been a shift in interest towards country, we hope that Warsaw and the the mid-scale market, “There is also whole country will continue to rank strong potential for investors in the high on the map of foreign companies’ budget sector as expansion plans in expansion,” Jeschek said. He added that this segment have so far been rather for Karimpol, Poland remains a key marlimited”, he added. ket in terms of the investment policy.

“Large hotel real estate transactions The company now has two investments are becoming more frequent and inves- in the pipeline and further acquisitions tors who typically shied away from are being planned. hotel investments are starting to take Indeed, international real estate notice of increasing yields in our sector,” investors remain active across CEE, Hotel Professionals said in a report ana- with new capital streaming in from lysing the hotel market performance in regions including Asia and the Middle 2015. There are now good prospects East. “There is a greater diversity of for one-, two- and three-star economy, active investors across CEE,” said budget and mid-scale products in most Dieter Knittel, Director Europe, Real cities and towns in Poland. “It is in these Estate Finance CEE, at pbb Deutsche market sectors where we especially Pfandbriefbank. “Established European note increasing interest from hotel and U.S. investors - as well as local developers and operators.” money - are now being joined by Asian There is also rising interest in develop- and Middle Eastern capital. We are ing hotel projects near office schemes seeing larger portfolio deals, especially and airports. International hotel chains with a pan-CEE focus, and foreign are now increasingly interested in the money is buying into local platforms,” regional cities in Poland, the Colliers Knittel added. by Adam Zdrodowski

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The logistic centre

of German company Rossmann, located in Łódź. The city sits at a crossroads in the centre of Poland and attracts many logistic investments. It also has a direct railway connection with Chengdu in China.

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urban issues

Poland’s outsourcing future How far can the business service sector go?

The last 20 years has proved Poland

Delivery centre for Infosys BPO Poland,

Urban Issues MIPIM 2016

to be a great country for the develop- in Łódź, Poland's second largest city. Infosys, an Indian company headquarted in Bangalore, ment of the outsourcing industry, and provides business consulting, information the last decade has confirmed it is a technology, software engineering and outsourcgreat location for advanced modern ing services. The Łódź Delivery Centre was business services offered by Business established in 2007 and is the largest Infosys location outside of India. Over 2,300 highly Process Outsourcing (BPO) and Shared qualified professionals are employed, providServices Centres (SSC). The companies ing BPO and ITO services in 24 languages and piling into Poland no longer just go to 48 countries. The Centre focuses on finance, the traditional hotspots such as Kraków, accounting, sourcing, procurement, sales and fulfillment services, and high-end services.

Warsaw and Wrocław - recognised by Tholons Research Team as the best Wiktor Doktór is Polish BPO destinations - but other cit- growth in accessible cities where A, B+ CEO of Pro Progresies across the country, all of which are and B class office space is available, and sio Foundation. The hungry for BPO/SSC investments. where there are universities with ecoFoundation focuses As a result, the industry has grown nomic, IT or language profiles. Over the on analysis and growth, development and edu- in Lódź, Poznań, Gdańsk, Lublin and last few years we have seen large comcation of outsourcing Bydgoszcz, but also in smaller towns panies deciding to expand their busiand modern busilike Rzeszów, Opole, Piła, Szczecin and nesses outside Kraków or Wrocław, for ness services sector Radom.

Hunting down new locations example, by locating in Gdańsk, Łódź in Poland. The Pro almost every year, investors have dis- or Opole. This trend will definitely conProgressio Group also manages outcovered new BPO destinations, bring- tinue. Smaller and undiscovered locasourcing media in ing investment and modern business to tions will also be chosen by Polish Poland, such as the some of Poland’s economic backwaters. service providers, who do not have OutsourcingPortal and Outsourcing& But how far will the BPO/SSC surge special language requirements and are More Magazine, as go, and how long will it continue? Will much more open to running their busiwell as investor supcurrent destinations continue to grow ness in smaller towns and cities. port web platform and which new locations will appear?

Best2Invest.org.

Will investors divide their operation Booming growth and demand areas? What will the next decade bring? The majority of BPO/SSC investment in To be honest, these are very difficult Poland has so far come from the US, questions to answer. The BPO/SSC UK, France, India and the Netherlands. industry shows no signs of stopping. In This will continue, but there will also fact it is developing fast, but the model be faster growth in investment from has changed and will keep on chang- Germany, Scandinavia and Ukraine. ing. In recent years there have been These three countries have started to several several large investments. Big become more active in the last two BPO/SSC companies opened opera- years and this looks set to continue. tion centres for 1,000, 2,000 or 5,000 Investors from those destinations are employees. Despite this the average highly demanding, especially for lansize of new centres is between 180 and guage and IT skills. The inclusion of 250 employees and we can expect this Ukraine here might come as a surprise to be the case in the near future, with to many, but the Ukrainian IT industry mid-size and larger investments few is booming and is one of the fastestand far between. growing in the CEE region. Ukrainian IT As the industry has grown in large companies are looking actively for furcities, it has directly affected the ther development in Ukraine but also in growth of competition, the scarcity of countries like Poland, and even eastern professional resources and the costs Germany.

In the future, there will be a signifiof operations, especially in salary levels and availability of office space. This cant demand for languages such as situation creates opportunities for other German, Dutch, Swedish, Italian and cities and even hitherto undiscovered Spanish. It goes without saying that locations to get new investments. While English is a must, and demand for this it is unlikely that large BPO/SSC mul- language will only continue. In the first tilingual operation centres will settle two months of 2016, there has been in cities with populations of less than increased interest from investors in 50,000 inhabitants and no modern Sweden, Spain and Germany, who office space, we are likely to see a fast include in their “must have” require-

ments the highest fluency in languages, both written and spoken. This is an opportunity for universities and language schools to change the education profile of their schools.

When it comes to IT skills in Poland there is a huge demand for skilled employees, especially for programming, and this will certainly continue. Hightech skills are a basic requirement of the majority of IT outsourcing investors from Ukraine, as the Ukrainian IT business is outstripping the pool of skilled labour. Another fast-growing development area is automation and robotics, especially in finance and accounting.

Poland is developing and will continue to develop in education, an area very closely related to BPO/SSC. Besides events organised by ASPIRE and ABSL, there are other conferences, like IQPC, SSON, IAOP, Deutscher Outsourcing Verband, Lviv IT Cluster or Scandinavian-Polish Chamber of Commerce, where BPO/SSC demands, requirements and best practises are discussed. It will be at these events that the milestones and trends will be set for the next few years. This growth will continue for the coming months and years and there is little that could limit the growth. We may expect new players as well as the continued development of existing BPO/SSC centres.

by Wiktor Doktór

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business services glossary Business Process Outsourcing (BPO):

an industry of external companies who provide a range of services in an outsourcing model, which may include finance, purchasing, IT, legal, customer support services. BPO supports the “external” client.

Shared Service Centre (SSC):

an organization supporting other businesses from the group of companies owned by one larger corporation. They usually support larger companies who have offices, factories or plants in various locations. SSC allows the accumulation of support of one or more type of services in one operation centre. SSC usually supports the “internal” client.

ASPIRE: the

association of BPO/ SSC companies operating in the city of Kraków.

ABSL: the association

of BPO/SSC companies with membership structure around Poland, Czech Republic and Romania.

Internet Technology Outsourcing (ITO): a part of BPO focused only on IT outsourcing, including software and hardware production and services.

We see new BPO locations being discovered by investors and it is increasingly in cities where they were not present before.

International Association of Outsourcing Professionals:

the biggest outsourcing professionals association worldwide, with over 120,000 members.

The Shared Services & Outsourcing Network:

a community of shared services and outsourcing professionals, with over 100,000 members.

photo: Andrzej Bogacz (Forum), illustration: George Peters

International Quality & Productivity Center:

the BPO/SSC event organization operating worldwide and running local and cross-regional events dedicated to outsourcing and shared services industries.

Urban Issues

Why Poland?

Strong economic fundamentals and unrelenting potential - why you should look at Poland's commercial real estate market

Known as

Monika RajskaWolińska is the

Managing Partner of Colliers International in Poland

Colliers International is a partner

Urban Issues MIPIM 2016

of Poland Today’s MIPIM 2016 Edition of Urban Issues.

In recent years, the warehouse and hotel markets have been a revelation

the success story of a new approach to working culture and Europe, Poland is a stable market with corporate communications. More and a sound financial and legal system. The more companies are concentrating on improving the comfort of their employcountry’s economy is healthy, largely unaffected by the last global recession. ees and creating inspiring, visually On the contrary, it’s growing and at an attractive working environment. This impressive rate, reaching more than 3.5 is still an innovative approach on the percent for the whole of 2015. European Polish market, but developing dynamiCommission and World Bank estimates cally. We have also refurbished and for the coming years look even better, redesigned our Warsaw headquarters with the growth forecast for 2016 flucaccording to the workplace solutions concept, wanting to test workplace tuating around 3.4-3.7 percent. These forecasts are almost twice the aver- investors with different risk profiles, innovation on ourselves before offering age GDP growth for the whole of the particularly from North America and the service to clients. We were inspired European Union, estimated at 1.9 per- the Far East, willing to invest their capi- by the acquisition of AOS Group in 2014 cent (for the Eurozone the forecast tal in the Polish market.

- a market leading workplace consultis lower at 1.7 percent). ing firm operating mainly in France, but Poland is the largest economy in Outsourcing Eldorado also in Belgium, Spain, Morocco, UK, the Central and Eastern Europe and the The fact that Poland is a proven and Netherlands and Switzerland. Further sixth largest economy in the European attractive market is also shown by acquisitions are highly probable.

Union. This imposes certain obligations, the presence of the global invest- So why Poland? Apart from being an but also shapes the economic pol- ment elite, which includes giants such established economy with ever growing icy of Deputy Prime Minister Mateusz as Blackstone, Starwood, Hillwood, value of investment transactions, develMorawiecki. The policy is based on PIMCO and WP Carey. The most active oping regional cities and attractive a new development strategy, which has been Deutsche Asset & Wealth destination for modern business serenvisages economic investments of Management, whose Polish portfo- vices, Poland is a country open to new up to PLN 1 trillion (around $250bn) lio has reached €1.3 billion in value. technologies and innovative solutions.

One incentive to invest in Poland is Attention to the highest quality of workin the coming years.

This strategy will also benefit the the higher return on investment than place, workforce and services proves the commercial real estate market, which in the West with comparable risk. ROI maturity of the market, not just in relais in good shape at the moment. The in Warsaw is currently around 5.5-6 tion to commercial real estate. After all, total value of transactions in the invest- percent for prime office and slightly even if conditions change, the approach ment market last year amounted to €4.1 more in the regions. to business matters most and this has This result was influenced by factors always been very positive in Poland. billion (more than PLN 17 billion) which was the best result since the record including the rapidly developing BPO/

by Monika Rajska-Wolińska pre-crisis year of 2006. For compari- SCC sector in Poland, which is growson, the value of closed transactions ing at a rate of 20 percent per year and in 2014 amounted to €3.18 billion (PLN shows no sign of slowing down. Today, 13.5 billion). The office market also saw the outsourcing sector employs close to further records set in, for example, the 150,000 people, who generate demand amount of leased space. The situation for new office, storage and other types is similar in the warehouse sector, while of space. Regional cities, like Kraków, the retail market was able to boast Wrocław, Gdańsk and Poznań, are very a supply of new space comparable to popular in this respect and Kraków the record year of 2013. In recent years, was ranked by the consulting company the warehouse and hotel markets have Tholons as the best place in Europe been a revelation in Poland, with the – ninth best in the world - to conduct latter growing by nearly 38 percent. It modern business services in 2016. will continue to climb steadily, given Economic factors are one thing but a the interest from both investors and country’s attractiveness can also be large hotel chains, shown in the entry measured by the quality of the workof new international brands such as AC force. At the end of 2014, we had 434

by Marriott and Indigo. These trends high schools in Poland with circa 1.5 milprove that Poland is well-regarded in lion students, and over 400,000 graduthe investment market. The country ates. Although there is no shortage of offers steadily increasing liquidity at the talent in Poland, the competition for same time as offering a higher return the brightest is fierce and is becomthan in Western Europe and this in turn ing a growing challenge for compatranslates into higher interest among nies, which have to realise the need for

photo: Andrzej Bogacz (Forum)

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The missing link in Polish real estate For nearly 10 years investment funds operating as REITs have experienced dynamic growth in Europe, but have not been implemented into the Polish market. This should change.

Economic growth

Piotr Rusin is a

licensed legal advisor in the law firm Miller, Canfield, W. Babicki, A. Chełchowski i Wspólnicy Sp.k.

He graduated from Warsaw University, Faculty of Law and Administration.

He also obtained a degree at the Centre for American Law Studies organized

by Florida University, Levin College of Law. He specializes in real estate, commercial law and banking.

Miller Canfield is a partner of Poland

Urban Issues MIPIM 2016

Today’s MIPIM 2016 Edition of Urban Issues.

entails – and sometimes forces – change to existing methods of financing investment.

During globalisation, classic forms of investment are used with modern methods of financing. However, real estate financing in Poland is still primarily based on mortgage and construction loans, granted by banks. A lack of variety in the methods of financing is characteristic of a financial market that has yet to fully develop.

Even though the Polish investment fund market is growing and the funds operating on the market are stoking the interest of both institutional and individual investors, funds investing in real estate have been unable to achieve a share of the market even comparable to funds in other European countries. One reason for this is the state of Polish legal regulations for creating and operating investment funds for real estate. There is a lack of a legal framework necessary to create a type of investment fund called Real Estate Investment Trust (REITs), which is widely used in countries across the world and is dedicated to real estate investment.

REITs are a kind of a closed-end investment fund created for the purpose of investing in real estate, bonds secured with mortgage or both. They developed in 1960s America to allow individual investors to access the very profitable commercial real estate market, previously reserved for institutional investors, by using join-financing to eliminate the high entry threshold acting as a barrier to the market. They have certain tax privileges: they have the right to deduct their dividend payments out from their income because they are required to regularly pay their investors the vast majority of their profits - almost 90% in the United States. In order to maintain this privileged status, REITs must meet the requirements of periodic tests designed to verify that all legal statutory requirements are met regarding sources of income, the state of possessed assets and the ownership structure. Most REITs in the US are commercial law companies that sell their shares on the regulated market, with IPOs providing one of the main sources of capital for the funds. Types of REIT can vary: capital funds directly invest into real estate and manage pur-

REITs developed in 1960s America to allow individual investors to access the market

created a niche that foreign REITs are trying to utilise by investing in numerous sectors of the market: offices, commercial premises or warehouses.

Introducing the necessary regulation in order to construct the legal framework allowing the creation of REITs in Poland would help to improve the current state of affairs. REITs are an attractive investment opportunity because of their regular provision of income, provided by their periodically paid chased assets while mortgage funds dividend. They also have substantial purchase indirectly or debts secured asset liquidity, lower transaction and by mortgage. In the American mar- management costs and better public ket, hybrid funds deal with both types supervision compared to closed-end of investment. There has also been an investment funds.

In light of growing capital needs of emergence of so-called specialised funds which focus their investments on the Polish market, legislation to allow a select area of the market; for exam- REITs would be in the best interests of ple, offices or warehouses. This has the real estate market and the Polish lowered management costs, because economy as a whole. Their simple structhere is less need to use a wide array ture, allowing for real estate purchase of consulting services, but has been and management, provides for regucriticised for increasing susceptibility lar profits meaning REITs would be to market fluctuations. interesting to individual clients, allowWhile REITs were created to serve ing them to invest in commercial real individual investors, they are currently estate, which would normally require also used by institutional investors and an amount of capital well beyond the are a major source of real estate financ- reach of an individual investor. Because ing in the US. Although first introduced international financial institutions are to Europe in Holland in 1969, the legal accustomed to this form of investment, framework brought in by Germany and they would also be more willing to invest the UK in 2007 encouraged a boom the Polish market. The future of REITs in this type of real estate investment. in Poland looks bright as representaAlthough regulations in the European tives of the Polish real estate market investment fund market have been har- and the government have recognised monised through the EU, REITs have the need to change the existing Polish not been included in the changes and law. Reviews are being prepared and national regulations in European coun- seminars and conferences debating the tries vary widely as a result. Despite future presence of REITs in Poland are their continued growth worldwide, becoming increasingly more common.

Poland currently has no legal structure The drive to raise awareness has made available for creation of REITs, with the progress: information has recently surclosest alternative being closed-end faced focusing on preparations for the investment funds. These can directly expected bill creating the legal frameinvest in real estate and purchase real work for Polish REITs. by Piotr Rusin estate ownership, while open-end funds can only invest in real estate indirectly, by buying bonds of companies a liquid investment in the real estate market.

REIT (real estate investment trust) Despite the growth of the Polish uses the pooled capital of many investors investment fund market, funds buying to purchase and manage real estate through into real estate are a small portion of income property or mortgage loans and often trades on major exchanges, like a stock. REITs the market. Currently, the number of provide investors with an extremely liquid closed-end investment funds invest- stake in real estate. They receive special ing in real estate is less than 10. Given tax considerations and typically offer the rapidly developing market of com- high dividend yields. mercial real estate in Poland, this has

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Will the new government

photos: Grażyna Myślińska (Forum)

introduce legislation enabling REITs to be formed and traded on the Warsaw Stock Exchange? This is the question the Polish real estate industry hopes to get a positive answer to soon, bringing a highly liquid form of investment structure into the commercial property market.

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urban issues

Developing a new approach Troubled by the past and struggling to plan for the future – urban development isn’t coming easily to Polish cities.

A passion for cycling

Matthew Day

Urban Issues MIPIM 2016

covers Central Europe for the UK’s The Telegraph, while also writing on Central and Eastern European affairs for The Scotsman.

He has reported on major events such as the 2010 Smolensk disaster and Poland’s recent presidency of the EU. He first came to Central Europe in 1992 as an English and history teacher.

Good cities have density in abundance; bad ones do not.

may not a Warsaw-based architectural practice. immediately set Agnieszka Imiela out “It was then under a command economy as someone taking the lead in chang- which resulted in residential spread ing the urban environment of Polish cit- through the city into areas you nories, but that’s what she is. Joining forces mally wouldn’t expect,” he continued. with other cyclists, the Wrocław resi- “A lot of basic worker housing is pretty dent successfully battled with the city’s much placed right in the middle of the authorities to get new cycles paths laid. city, and there was little provision for In the grand scheme of things, it is a commercial enterprise. And such comsmall victory for her grassroots cam- mercial enterprise there was tended paign group but one that, nonetheless, to fill in the gaps.” reduced car use and demonstrated that This left Warsaw with a developpeople can force the pace of change in ment problem once the one-party state The Urban Land Institute highlighted urban planning. “You can either sit at had expired. The move to a traditional Warsaw’s Powiśle district (pictured on the opposite page) as one of the city’s few urban home and moan about your polluted model of a city of concentric rings movdevelopment bright spots. Once a run-down and unfriendly city with horrible traffic ing out from the most valuable land in area with many housing blocks and empty jams or you can stand up, do something the city centre to the commercial and industrial space, Powiśle has benefited from industrial land on the outskirts became, the opening of high-profile facilities such as about it and change things,” she said. the Copernicus Science Centre and the Warsaw And few deny that the urban envi- explained Ayre, “difficult to impose,” University library. With these as a lure other ronment of Poland’s cities needs on Warsaw. developments have sprung up and the district change. In a quality-of-living survey Another aspect of the past that con- now has a fashionable side to it, pulling in bars, published by Mercer consultancy firm in tinues to hamper urban planning is the restaurants and people.

February, Warsaw came a lowly 79th of thorny problem of property restituworld cities and also suffered the indig- tion. The huge destruction that took nity of coming behind fellow Central place during the war, coupled with the ing the issues of city life, such as transEuropean capitals Prague, Budapest catastrophic death toll exacted on the port and pollution, can only take place if and Ljubljana. The only other Polish city Polish people, means that to this day the city’s authorities have a clear vision to make it onto the table was Wrocław, plots of land and old buildings are left of what they want to do and when. coming in at 99. Depressing reading, either empty or derelict because of Experts say this is missing, and even if perhaps, for a country’s cities trying a lack of legal certainty over owner- they have a plan, it is aged and patchy. to portray themselves as dynamic and ship. This problem is particularly acute “They can point to a strategy or a plan prosperous, unfettered by the dowdy in Warsaw where immediate post-war from 2006, in fact it was made when development plans swept away whole Lech Kaczynski was mayor so I don’t drabness of their communist past. streets. Even when owners or their think it comes out of the drawer that The problems of history heirs do come forward, the potential often,” said John Banka, a partner with The past, however, still casts a shadow legal battles over the value of a prop- property firm Colliers and Chair of ULI over Polish cities and the strength erty can scare developers away, halting Poland, talking about Warsaw. “Some of their urban planning. Reduced to development plans. of the plan is specific but there should rubble by the forces of destruction Several Polish governments have be a long-term development strategy. unleashed in the Second World War, mulled bringing in a restitution law, but I think what is missing is an understandthey were then subjected to commu- such plans have always been shelved ing of the global context in which the nist planning for a command economy, owing to fears of huge costs they city operates. ‘What am I good at, who which left fresh scars. To rub salt into might involve. But without a law, urban are my competitors and what do I have the wounds, the one-party state left development can stall: experts point to to do to get better?’ Three basic quesPolish cities in dire economic straits, the saga surrounding Warsaw’s Plac tions that never get discussed.” He is with little or no money to fix their many Defilad. A prime piece of city-centre not alone: a 2015 report by the Urban problems come the age of democracy land right next to the Palace of Culture, Land Institute, the international organiand the free market. the square has been the subject of sation promoting “responsible land use”, All of Poland’s cities suffered from numerous development plans to bring found that in Warsaw: “A binding spatial these curses but it was Warsaw that, additional life to the capital’s heart. But plan only covers a minority of the city, perhaps, suffered the most. The victim all have foundered on the problem of and key areas such as Wola are curof monumental levels of damage during ownership and so the area remains lit- rently unplanned. This deficit results in the war, the capital was earmarked for tle more than a carpark and access way. small ‘islands’ of development that lack energetic and vigorous post-war socialcoherence across neighbourhoods. ist planning that still has a huge influ- In need of a plan There is also a lack of transparency in ence over the city. “I think Warsaw is a While legacy issues stymy develop- the development approval process.”

Karol Janas, head of the urban polparticular case owing to the destruc- ment, Warsaw and other Polish cities tion of the city,” said Paul Ayre, an also, it appears, struggle with a lack of icy observatory at the Kraków-based architect and head of VSF-Creative, planning. Urban development address- Institute of Urban Development, attrib-

Świętokrzyska

is just one of the streets of Warsaw which has had a bicycle path added to the pavement, making Poland’s capital one of the most bike-friendly cities in Europe.

Plac Grzybowski

in central Warsaw has been transformed into an attractive public space.

utes this lack of vision to city authorities focusing on “managing” their cities and building economic viability. While he concedes this is important, because there would be no urban development without jobs or money, it has come at the expense of long-term planning, leaving Polish cities stuck in a planning rut and trailing in the wake of their Western counterparts.

photos: Krystian Maj (Forum), Maciej Margas (Forum), Adam Burakowski (Fotorzepa / Forum)

Time to get dense These limitations mean Polish cities - in particular Warsaw - lack density.

Now a key aspect of urban development, the concept of density revolves around aspects such as good connectivity, green spaces, a mix of high and low-income housing and accessible amenities. Good cities have density in abundance; bad ones do not. “City centres are getting popular again because there is such a thing as good density, places where liveability is considered, the buildings are built well and there is also a network of needs in close proximity,” explained Banka.

Although possessing a widespread public transport network, Warsaw’s lack of density, continued Banka, means it is becoming “car challenged” as people pile on to a road network unable to cope with the swelling motorised crowds. This can affect the viability of neighbourhoods, which can become saturated with cars or inaccessible because of dependency on vehicleclogged transport arteries. A lack of density also contributes to the growth of urban sprawl as people escape the cities. A common phenomena in most Polish cities, sprawl encourages further car dependency and often takes place with scant consideration for the expansion of necessary amenities in the new neighbourhoods.

To the future However, problems with the past and present do not preclude looking to the future. Development projects are now bringing density to cities like Warsaw, by mixing the private and working life.

The days when an office block or shopping centre was designed with little thought of inter-connectivity appear numbered. “We have initiatives aiming to create a common space in two city-centre initiatives through the par-

ticipation of residents, foundations and representatives of the city and the developers,” said Katarzyna Zawodna, director of Skanska Property Poland, referring to the Superciściżka in Kraków and Nowa Towarowa in Warsaw projects. Superciściżka is a case in point: a public-space development, its developers say its final shape “will be decided by the residents” but the process will involve the input of people and local businesses. The goal is to make an area now dominated by traffic, quieter and more people-friendly. Ghelamco, a Belgian developer very active on the Polish market, is also, it appears, keen to apply the new thinking to its own projects such as plac Europejski, an open-space project adjacent to its massive Warsaw Spire development in the capital’s Wola district. “Our investment goes far beyond the traditional framework of development activity, con-

fined as it usually is to a few elements of small architecture or modest greenery around the building,” said Jarosław Zagórski, Ghelamco’s commercial and business development director. “Our project is part of a much wider horizon of sustainable development. In this approach, we take the view that many actors are responsible for co-creating the urban environment – as a developer, that includes us”.

There is a sense urban development has a brighter future in Poland, stemming from the residents of Polish cities, not their guardians. “I’m very optimistic, despite the lack of vision,” said Janas.

“There is huge human potential here.

People really want to achieve something.

The urban movements are very active and really trying to influence people.

After the transformation people voted but didn’t engage, they were concerned with their own interests. Now there is this awareness that they are citizens and can influence things.” Agnieszka Imiela, the Wrocław cyclist would agree. “I was so fed up with spending hours in the car and so worried about my daughter riding a bike on busy streets that I decided to find others that thought alike,” she recalled. “But we didn’t shout about how angry and disappointed we were, we found solutions. We offered really good solutions that the city authorities just could not just ignore.” by Matthew Day

The Powiśle district of Warsaw on the west bank of the Vistula River is a prominent example of a successfully revitalized area in the capital city. The districts of Wola and Praga look to the district for inspiration.

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urban issues

A good year for capital Del Chandler, managing director capital markets CEE at BNP Paribas Real Estate, talks to Poland Today about the year ahead in Polish investment and development

How would you summarise the real estate market in Poland & CEE over the last year, and what is your outlook for the year ahead?

Del Chandler is the

managing director capital markets CEE at BNP Paribas Real Estate.

BNP Paribas is a partner of Poland

Urban Issues MIPIM 2016

Today’s MIPIM 2016 Edition of Urban Issues.

Investment volume in Poland and the CEE region was extremely robust in 2015. Many countries are approaching pre-crisis levels of investment volume, with Hungary even exceeding it. It was a very good year for capital invested, with nearly €9 billion spent, the third highest CEE regional investment volume on record. In Poland, total annual investment volume amounted to €4.1 billion, the highest figure noted since the record year of 2006, which saw €5.05 billion invested. No market sector evidenced a slowdown or even a pause.

As a result of 70 investment transactions concluded on the Polish market, total volume increased by 30 percent compared to 2014. Retail was the most sought after sector, accounting for 55 percent of all deals closed, while the office sector had a 33 percent market share. Prime yields declined by 0.25– 0.5 percentage points and are now valued at 5.5–5.75 percent for the best assets in primary locations.

In 2015, Czech Republic saw the second highest volume of investment deals on record, providing an annual figure of €2.65 billion, and in 2016, there will be more office and retail investment transactions, while hotels will be popular, despite limited amounts for sale. In Hungary, the office sector was by far the most sought after and demand for industrial real estate dominated the Romanian market in 2015, making up 40 percent of investment volume. In 2016, demand in Romania is expected to return to office and retail, but industrial will also be sought after.

Having analysed the scope of ongoing deals in the pipeline, we expect 2016 to remain a strong year for the CEE. The Polish office market in regional cities, mid-size office market in central Warsaw and high-street properties in CEE capitals will be busy sectors for investors.

cial crisis. When developers exceed this net level with large volumes of new buildings, pricing pressure is a foregone conclusion. The vacancy rate oscillates around 12.5 percent and is increasing because of several hundred thousand square metres in the pipeline. Pressure on pricing and the vacancy rate will not subside until the net letting uptake is fully amortised with the current development pipeline.

How is the climate under the new government affecting the investment appetite? Are investors concerned?

Over the last few years, Poland has developed a very diverse manufacturing and service sector and this has made it very resilient in growth, irrespective of how well run the government is. Poland did really well in 2015 and this should continue into next year, but there are clouds on the horizon onwards from 2017. There may be major fiscal imbalances after the introduction of new laws, like the 500+ grant or the increased tax-free allowance, which may lead Poland to enter Excessive Deficit Procedure. There is also potential banking sector instability expected when the CHF loans are converted into in PLN for Polish home owners who purchased their home using CHF loans prior to a steep devaluation of the PLN /CHF exchange rate. This will be addressed by the Government at the earliest in 2017 and the cost of conversion for banks could be much lower than had been estimated. Nevertheless, the banking sector remains very stable with a tier 1 capital ratio (CET 1) at 14 percent.

Poland’s budget projections may prove too optimistic, with real GDP growth and inflation expected at 3.8 percent and 1.7 percent respectively. Should Poland’s economy fare worse than expected, the prospects for next year’s budget revenue would worsen and we are currently projecting 3.1 percent GNP growth for 2016/17 and inflation at 1.6 percent in 2016.

What is your assessment of the office development pipeline in Warsaw?

What long-term fundamental drivers are you looking at for development in Poland?

Warsaw has managed to maintain consistent net office letting uptake, except for during the last world finan-

We look at different growth engines for different countries. There are strong market fundamentals across

all CEE and we are expecting good results for 2015, but GDP forecasts for 2016-2017 are moderate across the CEE, and while there are different reasons depending on the country, they are all struggling with very marginal inflation or deflation. Investment vehicles, especially ones already familiar with the market, are looking to allocate their funds in the region and the cost of bank financing remains at record lows, but there are questions of for how long.

The Polish banking sector, although under threat with the new banking tax, is much stronger than in any other country in the region. Nevertheless, higher margins are now translated into the market because of the tax. While liquidity has moved out in some smaller banks, larger banks are interested in lending in the real estate market and liquidity is still fairly strong. Unless the government introduces anything additional for the banking sector, the system should continue to support the market for the foreseeable future.

How does this year and the future look in terms of investment deals for Poland and CEE? In 2016, Poland should continue to show robust growth but it depends on high value products being available, since there were large share deals and retail transactions last year. If you look at 2015, major shopping centres like Riviera and Stary Browar came to the market and, with major share acquisition deals, were large platforms for the industry. These won’t be available on a year by year basis so, even if demand is strong, the product line may not be able to match demand.

In the next two to three years, investments cycles within CEE will depend on stronger growth in Western Europe. In return for increased growth and steady inflation, there will be a steady flow of capital into the CEE, encouraging more investments and deals. Following growth and higher inflation, we will also see rising interest rates which will keep investors motivated and looking for higher yields in CEE. With Eurozone growth steady but unspectacular, it’s unlikely we will see much change to current investment trends until 2017.

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Urban Issues

Potential for the future Poland Today sits down with Jeroen van der Toolen, CEE managing director at Ghelamco

This is a big year for Ghelamco with the opening of the Warsaw Spire and your 25th anniversary in Poland. When Ghelamco started out, what were your expectations for the Polish market?

Jeroen van der Toolen, managing

director for CEE at developer Ghelamco.

Ghelamco is a partner of Poland

Urban Issues MIPIM 2016

Today’s special edition of Urban Issues for MIPIM 2016.

Ghelamco entered Poland at the very beginning of the 1990s. At the time, the Polish office market practically didn’t exist, and it lacked reliable and experienced companies to create new investments. Once wellqualified, international companies started their activity in Poland, the modern office market developed rapidly to lead the whole region of Central and Eastern Europe.

For our company, Poland was a very promising market from the beginning; it had great potential for development. We knew from the moment we started operations here that it would be a promising business for decades.

In the past twenty five years, a lot of things have changed in a positive way, and we have been actively participating in those changes, introducing new quality and environmental standards to attract both local and international tenants from various industries. We have been able to distinguish ourselves through our innovative thinking and our long-term outlook, which has enabled us to anticipate changes in the market.

From what we have learned about Poland, our outlook for the future is optimistic. It has taken Poland only 25 years to become one of Europe’s most respected economies and most attractive markets. I believe that the real estate market will continue to strengthen and, in the next 25 years, Poland will grow and become even more important within Europe and the world.

What are the key developments in the office market in 2015 from your perspective?

In 2015, the Polish commercial real estate market was highly active. At the end of the third quarter in 2015, total volume of office space in Warsaw amounted to 4.6 million sqm, with nearly 240,000 sqm of modern office delivered in that timeframe. The unparalleled dynamic of the market is reflected in the demand for office space. Last year saw a surge in the volume of lease transactions and net absorption; in Warsaw, for

For our company, Poland was a very promising market from the beginning

example, the outcome of the first three quarters of 2015 were equal to or higher than in 2014. We are glad to have participated in this dynamic growth – 2015 was also a record-breaking year for our company in terms of lease volume. Last year, we signed lease agreements for 80,000 sqm of office space in Warsaw and Łódź. This is the best result in our 25-year activity here, but also among all of the commercial developers operating in Poland’s office property market.

We are really proud to have concluded The square will combine commercial the largest transaction outside Warsaw and public functions and will be a great by leasing of 24,000 sqm of office meeting space for all Varsovians.

We don’t want to slow down in Wola space to mBank for its new seat in Łódź as well as concluding a record deal for and we have more projects in the pipethe Warsaw CBD, leasing 22,000 sqm line, including Sienna Towers, Spinnaker in Warsaw Spire to Samsung. and an investment next to Plac Zawiszy, in the centre of Warsaw. For each newly developed project, we analyse the infraThere are a lot of developments structure and traffic and create soluplanned or under construction in tions for cars, like vast underground the Wola area around Towarowa parking spaces, and for bicycles, such and Rondo Daszyńskiego. It’s clearly as parking spaces and ramps. We also a dynamic area, but will there be a support the city bicycle rental netchallenge in terms of access by road, work and financed a post of Veturilo parking and other infrastructure?

We saw potential in the Wola dis- at Plac Europejski. For Wola, the sectrict and are proud to have initiated ond metro line also drives development, a redefinition of the area, shifting along with the well-developed network Warsaw’s CBD border further west- of trams, buses and trains. We knew ward. We had a vision to bring change how important this was and decided to the district many years ago through to integrate Sienna Towers with the our office developments: Crown Tower, underground, making the project one Crown Point, Crown Square, and Prosta of Warsaw’s first to have direct access Office Center, and our more recent to the metro station. projects, the Warsaw Spire office Businesses like the fact that there complex and Wronia 31.

Rondo Daszyńskiego in particu- is a lot of potential growth in cities lar is becoming a new business hub of in Poland. How much of a factor is Warsaw. It’s crucial to have a holistic, this in your development plans?

Apart from Warsaw’s office market, sustainable approach towards commercial projects, and consider how we have planned an extensive develthey influence the urban fabric. We cre- opment in both regional markets and ated Plac Europejski because we think other market sectors, such as residenan inhabitant-friendly urban space is tial and retail. We are currently developwhat the quarter was missing for years. ing Przystanek mBank in Łódź, our first project in the city. We are continuing to search for new development opporghelamco group tunities and have a few projects underway in other regional cities. But looking Established in Belgium in 1985, Ghelamco at the regional markets from a wider began as a general contractor focusing on industrial real estate, but has grown into perspective, I think their potential lies a leading European real estate investor and dein connectivity, not just attractive plots veloper. The company has been active in Poland or workforce availability. Good infrasince 1991 and, so far, has sold 15 projects structure is a key factor, and the gap in the country, delivering over 400,000 sqm of modern office space. Ghelamco's operations will grow between cities that have good have expanded beyond Belgium and Poland, railway links, airports and road connecto Russia and Ukraine as well. tions, and those that don’t. Cities that

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Urban Issues

have good transport links will gain importance, investment and jobs, and, from a real estate perspective, they will become more attractive for investment.

Ghelamco is seen as an office developer first and foremost.

Now you’re branching into retail.

Why is this and what plans do you have for the retail sector?

To respond to changing customer requirements we want to propose an alternative to the large-scale shopping centres. We want to fill a niche for convenient, medium-sized neighbourhood centres that cater for the needs of the local community. Our first local centre, Plac Vogla in Warsaw’s Wilanow, was launched in October last year. The project, with approximately 5,200 sqm retail space, has as many as 30 premises, including high-quality shops, restaurants and cafes. The concept is a carefully designed, one floor-high building with all premises accessible from street level. We think the architecture of Plac Vogla matches with the prestigious neighbourhood of Wilanów. Also, future projects such as Pasaż Tukanów in Piaseczno and Prochownia Łomianki, will be tailored to local communities.

They will combine a tenant mix to suit the individual needs of shoppers and feature space for holding local events.

Ghelamco's Warsaw Spire,

reaching a height of 220 metres, is a complex of neomodern office buildings currently under construction. The Spire has recently been topped out and will be completed before this summer, making it the second highest building in Poland, after the Palace of Culture.

We have seen that the demand for luxury residential real estate has been rising and that the market has very good prospects. Poles are increasingly valuing this niche so we knew we had to start investing in it. Our new investment, Foksal 13/15, is located in the very heart of historic Warsaw. We are building state-of-art real estate, the status and value of which we believe will be incomparably higher than any other newly built projects. And using a team of experts, we will be restoring the buildings to their former splendour, in consultation with the Office of the Historic Buildings' Conservator in Warsaw. As far as we are aware, Foksal 13/15 will be the only investment in Poland’s luxury real estate market to feature such authentic architectural detail from the past. Each of the luxury apartments will be tailor made specifically for clients’ needs.

photo: Ghelamco

Do you have plans for other sectors?

EVENT rEViEw

Top right: Richard Stephens, Founder & Editor, Poland Today, opening the Primetime Poland conference in London.

Below: Marek

Matraszek, Founder and Chairman of CEC Government Relations.

poland today conference

Primetime Poland in London

At a recent conference in London, British and Polish business leaders shared their insights on what will happen in the months and years to come in Poland, with special attention paid to politics. Marek Matraszek, CEO of CEC Government Relations, kicked off with a political overview, with Katya Kocourek of Stroz Friedberg and Marek Rozkrut from EY, focusing on Poland’s economic future following the 2015 parliamentary elections. Moderated by Andrew Wrobel of Emerging Europe, the first panel discussed Poland’s changing economic situation, and in particular the country’s knack for entrepreneurship. Former Polish Prime Minister Jan Krzysztof Bielecki, Mark Gaskell of Equity & Grant and Martin Oxley, CEE strategy advisor at UKTI all agreed that Polish innovation and entrepreneurship is a vital factor for Above: Mark Gaskell, Founder and ManagPoland’s economic growth.

Polish real estate was the focus for the ing Director of Eq& Grant; Robert second panel, and the mood was pos- uity Nowakowski, Direcitive. Moderated by Richard Betts tor of International from Property EU, the panel included Markets, Elżanowski Adrian Karczewicz, transaction direc- Cherka & Wąsowski tor at Skanska Commercial Development Law Firm and Martin Oxley Strategy Europe, Maciej Król, CEO of Xcity Adviser UKTI, CEE Investment, Charles Weston Baker of Savills and Anna Kicińska, Partner at EY. During the discussion, Ms. Kicińska suggested that the hotel sector would be strong in 2016 due to high occupancy rates and, according to Mr. Baker, Poland will replace Berlin in international residential investment because of a large demand for housing stock in Poland.

by Liam Frahm

photos: Gosia Skibińska

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EVENT rEViEw

Above Jan Krzysztof Bielecki, Chairman of

the Board of Partners at EY Poland and former Prime Minister, with Dr Katya Kocourek, Lead Analyst for Central and Eastern Europe at Stroz Friedberg.

Left: Anna

Kicińska MRICS, EY Real Estate Advisory Group discussing real estate investments in Poland.

Above: Jan Krzysz-

tof Bielecki, Chairman of the Board of Partners, EY Poland and Marek Rozkrut, Partner at EY

Left: (r-l) Richard

Betts, Publisher, PropertyEU talking to Maciej K. Król, CEO, Xcity Investment and Adrian Karczewicz, Skanska Commercial Development Europe

70 nature

Boguslaw Chrabota

is editor in chief of Rzeczpospolita, a leading opinionforming daily Polish newspaper. He earned a law degree at Jagiellonian University in Kraków. From 1990 to 1993 he worked for Polish public television station TVP. Later, he was a member of the team that founded the first Polish private television station, Polsat. In 2014 he was decorated by President Bronisław Komorowski with the Order of Polonia Restituta.

photo: Maciej Jarzębiński (Forum)

Pieniny mountains Located on the border between Poland and Slovakia, the Pieniny mountains are divided into three areas: Pieniny Spiskie, Pieniny Właściwe and Małe Pieniny. The highest peak is Wysokie Skałki at 1050 metres.

The most beautiful mountains in the world

nature

A personal account of the magnetic charm and mesmerising beauty of the Pieniny

are little. Compared to them, the Beskidy Mountains are like a whole province and the Tatras are like the Himalayas.

Still, the Pieniny are considered the most delightful of the Polish mountain ranges. Sunny and welcoming, they find the ideal balance between lofty rocks and an idyllic painting. They're only a dozen kilometres of limestone, but they're endowed with an abundance of nature, as if someone had captured the Apennine Peninsula in their garden. A fistful of Alpine nature, some Tuscan lowlands, butterflies and meadows sparkling with colourful flowers. It’s hard to forget this landscape.

It’s hard not to come back.

I’ve been coming back for around 40 years. Four decades ago, the mountains looked like panels of an altarpiece on both sides of the magic Dunajec Valley. It was rather wide, and meadows covered with limestone straddled both sides. In the middle, a brook flowed through traditional highland villages with wooden churches and larch cabins. It has always fascinated me that many of the villages carry postGerman names. Dursztyn, Falsztyn, Frydman – traces left by 16th century German settlements. Even the region’s name doesn’t quite sound Polish: Spisz.

Who came up the name? Hungarians?

Some people think so. For centuries, Spisz lay on the border between Polish and Hungarian kingdoms.

The border area was remarkably comely. This was where the Dunajec Valley became a narrow passage. A little bit like Gibraltar, but in the mountains. Borderland fortresses stand on both river banks: the Polish Czorsztyn Castle and Hungarian Niedzica Castle, both shrouded in myth. Czorsztyn Castle was once occupied by ruffians, led by Aleksander Kostka-Napierski, a 17th century rebel who was later impaled in Kraków. At the end of the 18th century, the fortress slowly fell into disrepair. Today, in a somewhat better state, the castle attracts thousands of tourists. Niedzica, on the other side of the valley, is one of the most beautiful medieval fortresses in Europe. According to legend, hidden somewhere in the depths of the castle is the Inca treasure of Túpac Amaru.

Indeed, historians have confirmed the

‘The Pieniny are like a magnet; I am drawn back every year. It feels like coming home. noble Berzeviczy family, who owned the castle, were related to the Inca ruling dynasty. Barely damaged, and fascinating with its excellently preserved interiors, Niedzica Castle is not only an architectural gem, but has also made for many a wonderful film set.

Gentle slopes The narrow passage between the Pieniny mountains does not exist anymore. Today, the castles are separated by an artificial lake. Although the decision to create the lake was made in 1960s, the valley was only flooded 30 years later. 10 years before, people were moved from their wooden villages and the ground was lowered. Even now, in the clear waters of the lake, you can sometimes see the remains of a farmhouse. From spring to autumn, at the foothills of the Pieniny, the mainsails of dozens of sailing boats shimmer white.

The scorching sun creates the illusion that you are not in the Polish mountains, but in Provence or Campania.

The lake continues to the foothills of Niedzica Castle, where there is an impressive dam. Further down, the river appears again and the most famous river gorge in the Polish mountains, the Dunajec Gorge, begins.

Certainly, the landscape owes its beauty to the Dunajec, which carved the gorge out of soft limestone. The Pieniny’s gentle slopes suddenly end in steep cliffs, hundreds of meters high.

The river twists and turns, surrounded by larch and pine forests with thousands of herbs and flowers. From time to time, a bear takes a rest from climbing the steep Tatra slopes to relax in this mountain spa. The Dunajec Gorge is more than a beautiful landscape.

Here you can enjoy rafting in its foaming waters - the Pieniny raftsmen have offered trips since the mid-19th century.

Today, it’s a good business. Summer is marked by never-ending crowds of tourists with local highlanders wearing blue vests, telling stories and anecdotes, always tinged with humour.

Coming home But this is just one face of these mountains - the Pieniny that most Poles know. Always full of people. Noisy.

There exists a different Pieniny, which I love much more: Pieniny Spiskie.

While it may be not as breathtaking as the area around the gorge, it is exceptionally peaceful and secluded, ideal for nature connoisseurs and solitaries. It begins by Niedzica Castle and stretches to the West, in the opposite direction to the touristy Trzy Korony Massif. You are unlikely to meet other trekkers here. Even the trail signs are hardly noticeable, blending in with the abundant nature around. Gentle slopes, humid forests and sapphire meadows are a kingdom for birds and butterflies.

In autumn, the forests are full of delicious red pine mushrooms. Highlanders watch their flocks of sheep on mountain pastures. During the summer they set up bonfires and make sheep’s cheese and żentyca, a sheep’s buttermilk. The indigenous highlanders are from a different planet. How wonderful it is to sit by the fire and listen to their stories, and żentyca tastes like nothing else in the world.

The Pieniny are like a magnet; I am drawn back every year. It feels like coming home. The highlanders will be waiting for me with fresh cheese.

I can hear żentyca fermenting in a curved, wooden mug. In summer, I visit my beloved larch shepherd’s hut by Falsztyn; in the autumn I check if the wind has ripped any tiles off the roof of Niedzica Castle. Wind brings the scent of the lake and mountains. Sometimes, in the evening, the valley is covered by fog, and then it's worth climbing higher to look at the landscape from above. This is when the Pieniny is at its most beautiful, like islands drifting in an ocean of clouds. And down below people sleep in their mountain huts, as they’ve been doing for centuries.

They will dream of Kostka-Napierski and Túpac Amaru. Above them lies the everlasting beauty of the mountains...

by Bogusław Chrabota

The Dunajec gorge marks

Poland's southern border. From this viewpoint, Poland is on the right while Slovakia is on the left.

Off in the distance, some 40km away in the horizon, you can see the summits of the Tatras, Poland's highest mountain range.

photo: Jan Włodarczyk (Forum)

The Pieniny mountains

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72 books

Literary giants An accessible guide to the essential Polish authors

This year, Wrocław assumes the mantle of UNESCO World

photos: FoKa (Forum), Jan Morek (Forum), Woody Ochnio (Forum), Sławek Biegański (Forum), Aleksander Jalosinski (Forum)

Book Capital, a distinction recognising the city’s role as a culture hub as well as Poland’s rich literary heritage. During the events in Wrocław, an international book anthem will be penned based on a poem by Tadeusz Różewicz. To celebrate Wrocław as the 2016 World Book Capital and to pay tribute to Poland’s greatest wordsmiths, Poland Today has selected 6 literary heavy-weights that anyone who wants to understand Poland should read. by Philip Boyes

Adam Mickiewicz

Witold Gombrowicz

Born: 24 December 1798 Died: 26 November 1855

Born: 4 August 1904 Died: 24 July 1969

The emergence of modern Polish literature coincides with when Poland, partitioned by Russia, Prussia and Austria in 1795, ceased to exist as an independent state. The once powerful republic sank into a historical hibernation that was to last for over one hundred and twenty years.

Dark humor and absurdism are Polish specialties that appear in abundance throughout the novels and stories of Witold Gombrowicz.

Unified political leadership was impossible to achieve in a country sliced into three segments, with each section ruled as a distant province of an empire with its own foreign language. It was the three great bards of the Polish Romantic era – Adam Mickiewicz, Juliusz Słowacki and Zygmunt Krasiński – who effectively provided Poland’s ‘spiritual government’.

Mickiewicz’s masterpiece, Pan Tadeusz (1834), was an all-verse novel written at a time when literacy was spreading rapidly, making his lines and phrases an integral part of everyday communication. To this day, there is not a Pole who cannot recite ‘Oh Litwo, my homeland, you are like health…” with ‘Litwo’ referring to Lithuania, which was historically united with Poland and the native land of Mickiewicz. His drama Dziady, which translates to Forefather’s Eve, draws on Slavic pagan traditions of commemorating the dead, portraying Romanticism’s engagement with mysticism.

Henryk Sienkiewicz Born: 5 May 1846 Died: 15 November 1916 The winner of the 1905 Nobel Prize in Literature, Sienkiewicz is best known for Quo Vadis and his Trilogy: With Fire and Sword, The Deluge, and Fire on the Steppe.

Quo Vadis is an epic saga of love and courage set in Nero’s Rome. Translated into over 40 languages, the novel depicts the degenerate days leading to the fall of the Roman Empire and the tribulations of early Christianity. Written in the late nineteenth century, his Trilogy set in the Polish-Lithuanian Commonwealth described – and in many ways helped forge – the national character of Poles, inspiring many to resist foreign occupation.

The late 19th century also produced another master of the novel, Bolesław Prus. Known for his accessible prose and historical detail, Prus’ most famous work, The Doll, skillfully portrays Warsaw under Russian rule in the 1870s and is punctuated by political tensions and social conflict.

In Ferdydurke, a bitterly funny novel, Gombrowicz’s hero narrates the story of his absurd transformation from a confident 30-year-old man into a paranoid teenage boy. Gombrowicz’s creative wordplay and ability to weave comedy and seriousness earned him a reputation as a Polish literary icon.

His books, however, are not to everyone’s taste: in 2008 his playful novels were removed from the school syllabus by the Polish minister of culture on the grounds that they were corruptive to Polish youth.

The Second Polish Republic (1918-1939), the period during which Gombrowicz established himself as a prolific writer, was a short but exceptionally dynamic period in Polish literary consciousness. Gombrowicz’s contemporaries Bruno Schulz, a self-confessed "parasite of metaphor", and Stanisław Ignacy Witkiewicz both treated readers to a magical panoply of characters.

73 books

‘Language is the only homeland’ – Czesław Miłosz

Czesław Miłosz Born: 30 June 1911 Died: 14 August 2004 The recipient of the Nobel Prize in Literature and widely regarded as one of Poland’s greatest poets, the life of Czesław Miłosz spanned almost a century. Born in a LithuanianPolish province of tsarist Russia, Miłosz died having seen the Nazi and Soviet totalitarian empires rise and fall.

Tadeusz Różewicz Born: 9 October 1921 Died: 24 April 2014 A poet and playwright, Różewicz wrote his first poems while fighting in the Polish resistance during WW2. To reflect the loss of moral and cultural norms after the war, Różewicz's poems lacked metre, rhyme and metaphors and were stripped bare of anything that could be considered aesthetically pleasing. The war forever haunted Różewicz, but so did the moral obligation to write about it. As he wrote in I Did Espy a Marvelous Monster: "At home a job / awaited me: / To create poetry after Auschwitz." He accomplished this with both elegance and pathos.

Another gripping account of life in Nazioccupied Poland is Tadeusz Borowski’s “This Way for the Gas, Ladies and Gentlemen”, which is based on the author’s own experiences surviving Auschwitz and Dachau concentration camps. The book depicts a world where prisoners eat, work and sleep a few metres from where others are murdered and where the difference between life and death was often down to a second bowl of soup.

In his best-known prose work, “The Captive Mind”, Miłosz captured not only the malice of totalitarian ideology, but also its seductiveness. A master of probing inquiry and graceful expression, Miłosz’s poetry provided precious insights into fundamental human dilemmas and covered a range of topics from metaphysics and immortality to love and nostalgia.

In the same generation as Miłosz, and arguably in the same poetic masterclass, are Zbigniew Herbert and Wisława Szymborska, also a Nobel Prize winner. Szymborska was an intellectual poet but one whose style is accessible to the wider reader. Her poems are often witty descriptions of serious situations, such as “Cat in an Empty Apartment”, which is written in the voice of an offended cat whose owner fails to return. Herbert, on the other hand, was a political poet who explored the mechanisms of power and ideology, often drawing on classicism and mythology.

Stanisław Lem Born: 12 September 1921 Died: 27 March 2006 An internationally acclaimed science fiction writer, Stanisław Lem is best known for “Solaris”, a story set on a research station in orbit around a mysterious planet. The book was later made into a Hollywood film directed

by Steven Soderbergh, starring George Clooney.

Lem’s writing is wryly comic and largely allegorical. His books have been translated into more than 40 languages, selling close to 30 million copies.

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Bartosz Węglarczyk is

photo: Maciej Biedrzycki (Forum)

a journalist and programme director of Onet.pl. Between 1989 and 2011, he worked for Gazeta Wyborcza as foreign editor and served as a correspondent in Moscow, Brussels and, between 1998 and 2004, Washington D.C. In 2011, he left Agora to become editor of Success, a monthly owned by Presspublika, before moving to Rzeczpospolita. He has also worked for TVN and Superstacja on TV.

Eyewitness: Smolensk A personal recollection of the days after the tragedy and a friend who was on board

Mariusz Handzlik,

a very good friend of mine, was on board the flight to Smolensk. I knew him well from my time as Gazeta Wyborcza’s bureau chief in Washington D.C., where he worked as a diplomat in the Polish embassy. He was heavily involved in Poland’s negotiations to join NATO and was in charge of contacts with the Pentagon.

He was extremely smart, hardworking and focused on his career. Mariusz's main goal in life was to serve his country and he was an ideal civil servant.

In the 1990s I wrote a big story about Poland joining NATO and highlighted 10 people that were vital to the accession negotiations behind the scenes, and he was one of them. He worked very hard at the Pentagon, even organising a football league in order to get in with the military personnel.

After he was made Polish ambassador to the UN, I used to stay at his Manhattan flat when I was in New York.

When President Kaczyński asked him to be his foreign affairs advisor, I was staying with him and he asked me what I thought he should do. I’m very American at heart, and my philosophy is that if your president asks you to do something, you do it. So I told him that it was a big chance for him and that he should go for it. We last met for dinner a week before the flight, and he told me that he was planning to go on vacation with his kids after the trip to Smolensk.

When I first heard that something had happened to the plane, I thought it was just a mechanical fault and that everything would be okay. It was a Saturday, so I was at home where my TV is always tuned into 24 hour news.

I must have seen coverage on TV but the days after the crash are a blur in my memory. It was similar to the days after the September 11 attacks, which I covered in New York. Both were extremely

Mariusz's main goal in life was to serve his country and he was an ideal civil servant

tragedy in smolensk On 10 April, 2010, a Polish Air Force Tupolev

Tu-154M crashed near Smolensk, Russia killing all 96 people on board. Many of those on the flight were high-ranking officials, including President Kaczyński, his wife Maria and former President-in-Exile Kaczorowski, who were due to attend ceremonies marking the 70th anniversary of the Katyn massacre. Other government officials were also on board, as well as relatives of victims from the Katyn massacre.

hectic and overwhelming to live and work through. I was foreign editor at Gazeta Wyborcza at the time of the crash, so I was editing stories as they came in. At the end of the day, journalists are humans and it was hard to keep the personal and professional separate.

Covering the Smolensk story was an emotionally draining experience because we didn’t know the names of the victims at first: we knew that the president was on board, but it took a while for the other names to filter through. Nobody ever follows every person who accompanies the president on official visits, so we had no idea who exactly was on board. People were shocked and confused as the names were announced. We just didn’t expect people like the President of the National Bank would be going to Smolensk.

Mariusz’s friends from the Pentagon were calling to ask me if he was on board and we were hearing stories of people who missed the flight because it left very early in the morning and they’d overslept. It was a very emotional time.

Smolensk has changed Poland a lot.

It was a defining moment in our history: the democratic elections in 1989 were one and now the crash is another.

One thing that has stuck in my mind from the days after the crash is when the bodies were flown back to Warsaw.

A lot of people were crying and everyone felt numb. I don’t think people could make sense of the loss.

When I was a foreign correspondent in Moscow, I learnt a Russian word: ‘bardak’. It means total chaos or mess.

I don’t believe that something evil or intentional happened in Smolensk, I think it was ‘bardak’. I miss Mariusz a lot and I think Poland does too. Right now, I think he would be at least the deputy foreign minister, if not the actual minister. by Bartosz Węglarczyk

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history

According to a poll conducted

by Millward Brown between 25 and 29 March 2015 for Gazeta Wyborcza, 22 percent of Poles believe that the Smolensk crash was the result of an assassination. Of the 1,003 asked, 34 percent of 18 to 24 year olds believed that the crash was an assassination, while 37 percent of Poles believed the crash was caused by pressure on the pilots to land in poor weather. 34 percent thought that the crash was the sole responsibility of the pilots.

Mariusz Handzlik

was born on 11 June 1965 in Bielsko-Biała.

During his career, he worked as First Secretary at the Polish Embassy in the United States, Deputy Director of Security Policy at the Ministry of Foreign Affairs, Polish Ambassador to the United Nations and Undersecretary of State in charge of Foreign Affairs, among other positions. He died aged 44. Divorced, he was survived by his three children.

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14 April, 966. Mieszko I of Poland converts to Christianity

Royal legacy Mieszko had several children,

including Bolesław I the Brave, the first crowned King of Poland and Mieszko’s successor. Although the life of Mieszko’s eldest daughter Świętosława is shrouded in myth, it’s possible that she married both King Eric of Sweden and Sweyn Forkbeard of Denmark, the first Danish King of England and father of King Canute.

photo: Wikimedia commons

history

It happened in… April

Depicting the Christianisation

of Poland, Jan Matejko's piece is from a cycle of paintings portraying the history of civilisation in Poland.

Mieszko is the central figure, holding the cross with sword in hand. Painted in 1889, the work is owned by the National Museum.

Baptised

on Holy Saturday, Duke Mieszko I became Poland’s first Christian ruler on 14 April 966. Mieszko’s baptism marks the birth of the Polish state and the start of Christianity in Poland, which had previously been pagan.

Following the death of his father Siemomysł, circa 960, Mieszko ascended to power and assumed control over the Polanie tribes. Although the exact territory that Mieszko inherited from his father is unclear, it appears that he sat in a powerful position as Duke of Poland. Traveller and writer Ibrahim ibn Jakub described the Duke as in control of a vast ‘Northern’ area with a substantial, efficient military force at his disposal.

Following negotiations with Duke Boleslav I the Cruel of Bohemia, the Poles entered an alliance with the Bohemians in 964. As a result of this alliance, Mieszko married Dobrawa,

Boleslav’s daughter, in February 965.

His marriage to the highly devout Dobrawa has often been considered a factor in Mieszko’s conversion to Christianity, although there may have been other political motives to his baptism.

Mieszko may have feared expansion from other Christian rulers and converted to Christianity to deprive them of their opportunity to forcibly Christianise his lands. Through his conversion, Mieszko began the path for Polish acceptance into wider European politics as well as the gradual adoption of Latin culture, which fostered literacy and education in the illiterate Polish tribes.

Following Dobrawa’s death in 977, Mieszko married Oda, the daughter of Theodoric, a German count. Mieszko’s marriage improved relations with the Germans, allowing him to expand

into Lesser Poland, taking control of Kraków by 990. Much of Mieszko’s later life was spent on territorial expansion and by 992, he was in control of Wielkopolska, Kujavia, Mazovia, Eastern Pomerania, Lubusz, Western Pomerania, Śląsk and Małopolska.

Just before his death in 992, Mieszko signed an act of donation called the Dagome Iudex which placed Polish land under Papal control. While such a gift could be seen as illogical, it can also be seen as an astute political decision as placing Polish land in the Patrimony of St. Peter helped protect it from foreign invasion. Even though the donated land was officially under Papal control, it was in reality managed by the Polish, meaning Mieszko’s donation to the Papacy was largely figurative. It is the first donation of its kind on record. In 1966, Poland celebrated a millennium of existence as a state. by Liam Frahm

Ęą

The language puzzle

Why Polish survived as a national language while Irish didn't

Although

lying at the opposite ends of Europe, Poland and Ireland have more in common than you might think.

Both struggled with invasion for several centuries, both lost their independence to the hands of foreign powers, and both have fought, and regained, their independence. But when it comes to language, often a vital element of a country’s culture and national identity, it is interesting that English has all but replaced Irish in Ireland while Polish remains dominant in Poland.

Lying on the fringes of Europe, Ireland has always been in Britain’s sphere of influence. Its proximity to its neighbour and relative isolation to other nations has meant that British culture has had a dominating influence on Irish culture. Poland, however, lies in Central Europe and has always been surrounded by powerful neighbours.

Its location has led to numerous border changes and meant that Polish culture has not fallen under the sole influence of a single, dominant foreign culture.

Instead, Polish culture has been influenced by all its powerful neighbours throughout history. The fluid nature of Poland’s geopolitical history helped prevent a single culture from dominating Polish culture, even when Poland did not exist as a state. In contrast, Ireland’s isolated geographical location forced it to accommodate centuries of British interference.

Geographical has also played a part in the historical development of nationhood for both countries. Far back in history, Ireland was officially united after Viking invasions during the 9th century, but remained bogged down by internal conflicts between different regional powers. Although conquered

by Henry II of England in 1169, Ireland remained fairly autonomous. This led to a period of recovery for Irish, which

was crushed by the Tudor conquest of Ireland in the 16th and 17th century, which made English the official language of Ireland. It has been bilingual ever since. Unlike Ireland, Poland more or less functioned as a unified national entity following its inception in 966. Although beset by wars and invasions, Poland was able to develop as nation over 800 years and, at the same time, foster a sense of national identity. It was only after this long period of independence that Poland was partitioned by Russia, Prussia and Austria at the end of the 18th century.

A desire for unity

When the English first arrived on Irish soil, there had been little time for Ireland to develop a sense of national identity and unity. In contrast, Poland enjoyed centuries of independence and had been able to develop a sense of national identity, in which language played a key role. Even when Poland lost independence, the Polish language helped to foster a desire for unity and common Polish values. For Poles, their language acted as a link back to a time where an independent Polish state existed to represent them. It also served to link them to other Poles that they had been separated from during the partitions.

History shows that Henry II’s successful invasion advanced the spread of

Mother tongue Polish is the most widely spoken member

of the West Slavic language family and is estimated to be spoken natively by some 44 million people worldwide. It is a recognised minority language in Lithuania, Slovakia, Ukraine, Czech Republic and Bosnia & Herzegovina. Irish is part of the Gaelic family and, according to a 2011 census, is the third most widely spoken language in Ireland after English and Polish.

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Culture

For Poles, their language acted as a link back to a time where an independent Polish state existed to represent them. the English language in Ireland, but psycholinguistics can help to explain why English occupation led to the adoption of English as Ireland’s primary language.

A language can became predominant in a society because of its functions within society. As the everyday language in Ireland, English fulfilled basic societal functions: it was used in schools and in the workplace. Because English was spoken in those environments, it began to spread to other areas, like the home.

Poland differs from this because the country as a whole has never been bilingual, and has never been seriously threatened by an alternative language. Even in times of occupation, Russified and Germanised Poles were always in the minority.

Although the two countries have much in common, history shows that the Irish had less time to develop their national identity and preserve their independence than the Polish, who lost independence only after hundreds of years of sovereign rule, during which they developed a clear sense of their culture, language and national essence.

With that said, national identity is not developed from language alone. Years of struggle for independence from both nations show a strong sense of national identity and cultural distinctiveness, regardless of the status of their language. by Julia Zagrodzka

Julia Zagrodzka

is currently studying a Master’s degree in Applied Linguistics at the University of Warsaw. Keen on foreign languages, she has also a strong passion for travelling.

In her free time, she occasionally volunteers for Warsaw Uprising Museum and Association for Legal Intervention.

sport

going for gold

The ones to watch in Rio: Poland's Olympic hopefuls

Anita Włodarczyk

Piotr Małachowski

Hailing from the south-west town of Rawicz,

The current world discus champion, Piotr Małachowski began his international career with a win at the 2006 European Winter Throwing Cup in Tel Aviv. The 32-year-old from Żuromin made his first appearance at the European Championships later that year, finishing a respectable sixth.

She made her Olympic debut at Beijing in 2008, coming sixth but won her first major international gold medal a year later at the European Team Championships. Włodarczyk quickly followed this up with gold at the 2009 World Championships in Berlin, where she set a new world record of 77.96m. But while celebrating her success, she sprained an ankle and that was the end of her season.

Two years later the thrower won Olympic silver, coming second to Estonia’s Gerd Kanter.

He then picked up another silver at the 2009 World Championships in Berlin, with a throw of 69.15m that also set a Polish record.

Anita Włodarczyk is a world champion hammer thrower and the first woman in history to throw the hammer beyond 80m. The 30-year-old won silver at the 2012 London Olympics and currently holds the women’s world record with a throw of 81.08m.

At London 2012,

a total of 319 athletes represented Poland in over 30 different sports. In total, Polish Olympians won 10 medals, equalling the Polish performance in Beijing and Athens.

Highlights included gold in the shotput and weightlifting.

At the Paralympic Games, Poland won 36 medals, including 14 golds.

In 2012, the hammer-thrower secured gold at the European Championships in Helsinki, before competing in the London Olympics later that year. It was there she used equipment that had belonged to Kamila Skolimowska, the 2000 Olympic hammer champion who had died in 2009 after suffering from a blood clot.

Włodarczyk took home a silver medal with a throw of 77.60m after coming second to Tatyana Lysenko.

In 2014, Włodarczyk won the European Championships in Zürich with a championship and national-record breaking throw of 78.76m.

A year later at the World Championships in Beijing, she broke the world record yet again, and became the first woman to throw beyond 80m, while on her way to winning gold.

Małachowski went one better later that year with gold at the European Team Championships, and won gold again at the European Championships in 2010, with a championshiprecord throw of 68.87m. But, his golden streak failed to last and at the 2012 London Olympics, he came fifth.

In 2013, Małachowski was back to his best, winning silver at the World Championships in Moscow as well as throwing a personal best of 71.84m: the fifth longest discuss throw in history. On form, he then went on to win gold at the 2015 World Championships in Beijing, throwing a distance of 67.40m.

photos: Kai Pfaffenbach (Reuters), Christian Charisius (Actionplus), Łukasz Dejnarowicz (Forum), Peter Andrews (Reuters), Imago (GEPA pictures), Mikhail Japaridze (TASS)

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Adam Kszczot An 800m specialist, Adam Kszczot won his first major international medal in 2010 at the World Indoor Championships in Doha, where he finished third. The man from Opoczno also won bronze in the 800m later that year at the European Championships in Barcelona.

Kszczot then took gold at the 2011 European Indoor Championships in Paris.

At the annual Meeting Pas de Calais in 2012, Kszczot ran 1:44.57, breaking Paweł Czapiewski’s 10-year-old Polish indoor record, to become the third fastest man over 800m.

He also made his Olympic debut that year, bowing out in the semi-finals.

The runner won gold again at the 2013 European Indoor Championships, making him the first man to defend the title in 42 years. He went on to win gold at the 2014 European Championships in Zürich, and silver at the 2014 World Indoor Championships in Sopot. A year later he ran 1:46.08 to take silver at the World Championships, and helped Poland to a silver medal in the 4x800m at the IAAF World Relays.

summaries by Liam Frahm

After impressing in London, expectations are higher than ever for Polish athletes

Radosław Kawęcki

Marta Walczykiewicz

A highly successful swimmer specialising

A multi-disciplined kayak sprinter, Marta Walczykiewicz first rose to prominence at the 2007 Duisburg World Championships when she won bronze in the two-person K-2 200m sprint. The athlete from Kalisz followed this up with two silver medals at the 2008 European Championships in the K-2 200m and 1000m.

in the 200m backstroke for both the 25m short course and 50m pools, Radosław Kawęcki has competed on the international circuit since 2009. Born in Głogów, the 24-year-old set a Polish record in 2009 for the 200m backstroke at his first World Championships with a time of 1:55.60. In the same year, he took silver in the 200m at the 25m European Championships as well as gold in the European Junior Championships.

In his homeland, Kawęcki won gold medals in the short-course pool at the 2011 European Championships in Szczecin for 100m and 200m. A year later, he dominated the European Championships once again, winning gold in the 25m pool with a championship and national record time of 1:48.51 over 200m. He achieved the same feat in the 50m pool in Debrecen, setting a championship and national record time of 1:55.28.

On top of this, Kawęcki won gold at the 25m World Championships in Istanbul and then finished fourth in his Olympic debut in London. He achieved further success with gold medals at the 25m European Championships in 2013 and silver at the 50m World Championships in Barcelona.

The following year brought him two medals in the 25m World Championships in Doha, with gold in the 200m and silver in the 100m. He also secured 50m European gold for the 200m in Berlin. Kawęcki’s 2015 preparation for Rio boded well for the future, with 200m and 100m gold at the 25m European Championships, and a silver medal in the 50m World Championships.

After winning bronze at the 2009 European Championships in the K-4 500m, Walczykiewicz won her first major individual medal with a silver in the K-1 100m at the 2009 World Championships in Dartmouth. She then won silver and bronze at the 2010 European Championships at Trasona, in the K-1 200m and K-2 500m respectively. In the same year, she also won silver in home waters at the World Championships in Poznan, in the K-2 200m category.

Walczykiewicz continued to succeed individually, winning silver in the K-1 200m at the 2011 World Championships in Szeged and 2012 European Championships in Zagreb.

At Szeged, she also won bronze in the K-1 4x200m relay. She maintained her dominance in the K-1 200m category, winning her first major international gold medal at the European Championships in 2013.

In the same year at the World Championships in Duisburg, she finished on the podium twice, winning silver in the K-1 200m and K-1 4x200m relay. Walczykiewicz dominated the 2014 World Championships in Moscow, winning gold in the K-1 4x200m and silvers in the K-1 200m and the K-4 500m. After winning silver in the 2014 European Championships for the K-4 500m, she went on to win gold at the inaugural European Games in Baku in her favoured K-1 200m category.

Karol Robak A promising 18-year-old taekwondo star Karol Robak will be making his Olympic debut later this year after winning gold to qualify in Istanbul earlier this year. Robak won his first major medal at just 13, when he won silver at the 2011 European Cadet Championships in Tbilisi, fighting in the 53kg weight division.

A year later, Robak fought in the Junior World Championships, hosted in Sharm elSheikh in Egypt, where he won bronze. He has since moved up weight divisions to 68kg, which he currently fights in. This shift in weight categories has proven successful, with Robak earning silver at the 2015 Junior European Championships in Bucharest.

Also in 2015, he won his first major medal at a senior level, with a silver medal at the European Games in Baku. With his qualification for Rio secured, Robak is sure to be one to watch this summer.

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Robak is just one

of the Polish athletes to have already qualified for Rio 2016. This year will be the 21st time that Poland has attended the Games, having made their debut in 1924. Poland has only failed to attend one Olympic Games since: the 1984 Games in Los Angeles, as a result of the Soviet boycott.

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A new generation of safe hands Poland has produced talented goalkeepers through the years and there is no shortage of fresh talent now

Over the years,

Liam Frahm is Po-

land Today’s editorial co-ordinator. From the United Kingdom, he is interested in international affairs, politics and economics. Next year, he is studying politics at Oxford University.

Poland has produced talented goalkeepers who have performed at the highest level for both club and country. English fans of a certain generation won’t have forgotten Jan Tomaszewski’s outstanding performance in the 1974 World Cup qualifiers that helped to put Poland through at the expense of England, especially as Brian Clough had labelled Tomaszewski a ‘circus clown in gloves’ in a pre-match interview. Nor will fans of AC Milan forget Jerzy Dudek's ‘spaghetti legs that helped guide Liverpool to victory in the 2005 Champions League Final, hailed as the ‘Miracle of Istanbul’ by Liverpool fans ever since. Dudek denied Milan's star striker Andriy Shevchenko with an outstanding double save to bring the match to penalties before denying Shevchenko again from the penalty spot in the shootout to win the match and the cup.

A new crop of Polish goalkeepers have emerged on the international stage over the last decade. The English Premier League appears to be an attractive destination, with several Polish internationals plying their trade for English clubs. The competition between Wojciech Szczęsny and Łukasz Fabiański for the first team spot at Arsenal was a notable part of Arsenal’s 2014 season. Although Szczęsny was

photos: Wojciech Artyniew (Forum), Tomasz Prażmowski, (Forum)

Brian Clough had labelled Tomaszewski a ‘circus clown in gloves’ in a pre-match interview

Jan Tomaszewski

in action in Poland's 2-0 victory over England in 1973. Goals from Robert Gadocha and Włodzimierz Lubański, along with Tomaszewski's clean sheet, secured an important Polish victory in their campaign for qualification to the 1974 World Cup.

Arsenal 'keeper

Wojciech Szczęsny turning out against former side Legia Warsaw in 2010. The preseason match, which finished 6-5 to Arsenal, was played to mark the re-opening of Legia's Polish Army stadium after two years of renovation.

number one for most of the season, even winning Premier League Golden Glove in 2014, it was Fabiański in goal for Arsenal in their victory over Hull City in the 2014 FA Cup final.

However, Arsenal isn’t the only English club to experience success with a Pole between the sticks. Birmingham City ‘keeper Tomasz Kuszczak was part of the dominant Manchester United squad that won four league titles between 2007 and 2011, as well as the Champions League and FIFA Club World Cup in 2008. Experienced international Artur Boruc has also spent much of his club career in the United Kingdom, winning the Scottish Premier League three times during his five year stint with Celtic. After a brief stint in Italy, the former Legia Warsaw captain returned to the UK and has since played for Southampton and Bournemouth, where he helped the latter to their first ever promotion to the English Premier League.

Outside of England, Polish goalkeepers play at the highest level in other leagues around Europe. VfB Stuttgart ‘keeper Przemysław Tytoń spent several years in the Dutch Eredivisie with Roda JC and PSV before his move to the Bundesliga and has played 13 times for the national team including a substitute appearance against Greece, where he saved a penalty after replacing Szczęsny who had been sent off.

More recently, a new breed of Polish ‘keepers have come through the ranks and moved abroad. Łukasz Skorupski signed to Italian Serie A giants A.S. Roma and has represented Poland at both under-21 and full international level, making his debut against Macedonia in 2012. Michał Szromnik plays for Scottish Premier League side Dundee United and has also represented Poland at an under-21 level.

It doesn’t look like Poland will be running out of quality goalkeepers anytime soon. Legendary German ‘keeper Oliver Kahn once said that goalkeepers ‘need an element of insanity’. Whether this says something about the Polish character or not is a whole different ball game, but Poland has produced top quality goalkeepers that have performed and excelled at the highest level of football, and it looks like this won’t stop anytime soon. by Liam Frahm

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impressions

A path for transformation Poland Today sits down with Mahan Charmshir, an Iranian living in Poland, to ask about his experiences in the country

Mahan Charmshir grew up in Tehran

before moving to Malaysia. At Malaysia’s MARA University of Technology, he completed a bachelor’s in architecture before moving back to Iran. After working in architecture for two years, he took an MBA in branding before working in advertising for a further two years.

He came to Poland in October 2015 to study for a degree in international relations at the University of Warsaw. In his free time, he enjoys reading, listening to rock and jazz music, and discussing world events with his friends.

Kraków is my favourite place in Poland because with the history and architecture it feels like you’re living in the distant past.

What were your first impressions of Poland?

Poles are very interesting and friendly to foreigners. It’s funny when they realise I’m Iranian, because they think I’m from Mars. They don’t see many Iranians, so they want to know about my culture, language and the political situation. They’ve heard about Iran in the media, so I’m asked a lot of questions. At the moment in Europe, it’s hard to find people like the Polish. They are very curious and open-minded.

I’m interested in history and the best thing about Poland for me is that you can see everything together here. You can see history from the 13th century to the modern era. Kraków is my favourite place in Poland because with the history and architecture it feels like you’re living in the distant past. But in Warsaw you can see the history of the communist era and the visible transformation from communism to capitalism. If you want to see Europe in one package, Poland is a good country to visit.

What are the most striking similarities between Poles and Iranians?

photo: Mahan Charmshir's archive

Like Poland, so many people in Iran want to leave the country, especially to Australia, Germany and the United States, because they want good social services and better opportunities. It’s very strange because people elsewhere don’t seem to have the same desire to leave their country.

People in Iran are in a situation that make them cautious about their future, and Poles have lived through similar experiences. We lived under sanctions, have been through a war and a revolution, and in these situations you have to defend what you have and protect your family. It’s a lot better in Poland, but you can still see people acting in the old ways: when they shop, they protect their place in the queue. However, Poles and Iranians are both very hospitable.

And the most striking differences?

Polish students live in a more open society and have access to things that Iranian youths don’t. When I talk to Polish people about Różewicz or any other Polish poet, they always ask me how Polish poets can be famous in Iran.

I want to say that it’s because we read the best literature out there, but we just

have to read whatever we can get hold of. Access to information in Poland is good because lots of people with different opinions can hold lectures and seminars. Because of the sanctions, Iran doesn’t have this level of access to knowledge. So, we have to learn whatever is available.

What advice would you give someone moving to Poland from Iran?

First of all, bring warm clothes! I lived in Malaysia where it’s always summer so the cold and snow was initially hard to adjust to.

Then, they should visit and experience the atmospheres of different cities. The historical partitions of Poland left their mark on the cities so they should see how they differ, and decide which city they like best.

What Polish things do you wish they had in Iran?

The whole process of transformation.

After 1989, Poland transformed economically, politically and culturally, reconnecting themselves to the Western world. I’m looking for a model that I can use back in Iran. Because Poland lived through this experience, I could use it as an example to help my country develop in the post-sanction era.

I don’t want any kind of political change or revolution: everything in a country is related to the economy and when you trade with the world, it will eventually shape the society you live in. For example, if you have better access to cars and road infrastructure, you can teach people how to drive more safely and then they begin to respect the laws of the road. This transformation is the kind of transformation I want for Iran.

What are your thoughts on the future of Poland?

Nowadays, I don’t know what will happen with the new government, but, Poland is starting to become a player in Europe. Donald Tusk said, ‘if you do not find yourself at the table, you will find yourself on the menu’. This is important because Poland wants to participate more and more on the international scene: it wants to be at the table.

Economically, it is doing great; it has a bright future and I am glad to be a witness of it. interview by Liam Frahm

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