POLAND TODAY magazine #05 by Poland Today

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photo: PeskyMonkey / Bartosz Stefaniak

Does Donald Tusk have the political will to force through healthcare reform? page 30

Maritime trade and improved transport links boost Pomerania. page 40

Poland's unlikely role model as it seeks to maximise BPO potential. page 50

Brand Polska redressed

(05) SEPT/OCT 2013

The country has changed. How to let the rest of the world know? page 18

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

photo: Maciej Moskwa / TESTIGO

Polish Humanitarian Action (PAH) Making the world a better place

Join our unique PAH SOS Club and become a maker of change! Every year, thousands of people suffer and die in humanitarian crises and armed conflicts around the world. Regular financial help from donors like you helps us act swiftly when a catastrophe strikes and allows us to plan long-term solutions to existing crises. Anyone who pledges a monthly donation can become a member of the PAH SOS Club. Or can submit a one-time donation equal to 12 monthly donations. This year, thanks to members of the PAH SOS Club, we provided emergency aid to tens of thousands of internally displaced people in Syria. Please donate by going to www.pah.org.pl and see how you can make a positive change..

Syria, March 2013,

a family receives an emergency kit from PAH. Thanks to the generosity of PAH SOS Club members we were the first international NGO in 2013 to provide help to those in need in the north of Syria.

TABLE OF CONTENTS

EDITORIAL

PROMOTING POLAND

FEATURE

Controlling the message

Poland's public health woes

12-17

After a promising start in 1991 when the government of Jan Krzysztof Bielecki decided that Poland needed to tell the world that it was changing and commissioned an advertising campaign to start things off, the political will dissipated, thus promoting Poland became an individual sport with different ministries and national organizations all doing their own thing. Cynthia Naugher Sklodowski looks at how Poland has presented itself in the last two decades and where things might be headed.

LEADER

NEWS ROUND UP

IN FOCUS

Branding Polska

As one of the world’s leading experts on fashioning a consistent message with which countries, cities and companies can attract the attention of the world, Wally Olins has a wealth of experience from which to draw. Richard Stephens talks with Olins about why Poland has been a special case of his for more than a decade, and why whether or not that experience will be put to full use for this country remains to be seen.

Something old, something new

Israelis have had a negative view of Poland and Poles since their nation was founded more than 60 years ago. Signs are, however, that green shoots of reconciliation are starting to show, reports Mladen Petrov from Tel Aviv,.

The face of Poland

How do outsiders perceive Poland? How do Polish emigrants view their homeland from abroad? In a variety of different ways, it appears. From tired, out-of-date clichés to refreshingly positive reviews, the country’s image abroad is a mixed bag. But it’s obvious that it’s people, much more than advertising campaigns, that shape a country’s perception. We hear from seven souls who all want the best for Poland, in their different ways.

Table of contents

Poland’s place in the world

The country is riding high, with an internationally-respected ruling class and a stable political landscape, says Ed Lucas, international editor of the Economist. But at what costs? Despite painfully slow reforms (if they’ve been tackled at all), it seems the country might still be moving in the right direction after all.

Poland’s healthcare system is in need of a topto-bottom overhaul. With finances squeezed, and only set to tighten even further in the years ahead, there is a growing realization that the involvement of the private sector must be encouraged and accommodated. Will facing up to the seemingly insurmountable challenges prove electorally costly? Vice minister Sławomir Neumann, talking to Jan Cienski, actually thinks the opposite.

BANKING

Weathering the storm

Monika Rozlał finds that Polish banks haven’t been as hard hit in the past year as many market-watchers had expected, with year-onyear profits up in the first six months of 2013. While the details paint a more complex picture, there are other good signs, with the value of bad loans written off so far this year much less than in 2012. Is it possible that 2013 may yet turn out all right for most financial institutions?

COUNTRY FOCUS

Quibbling rivalry

By all rights, Poland and Lithuania should be good friends. They share elements of a common cultural and historical heritage and are both well-ensconced members of the EU and NATO. Petty-seeming arguments, however, spoil the relationship between the ruling elites of the two countries (but not between the people). Instead of squabbling, Philip Boyes explores why Poland and Lithuania should be presenting a united front.

VOIVODSHIP FOCUS

Drawing strength from the Baltic Sea

Pomerania has many attractions. It’s a gateway to the world for the maritime trade and a magnet for Polish and foreign tourists in the summer. A vastly-improved road link between the TriCity area and Warsaw has almost halved travel time. Robert Galea finds out which business sectors are established in the seaside region, and which are finding their feet.

Branding Polska. page 18

Poland's Public health woes. page 30

What Truffles? Polish mushrooms offer more. page 60

43-53 HISTORY

Eyewitness: On 4 June 1989, communism in Poland ended

Despite the fact that non-communist representatives had been elected to Parliament in the first partially-free elections of 4 June 1989, as the year drew to a close the end of communism in Poland had still not been officially announced. This all changed when a young actress, Joanna Szczepowska, turned tables on the presenter in a TV interview and said the words an entire population had been waiting over 40 years to hear.

It happened in... October

Two years after martial law, the apparent natural order of things was re-imposed on onestate Poland after the heady appearance of the Solidarity movement. Then a small crack in the granite communist facade was created when Norway’s Nobel Prize Committee announced the recipient of the 1983 Nobel Peace Prize. It was the man with the distinctive moustache from Gdańsk, and it thrust him back into the global limelight.

LIFESTYLE

Tricity: for better, for worse

Visiting the scene of happy childhood memories, Charlton Dwight, a US expat of Polish extraction living in Hong Kong, travels from Warsaw to the TriCity area. In Sopot he finds a resort of bustling vitality and a mix of languages – a far cry from the small town of his early days.

Tricity: for better, for worse. page 58

FOOD

TABLE OF CONTENTS

What Truffles? Polish mushrooms offer more

Mushroom season is upon us, which means that across the country Poles are heading to the forest to resume their love affair with wild mushrooms. While foraging is not for the untrained eye, the treasures that abound are practically endless. Fry them, marinade them, put them in pierogi, add them to soup – there are countless ways to savour these delicacies. Magdalena Kasprzyk-Chevriaux guides us through the rich culinary world of fungal delight.

SPORTS

Fire in the ring

While Poland’s football teams continue to disappoint on the European stage, a new hero has emerged in boxing. Or should it be ‘anti-hero’. Artur “The Pin” Szpilka is certainly no saint, but he’s making his mark in the ring and looks to be a world champion in the making. He’ll need to keep his fighting instincts in the ring, however, if he is to live up to his potential, as Michał Dzida tells us.

CULTURE

Fall into Poland’s cultural life

From Nike bookworms to Swiss fasionistas, via the capital city’s increasingly established film festival, along a detour of travelling troubadours, past a GLAM conference at Zachęta Gallery, gliding by Czerwony Gitare and finishing with the world’s biggest planetarium at the Palace of Culture, Damien takes us on an Autumn cultural tour to satisfy all your senses.

Fire in the ring. page 62

“In the UK,

Kraków is synonymous with stag parties." That statement, which appears in this issue of the magazine amongst a series of personal comments about how Poland is perceived abroad, embodies all that is wrong about Poland’s international image (and the UK’s too, but that’s a different story) - it's shaped by others, not by Poland. Such a sentiment is no news to anyone, of course. It’s been prominent for at least a decade. Poland as a grey and backward country – that’s been prominent for half a century. Poland as a nation of hopelessly unreliable romantics – well, that’s been around for a couple of hundred years at least. The Soviets did a great job of propagating it during the WWII parking it firmly in the western consciousness. For professional Poles, and foreigners who live here or know the country well, it seems inconceivable that most people around the world know nothing about Poland and, if they do, they generally think of it as a cold grey place buried under a perpetual snowdrift, and sometimes even that it’s a part of Russia. Don’t they know about the vibrant cities of Wrocław, Poznań, Kraków and Gdańsk, not to mention Warsaw? Haven’t they heard about the golden beaches of the Baltic Coast or the lush green woods and fields of the Beskidy and Świętokrzyskie mountains? Haven’t they heard about the business opportunities, the high standards of education and the exceptional work ethic of the Polish people? Some have, of course, but they are an interested minority. Most people haven’t heard these things, because Poland isn’t telling them. The benefits that can be reaped if an attractive and coordinated image of Poland is conceived and then promoted abroad are huge. It’s high time the government, working with the Presidency, took the lead in doing so. And Poland Today is doing its bit. In May next year we are organizing an event which will present the best of Polish business over the last 25 years. More details to come in the next issue…

Richard Stephens

Publisher Poland Today

Publisher’s Note

BUSINESS REVIEW

EDITORIAL

Olins gets to the heart of creative tension – a term that he feels captures the country’s identity and one that he believes can be projected effectively onto the global stage Poland Today Sp. z o. o.

ul. Złota 61 lok. 100, 00–819 Warsaw, Poland tel/fax: +48 224648269 mobile: +48 694922898, +48 505006606 www.poland-today.pl

Publisher Financial Director Creative Director Business Development Director Sales Director New Business Consultant Guest Editor Business Review+ Editor Real Estate Editor Production Manager Website Editor Website Manager Key Account Manager Andrew Nawrocki

Editor’s Note

works as a freelance strategic consultant and financial journalist in Warsaw. He has worked in London for a major investment bank, and has made Warsaw his home for the past 3 years. Originally born in Canada, he has spent much time in both North America and Europe.

As I reviewed this edition, starting in Warsaw and finishing in Toronto – my new home – I can’t help myself from sinking deeper and deeper into my chair, somehow wishing that I’d fall back and land in Poland. Don’t get me wrong, I love Canada, but this edition is a testament to how much Poland has to offer. And, very simply, it makes me wistful. From the “bright lights” of Sopot (see page 58) to the increasingly popular sport of mixed martial arts amongst Poles (see page 62), Poland continues to shrug off its image of being that uncooperative – and at times awkward – neighbour within Europe. And perhaps no part of the year shows Poland in a better light than summer. Speaking of image, in this edition’s cover story, Richard Stephens, Publisher of Poland Today, sits down with world renowned brand consultant Wally Olins to speak about just that – Poland’s image. Or should I write, Polska’s image? Olins gets to the heart of “creative tension” – a term that he feels captures the country’s identity and one that he believes can be projected effectively onto the global stage. See page 18 for the full interview. Although Poland clearly has much going for itself – it is indeed “riding high” as Ed Lucas writes in his article on page 28 – the country has a tendency to get bogged down in trivial quarrels. As Philip Boyes writes in his analysis of PolishLithuanian relations, the two countries can’t seem to break away from small grievances that divide, and instead focus on similarities that unite. Full story found on page 36. Finally, as in every issue, we look at a region of Poland. In this edition we dive into the Pomeranian voivodeship, looking at different aspects including – but not limited to – its economy, infrastructure, and potential for growth (see page 40). We also check out an exciting start-up from the area, as well as what is being done to connect this part of Poland with the rest of the country. Whether you find yourself back at work or taking an early autumn vacation, I hope that you like our latest issue, and wish you a warm autumn.

Richard Stephens Arkadiusz Jamski Bartosz Stefaniak James Anderson-Hanney Aneta Kłodaś Tomasz Andryszczyk Andrew Nawrocki Lech Kaczanowski Adam Zdrodowski Cynthia Naugher Sklodowski Damien Moran Tim Bridgman Magdalena Gawlikowska

Contributors

Agata Nałęcz Cynthia Naugher-Sklodowski Damien Moran Edward Lucas Hanna Kozłowska Jan Cienski Maciej Szczepaniuk Magdalena Kasprzyk-Chevriaux Michał Dzida Mladen Petrov Monika Rozlał Philip Boyes Piotr Narel Roberto Galea

Proofreader

David Ingham

Photographs

Polska Agencja Fotografów Forum

Photo Editor

Bartosz Stefaniak

Graphic Editors

Bartosz Stefaniak Morgann Lechat Tomasz Wróblewski Aleksander Modzelewski

Intern

Samuel Desh

Magazine layout

www.bartoszstefaniak.com

Printing house

Mazowieckie Centrum Poligrafii ul.Duża 1, 05-270 Marki Poland Today Magazine is printed on Munken Print Cream ecological paper © 2013 Poland Today Magazine reproduction without permission is prohibited

NEWS ROUND UP

by Piotr Narel

POLITICS

BUSINESS & ECONOMICS

CURRENT AFFAIRS

PO leader remains, PO conservatives leave

Poles against privatisation of large state-owned companies

Poland has cheapest food in EU

Prime Minister Donald Tusk will continue his decade-long reign as leader of the governing Civic Platform (PO) party after defeating his sole challenger in recent party elections. The conservative Jarosław Gowin received over 20% of the vote despite the party’s generally centrist and pro-European stance. The first direct elections for the party were marked by low voter turnout with only 51.12% of the 42,000 registered PO members participating. John Godson, a conservative member of PO and one of two Polish parliamentarians of African origin, resigned from the party after the results were released for supposedly unrelated reasons. Gowin followed suit two weeks later. The last conservative hold-out in the party, Jacek Żalek, left on 12 September.

Poland has the cheapest food in the European Union, according to a June report released by the Eurostat statistics office, with food prices at 61% of the EU average in 2012. The EU’s most expensive food is in Denmark where the average food prices were at 143% of the EU average in 2012. Alcohol and tobacco prices in Poland are also quite low for the time being but new taxes on these products are set to be introduced in 2014.

Most Poles are against the privatisation of large-state owned companies, according to a recent poll which showed that 78% of those surveyed declared that such companies should remain in the hands of the government, and only 8% supporting further privatisation. Patriotism seemed to be a strong factor in the results, with 67% of big city-dwellers reporting feelings of pride for strong Polish brands.

100,000-strong four-day protests take place in Warsaw

Trade unionists launched a large-scale protest, lasting four days, against recent measures of the Civic Platform (PO) government, with city officials reporting up to 100,000 people taking part in the final day of the protests on Saturday, 14 September. The protest was organized by three union federations including the famous Solidarity (Solidarność), which in its heyday numbered about ten million members. Some of the issues that sparked the protest were abolishing the eight-hour workday, lowering of the minimum wage, and raising the retirement age for both men and women to 67.

Impatient Warsaw residents to vote on dismissal of mayor

News round up

Did Poland’s foreign minister get US and Russia talking on Syria?

Foreign Minister Radosław Sikorski’s telephone call to US Secretary of State John Kerry the day after Poland’s declaration that it would not take part in military action in Syria, and his follow-up meeting with Kerry in Vilnius, reported by international media including the New York Times, may have influenced the eventual deal between Russia and the USA to put Syria’s chemical weapons under international control. German daily Die Welt even said that Sikorski’s contribution to the debate on Syria was the pivotal moment in preventing a US military strike. Sikorski himself tweeted that he is “pleased that Russia has taken up Poland’s suggestion of her role in dismantling Syria’s chemical weapons arsenal.”

Polish lower house votes to amend 2013 budget law

Poland’s lower house, the Sejm, voted in September on an amendment to the 2013 budget which would allow the budget deficit to increase by about 16bn zł to 51.5bn zł. The amendment also reduces government spending in ministries by about 7.7bn zł. The government introduced the bill in August, arguing that it was necessary to offset the lower-than-expected tax revenues from this year.

PKP unveils new high-speed train

Passenger rail operator PKP Intercity unveiled a new high-speed train called “the Pendolino” in mid-August to thousands of curious Poles who came to see it in Wrocław. By May 2014, 20 of the Italian-made trains should begin coursing between Warsaw, Wrocław, Rzeszów, Gdańsk, and Kraków at speeds of up to 200 km/h.

photo: Adam Warzawa (Forum)

A referendum to decide whether to dismiss Warsaw Mayor Hanna Gronkiewicz-Waltz will be held on 13 October, not quite a year before the end of her term. An electoral commission determined in August that the organizers of a signature-collection campaign had submitted more than the required number of votes to hold a referendum. The capital’s mayor will be replaced if 3/5 of Warsaw’s residents actually show up on 13 October, and more than half of them vote “Yes” to the question “Do you support the dismissal of Warsaw Mayor Hanna Gronkiewicz-Waltz before the end of her term.”

Poland’s manufacturing PMI index at highest level in 25 months

Poland’s manufacturing PMI index, an indicator measuring manufacturing performance, increased to 52.6 in August, the highest level recorded in 25 months. The 50-point threshold, which Poland had already broken in July with an impressive increase to 51.1, determines whether an industry is growing or contracting. August’s result also beat month-on-month estimates and signals a continuing improvement in business conditions in the manufacturing sector.

Minimum wage to increase by 5% in 2014

The minimum wage in Poland is set to increase by 5% starting 1 January 2014, going from 1,600 zł to 1,680 zł per month. The decision was announced by the Polish government on 11 September.

Economic Forum in Krynica - PM optimistic about Poland’s growth

The 23rd Economic Forum in Krynica-Zdrój, Poland, was held on 3-5 September with a record-breaking 2,600 guests who took part in five plenary sessions and more than 160 panel discussions. The Prime Ministers of Poland, Slovakia, and Latvia gave opening speeches, and the event was covered by some of the world’s biggest media, including The Economist, Financial Times, Reuters, and Le Monde. The forum’s message was optimistic about Poland’s role in Europe. In his speech, Prime Minister Donald Tusk declared Poland’s economic slump over and posited that Poland’s GDP could grow as much as 2% by the fourth quarter of this year and 3% by early 2014.

Mexican sailors and Polish football fans brawl on Gdynia beach

Up to 300 Polish football fans representing Ruch Chorzów, a team based in upper Silesia, and a group of 56 Mexican navy cadets and officers, were involved in a large-scale brawl on a beach in the northern city of Gdynia in mid-August resulting in several injuries and arrests, as well as disciplinary action being taken against local police for their ineffective response to the violence. The football fans had travelled to Gdynia to support their team in a game against local team Arka Gdynia that evening. The Mexican sailors were on a break from their long-distance training trip abroad. The Ruch Chorzów fans association claimed that the fight began when one of the Mexican navy cadets struck a woman in the face. Investigations into the matter are ongoing.

Taliban attack on Polish and US base in eastern Afghanistan leaves up to 19 dead

Ten Taliban fighters, one American soldier, one Polish soldier, and up to seven Afghan nationals were killed in an attack on a military base primarily staffed by Polish soldiers from the NATO-led ISAF mission in eastern Afghanistan’s Ghazni province on 28 August. The attack began when a truck packed with explosives made an opening in a perimeter wall, which was then breached by ten suicide bombers also armed with assault rifles. The US, NATO, and Afghan forces shot and killed all ten Taliban insurgents before the attackers could reach the more populated areas of the camp.

Poland to reduce soldiers in Afghanistan to 1,000 in October

Poland is reducing the number of its soldiers serving in Afghanistan to 1,000 in October. At present there are about 1,600 Polish soldiers serving in the NATO-led mission in Afghanistan, which is due to end in 2014. Over forty Poles have been killed or have died as a result of their injuries since the start of the international mission in Afghanistan in 2002.

NEWS ROUND UP

IN FOCUS

21 September.

Firemen unload a replica of the icon of Our Lady of Jasna Góra (also known as Our Lady of Częstochowa, or the Black Madonna of Częstochowa). A mass was held in the square next to the church of St Alexander in Suwałki, attended by the Apostolic Nuncio to Poland, Celestino Migliore, and President of the Polish Episcopal Conference, Józef Michalik. In Poland, it is traditional that firemen perform a guard of honour for holy icons.

Photo by:

In focus

Andrzej Sidor (Forum)

NAZWA DZIAŁU

by Hanna Kozłowska

photos: FoKa (Forum), Massimo Insabato / Canio Romaniello

IN FOCUS

Mushroom-picking: A Cast of Characters

Poland's place in the world.

The country is riding high, with an internationally-respected ruling class and a stable political landscape, says Ed Lucas, international editor of the Economist. see page 28

The smart and snarky side of the Polish internet

“Wałęsa. Man of Hope.”

The highly anticipated biopic about This classic late summer pastime is While Poland lacks top-notch satirical Solidarity leader and former presithe setting for a well-known flirting media, such as America’s The Onion dent Lech Wałęsa received a standing scene in Polish literature and is sere- or The Daily Show, there’s a corner of ovation at its worldwide premiere on naded in several songs. It’s an art, it’s the Polish-language internet which 5 September at the Venice International a science, it’s a tradition, and the Polish makes up for the loss (at least to Film Festival. “Wałęsa, Man of Hope,” language has a separate word for it. a certain extent). The ironically-entitled was widely praised by international The season for mushroom picking, “Hipsterski maoizm” (Hipster Maoism) press, with Italian journal “La Repubblica” or “grzybobranie”, is in full swing. is followed by over 30,000 people on calling the Venice screening “a great Here are our main characters: the deli- Facebook and is updated daily with historical event.” The film directed by ciously meaty Rydz (saffron milk cap), poignant political commentary by Academy Award winner Andrzej Wajda the tiny and tasty Kurki (chanterelles), way of the meme (aka – a photo with portrays two decades of Wałęsa’s life the ordinary Prawdziwki (porcini) a two-pronged caption). Though – from 1970 to 1989 – and his transition and the treacherous Muchomor (fly clearly left-leaning, the site mocks poli- from electrician in Gdańsk to leader of agaric). Kurki, sold by the basket on ticians across the entire political spec- a national freedom movement and Polish roadsides, and especially the trum with Aleksander Kwaśniewski, Nobel Peace Prize laureate. The movie’s handsome Rydz, are rare outside Jarosław Gowin, Donald Tusk and title “Man of Hope,” is meant to be remithe country, making them an emigrant’s Jarosław Kaczyński among its most fre- niscent of two communist-era cinematic nostalgic culinary dream. The lat- quent targets. The jokes are intended masterpieces “Man of Steel” and “Man ter’s evasive nature is described in the for a savvy audience, though you of Marble,” all three directed by Wajda. iconic 1960s song “Rudy Rydz”, where need not be a hipster to laugh at them. Janusz Głowacki, author, playwright and Helena Majdaniec compares Rydz- A recent post showed Lech Wałęsa ask- screenwriter, whose portfolio includes picking to dating (or is it a metaphor?). ing Andrzej Wajda, “Why wasn’t I por- cult film “Rejs” (The Cruise), wrote the When Polish children are introduced to trayed by …[the handsome actor] Piotr screenplay, and Academy Award nomimushroom-picking, the two specimens Adamczyk?” referencing Wajda’s new nee Paweł Edelman was the director of they first learn how to distinguish are film “Wałęsa” [for more about this film, photography. The star-studded cast the common-but-yummy Prawdziwki see below]. This summer’s Internet rev- includes Robert Więckiewicz as Wałęsa with its spongy cap, and the poisonous elation is “When you live in Warszawa,” and Agnieszka Grochowska as his wife, Muchomor that screams “Don’t eat me!” a Tumblr blog modelled on similar sites Danuta. The subject, Lech Wałesa himwith its red colouring and white polka about other big cities around the world. self, has seen the movie and has generdots. You can find a comprehensive and It’s a collection of gifs (animated images) ally approved saying that “he actually rhymed list of Polish mushrooms in the commenting on everyday Warsaw life. wasn’t bored,” and was even touched 19th century national epic “Pan Tadeusz” Riding a bus, for instance, is illustrated at times. Wałęsa didn’t however like by Adam Mickiewicz, where mushroom- by a stampede of guinea pigs. The blog Robert Więckiewicz’s portrayal. “I was picking serves as the background for is in English, and the references are never such a buffoon, such a know-itthe risqué behaviour of Polish nobility. international, including one reference all,” he said in a radio interview. Critics, No hallucinogens are involved. to reality TV star Kim Kardashian roll- in turn, are in awe of Więckiewicz’s role, ing her eyes at “another friend who just saying he not only played the Solidarity started running.” Expats from warmer leader, he “became him.” The release climates will appreciate a nonplussed date of “Wałęsa, Man of Hope,” for monkey covered in snow captioned, Polish cinemas is 4 October. “Your first summer in Warsaw if you’re from a tropical place.” whenyouliveinwarszawa.tumblr.com www.facebook.com/hipsterski.maoizm

photo: Woody Ochnio (Forum)

Sławomir Mrożek, playwright and author

photo: US Army's 101st Airborne Division press service

The priciest Polish celebrities

Private Filip Marciniak

Forbes magazine has come out with its annual ranking of the 100 most valuable Polish celebrities. If you’re a high-achieving athlete or popular actor, you’re in for the big bucks, according to advertising specialists. Topping the list is arguably the best Polish football player in a generation, Robert Lewandowski. Not far behind him is actor Marek Kondrat, who has only recently showcased his acting skills in ubiquitous ING Bank commercials. Third, somewhat unexpectedly, is activist Jerzy Owsiak, founder of the Great Christmas Aid Charity (Wielka Orkiestra Świątecznej Pomocy, WOŚP). Owsiak recently participated in an ad campaign for wireless operator Play. Other top ten pricey celebs include tennis players Agnieszka Radwańska and Jerzy Janowicz as well as top model Anja Rubik.

In today’s world, where conventional war is increasingly substituted by the use of unmanned vehicles such as drones, you rarely hear about battle heroes. But then there is Private First Class Filip Marciniak, who, during an exchange of heavy machine gun fire with rebels in eastern Afghanistan, selflessly put himself in danger to save a small boy from being shot. “He hastened to carry the child, paralyzed with fear, out of harm’s way.” For this feat PFC Marciniak, an experienced sapper, was awarded the “Hero of the Battle” distinction by the Regional Command East, the international military force in charge of Eastern Afghanistan. The Polish contingent in Afghanistan has begun operation “Return Home,” with only 1,000 soldiers to remain in the country starting this autumn.

photo: Grażyna Myślińska (Forum)

People

Along with Witold Gombrowicz, Sławomir Mrożek was a Polish playwright of international renown. The lifelong émigré died on 15 August in Nice, France, at the age of 83. In his works, which included satirical drawings, short stories, essays and plays, he relentlessly mocked Polish pomposity and delusions of grandeur. His trademark was dark and absurd humour, and “Mrożek-esque” became a cultural reference point, describing something surreal. His most famous plays include The Emigrés and Tango, a 1964 absurdist play that illustrates the inner workings of totalitarianism. He left Poland in 1963, after which he lived in France, the United States, Mexico and Italy.

Zygmunt Bauman

IN FOCUS

by Hanna Kozłowska

photo: Łukasz Dejnarowicz

An internationally-renowned sociologist and philosopher, Zygmunt Bauman, made the news in Poland after his lecture at the University of Wrocław during the summer was interrupted by a group of men from a neofascist political formation, the National Rebirth of Poland (NOP), who cursed at the 87-year-old professor and yelled “Nuremberg for Communists!” Bauman, like his fellow emigrant intellectual Sławomir Mrożek, was involved with the Communist regime as a young man. He left Poland after the anti-Semitic campaign of 1968 and is known for his work on the philosophical underpinnings of the Holocaust, though the irony of their “Nuremberg” chants was probably lost on the neo-fascists. In August, Bauman, who now lives in England, declined to accept an honorary degree from the University of Lower Silesia, fearing a similarly hostile reaction.

Elżbieta Benkowska

Would you be able to locate Grudziądz if asked by the Russian secret services? Natemat.pl, a news and blog platform, reported that while boarding a plane to Hong Kong from Moscow’s Sheremetyevo airport, Andrzej Borowiak, a journalist for the Polish Press Agency (PAP), was taken for Edward Snowden, the former NSA and CIA employee who leaked information about US government mass surveillance programmes. Several men, allegedly from the Russian secret service, decided to test Borowiak’s knowledge of the country he was claiming as his. They asked about Polish rivers, Polish cities and were especially insistent on the location of Grudziądz. Finally, after being told that he “really looked like Snowden” he was told to sing the Polish national anthem.

photo: materiały prasowe

Andrzej “Snowden” Borowiak

Although she didn’t win the Palme d’Or at the Cannes International Film Festival, 25-year-old director Elżbieta Benkowska’s nomination for her short story film “Olena” was no small feat. Born on the same day as Academy Award winner and Cannes laureate Roman Polański, only 55 years later, Benkowska has been making films in her Gdańsk neighbourhood since she was 18. Her 15-minute film, a Master’s thesis for the Gdynia Film School, was one of nine chosen for the Cannes distinction out of more than 3,500 entries. In July, she won first prize for shorts at the Sopot Film Festival. “Olena” is a story of a Ukrainian couple on a train to Sweden via Poland. The girl’s wallet and passport get stolen and thrown out of a window, ultimately leading to revelations about the true purpose of their journey.

18 LEADER

Most countries strive to portray

illustration: iJacky

themselves to the best possible advantage. Poland is no different. In the ultra competitive modern global economy, the stakes are high. Yet the challenges the country faces in overcoming historicallynegative perceptions abroad, and lack of coordination at home, are perhaps greater than those faced by the majority of nations.

BRANDING POLSKA

Can Poland finally fashion an image that can be projected successfully on the global stage? Poland Today publisher Richard Stephens meets branding guru Wally Olins.

If you look at the first report that we wrote in 2005 and compare the situation in 2013, Poland is more accepted and more understood, but still nothing like as much as it should be WALLY OLINS The world’s leading practitioner of branding and identity according to the Financial Times. First with Ogilvy, then Wolff Olins and now as Chairman of Saffron Brand consultants, he has advised companies such as AkzoNobel, British Telecom, C&A, Fujitsu, Lloyds of London, Renault, Tata and Volkswagen on their corporate image. He has also counselled countries and cities on devising and projecting a global brand, including London, Mauritius, Northern Ireland, Portugal, Vietnam... and Poland. Olins has visited this country many times at the invitation of one governmental department or another and in 2004, after researching Poland both inside and outside the country, came up with the term “creative tension” as a way of describing the identity it could project onto the global stage. It might well have been Poland he had in mind, however, when a few years ago he said: “[Advising a country] seems to involve endless meetings. And it›s never clear who is in ultimate control. And just when you’ve figured things out and it’s being implemented, the government changes and everything is thrown out.” But things may soon take a turn. When the publisher of Poland Today, Richard Stephens, sat down with Mr Olins, he was still optimistic.

When was the first time you heard Poland mentioned? I was always fascinated by Poland. When I was a small child my friends all collected stamps from the British Empire, but I collected stamps from Poland, Russia and Spain because they seemed to me to be exotic.

When did you first come to Poland and what were your impressions? I first came to Poland in the 1990s when I was invited by the Polish Chamber of Commerce to speak about a national brand for Poland. I was asked to create an idea around what a brand for Poland could be. At that time there was a profound feeling amongst Poles that their achievements and sufferings were unrecognized. Poland has to have a place amongst the more important nations of Europe because of its geographical position, cultural contribution, size and population, and because of its awareness of the way the world is moving, which many other countries don’t have. It needs to have a higher profile internationally so it can get the levels of tourism and the levels of FDI, and the self-confidence that it needs. The older generation are not confident about their nation, even if they may be self confident as individuals. Younger people are different.

Young people sometimes say to foreigners, why are you here? Exactly. Why choose this place to come to?

Are the young people in every country like that? No. If you look at the psychology of nations it’s very interesting. The British have such levels of self-confidence, whether appropriately or not, that they don’t much mind what others think of them. Although Americans very much want to be loved, and think they deserve to be loved, they have no doubt – and I’m talking in general terms - that they are the world’s top nation. Spain is an interesting case. They are terribly concerned about what others are saying about them. Coming back to Poland, Poles care very much what people think about them and they assume the world does not regard Poland highly. The truth of the matter is that if you

do the research abroad, that is indeed what people think. But it’s changing, it’s improving, and the more people visit Poland, live in Poland, the more investment there is in Poland, the more attitudes will change. The purpose of the exercise we’re involved in is to help align perceptions with reality so Poland can become more prosperous more quickly and be much more self-confident. It is happening. If you look at the first report that we wrote in 2005 and compare the situation in 2013, Poland is more highly-regarded and more understood in Europe, but still nothing like as much as it should be.

Why has Poland been unable to craft a single attractive image for itself, and is it even possible for a country like Poland to do that? As you say in your 2007 report, “A brand for Polska”, the country has a “contrasting nature.” Every country has contrasts. But the last 20 or so years have seen so many dramatic changes in Poland. I come to Warsaw every six months or so and each time it’s changed. Poland is normalizing. But the pace of that in perception terms abroad is much slower than reality. Poland, Bulgaria, Romania are all lumped together. Norman Davies is right, it’s Western Europe and Eastern Europe. All of these things mean that the real changes that are taking place are being very slowly followed by changes in perception. And that delays Poland’s acceptance by the world of its true position. It’s not the world’s greatest power, but it’s a significant influence within the European Union.

If you were completely in charge of branding Poland, with unchallenged executive powers, what would be your campaign? What would you emphasize? First of all forget the word campaign. We’re talking about changes in perception over a period of 10, 15 or 20 years. If you look at any country, and Poland is no exception, there are thousands of ways that various bits of Poland make an impact on various different audiences over time, whether in terms of culture, sports, food, film, manufactured products, tourism, academia etc – all of those things come out of

19 LEADER

Richard Stephens

is publisher and founder of Poland Today. He has been involved in publishing & editing magazines, as well as organizing conferences and events in Poland for several years. He has a degree in Theology & Religious Studies from Bristol University in England.

a country separately, in a way which is not mutually supportive. You have to look at what is being produced, from small cities to regions to sports activities, and you try to work out a way by which all this activity can be coordinated in such a way that each becomes mutually supportive. I’m not talking about a logo, I’m talking about something quite different than that.

First of all, forget the word campaign. We’re talking about changes in perception over a period of ten, fifteen or twenty years

CREATIVE TENSION AS DEFINED BY SAFFRON BRAND CONSULTANTS Poland has a remarkable capacity both for

survival and reinvention. Poles are above all resilient. Extinguished from the European map for more than a century, Poland bounced back as an independent country in 1919. Crushed by the Nazis and then controlled within the Soviet bloc from 1939, Poland emerged in 1989, very largely through Solidarity and other national efforts as a democratic nation.

Poland draws its personality, power and

perpetual motion from a wealth of apparently opposing characteristics. Polish people are idealistic and also pragmatic and resourceful; the Polish character is ambitious and also realistic. Poles are calm and they are also volatile. Poles can be very charming and also tough. Over the years Poles have learnt how to be all these things sometimes serially often simultaneously. Poland is a country driven by these kinds of creative tensions.

There will be tourism advertising campaigns, there will be advertising campaigns for foreign direct investment, and these advertising campaigns should be created in such a way that they are mutually supportive and part of a much larger whole.

You have in the past indicated that it isn’t effective when cities do their own campaigns. Why is that? I’m not saying it’s not effective. What I’m saying is this: you take a city like Lublin, which is not very well known outside the country. It wants to promote itself for all sorts of reasons, which is fine, but it will be much more effective if it’s seen as part of an effort to promote Poland as a whole. There are some cities like London, Berlin, Paris, Istanbul which are virtually city states. They have such a powerful presence, so powerful a style and personality that it’s almost separate from the country they come from. There isn’t a city like that in Poland. Łódź needs Poland, Wrocław needs Poland, Gdańsk also needs Poland, because these cities don’t have sufficient stature worldwide to promote themselves on their own. It’s easier for them to work in a national context.

For this to reach its full potential doesn’t it need a coordinating? You need to coordinate it with a very light touch, but you do need to coordinate it. If you have a government which becomes authoritarian and right wing and obstructive and difficult, there’s nothing you can do about it. So when you say to me, can you handle a country which is not in such good shape, the answer is no. But Poland is a perfect country to do it with.

Creative tension simulates a restlessness

But who can do that for you? Who can say, “Listen, we want you to develop your initiative”. The presidency, the Polish chamber of commerce?

It’s why Poland is constantly changing

It’s important to have a combination of the public sector and the private sector; it’s useful to have a symbolic figure at the head, such as the President.

unsatisfied with the status quo, and a boisterousness that’s always stimulating and often astonishing. This creative tension is why Poland produces so many entrepreneurs, artists and sportspeople.

photo: Tomasz Makolski

What about advertising campaigns, aren’t they important?

and evolving, sometimes tumultuously. It’s why Poles value their past and also look to the future. And it’s why Poles have always gone their own way and tried to achieve the impossible – often succeeding… Poland will surprise you. Just as the world influences Poland, Poland will influence the world.

But do you need a chief executive, like Lord Coe with the Olympics in Britain?

London born and Oxford educated, Wally Olins has

been dubbed “the world’s leading practitioner of branding and identity” by the Financial Times.

Over the years Olins has worked

with many of the world’s largest organisations including Renault, VW, Tata and BT on branding and identity issues.

vices. Poland doesn’t have them. They need to be constructed, and it can be done. Internationally-recognized names that are associated with Poland to their own advantage and to the advantage of Poland.

LEADER

What about branding Poland?

It would probably help to have a figure like that. But this is not the Olympics, it’s not overt. It’s much more low-key, more subtle. It’s not only advertising, it’s a cultural programme. There are many people who want to do it. There are young Polish entrepreneurs, there are young people in business, in industry and in academia, who want to raise their heads, who want a direction. We (Saffron) have a direction.

Are you optimistic or pessimistic that this kind of coordination can be done in Poland?

It would be helpful to associate the national brand with one word – Polska. Not Poland, not Pologne. I would use the word Polska on Polish high-quality products. I would use it on food products, on film, on technical products, on levels of education, you need to do these things with determination. And, of course, it has to be visualised and we have an idea about that.

There could be. There are a number of Polish brands that are potentially of international value. You need to have a very ambitious company, you need to have people at the top who understand what the brand is and what creativity can do, and you need the money behind it. Countries flourish with iconic products and services, look at the United States, they’ve got product power and influence that is staggering. Look at technology with Google, Apple, Amazon. Look at the high streetwith McDonalds, Coca Cola. In showbiz, you have Hollywood. Everywhere you look, and I hate to use this word, there are 'iconic' products and ser-

can provide a better example of the longterm staying power of national identity than Poland,” Olins has stated.

So, you as Saffron have a concept, even visually? We have a visual metaphor for describing what Poland is. And I know from my experience that it will work. We haven’t presented it to anyone outside the company. And we are keen to do it.

I wouldn’t be sitting be here today if I wasn’t somewhat optimistic. It’s so And you have a strategy which obvious that Poland needs this, but it you think can be implemented? could be done far more effectively and I think we have a core idea which far more quickly. It’s a question of per- is built around this ‘creative tensuading people that it is in their inter- sion’ idea, talking about what Polish ests to join together because they will people achieve sometimes despite get the combined strength of all the themselves. In a way it’s very self-conpromotion that is taking place about fident. It’s about what Polish people Poland, which at the moment is being have achieved despite all the things wasted because it is being squan- that have happened to their nation. dered by individual groups of people That is the core idea. without any coherence at all. Whereas if you have coherence you have a huge Shouldn’t this be coming influence at your disposal. This country from a Polish creative is not short of creative, clever people. agency, not a British one? But there has to be a willingness to We are not British, we are multinacooperate and although in many coun- tional. We have had Poles on our team tries you have this difficulty of coop- from the very beginning. Collectively, erating, I think in Poland it’s harder, as whether you are talking about Poles I’ve found from personal experience. Everywhere is difficult but Poland is especially difficult.

How about company brands? Could there be flagship Polish, internationally-recognized brands?

“No country in the world

I come to Warsaw every six months or so and each time it’s changed. Poland is normalizing. But the pace of that in perception terms abroad is much slower than reality

from industry, from the church, from academia, we have all agreed that this direction, which originated with our thinking, is appropriate. It needs to be directed and coordinated from Poland, but we would be able to give advice on the basis of our experience.

So you have the idea. What should be the next steps, so this idea becomes reality? The next step should be that it’s commissioned by a serious authority which would be prepared to take it forward. We then form a working party which consists of people from the communications industries in Poland, senior people from government, people from various other activities - culture, sport, industry etc., and we develop the central idea visually. Then a Polish team looks at ways in which everything that presents an idea of Poland, whether in industry, sport, culture, food or anything else, supports everything else. But we’re not only talking about promotion. Over time we look at the touchpoints. We look at gateways, at ways in which an impact is made on people when they arrive here. For example, Warsaw Airport. It’s like every other airport in the world. There’s nothing in it that says it’s Poland. We look at a whole series of other touch points. Things like making the bureaucracy for direct investment easier. I’m not saying that you don’t do campaigns – maybe you do, but they should not be regarded as the beginning, middle and end of it. They are part of a process by which change takes place. Then, over time, you monitor perceptions of Poland by checking with a series of audiences in a series of different countries.

interviewed by Richard Stephens

PROMOTING POLAND

CONTROLLING THE MESSAGE A look back at the evolution of promoting Poland

Poland is a country with a history more dramatic and dynamic than an episode of Game of Thrones. It’s been taken apart and reassembled more times and in more configurations than a child’s Lego set. All the while, the one thing that has made it through every ordeal unscathed is Polish spirit and resilience. Despite the past, today Poland is a thriving, modern country. However, years of Soviet control until the fall of the People’s Republic of Poland (the PRL) in 1989 had left Poland shrouded in mystery. Though immediate neighbours perhaps had a general opinion about the country – largely formed from stereotypes and historical misconceptions - the further west one went, the more Cynthia Naugher exponential the decrease in understandSkłodowski, ing and knowledge of the country. General a Texas native, perceptions were largely outdated, negahas lived in Poland tive and focused primarily on Poland’s for four years with her Polish husband experiences in WWII, the Holocaust and and young son. Her its communist history. career so far has inEven as recently as the early 2000’s, cluded stints in NYC some of the more stereotypical percepat both Cosmopolitan tions ranged from the American telling and Seventeen magazines, as well as for a Polack joke to the Brit talking about the a Dallas advertising reliable Polish plumber to the German firm, and she is now joking, “Vacation in Poland – your car’s concentrating on tryalready there.” Due to the prevalence ing to get the hang of Polish life and culture, of post-PRL stereotypes and misconcepwhich is a full-time tions, in 1991, two years after the counjob in itself. try’s first free elections, Prime Minister Jan Krzysztof Bielecki's government decided to invest around $1.2m – a significant amount of money in Poland at that time - towards creating an advertising campaign designed to promote Poland. Strong desire and motivation to change perceptions of Poland abroad combined with top-level government figures who saw the need to prioritize such actions. The general consensus at the time hinged on the idea that directing resources towards advertising was the best solution in the quest to create a new worldwide image to match the new Poland.

ski jumper extraordinaire Adam Małysz, cross country skiing world champion Justyna Kowalczyk, four-time Olympic walking champion Robert Korzeniowski and boxing legendin-the-making Artur “The Pin” Szpilka (for more about him go to our sports round up). When considering this trend towards individualism, it is really not so surprising that since the initial 1991 campaign there has been no single, unified message about Poland. Every agency, city, voivodship, industry and producer with a budget for promotions has their own individual campaign. While this works out well for some, it also creates competition in places where there should be collaboration. This is particularly evident in the scores of competing “Poland” logos that abound.

While good advertising can potentially raise awareness of a country (but not much towards brand building), bad advertising can have a more lasting effect

Individual pursuits The fruits of this particular campaign amounted to a couple of multi-page advertorials appearing in major international publications like Time magazine. Subsequent studies showed that while this effort had a positive effect, people still wanted to know more. This newfound resolve did not last and proved to be nothing more than a false start. Unified government involvement in creating an image for Poland fell along with Bielecki’s premiership. Subsequent administrations failed to recognize or prioritize the need for centralized control over the country’s image, thus leaving it to become an individual sport. Ironically enough, this individualized approach is somewhat of a marked Polish characteristic. Amongst Polish traits, individualism is typically near the top of the list. This concept is seen nowhere more clearly than in Poland’s greatest sports heroes. Though team sports here are very popular – football especially – Poland’s individual athletes are the real stars, like tennis’s golden girl Agnieszka Radwańska,

A council to coordinate them all

Some of the international promotions are effective, well thought out and wellexecuted. But for every strong campaign, there is a contrasting weak campaign. While good advertising can potentially raise awareness of a country (without necessarily brand building), bad advertising can have a more lasting effect. A recent example is the Promotion Department of the City of Warsaw, which was shut down in September amid discontent surrounding some ill-conceived promotional tactics, according to the online version of Gazeta Wyborcza daily. A few of the more interesting tactics included the idea for a stunt during which a piano (as in a life-sized piano) would be tossed out of the window of Frederic Chopin’s former apartment, and a now infamous, slightly-creepy, 2012 promotional city ad preceding the Euro 2012 Football Championship in which a man in a tracksuit chases a woman around Warsaw. The ad lasted a total of two days on air before it was pulled and then replaced. Ill-conceived campaigns aside, the lack of a common coherent narrative amongst international promotional activities is, according to some experts, a more pressing concern. The government needs to control the message it puts out for the country and itself. If you don’t control your own message, the reality is that someone else will. It does, however, look like the big guns are starting to listen. Signs are now pointing towards a more streamlined and consistent message coming straight from the top, with the formation of the Council for the Promotion of Poland, an inter-ministerial advisory board to the prime minister, being a positive start. “2014 will be a special time marked by a round of anniversaries of events from Poland’s modern history,” said Polish Foreign Minister Radosław Sikorski at the the opening of the Council on 11 July. “25 years of systemic transformation, 15 years of NATO and 10 years of EU membership are an excellent opportunity to reinforce Poland’s positive image around the world.” Poland’s image is indeed changing, and hints of a cohesive Polish message should go a long way towards boosting its profile around the world. by Cynthia Naugher Sklodowski

Something old, something new

PROMOTING POLAND

Why bother promoting Poland in Israel? Because, after many years, it might actually work.

This autumn, low-cost carrier WizzAir will start flying from Katowice and Warsaw to Tel Aviv. With Israel enjoying good press as a holiday destination in Poland, it is certain that the flights to Israel will be popular. But what about bookings on the Tel Aviv-Warsaw-Tel Aviv route? Promoting Poland in a country where the memory of the Holocaust is so alive and present poses one of the biggest challenges for the image of Poland abroad, a country which once boasted the biggest Jewish community outside Israel, over three million strong. Today, the fact that many Israeli political leaders and journalists still mistakenly refer to “Polish death camps”, when they really mean Nazi camps located in Poland, doesn’t help to bridge the gap. And yet, a few positive changes can be observed and, step by step, other sides of Poland are being discovered. Successful campaign? Well, not exactly. Talia Altar-Calo, a professional tour guide who spent three years in Poland working as an educator with the Jewish community of Warsaw from 2005 - 2008 (even so recently an usual choice for a young Israeli student), recalls, “As an Israeli with Polish roots, I found myself interested in Poland from a very young age. However, Poland for Israelis at the time was a synonym for the Holocaust,” she says. “It is still very much so due to many reasons but in recent years the vast cultural collaboration between the two countries has been making waves, and more and more people are hearing about Poland in a manner not related to the Holocaust.”

Fewer historical complaints Indeed, major events like the highly successful ‘Polish year in Israel’ (20082009), contribute to the changing image of Poland, with many articles now focusing on the growth of Jewish life in the country, or the rapid changes in cities like Warsaw, rather than the predominant Holocaust-led narrative. Backed up by the media, Poland is now being presented as a modern European country, full of attractions. Major events like the EURO 2012 football championship also bring the other Poland closer to Israelis. All of a sudden, a vacation in Poland has gained a whole new meaning.

More and more people are hearing about Poland in a manner not related to the Holocaust

“I do see a change compared to my first long stay in Israel in 2003,” observes Jacek Olejnik, First Secretary of the Embassy of the Republic of Poland in Tel Aviv. “Ten years have passed and now I almost do not hear any “historical” complaints about Poland. I mean, some people criticize concrete facts from our history, and rightly so, but honestly speaking these days I don’t meet people with a negative and biased attitude to Poland and Poles.” According to Olejnik, the main than other European countries. I also factor behind this change is not down always tell Israelis that it is much less to any single big ad campaign. “It is anti-Semitic than the place their grandbecause of uncountable new links cre- mothers might remember. It is a matter ated between our states over the last of education,” Daniela believes. 20 years. We connect on many levels: business, politics, military, intelligence, Jewish history in Poland not culture. Lots of youth encounters and only negative exchanges. It all pays off.” Jacek Olejnik also believes Poles are the best tool for promoting their country. Focusing on beautiful things “I talk to people on every possible Israelis are now willing to listen. Luckily, occasion. I explain and explain, show Poland has many famous people on its movies and photos, invite and encourside. Etgar Keret, the highly celebrated age Israelis to go to Poland,” he says. short story writer, is a supporter. Keret, The heritage trip most Israeli schoolwhose parents were born in Poland, has children have taken to Poland for a soft spot for the country and uses many years now has been a matter every occasion to underline that. Last of heated discussion both in Poland year he flew to Warsaw for the opening and Israel. Poland has been trying of the ‘Keret house’ in Warsaw’s Wola to add more than visits to the Holocaust district, at 14 sqm, possibly the small- sites to the programme, thus enabling est house in the world. “You know, my thousands of Israeli students to get mother jokes that I am not an Israeli more from these compulsory trips. writer but a Polish émigré in Israel,” The Jewish community of Poland is also Keret told me prior to the opening of open to meeting with young Israelis and the house, which was featured in media talking about Jewish life in contempoall over the world, including a prominent rary Poland. Luckily, there have already been piece in The New York Times. The world changes made in the history books, and heard again: Poland is changing. Polish Jews living in Israel are also with new institutions like the Museum doing their share. Warsaw-born Daniela of the History of Polish Jews open in Malec-Korin, a Tel Aviv-based transla- Warsaw, Israeli students can now learn tor and NGO activist, is one of these not only about the Holocaust, but also devoted Polish advocates. “I promote about the centuries of rich Jewish life Poland by talking to people and pre- in Poland before the biggest tragedy senting the real, bigger picture of in Jewish history overshadowed evea modern country with a lot of things rything that preceded it. Talia Altargoing on, especially on the cultural Calo will be coming to Poland with her scene with concerts, art and so on. Israeli groups more often. “In 2008, I focus on simple things: our mountains, when I came back from Poland to Israel the sea (many people don’t know about for good, I had a lot of encounters this), the lakes. It’s not easy. Although with people who believed I had been less people are perceiving Poland brainwashed. They couldn’t grasp it only as the Holocaust land, there is - how come I could saying good things also the anti-Semitic label to deal with. about this country? Now there are less I defend Poland by saying it is an aver- people like that. We are getting there.“ by Mladen Petrov, Tel Aviv age anti-Semitic country, not any worse

Mladen Petrov is

a Warsaw-based Bulgarian-born journalist, most recently with Bloomberg Businessweek Polska. He is a frequent contributor to Capital, Bulgaria’s leading weekly publication. His articles have appeared in publications such as The Jewish Daily Forward (USA), Haaretz (Israel) and Malemen, Forbes and Newsweek in Poland. He is also a winner of the EUfunded “Journalists Against Discrimination” award.

PROMOTING POLAND

Cynthia Naugher Skłodowski's professional profile on page 22

The face of Poland Poland’s secret weapon in the branding war

As an American growing up in the southern United States – with not an ounce of Polish heritage – I can’t say that Poland figured high, or even at all, in my consciousness. As images of faraway places formed in my head, whether through films, history lessons or even jokes, the picture of Poland that emerged was basically that of a grey and snowy place with lots of gloomy people in Russian babushka-style head scarves, and lots of cabbage, potatoes and kiełbasa. Years later I moved to New York for my first post-university job, where I made my first Polish friend. His name was Tommy, and he and his family had moved to the States from Szczecin in the early 80’s. Always having been interested in foreign cultures (just not particularly Poland up until that point), I quizzed him ad nauseam about his homeland. He didn’t do much to dispel my preconceived notions. In fact, I think he made them worse. Though on a positive note he did recommend that I try this little Ukrainian restaurant (very similar to Polish) in the East Village called Veselka, where I was introduced to the wonder of pierogi. A positive endorsement, indeed. Flash forward a few years, and here I am happily married to a Varsovian man and living in Warsaw. Sure, the Poland that Tommy left in the 80’s and the Poland that I moved to in 2009 are two completely different places. Even so, though my perception of Poland has changed greatly, without my husband who, contrary to Tommy, was quite enthusiastic about his homeland, I can’t say that I would have ever had the desire to visit, much less live here. The reason for that is simple. People are the best branding tool that a country has. Poles abroad – or even foreigners who have come to love Poland – can be some of its most passionate supporters. And on the flip side, its biggest detractors. We’ve spoken with some of these people to find out their views on how Poland is perceived and promoted abroad, as well as how they think Poland could present a stronger image. Here are some of their thoughts. by Cynthia Naugher Sklodowski

A grey and snowy place with lots of gloomy people in Russian babushka-style head scarves, and lots of cabbage, potatoes and kiełbasa

“My Polish story starts with flatmates in London” I have spent the last 13 years coming and going from Poland. I have seen the country change in mostly fantastic ways. And I hope I’ve been able to share my enthusiasm for the country, its people, culture and history in the many articles I’ve written and in conversations I’ve had across the globe. My Polish story starts with flatmates in London who were from Lublin and convinced me to move to Poland. I left Warsaw in 2001, but came back almost every year to visit. The country - from a journalistic stance - was a gold mine for stories. Positive steps made as Poland joined the EU, loads of FDI coming in, a booming arts scene and so on. But sometimes I felt like it was a battle to get interest when I pitched story ideas, and this was partly because Poland wasn’t promoting itself in a modern, vibrant, contemporary way. A friend who worked for the Polish Embassy in London complained to me recently that there are something like 30,000 Poles who work in the financial services sector in London’s City, but the general view in the British press - and French too - is that Poles clean our homes, paint our houses and watch our children. While that historically was the case, the balance has quickly and steadily been redressed. Yet, that is not being seen in the press about Poland. Poland needs to stop just promoting past. For example, when Obama was in Warsaw last year, he was taken to Holocaust memorials, Warsaw Uprising monuments, etc. While those things are important and integral to Poland’s history, it is just that... the past. Obama should have been taken to see a kickass exhibition at Zacheta, or to the fabulous new stadium in Praga or to the hip and intriguing cultural complex that is Soho Factory/Mińska 25. To show that Poland is rocking head first into the 21st century. I love Poland and I can only hope the country will be able to promote itself so that others like me - who have no family connection to the country - fall in love with the place.

Ginanne Brownell is an American-born journalist based in London. She writes for publications including the Financial Times and International Herald Tribune.

PROMOTING POLAND

“I think that there is a developing trust now towards Poland”

“Roves of Polish mobsters in Adidas jumpsuits”

I came to Switzerland in the summer of 2008. Since then, I’ve been living in Lausanne. By the time that I left Poland it was already obvious that the country could breathe a little bit better on both social and economic fronts. At the same time, the culture and lifestyle were really emerging, especially in Warsaw, and on a smaller scale in smaller cities. What’s funny here is that, as my partner is Italian-speaking and I have taken on a bit of his accent, when I tell people I’m Polish they are often disappointed I am not Italian. But I notice a kind of sympathetic curiosity when it comes to talking about Poland. People here in general remember well the fall of the Berlin Wall, and I have met many people who actually travelled to Poland before 1989. In the mainstream, the image of Poland as a far away, cold, grey and sad country is still prevalent, but those who have had any contact with the country are in general quite impressed and enthusiastic about how the country really is compared with their preconceptions. I think that there is a developing trust now towards Poland based on the relatively stable political situation, and the kind of ‘no shock’ policy that we have had, which is bringing its fruits in terms of a wider Polish presence abroad and better articulation of the Polish voice in Europe. People are starting to realise that the economic future and business is in the east. Also during the EURO 2012 championships many of my colleagues here were working in Warsaw, and now have quite positive opinions about the country. In terms of promotion in Switzerland, I’ve never seen any advertising for Poland – except maybe around EURO 2012. I think there is still a lot of work that needs to be done in terms of changing the image of Poland here.

I think that, generally, Poland has trouble promoting itself. I don’t know if modesty is part of being Polish, if it’s some sort of hangover from Communism, or what, but Poles don’t tend to sell themselves in the way that Americans do, which can be endearing, but also detrimental to the image of Poland. While pitching stories on Poland, people were generally fascinated by all the changes I was describing within the country, particularly where Jewish life is concerned. Our American problem is that, we don’t know much about it—it’s still a mystified world in many ways, and one that many people are dying to learn more about. A lot of people I meet in the US tend to think of Poland as a backwards country suffering from the acute effects of Communism. They imagine roves of Polish mobsters in Adidas jumpsuits and decaying architecture. And the only Polish food anyone ever asks about is pierogi. I think a lot of people’s images from Poland are still based in what they saw on television in the 1980s. Part of the problem too is that American Poles tend to represent Poland, which is a very skewed representation as well. American Poles tend to be even more Catholic and right wing than most Poles in Poland. Of course, nothing could be further from the truth, and so, often, I’m telling people how much the country has changed since 1989 and how much it continues to change each year. I’m usually gushing about the country’s incredible contemporary artists and writers, the wealth of history, and, above all, how cost-friendly it is for travelers and ex-pats compared to Western Europe. I’m also often dealing with American Jews who have preconceived notions about Poland as a virulently anti-Semitic country and I’m often trying to show how that’s really not the case and that, in fact, if one is truly interested in the history of the Jews, Poland is the place to be, especially right now.

Paweł Kurpios, Wrocław-native anthropologist and author of the column Polandisgrowing

Denise Grollmus, American writer and journalist, recently returned to the States after one year as a Fulbright scholar in Warsaw. Her stories on Poland have appeared in several publications and media, including the Guardian, New York Magazine and Tablet Magazine.

It has changed in the sense that I think that people with money can live in Poland very happily because they can buy anything “I did not see a future there, especially for my daughter” I left Poland in 1981. I went to Austria and then stayed in Switzerland until that December, when I left for South Africa. I left Poland because I did not see a future there under the communist regime, especially for my daughter. Has my opinion changed since? This is a very complicated question to ask. It has changed in the sense that I think that people with money can live in Poland very happily because they can buy anything. But this is applicable only for those who work for big international companies or foreigners. Ordinary people very often struggle economically. The biggest problem that, I see is that in the 1990s, the highest communist political figures renounced their communist party membership and changed their colours from red into a very light pink. They snatched all the national property which formerly belonged to the state into their own hands by doing wild and very quick privatizations, and sold most of it to foreign companies. In this way the majority of banks, industries and even part of the land is now in the hands of non-Polish citizens, obviously giving dividends to them but not to the Polish people. People of South Africa are generally very nice and warm, irrespective of the colour of their skin or heritage and they are very interested to hear my stories of Poland. I suppose there is a little bit of promotion about Poland here, mostly concerning travelling to see the country’s natural beauty, but even these are scarce. But yes of course I would recommend visiting Poland to my friends and colleagues.

Dr Andrzej Boldireff Strzeminski (born in Łódż) lives in Cape Town, South Africa.

PROMOTING POLAND

I stress the fact that young people are very well educated, and that certainly not all of them are plumbers “Can you name a single tourist campaign without a seductive girl with a true Slavic look?” Luckily living in Brussels I rarely meet people who have no idea about Poland, but I do encounter those who still think of Poland as a fairly backward country. Often, when I mention the fact that I’m from Poland, I get a reaction like “Ooh, Polish plumbers are very good”. Then I usually explain to them calmly that a lot has changed since communist times and use the argument that Poland has been unceasingly growing for the past few years (unlike most European countries). I stress the fact that young people are very well educated, and that certainly not all of them are plumbers, construction workers and cleaning ladies. Usually quoting a few facts and figures go a long way. Meanwhile another shallow impression of Poland that I try to fight with is the Ryanair-driven image of a country of “cheap girls and cheap beer.” But could we blame Ryanair for that? I think that Polish promotional campaigns still rely a lot on stereotypes - can you name a single tourist campaign without a seductive girl with a true Slavic look? In Belgium I am happy to see some progress – for example a new campaign of the Mazuria region in the Brussels metro, concerts of Polish musicians in major Brussels concert halls, art exhibitions... But still, a lot needs to be done. A lot of promotional events seem to be more aimed at homesick Poles rather than at foreigners.

Marta Brelih-Wąsowska (Warsaw born) is the Communication Officer of UNICA Network of Universities in Brussels.

“That Poland doesn’t exist any more”

In the UK, Kraków is synonymous with stag parties

I was born in Warsaw, but I haven’t lived in Poland for 32 years (I left when I was five). My mother and I would spend summers there, though, starting in 1988. My parents and I came to America on Thanksgiving Day of 1981 for what was meant to be a one-year work exchange for my father. Two weeks later, martial law was declared in Poland so my parents decided to stay in America. In the early 80s, the Poland-U.S.A. juxtaposition was largely framed in my mind by haves and have-nots. The US had grocery stores full of food, McDonald’s, and Barbie dolls! Poland had queues for toilet paper so rough it would take a layer of skin off. Poland is no longer home for me. However, it still has a very strong pull and I have a huge amount of nostalgia for the Poland of the summers of my childhood. Because of the enormous changes in the past few decades, though, that Poland does not exist any more either. I find that people generally have no notions of Poland, especially in Texas, where there are relatively few Polish immigrants. In New England, kids in elementary school asked me if there were polar bears there. When I lived in the Chicago area as a teenager, people would generally respond by telling their favorite Polack joke. Now, educated adults sometimes bring up Lech Wałęsa. Sadly, the average American knows almost nothing about Poland and would be hard-pressed to find it on a map. I’ve also never seen any kind of promotion for Poland in the US. Honestly, I wouldn’t recommend visiting Poland. The things that I love about Poland: my family, the home cooking, shopping in open-air markets, speaking the language – that sort of thing - would not be experienced by a tourist. The thought of someone going to Poland and staying in a hotel and visiting museums and memorials sounds so unappealing - they would be missing so much! That said, if someone is going I do generally recommend people visit Kraków over Warsaw, as I don’t think of Warsaw as particularly attractive.

I left Szczeczin for San Francisco on 6 June 2000, and after a brief stint there followed by a few years in Texas, I moved to London, where I’ve been living ever since. Despite the fact that there are something like over half a million Poles in the city, there are actually none really in my circle of friends. My office [software engineering firm] is a different story – I think half of the people who work there are from Poland. You constantly hear Polish being spoken around the building. What I find amusing is that I don’t think that I‘ve met a British guy here who hasn’t been to Poland for a stag party. In the UK, Kraków is synonymous with stag parties. It’s incredible really. I guess that’s a kind of promotion in itself. Or public relations, really. I’m not sure if that’s good or bad though. I guess it’s the combination of cheap flights, the fact that the pound goes a long way there, so everything is really cheap, and that there is a lot of vodka and good-looking women. Otherwise, beside lots of ads for cheap phone cards to call Poland and for cheap money transfers to Poland on the door of every convenience store here, I haven’t noticed a lot of promotion for the country. The best advertising of Poland here was of course the Euro 2012 campaign, which seemed well-organized and showed Poland in a very good light. I also thought that plumber ad campaign a few years back was pretty amusing. And I do of course often recommend to my friends to visit Polska, especially Kraków, Wrocław, Gdańsk, Poznań, Zakopane and, of course, our lovely capital Warszawa! I also mention that Polska has a phenomenal variety of lakes, which I grew up on and love. On top of that I tell them that we have it all: mountains, sea (and lakes of course). Everyone who’s gone there following my suggestion has fallen in love with the country.

Karolina Augustynowicz King (Warsaw

born) is a professional photographer currently living in Dallas, Texas, USA.

Kuba Borys (Szczecin born) is a software engineer living in London.

28 POLAND’S PLACE PROMOTING POLAND

IN THE WORLD

Edward Lucas is International Editor of The Economist. He has covered Central and Eastern Europe for more than 20 years, witnessing the final years of the last Cold War, the fall of the Iron Curtain and the collapse of the Soviet empire. He holds a BSc from the London School of Economics and studied Polish at the Jagiellonian University.

photo: Jean Ursula

How Poland has transformed its image, and what is still left to do

Poland is riding high.

It enjoys a uniquely close relationship with the European Union’s most powerful country, Germany. It is one of America’s most trusted allies in continental Europe. Alone in the region, it has a serious military budget (expect some headlines on new arms purchases in coming months). It is the unquestioned leader of the Visegrád group of central European countries. It has defused its tense relationship with Russia: trade is booming, and Poland is spared the venomous invective the Kremlin directs against other former captive nations such as Ukraine and Estonia. It has survived the world financial crisis without falling into recession. Perhaps for the first time in its history, Poland has become a byword for political stability.

A price worth paying?

This price is worth paying. For too long Poland was seen as romantic, tragic, disorganised, history-obsessed and exotic. Outsiders smirked at Polish roads, at Polish drinking habits, at Polish unpunctuality, at Polish thin-skinnedness. Poland was like a dysfunctional family member: a problem to be navigated, rather than a partner in a common cause.

Serious is good, exciting is better For all its shortcomings, the era of Donald Tusk, and of ministers such as Radek Sikorski and Jan Vincent Rostowski, has largely ended such stereotypes. When they do appear, as in canards about Polish anti-Semitism, or in the infamous BBC Panorama programme “Stadiums of Hate,” they are conspicuous because they are not just inaccurate, but so rare. There is plenty still to do. At all costs Poland should avoid a return to the petulant, stubborn and unworldly approach of Jarosław Kaczyński, in which every insult and injury was tended with a gardener’s loving care. Those years were interesting and exciting for journalists, but bad for Poland. Instead, I would like to see the country being equated not just with solidity, but with originality. Poland is not just a reliable place to do outsourcing, but a great place for R&D. Poles are not just hard-working, they are creative. Poland is not just a place for a cheap, fun holiday, but for high culture and world-class food. Whoever forms the next Polish government should build on the achievements of the past, not negate them. Poland has shown it can be serious. Now it needs to show it can be exciting. by Edward Lucas

For too long Poland was seen as romantic, tragic, disorganised, history-obsessed and exotic

The costs have been serious. Reform has been soft-pedalled. Polish public services do not offer the choice and excellence the private sector provides. Poland can seem timid. It forswears the grand gestures of protest and solidarity, which were once its hallmark. It has tolerated Russia’s sloppy investigation into the 2010 plane crash that nearly decapitated the country. It does nothing to subvert the ex-KGB regime in the Kremlin, or even to help democrats in next-door Kaliningrad. If Georgia is attacked again, it is hard to imagine President Bronisław Komorowski leading a mission to Tbilisi. Poland was conspicuously absent from the campaign in Libya and shuns strikes on Syria. Polish foreign policy concentrates on boring negotiations which bring practical benefits, such as the excellent European Union budget deal.

29 May 2014 +( * ŏ + 5ŏđŏ $!ŏ +5 (ŏ /0(!ŏđŏ ./ 3

More information coming soon...

30 POLAND’S PUBLIC FEATURE

HEALTH WOES

Deputy Health Minister Sławomir Neumann discusses whether reform can fix Poland’s ailing health care system without bringing down PO

Poland’s public health care

system is headed for a new bout of reforms as the government tries to deal with long-running problems, like underfunding and long waits for medical procedures, which have made the National Health Fund (NFZ) one of the country’s least popular institutions. The stakes for premier Donald Tusk and his centrist Civic Platform (PO) party are very high; elections are due in 2015 and the ruling party has fallen behind the opposition in the most recent opinion polls. However, the track record for reform over the last two decades is fairly bleak. Despite frequent and often quite dramatic attempts, the health care system has mostly just been an electoral dead weight for past governments. Still, Sławomir Neumann, the deputy health minister, is confident that this time around the government will get it right and not pay a price at polling stations. “Good changes to the heath system could actually be an electoral advantage rather than a hindrance,” he said during a break at the recent Krynica economic forum, during which health care was one of the major subjects of discussion.

Decentralising the NFZ Health Minister Dariusz Arłukowicz is going to kick off his reform proposals this autumn. The central idea is to decentralise the NFZ, allowing the market to dictate where health care złotys are spent. The government is also going to push to allow for a broader market for medical co-insurance, as well as electronic ID cards for doctors and patients. The problem is that the barriers to actually accomplishing a successful outcome are very high. Arłukowicz’s predecessor Ewa Kopacz, now the speaker of parliament, has admitted that her inability to overhaul the health care system was her biggest failure in her four years as minister. Kopacz oscillated between a heavy dose of government control, for example setting low drug prices, leavened with a more market-orientated approach like decentralising the NFZ and linking NFZ payments to patient satisfaction. The same tug-of-war can be seen in Arłukowicz’s ideas. On the one hand he wants to make local control more effective, although

HEALTH SPENDING FIGURES FOR POLAND

illustration: Janulla

Total health spending accounted for 6.9%

of GDP in Poland in 2011, more than 2 percentage points lower than the OECD average of 9.3%. The United States was, by far, the country that spent the most on health as a share of its economy, at 17.7%, of its GDP followed by several European countries including the Netherlands (11.9%) and France (11.6%). Source: OECD Health Data 2013

all the money for health care will still flow out of Warsaw. The main goal would be to divide the NFZ’s current functions of being both a main payer as well as the health care system regulator. After the reforms the local units of the NFZ would be in charge of payments, while a new institution will set prices for medical procedures, control quality and safety both for the public system as well as for other payers, primarily from private sector insurance companies which will play a larger role than they do today.

Treading lightly on the issue of copays However there is also a squeamishness over some market-friendly, but politically difficult schemes like co-payments. Many countries have brought in systems where patients have to pay a fee for accessing medical services, with the idea being that they will be more careful about frivolous visits to the doctor. Neumann is strongly opposed, saying: “The idea of going to the doctor and the NFZ pays 100 zł and I pay an additional 50 zł, there is no way that is going to happen right now.” He adds, “This is something which creates a lot of discussion and a lot of controversy. These micro-payments exist in a lot of countries and the experience shows that initially they do have an effect, but over time it disappears. That means the patient numbers remain the same and then servicing the system is more expensive than it was before.” Instead, the reformed health care system will put much more stress on allowing for co-insurance in which patients can get additional insurance to cover a wider range of medical services and skip long waits, something that would also allow hospitals to put excess capacity to use that currently sits idle. Private insurance already exists in Poland, most widely in the form of policies sold by private medical companies like Luxmed and Medicover, services often provided to their employees by companies, but so far only about 2 million Poles are members. “It is still limited, but an obvious market success,” says Neumann. “However, I would like this to be something for 10 million people and not just 2 million, that this elite system be turned into a more egalitarian one.”

Despite frequent and often quite dramatic attempts, the health care system has mostly just been an electoral dead weight for past governments

FEATURE

Jan Cienski is

the Warsaw and Prague correspondent for the Financial Times. He has been in Warsaw since 2003. Prior to that he spent five years as the Washington correspondent for the National Post, a Canadian newspaper. He also spent several years in the US working for the Associated Press. From 1992 to 1995 he worked in Moscow for the German News Agency DPA. Jan has a degree in international relations from the University of Toronto.

Poland’s most unpopular institution

photo: Maciej Biedrzycki (Forum)

Expanding the private insurance sector One idea would be for patients to choose whether their obligatory health care payments go into the government system, as happens now, or whether that money flows to private companies, said Dorota Fal, advisor to the Polish Insurance Chamber, during a health care debate in Krynica. But an enormous amount of work needs

to be done before the private insurance sector can become more widespread, warns Konstanty Radziwill, deputy head of the Supreme Medical Council, the self-government body for doctors and dentists. The government first has to properly define the “basket” of medical services which will be covered by the state, as well as refund costs and acceptable wait times. That would allow insurance companies to step in and offer additional services based on that basket. However, setting any limits on health care spending is very unpopular and politically fraught. “I think the demands on the public payer will never catch up to social expectations,” admits Neumann. “However you define it the demand will always be greater than the supply. You can spend an infinite amount.” One problem for the Polish health system is that spending so far is very far from infinite. Poland currently spends about 7% of gross domestic product on health care, the second lowest level in the OECD club of rich nations, only ahead of Mexico. The OECD average is about 9% of GDP. About 64% of Polish spending comes from the NFZ, with the rest coming from private insurance and directly from patients’ pockets. Although Poland still trails the rest of the OECD, the situation has improved. In the 1990s, medical spending came to only about 5% of a significantly smaller GDP. Although Polish spending is relatively low, social expectations are high, as Poles look to the level of care available in other EU countries. The result has been that the Polish system rations heath care through very long wait times for anything but life-threatening procedures. A recent study by Ernst & Young, the consultancy, finds that wait times for some elective procedures like hip replacements and eye surgery can exceed 1,300 days.

The result is that the NFZ is one of the country’s least popular institutions. A survey by the CBOS polling organisation finds that only 12% of Poles had a favourable opinion of the NFZ. There is a general recognition that more money is needed for the system, something that the ministry hopes will come from the private sector. Poland’s gov- Sławomir ernment is already brushing against Neumann, the deputy health debt and deficit thresholds and there minister, is hopeful is little room for massive injections that healthcare of public funds into health care. reform can However, spending needs are high. be successful – and even help Although Polish hospitals are much at the polls. better equipped now than a decade ago, in part thanks to the flood of EU funds into the country after it joined the Union in 2004, now a huge

32 FEATURE

Poland currently

photo: FotografiaBasica

spends approximately 7% of its GDP on health care – though this is still a big improvement from the 90’s when it was around 5%.

A survey by the CBOS polling organisation finds that only 12 per cent of Poles had a favourable opinion of the NFZ amount will have to be spent on modernising hospital buildings. Neumann estimates the need at about 20bn zł. “When we look at the investment needs, it is immense,” he says. “The buildings are old and devastated.” Local governments, which control most hospitals, are now scrambling for the money to upgrade facilities. There is little likelihood of them turning to public private partnerships, a contract

between public sector payers and priNeumann says that the answer vate companies which has never really is closer coordination between the prigotten off the ground in Poland. “PPP vate medical business and the NFZ. does not work in Poland because there “We would like investments in health is an immediate fourth P which appears, care to first be agreed with the payer,” the prosecutor,” jokes Neumann. he says. Instead of building new hospitals, the best answer would be for Can this dysfunctional private business to invest in upgradrelationship be mended? ing existing hospitals. “I think what we The health sector’s experience with need is a modernisation of the existing the private sector, particularly pri- hospitals and not the construction of vate hospitals, has also been bruis- new ones. I think we have entirely ing. Private hospitals complain that enough hospitals,” he says. they have seen a dramatic cutback Just where health care spending in the number of NFZ contracts they should go is another part of Arłukowicz’s are able to sign, throwing into doubt reform package, which is supposed to their financial future. There is a suspi- create a “needs map” for the country. cion that local NFZs are pushing con- If the reform package works, tracts onto public hospitals owned by Neumann could be right that the result local governments, although they could be a boost for Civic Platform. tend to be less efficient, because “Reforming the NFZ is a priority for of the political consequences of letting this government over the next years,” a public hospital fail. he says. by Jan Cienski

33 Healthcare Matters Building a sustainable healthcare system for Poland

27 November 2013 InterContinental Hotel, Warsaw

! (0$ .!ŏ 00!./ will discuss the current

shape of the Polish healthcare sector and explore how both public and the private sectors can best work together to build a more sustainable healthcare system. Participants will include: private healthcare providers, insurance companies, hospital management, legal experts, healthcare consultants and hospital planners & designers, as well as private equity funds and financiers. *ŏ!4 !((!*0ŏ*!03+.'%*#ŏ+,,+.01*%05Čŏ!4,!.0ŏ, *!(/ŏ3%((ŏ %/ 1//č

đ How the public & private sector can best work together đ Key changes to healthcare legislation đ Market consolidation by private healthcare providers đ Financing sources and structure for clinics and hospitals đ How banks & investors view healthcare compared to other sectors đ How local authorities can afford healthcare đ How local authorities can ensure healthcare provision is affordable & sustainable đ Private insurance challenges đ Super-modern hospital designs PARTNERS

PATRON

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34 Healthcare Matters Building a sustainable healthcare system for Poland

CONFERENCE PROGRAMME 8.00 – 9.00

Registration and coffee 9:00 – 9:10

Welcome by Richard Stephens, Publisher of Poland Today and conference moderator.

Introduction by Andrzej Mądrala, Vice President Healthcare, Employers of Poland (Pracodawcy RP) 9.10 – 9.25

Intorductory presentation: Poland’s healthcare market. The facts & figures – hot issues in polish healthcare Robert Mołdach, healthcare consultant, Employers of Poland, Partner, Institute of Health and Democracy 9.25 – 10.45

1st session: Providers & payers – the need for more balance Short introductory presentation by Monika Duszyńska, Partner, CMS Cameron McKenna and Bartosz Krawczyk, Manager, Deloitte Business Consulting Public & private providers. Market access for providers. Healthcare services distribution and availability. Fair competition. Healthcare services financing. Consolidation in the market by private healthcare providers. Private insurance framework. Hospital care coverage. Market access for health insurance – 10 million insured population challenge. Panel discussion: Deloitte representative (moderator) Małgorzata Surdek, Partner, CMS Cameron McKenna Dorota Fal*, Advisor to the Management Board, Polish Insurance Association (Polska Izba Ubezpieczeń – PIU) Anna Rulkiewicz, President of the Board, Grupa LUX MED Adam Rozwadowski, President of the Board, ENEL-MED 10.45 – 12.00

2nd session: Why invest in hospitals in Poland? short introductory presentation by Deloitte & CMS Cameron McKenna Tight times and tight public finance. Commercialization as a pathway for partnership with investors. Need for funds – 60 bln pln investment estimate. Public duty, private provision

PARTNERS

– gap waiting for a closure. National Health Fund (NFZ) – changing priorities, waiting for a reform: potential impact on private healthcare, privatization of healthcare and the interest of investors in healthcare sector. Success factors for investments in hospitals. Hospital chains or outpatient service networks – who will lead the cycle in the managed care? Panel discussion: Robert Mołdach, Employers of Poland, Partner, Institute of Health and Democracy (moderator) Roman Kolek, Vice Marshall of Opolskie Voivodship Marek Wójcik, Director, The Association of Polish Counties (Związek Powiatów Polskich - ZPP) Aleksander Kacprzyk, Managing Partner, Resource Partners Monika Morali Efinowicz, Managing Director Poland, Advent International Leszek Ejsmont, Med Polonia Piotr Gerber, President of the Management Board, EMC Medical Institute 12.00 – 12.30

Networking coffee break 12.30 – 13.45

3rd session: Coexistence of the public and private sectors Short presentation followed by panel discussion – Robert Mołdach, healthcare expert, Employers of Poland, Partner, Institute of Health and Democracy Continued division into public and private sectors is not crucial for the patient, quality of service is: money should follow the patient. Only hospitals providing the best quality of services should stay on the market. Poland cannot afford huge, multi-departmental hospitals close to the patients, as well as up-to-date medical infrastructure. Private investment is needed. The system should be designed in such a way that the patient can take informed medical decisions. Panel discussion: Robert Mołdach (moderator) Sławomir Neumann*, Vice Minister of Health Marek Haber, Hospital Director in Sucha Beskidzka, Former Vice Minister of Health Paweł Buszman, American Heart of Poland (Polsko-Amerykańskie Kliniki Serca) Andrzej Mądrala, Vice President, Employers of Poland

27 November 2013 InterContinental Hotel, Warsaw 13.45– 14:15

Presentation: Super-efficient hospitals – the future design of Polish hospitals The Healthcare Environment across all industrial economies, driven by a common trend of rising elderly populations with increased health needs, and with expenditure on Healthcare rising faster than GDP growth, is rapidly expanding. As costs of Healthcare rise, all authorities and healthcare providers are looking at ways to deliver services more efficiently whilst limiting expenditure. This has an important impact on the Briefing and Design of Healthcare facilities. Ron Morgan, Director of Architecture, Capita Property and Infrastructure 14:15 – 15:15

Networking buffet lunch 15.15 – 16.30

4th session: Finance sector as healthcare partner Presentations by the World Bank and the European Investment Bank followed by a panel discussion What conditions do banks need in order to invest in healthcare and what conditions should be met by investors to make it feasible financially? How do banks perceive healthcare financing compared to other sectors? What criteria need to be fulfilled before financing a project? Panelists representing leading financing institutions 16:30 – 17.30

5th session: Summary of the conference Review of the topics which have been tackled at the conference. Panel discussion: Małgorzata Gałązka-Sobotka*, Uczelnia Łazarskiego, Member of NFZ Council Prof. Stanisława Golinowska*, Instytut Zdrowia Publicznego, advisor to the President of the Republic of Poland Beata Małecka-Libera*, Vice Chair, Parliamentary Health Commission 17.30 – 19.00

Networking cocktail party * – to be confirmed Poland Today reserves the right to change the programme. For the latest version please go to www.poland-today.pl

PATRON

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Weathering the storm

BANKING

Polish banks ride roughshod over decade’s worst slowdown

You could be forgiven

for thinking Polish banks are struggling given all the chatter about an ugly outlook, the worst economic slowdown in four years, all-time low interest rates and an aversion to borrowing from both consumers and entrepreneurs. As recently as March, Poland’s two largest banks, PKO BP and Pekao S.A., which generate close to 40% of the entire sector’s profit, projected that the industry’s net profits would nosedive by 10-15% in 2013. While low-single digit growth rates can’t exactly be characterised as bullish, lenders operating on the biggest EU market in Central & Eastern Europe are not having the tough time many experts had predicted. Recent data from the National Bank of Poland (NBP) shows the banking industry recorded slight growth in profits in the first six months of 2013, up 0.6% year on year and registering 8.2bn zł in total. “We assume that this year will end with a positive result, contrary to what is being experienced in the sector,” says Mateusz Morawiecki, CEO of Bank Zachodni WBK.

A high price to pay Indeed, a closer look at the numbers unveils the toll taken by the economic slowdown, with total net interest income (i.e. the difference between revenues made by banks from charges on loans and spending on deposits) down by as much as 8.4% year on year, to 16.28bn zł. The fall in total net interest income is the price Poland’s central bank is paying in its attempt to kickstart waning GDP growth. More so, the Monetary Policy Council (RPP) slashed Poland’s main interest rates by 2.25 percentage points between November 2012 and July 2013 to the lowest ever of 2.5%, hoping to invigorate an economy that expanded by a mere 0.5% in the first quarter, the slowest quarterly pace in four years. According to various projections for 2013 economic growth, including one made by the European Commission, Polish GDP may not rise by more than 1.2%, which would be the worst result since 2001. Yet bankers can sleep well after the RPP called a definitive end to a series of interest rate cuts amid an improving economic outlook. NBP Governor Marek Belka concluded in early July that, “the worst is over for

the Polish economy and now a gradual recovery is to start.” This cheerful statement was buttressed soon afterwards by relatively strong second-quarter GDP data, which showed growth up to 0.8% from 0.5% in the first three months of 2013, mainly thanks to stronger demand coming from the eurozone for Polish exports. This is why Poland was able to boast its third consecutive monthly foreign trade surplus in June, for the first time ever since the statistics started being released in 2000. A month later in July, industrial output took its biggest leap in 18 months, while manufacturing increased for the first time in 16 months on the back of growing orders.

vices. Many of Poland’s banks posted better-than-expected earnings in the second quarter, having started benefiting from the financial market watchdog KNF’s green light for a less restrictive lending policy. Nearly half of the banks surveyed by the NBP at the end of June reported having eased their credit standards. The value of consumer loans rose by 484.2m zł between April and June, the industry’s first growth since the beginning of last year. Indeed, the trend seems to be setting in. According to recent NBP data, consumer financing increased by 0.6% to 133.7bn zł in July. Perhaps in conjunction with the fact that companies finally started hiring, as the monthly statistics on July corporate employment showed, Brighter outlook consumers were showing less and less Such data bodes well for the banking reluctance towards borrowing. Banks have been signalling reboundindustry despite net interest margins that are likely to remain under pressure ing interest in credit in the corporate as the RPP is expected to keep interest sector. The first signs of this breakrates at a record low for at least a year, through were seen in the June money with inflation hovering slightly below its supply data, which showed some posi2.5% target. Still, lenders have proven tive change in investment and shortthey can weather lean times. The coun- term loans. Clearly lenders are gearing try’s No. 2 bank, Pekao S.A., failed to up for recovery as the number plankeep its margin from decline, having ning to maintain restrictive policy one of the biggest deposit assets in on loans for companies decreased, Poland, but compensated with prof- according to the NBP’s survey. its made on bond sales and cost cuts, These signals complement the KNF’s surprising the market with second- statistics, showing that the total value quarter earnings on the upside. Those of all loans for the non-financial secwith smaller deposit portfolios, like tor rose by 2.9% in the first half of 2013, BZ WBK and Bank Millennium, simply year on year, to 834.3bn zł. As much dropped costly deposit promotions as 8.7bn zł of this growth was in June, and lowered the interest paid to clients, or about 1.1%. Wojciech Kwaśniak, depwhich allowed them to boost margins. uty head of the KNF, said in May that if Recent data from the NBP shows that the performance of the banking sector a key determinant behind the bet- sustains throughout the year, the 2013 ter than expected banking profits net result may not turn out to be any was largely the result of prudent cost worse than last year, when the industry cutting on the part of banks. Indeed, generated a record high profit. It could operating costs grew merely 0.2% to be quite an achievement to beat that almost 13.8bn zł while the net result result amid the worst slowdown in more from banking operations fell by 6.4% than a decade. by Monika Rozlał to 27.8bn zł. What’s worth stressing is that the value of bad loans written off between January and June shrank by 15.9% to 3.48bn zł from a year earlier, lending more proof of a prudent and cautious Polish banking system.

Easing back into lending Despite being cautious, one should not be misled that banks did not make money on their traditional ser-

Monika Rozlał

is a freelance journalist covering the Polish economy and stock market. She previously worked for 12 years as an economy reporter for Bloomberg News in Poland.

NBP head Marek Belka said in early July that the worst is over for the Polish economy and now a gradual recovery is to start

36 COUNTRY FOCUS

QUIBBLING RIVALRY

Can Poland and Lithuania forge a united front despite their past squabbles?

Philip Boyes, who

photo: Robert GardziĹ&#x201E;ski (Fotorzepa)

is half Polish and half British, has written speeches, sometimes on the back of restaurant napkins, for presidents, prime ministers and congressmen. A former Reuters journalist, his work has been published in the New York Times, Wall Street Journal and Financial Times. Philip is a graduate of the London School of Economics and Kingâ&#x20AC;&#x2DC;s College London.

Where is Europe’s

geographical centre? Is it, as both sides have preconceived attitudes towards each other, the Poles claim, in a village just north of Białystok? rooted more in long-standing myths than reality. Many Poles Or is it, as the Lithuanians argue, just north of Vilnius? see Lithuanians through the prism of the literature they read Two countries at the very heart of Europe, once part of the at school, in particular classics such as Adam Mickiewicz’s same powerful Commonwealth, with the richest of shared “Pan Tadeusz.” For their part, Lithuanians still regard Poland histories, find themselves at loggerheads not just over as their big and intimidating neighbour. a geographical detail, but over spelling, schooling, minoriSeveral petty squabbles, such as the row over spellties and identity. Football fans may not be the measure of all ing, still dominate Polish-Lithuanian relations. According things but many were truly shocked last month when Polish to Lithuanian law, official documents, such as passports and hooligans unfurled a huge banner at a match between Lech birth certificates, have to be written using the Lithuanian Poznan and Zalgiris Vilnius declaring ‘Lithuanian Cad, Kneel alphabet, which lacks the letter W and Polish diacritical signs. Before your Polish Master’ (‘Litewski chamie, klęknij przed Another dispute is about Lithuania’s Polish-language schools, polskim panem’). Typical arrogant Poles, say the Lithuanians. which have been strong-armed into teaching most subjects The Poles publicly apologised but privately complained about in Lithuanian. The official rationale is to improve graduates’ their thin-skinned neighbours. command of the national language and to improve their The European Union really does not need these kinds chances in the job market. But Poles in Lithuania have cried of squabbles. Both countries border on Belarus, the con- foul. Other disagreements include a row about restitution tinent’s last dictatorship. They should be working closely of property in the Vilnius region confiscated in the Soviet together to engineer change. Russia looms large, too. Yet the era and a spat concerning rules about using Polish on street arguments dogging relations between Vilnius and Warsaw signs. Earlier this month Lithuanian Prime Minister Algirdas sometimes makes it difficult to present a united front on the Butkevicius spoke out against dual-language signs. eastern fringe of the European Union. With goodwill, these problems would be trivial. Instead the issues have poisoned diplomatic relations. Somehow, Moving forward it seems nationalist politicians prefer Time then to patch up the quarrels. to curry favour with their voters rather For sure there is plenty of common than undertake work on common proground to celebrate, starting with the jects. A reverence for the Middle Ages terrain itself, so beautifully described by is all very well, with the memory of disthe Nobel Prize winning poet Czesław tant and not so distant battles (after all Miłosz, who was born in early twentiPoland’s modern national hero Piłsudski eth century Lithuania. In his memoirs was born in Lithuania), but Warsaw Miłosz describes how he grew up surand Vilnius now have to focus on buildrounded by talk of a more glorious past: ing Europe on what have always been “Shadows enveloped me: the clanking known as the Kresy, the Borderlands. of sabres, the rustling of Renaissance That means concentrating on the future gowns, the fragrance of old houses full and on genuinely important areas, such of animal hides, hunting arms, rusted as energy and transport links, rather armour; all this robbed what was going than getting stuck in the past. on around me of some of its reality.” The foundations have already been laid. Poland holds second place in terms Nostalgia for the vanished of foreign investments in Lithuania; Commonwealth gave birth to an era of last year the value of Poland’s forthe greatest romantic writers and poets eign investments in the country was in the Polish language. Polish poets 6.73bn zł. Many small Polish firms looked back at the Commonwealth have invested in Lithuania. The main and saw a lost civilization, a romantic big Polish investors are insurance ideal. Lithuanians see things differently. provider PZU as well as oil refiners Whereas Poles fondly remember the Lotos and Orlen. On the Lithuanian joint Polish-Lithuanian state of centuside, fertilizer producer Achema, ries past, Lithuanians remember it as a truck maintenance firm Skuba and time when their national identity was clinical development provider Scope bludgeoned by cultural hegemony. Baltija are leading the way in Poland. As the historian Norman Davies has In the energy sector, scope for cowritten, the creation of the Polishoperation is enormous. In 2006 Lithuanian Commonwealth changed Poland’s Orlen bought Lithuania’s Poland forever. From a small country, Poland became a large oil-processing plant Mazeikiu, the only oil refinery in one; from a rather average central European country, Poland the Baltic States. Despite hiccups related to the stopevolved into a unique, multi-national state. Poland conquered page of Russian oil deliveries through the Druzhba pipepagan Lithuania and together they now share centuries line, results have been promising. The construction of the of Catholic culture and profound literary connections. LitPol Link, a direct power connection between Lithuania and Poland, has entered its last stage and could be a gameFact or fiction? changer. Due to open in early 2015, the LitPol Link will conThat differences between the two countries have escalated nect the Baltic States with the European energy system. beyond mere neighbourhood tiffs is down to the political class Transport links between the two countries still offer a lot of in both countries rather than the people themselves (football room for improvement. fans excepted). According to a recent survey published by The Polish portion of the long-awaited Via Baltica route the Institute of Public Affairs (Instytut Spraw Publicznych) (between Warsaw and Tallinn) still remains to be built. relations between ordinary Poles and Lithuanians are warm. In terms of defence co-operation Lithuania and Poland work Even so, the report points out that there is still an asymmetry closely together within NATO, where Polish pilots take part in relations between the two societies: Lithuanians are less in operations defending Lithuanian air space – a promising trusting of their Polish counterparts. The report shows that development which has been largely ignored by hardlin-

The arguments dogging relations between Vilnius and Warsaw sometimes makes it difficult to present a united front on the eastern fringe of the European Union.

COUNRTY FOCUS

Restoration work

on Jan Matejko’s famous painting, “The Battle of Grunwald”, which depicts the legendary battle in which Lithuanians and Poles fought alongside each other to defeat the Teutonic Knights.

38 COUNTRY FOCUS

Whereas Poles fondly remember the joint Polish-Lithuanian state of centuries past, Lithuanians remember it as a time when their national identity was bludgeoned by cultural hegemony

THE HISTORY OF POLISH-LITHUANIAN RELATIONS As Pulitzer-winning historian Anne

Applebaum documents in her book “Between East and West – Across the Borderlands of Europe”, the seeds of the Polish-Lithuanian empire lay in a sudden, late thirteenth century vacuum: the Slavic empire of Kievan Rus had dissolved, the Mongols were weak, the Turks had not yet arrived on the scene and the Lithuanians – the last pagan nation in Europe – bust out of the northern forests and pushed south and east towards the Black Sea.

For a tiny nation, the Lithuanians

had conquered a vast slice of land. But by the fourteenth century, they had reached a dead end. They were no match for the superior technology of the Teutonic Knights who were pushing East. The Poles and Lithuanians had no special love for one another, but both needed to fight the Germans and both needed protection against Mongol raids from the east. The military and political advantages of union seemed worthwhile. Therefore in 1385, the Poles offered Jogaila, the Grand Duke of Lithuania (later King Jagiello), the hand of their 12 year-old Princess Jadwiga. With it came the status of a legitimate Christian, European king. As with Jagiello and Jadwiga, the Polish and Lithuanian nations were not a perfect couple, but the union lasted, in one form or another, until 1785.

In 1919 Poland, led by General Piłsudski,

sought to reclaim Vilnius. For General Pilłsudski, a descendent of Polonised Lithuanians and whose heart is now buried in a Vilnius cemetery, the invasion was no theft: half of the city’s inhabitants spoke Polish, he argued, while only a tiny minority spoke Lithuanian. From 1920 until 1939 Poland and Lithuania remained in a legal state of war. What ensued, for many decades, was a tit-for-tat exchange of diatribes and provocations: in Lithuania, Polish-owned land was confiscated, Polish schools, publications, and voting rights were restricted. Across the border, almost all Lithuanian schools were closed and many Lithuanian organizations were banned.

The fall of communism led to a formal

photo: Grzegorz Kozakiewicz (Forum)

reestablishment of relations between Poland and Lithuania. Poland was one of the first countries to recognize independent Lithuania in 1991 and was a strong supporter of Lithuania accession to the EU and NATO. Both Prime Ministers, Tusk and Butkevicius, have agreed that although on a strategic level relations between the two countries are good, there is still a lot of room for improvement.

Poland’s President Bronislaw Komorowski and Lithu-

ania’s President Dalia Grybauskaite meeting in Kraków in 2010 on the eve of the 600th anniversary of the Battle of Grunwald.

ers on both sides. All of this goes to show how interwoven the interests of the two countries really are. And it strongly underlines the need for even closer cooperation within the framework of EU economic policy.

A concerted effort Detoxifying relations between Warsaw and Vilnius will take a lot of effort on both sides. Sensitivity, something often lacking among historians and politicians, is needed when discussing the common heritage shared by Poland and Lithuania. In both countries history has too often been

treated as a tool to serve political interests. As Ernest Renan argued in his classic study of nationhood, communities are constructed more on the basis of a common forgetting than on common memories. The European Union was founded on the determination of France and Germany to put aside centuries of bloody conflict and the will to put together a lasting alliance. Poland and Lithuania both suffered terribly under German and Russian occupation, that shouldn’t be forgotten. But they should find the strength to put aside their ancient feuds and think about a European future. By Philip Boyes

40 VOIVODSHIP FOCUS

Drawing strength from the Baltic sea Naturally much of Pomerania’s attractiveness as a business destination comes from its location on the coast. But this is not the only draw.

Many regions in Poland lay claim to

Roberto Galea

cut his teeth at several publications in Malta while still a communications student. Since moving to Poland in 2004, he has contributed to many national and international newspapers, magazines and websites on subjects ranging from small businesses, economy, culture and fine dining. He currently produces Business Poland, a weekly TV show for CNBC Europe.

ous six hours to just three-and-a-half. being located at the “heart of Europe,” The region’s busiest airport – Gdańsk but few can substantiate that claim as Lech Wąłesa Airport – now manages well as the Pomeranian voivodeship some of the highest traffic in Poland. (‘Pomorskie’ in Polish). The region, situ- Between 2010 and 2012, a new air ated between Scandinavia, Western terminal was constructed while the and Eastern Europe is ideally located taxiway and apron (where the airclose to some of the continent’s larg- craft are parked, serviced and refuest thoroughfares. The area which seats eled) were modernised. The transport the three major cities in the region infrastructure in Pomerania includes – Gdańsk, Gdynia and Sopot – is known the A1 motorway, E65 railway line, as the Tri-City conglomerate, and Port of Gdańsk, Port of Gdynia and airport in Gdańsk. is home to nearly one million people.

On the water’s edge

Economy

One of the voivodeship’s biggest strengths is its position on the edge of the Baltic Sea, which ultimately gives rise to two powerful industries - logistics and shipbuilding. Some of the world’s largest shipping companies use the Gdańsk port as a major regional hub for sea freight, with containers being shipped to and from Asia, North and South America, and other European ports. In March 2013, DB Schenker, the freight logistics subsidiary of Deutsche Bahn, opened a new cross-docking terminal in the greater Gdańsk area. The 4,500 sqm facility will help the company improve its business operations in Poland and Europe. "We decided to invest in this location based on business targets and improvement of customer service on the one hand, and ecological and economic targets on the other hand,” said Janusz Górski, Chairman of Schenker Sp z o.o. Last year Pomerania ranked second in terms of volume of freight (after St Petersburg) among the Baltic ports, according to Invest in Pomerania, the body which promotes investment in the region.

In 2010 the Pomeranian region ranked seventh in Poland in terms of GDP. Industrial companies, mainly within the oil refinery sector, dominate the region’s economy. The titans include refiner Lotos, electricity provider Energa, paper maker International Paper Kwidzyn and the Gdańsk shipyard. Despite the region being known for its heavy industries, companies within the services sector are increasingly emerging. Some of the larger players in the voivodeship include insurers STU Ergo Hestia, MTU SA, as well as banks SKOK im. F. Stefczyka and Nordea Bank Polska. The latter, with its headquarters in Sweden, has specifically chosen Gdynia to head its Polish operations, taking advantage of the region’s unique selling point of possessing the highest number of Nordic language speakers in Poland.

Infrastructure The region’s road, rail and air travel infrastructure made significant improvement in the years leading up to the EURO 2012 football championship, with many of the roads which service the region improved or completely rebuilt. One of the major infrastructural projects undertaken was the modernisation of the motorway connecting Warsaw and Gdańsk. Thanks to the improved road surface and infrastructure, the driving time between the two cities was slashed from the previ-

POMERANIA STATISTICS Capital: Gdańsk Population: 2.23 million Av. monthly salary: 3,777 zł. (gross) Total area: 18,300 km2 Population density: 125/km2 Unemployment rate: 13.20% Other principal cities/towns:

Gdynia, Słupsk, Tczew, Wejherowo

Special economic zones:

The Pomeranian SEZ, Słupsk SEZ

some of the world’s largest computerrelated companies, including Intel, Satel and DGT, have opened centres in the area. Due to the growing investment from well known IT multinationals in the region, Pomerania is slowly becoming known as Poland’s “Little Silicon Valley.” Indeed, according to a report by the Polish Agency for Foreign Investment (PAIiIZ), eight percent of all the IT companies in Poland, and 18% of software production is produced in the voivodeship. Furthermore, PAIiIZ calculates that there are over 2,000 people Education Education is well catered for, with employed in Tri-City R&D centres. around 100,000 students attending Though impressive, these numbers 28 higher education institutions in the pale in comparison to the 20,000 region. With a strong maritime econ- currently employed in the information omy, it’s no wonder that Pomerania and communication technology (ICT) specializes in providing top-tier edu- sector, which alone generates around cation for those students interested 4.1bn zł in exports – a sixth of the in maritime studies. Aside from that, region’s total, PAIiIZ says.

One of the voivodeship’s biggest strengths is its position on the edge of the Baltic Sea, which ultimately gives rise to two powerful industries logistics and shipbuilding.

GDYNIA population: 250,000 The second largest city in the region,

Gdynia, has regularly been among the top three Polish cities in terms of investor attractiveness, according to annual polls conducted by Forbes magazine. Maritime industries are still a hugely important slice of the economic pie in Gdynia, with about 30% of the city’s population depending on the various industries associated with the sea. According to Gdynia’s City Hall, “This tendency will continue although citizens will cultivate the sea in a different, more modern way than today.” The city’s relatively low unemployment rate (6.4%), numerous higher education centres, coastal position, as well as a packed cultural calendar, makes Gdynia an attractive place to live in. Some of the largest companies that have decided to invest in Gdynia include: Coca-Cola HBC Polska, Allcon SA and Finnlines Polska.

GDAŃSK population: 460,000 Perhaps most famous for its role in

bringing down the iron curtain in the late 1980s, Gdańsk is a veritable business titan within Poland. It attracts business because of its developed maritime industry and highly educated workforce.

photos: Bartłomiej Banaszak

Investment opportunities in and around the city are plentiful. The Pomeranian Logistics Centre is a new 110-ha logistics centre around the Northern Port in Gdańsk. Meanwhile, the 70-ha Gdańsk-Plonia industrial park is under construction. In a bid to attract talent, the city also offers the Gdańsk Scholarship, a financial instrument designed for companies planning to have an operational unit in Gdańsk. The project is aimed at encouraging companies to take on graduates for additional training and funding. A small, but dedicated economy promoted in the city is the production of amber products.

The world’s largest container ship, a behemoth

Triple-E owned by Maersk Line as tall as a 20-story building and capable of carrying 18 thousand 20ft containers, captivated onlookers as it headed into the Gdańsk port.

Energy

Industry Regulatory Office (EIRO), putBecause of its energy-intensive econ- ting the voivodeship solidly in second omy, energy is particularly important in place in Poland Offshore wind-power is the Pomeranian region, with demand another segment showing huge potenexceeding supply. PAIiIZ calculates tial, expected to achieve a total capacthat the voivodeship imports 70% of its ity of 5,000 MW by 2020. in terms power to meet its needs, with both the of wind power capacity. But wind is not the only alternaoil/gas and shipyard industries consuming most of that. Although the region tive energy source associated with the is one of the lowest power genera- region. Pomerania is the likely locators in Poland, it is making headways tion for Poland’s first nuclear power in producing its own electricity while site, after the government announced looking for alternative, and sustainable, a decision in 2005 to move away from traditional coal energy and gas. methods of generation. Another source of energy – wind The World Nuclear Association says power – has seen a dramatic increase that electricity consumption in Poland in investment in recent years. This is expected to grow by 54% by 2030. coastal region is widely known for its The country, therefore, is in need of a fierce winds and has tapped into this diversified energy plan as it moves alternative source of energy. Up until away from coal. In early 2013, an arm of 2012, wind farms totaling 246.9 MW of utility provider PGE signed an $81.5m electricity production were installed contract with WorleyParsons, a leadin the region, according to the Energy ing provider of professional services

to the resource and energy sectors, for site characterisations of two plots in the region – in Choczewo and Żarnowiec. Only one will ultimately be chosen. The company says that the first Polish nuclear plant will generate approximately 3,000 MW.

Attractiveness There are a number of incentives that attract various businesses to the region. Real-estate tax is either totally or partially reduced if companies create new jobs for local citizens. Investing companies can also benefit from income tax subsidies (up to 60% of the qualified investment expenditures) offered by the two Special Economic Zones (SEZ) located in the region. Pomeranian SEZ and the Słupsk SEZ, together employ a total of 18,900 people and boast investment outlays of 7.38bn zł and 1.2bn zł respectively. “The first general factor that attracts foreign companies to Pomerania is the supreme investor support system” said Deputy Director Marcin Faleńczyk from Invest in Pomerania. “What is most important here is the fact that salaries are still lower than in other Polish cities, talent pool supply is steady (around 27,000 graduates a year), and the market is not saturated,” continued Mr Faleńczyk. “Furthermore, investors can also find modern A-class office space (over 380,000 sqm) at reasonable prices (€12-14 per metre).”

Potential for growth Despite a glowing history in the maritime industry, the region is slowly moving away from its traditional Baltic industrial roots. Experts interviewed by Poland Today agree that the largest growth potential in the Pomeranian region is in logistics, BPO/SSC (Business Process Off shoring / Shared Service Centre), and ICT (Information & Communication Technologies) among others. A number of international giants have already invested in the region, including Thomson Reuters, Lufthansa, and Sony Pictures. A recent report by the Association of Business Service Leaders in Poland (ABSL) said that between January 2012 and May 2013, employment in the Business Services Sector grew by 10% in the Tri-City area (compared with a 19% growth in Warsaw). The report added that as much as nine percent of all service centres in the area involved foreign capital. And the region has big plans for the future. “In 10 years time we envision our region being a leader within business services centre on one side, and a logistics and highly advanced manufacturing hub on the other” said Marcin Faleńczyk.

by Roberto Galea

BUSINESS REVIEW

TABLE OF CONTENTS

WARSAW STOCK EXCHANGE INSIDER

Hectic season keeps investors on the edge The summer is usually a time when investors have a chance to sit back and relax. Not so this year. Looming reform to the pension system, earnings reports, and new WSE alliances and indices kept everyone on their toes. . See page 46

BANKING & FINANCE

Busy Summer on the Financial Markets Acquisitions was a big buzzword of the summer in the banking world, with new alliances formed by major banks, as well as many gripping their seats in preparation for changes in pension funds and a revamp of the banking watchdog. See page 48

MERGERS & ACQUISITIONS

Another year of wait & see After the frantic spring, the summer is usually time when markets slow down and those in the banking and finance world prop up their feet with a nice umbrella drink for a little R&R. Alas, this year it was not meant to be. In this issue, Agata Nałęcz takes us along on the roller coaster ride of this summer’s exchange in the issue’s WSE Insider feature, and Monika Rozlał looks at how new government regulations and bank mergers kept everyone on their toes. On the energy front, the European Investment Bank kept the coal industry fired up with new emissions-based lending regulations that didn’t sit so well with coal-affiliated groups. Maciej Szczepaniuk takes a look at the potential effects of these new lending regulations, and what we can expect on the Polish market in the near future, among other topics. The past few months have also been good for the BPO sector, which saw a conference in Łódż this summer aimed at attracting more outsourcing to Poland. Tim Bridgman looks at this conference, as well as how Polish cities have starting looking to India as inspiration for the development of the BPO sector back at home. Lech Kaczanowski takes a look at why "cautious optimism," and "wait & see" were the dominant summer themes of M&A in Poland. Rounding out the Business Review this month is our issue’s guest editor, Andrew Nawrocki, who looks at a yacht-building start-up in the Pomorskie region which has high hopes of conquering this saturated market. Bet those in banking would have preferred to spend their summer on one of these yachts instead of glued to the indices. There’s always next summer…

Lech Kaczanowski takes a look at why those hoping for a sudden boom in M&A activity across the region may need to exercise patience despite dealflow figures in the CEE showing that the region largely avoided the downturn seen in major eurozone markets. See page 49

BPO / OUTSOURCING

BPO Poland looks to India for investment and leadership Tim Bridgman take a look at Poland’s BPO sector, which is looking to majorly expand in Poland, with India’s success in outsourcing serving as inspiration to Polish cities looking to duplicate their success on Polish soil, with Łódż on the front burner. See page 50

Jarosław Antonik, Member

ENERGY

The EIB curbs new coal power plants New changes in lending rules based on emissions have outraged companies within the coal industry over fears of lack of funding due to inability to comply, and the “little three-pack” is causing headaches to electric companies who fear less government support. See page 51

START UP

of the Board at KBC TFI, is confident that the Polish economy is getting over the slowdown, which, combined with signs of growth coming from the Eurozone, will support our equity market.

See page 46.

A Baltic type of Elegance Admiral Boats S.A. is a 3-year old company on a meteoritic rise. This issue’s guest editor, Andrew Nawrocki, take a look at this up-and-coming company with aims towards becoming one of Europe’s largest and most successful yacht makers. See page 52

"Significant long-

term investment

across Europe is essential to achieve our energy and climate targets and maintain a technological lead,” said European Commissioner for Energy, Günther Oettinger.

See page 51.

Central Europe

remains an attractive destination for buyouts because it continues to offer the type of growth prospects the "Old Europe" can no longer sustain.

See page 49.

44 BUSINESS REVIEW

GENERAL STATISTICS

Poland in a nutshell Geography: Poland, officially the Republic of Poland (Polish: Rzeczpospolita Polska), is a country in Central Europe, bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian enclave, to the north.

Population:

Total area:

Ethnic groups:

312,685 km2 120,696.41 mi2 69th in the world

Time zone:

CET (UTC+1)

Main river:

Vistula (1047 km) Oder (854 km)

History: The establishment of the Polish

Coat of arms:

The White Eagle symbol appeared for the first time on the coins made during the reign of Bolesław I (9921025), initially as the coat of arms of the Piast dynasty. The eagle’s graphic form has changed throughout centuries. Its recent shape, accepted in 1927, was designed by professor Zygmunt Kamiński and was based on the eagle’s form from the times of Stefan Batory’s reign (1576-1586).

state is often identified with the adoption of Christianity by its ruler Mieszko I in 966, over territory similar in size to that of present-day Poland. The Kingdom of Poland was formed in 1025, and in 1569 it cemented a long association with the Grand Duchy of Lithuania by signing the Union of Lublin, forming the Polish–Lithuanian Commonwealth. The Commonwealth ceased to exist in 1795 as Polish lands were partitioned between the Kingdom of Prussia, the Russian Empire and the Austrian Empire. Poland regained its independence as the Second Polish Republic in 1918. Two decades later, in September 1939, World War II started with the Nazi Germany and Soviet Union invasion of Poland (Molotov–Ribbentrop Pact). Over six million Polish citizens died in the war. The People’s Republic was declared in 1952 although Poland was a client state of the Soviet Union from 1944. During the Revolutions of 1989, the communist state was overthrown and democratic rule was re-established in the form of the “Third Polish Republic”. Despite the vast destruction the country experienced in World War II, Poland managed to preserve much of its cultural wealth. There are currently 14 heritage sites inscribed on the UNESCO World Heritage list in Poland. Since the end of the communist period, Poland has achieved high rankings in terms of human development.

Higher education rate: 88,7% of adult population (2010, Eurostat)

Gini coefficient: 31.1 12th in the EU (2010, Eurostat)

Life expectancy at birth:

men: 71,3 years women: 79,8 years (2010, United Nations)

Fertility rate: 1,38%

(2010, World Bank)

Human Development Index: 0.813

39th in the world (2011, United Nations)

GDP (PPP):

Total: $814 bn 19th in the world Per capita: $21,261 45th in the world (2011, World Bank)

researched and edited by Bartosz Stefaniak

GDP (nominal):

Total: $514 bn 22nd in the world Per capita: $13,463 51st in the world (2011, World Bank)

Capital city:

Warsaw (1,7 mn pop.)

Main cities:

Kraków (0,76 mn) Łódź (0,74 mn) Wrocław (0,63 mn) Poznań (0,55 mn) Gdańsk (0,46 mn) Szczecin (0.4 mn) Katowice (0,3 mn)

Key dates:

Christianisation: Apr 14, 966 Kingdom of Poland: Apr 18, 1025 Polish-Lithuanian commonwealth: Jul 1, 1569 Partition of Poland: Oct 24, 1795 Duchy of Warsaw: Jul 22, 1807 Congress Poland: Jun 9, 1815 Independent Poland: Nov 11, 1918 Invasion of Poland, WWII: Sep 1, 1939 Communist Poland: Apr 8, 1945 Republic of Poland: Sep 13, 1989

38,501,000 6th in the EU 34th in the world (2011 national census)

Internet: .pl Phone: +48 Drives: on the right

Density:

123/km2 (320/mi2) 83rd in the world (2011 national census)

98.1% Polish 0.6% Ukrainian 0.2% German 0.2% Belarusian 0.1% Lithuanian 1.8% Other (2011 national census)

Official language:

Polish

Law: the legal system has been developing

since the first centuries of Polish history, over 1,000 years ago. In 1791 Poland became the first country in Europe (2nd in the world) to adopt a Constitution as supreme law on its territory. Constitutional Tribunal is the highest jurisdiction in today’s Poland. Court decisions can be appealed to the European Court of Justice in Strasbourg. The Republic of Poland recognizes also the International Court of Justice.

Political system: a parliamentary representative democratic republic, whereby the Prime Minister is the head of government of a multi-party system and the President is the head of state. Executive power is exercised by the Council of Ministers. Legislative power is vested in both the government and the two chambers of parliament, the Sejm and the Senate. The Judiciary is independent of the executive and the legislature. Administrative order: Poland is a unitary

state. After the 1999 administrative reform, it is now divided into 16 provinces (voivodships), 379 districts (powiat) and 2479 local government communities (gmina).

National defense:

President:

Bronisław Komorowski

Next presidental election: 2015

Army: 100,000 (professionals) Yearly defense budget: $10 bn (2013)

Memberships:

UN, United Nations (1945) EU, European Union (2004) NATO, North Atlantic Treaty Organization (1999) WTO, World Trade Organization (1995) IMF, International Monetary Fund (1986) Schengen Agreement (2007) G6, Group of Six (2006) Council of Europe (1991) OECD, Organisation for Economic Co-operation and Development (1996) OSCE, Organization for Security and Co-operation in Europe (1994) Visegrád Group (1991) Weimar Triangle (1991) EEA, European Economic Area (2003) CBSS, Council of the Baltic Sea States (1992) IEA,International Energy Agency (2008) IAEA, International Atomic Energy Agency (1957) ESA, European Space Agency (2012)

Sources: National Statistics Office (GUS), National Bank of Poland, Min. of Finance, Min. of Economy, Min. of Employment, 2011 national census, Warsaw Stock Exchange, Eurostat, World Bank, United Nations, OECD

Prime Minister: Donald Tusk (PO)

Ruling coalition: PO-PSL

Next parliamentary election: 2015

National parliament:

460 members

Political parties:

PO: 207 seats (45%) PiS: 157 seats (34,13%) RP: 40 seats (8,69%) PSL: 28 seats (6,08%) SLD: 27 seats (5,86%) (female deputies: 24%)

Number of Polish deputies in the European Parliament:

51 seats (6,76% of total)

1595 1522 1444

BUSINESS REVIEW

1344 1275 1175 1057

Currency:

Currency exchange rates:

Polish Złoty (zł)

EUR: 4.19 (y/y+2.63%) USD: 3.14 (y/y +0.73%) GBP: 5.00 (y/y -1,07%) CHF: 3.39 (y/y +0.92%) JPY: 3.17 (y/y -20.16%) (Sep 16, 2013, National Bank of Poland)

Interest rate:

Jul 2013: 2.5% Jun 2013: 2.75% May 2013: 3% Mar 2013: 3.25% (National Bank of Poland)

PLN BILLIONS

980

Working time:

Average salary:

Workforce productivity:

Minimal salary:

$26.2/hour (2011, OECD)

1600 zł gross (Jan 2013, Ministry of Employment)

Nominal GDP growth: free float of the national currency helped the country maintain development even in the middle of the global crisis. (National Statistics Office)

Total employment:

Main tax rates:

GDP per capita in relation to EU average:

Jul 2013: 10.4% Jun 2013: 10.47% May 2013: 10.55% Apr 2013: 10.62% (Eurostat)

av. 1929 hours per year 5th place in OECD 3rd place in EU (2012, OECD)

885 814 772 685

721

617 551

98 99 00 01 02 03 04 05 06 07 08 09 10

National bank governor:

Inflation (y/y):

National bank reserve:

prof. Marek Belka

Jan 2013: €82.5 bn Jan 2012: €75,7 bn Jan 2011: €70.2 bn Jan 2010: €60.9 bn Jan 2009: €46 bn Mar 2008: €63.4 bn (National Bank of Poland)

International rating:

Aug 2013: 1.1% Jul 2013: 1.1% Jun 2013: 0.2% May 2013: 0.5% Apr 2013: 0.8% Mar 2013: 1.0% Feb 2013: 1.3% (National Statistics Office)

Economical overview: after 20 years

of constant economic growth, Poland with a nominal GDP per capita of $13,463 is recognized as a high income economy. It is the biggest economy in Central Europe, the sixth largest in the EU and, according to different sources, 19th to 21st in the world. It is also one of the most dynamic economies on the globe. According to the United Nations Statistics Division, Polish nominal GDP rose from $64,5 bn in 1990 to $514 bn in 2011. After China and Vietnam, it gives Poland 3rd place worldwide in long term development rate. During the ongoing crisis, Poland was the only member country of the European Union to have avoided a decline in GDP, meaning that in 2009 Poland created the largest GDP growth in the EU. Poland is also home for the biggest and most dynamic stock exchange in Central Europe. According to Deloitte’s CE TOP 500 survey, four of the 10 biggest companies in Central Europe are from Poland.

Fitch: A- (stable) Moody’s: A2 (stable) S&P: A- (stable) (Jan 2013)

Foreign direct investment in Poland:

1994-2011: €139.1 bn 2011: €10.9 bn (National Bank of Poland)

Polish direct investment abroad:

2011: €5.1 bn (National Bank of Poland)

photos: Tomasz Adamowicz (Forum), Adam Chełstowski (Forum), Rafał SIderski (Dziennik / Forum)

WIG20 stock index: 2012: +20% (2582 pt) 2011: -22% (2144 pt) 2010: +15% (2744 pt) 2009: +33% (2388 pt) 2008: -48% (1789 pt) 2007: +5% (3456 pt) 2006: +24% (3285 pt) 2005: +35% (2654 pt) 2004: +25% (1960 pt) 2003: +34% (1574 pt)

100 120

142

107

131

150

154

EXPORTS (€ billions): 40

102

116

117

136

143

Foreign trade balance: Poland’s economy plays an important role in the chain of supply of many global companies. A significant part of imports are capital goods needed for industrial retooling and for manufacturing inputs, rather than imports for consumption. Poland is also highly dependable on external fossil fuel suppliers. The current economic slowdown in Europe combined with the free float of Polish currency is exerting a major influence on Poland’s foreign trade.

51% (2004, EU accession), 51% (2005) 52% (2006), 54% (2007), 56% (2008), 61% (2009), 63% (2010), 64% (2011), 66% (2012)(Eurostat)

16 035 000 (2011, OECD)

Unemployment:

PERCENTS (Y/Y)

6.2 5.0

5.3 4.5 4.3

3.9

PIT, personal income: 18% (below zł 85k/y) 32% (above zł 85k/y) CIT, corporate income: 19% (flat tax) VAT, value added: 5%, 8%, 23% (Ministry of Finance)

Minister of finance:

6.8

Jacek Rostowski, awarded ‘Best European Finance Minister 2009’ by The Banker magazine.

5.1 3.9

3.6

4.3

1.9

1.7

1.2 1.4

10 year bonds interest rate:

3.99% (Jul 2013) 98 99 00 01 02 03 04 05 06 07 08 09 10

GDP growth rate: Poland’s GDP figures since

Public debt:

Warsaw Stock Exchange:

Balanced budget amendment:

the mid-90’s have varied greatly but, crucially, they have never gone into negative growth. In 2009 the country, was the only EU economy not to. While serious challenges remain, the figures are a testament to those who set the course of the economy during and immediately after the transition from communism to a freemarket economy. (National Statistics Office)

listed companies: 443 (45 foreign) total capitalization: €189 bn capitalization of foreign companies: €57 bn number of IPOs: 34 (2010), 38 (2011), 19 (2012) number of investment accounts: 1.5 mn 2012 total stock sales: €49.6 bn 2012 average stock sale per session: €200 mn (Sep 2013, Warsaw Stock Exchange)

Exports by destination (2012):

IMPORTS (€ billions):

3808 zł gross (y/y +1.4%) (Jul 2013, National Statistics Office)

Developed countries: €117.9 bn (82.2% of total) Developing countries: €11.6 bn (8.1%) European Union: €109 bn (76%) Eurozone: €74.4 bn (51.9%) Germany: €36 bn (25.1%) United Kingdom: €9.7 bn (6.8%) Czech Republic: €9 bn (6.3%) France: €8.4 bn (5.9%) Russia: €7.6 bn (5.3%) (2012, National Statistics Office)

Exports by sector (2012):

Industrial supplies: €41.6 bn (29.1% of total) Consumer goods: €30 bn (20.9%) Transport equipment: €27.9 bn (19.5%) Capital goods: €21.7 bn (15.1%) Food and beverages: €15.1 bn (10.6%) Fuels and lubricants: €6.6 bn (4.6%) (2012, National Statistics Office, BEC classification)

2012: 55.6% GDP 2011: 56.2% GDP 2010: 54.8% GDP 2009: 50.9% GDP 2008: 47.1% GDP 2007: 45% GDP 2006: 47.7% GDP 2005: 47.1% GDP 2004: 45.7% GDP (Eurostat)

Budget deficit:

2012: 3.9% GDP 2011: 5% GDP 2010: 7.9% GDP 2009: 7.4% GDP 2008: 3.7% GDP 2007: 1.9% GDP 2006: 3.6% GDP 2005: 4.1% GDP 2004: 5.4% GDP (Eurostat)

Poland’s constitution (adopted in 1997) caps public debt at 60% of GDP - the government cannot take on any financial obligations that would cause that limit to be exceeded. To ensure this level is never breached, Poland has a self-imposed debt threshold of 55% of GDP, and the government must take action to balance the budget once this level is exceeded.

Imports by origin (2012):

Developed countries: €99.4 bn (64.5% of total) Developing countries: €30 bn (19.5%) European Union: €88.5 bn (57.5%) Eurozone: €69.4 bn (45.1%) Germany: €32.8 bn (21.3%) Russia: €21.6 bn (14%) China: €13,6 bn (8.9%) Italy: €8 bn (5.2%) France: €6 bn (3.9%) (2012, National Statistics Office)

Imports by sector (2012):

Industrial supplies: €49.5 bn (32.2% of total) Consumer goods: €18.1 bn (XX%) Transport equipment: €19 bn (12.4%) Capital goods: €32.1 bn (20.9%) Food and beverages: €10.6 bn (6.9%) Fuels and lubricants: €24.1 bn (15.7%) (2012, National Statistics Office, BEC classification)

Exports dynamics in Eur (2012/2011):

Total: +4.9% EU: +2.3% Eurozone: +0.7% CEE countries: +22.1% Former USSR: +21.2% (National Statistics Office)

Imports dynamics in Eur (2012/2011):

Total: +1% EU: -2.7% Eurozone: -2% CEE countries: +13.9% Former USSR: +11.7% (National Statistics Office)

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46 BUSINESS REVIEW

WARSAW STOCK EXCHANGE INSIDER

Hectic season keeps investors on the edge Vacation usually brings less activity to the Warsaw Stock Exchange (WSE) as investors relax rather than follow the fluctuations of indices. This summer, though, was surprisingly hectic. At the end of June Finance Minister Jacek Rostowski as well as Labor and Social Policy Minister Władysław Kosiniak-Kamysz announced governmental plans of reviewing the national pension system. According to government experts, changes are urgently needed to reduce costs and risks related to the functioning of the pension system. Although many experts see a positive influence of the reforms on public finances, as well as the overall Polish capital market and future economic growth; the announcement by both Ministers came as a big surprise sparking insecurity and a drop in the prices of many shares. Many economists and market participants have criticized the government’s proposals for change to the pension system, resulting in a final decision not yet being reached.

Agata Nałęcz is

an investor relations specialist. She was previously a Reuters correspondent for four years, covering equity markets, the Warsaw Stock Exchange and Initial Public Offerings of domestic and foreign companies.

Highlighting this uncertainty is Jarosław Antonik, Member of the Board at KBC TFI. Speaking with Poland Today, Antonik stated, “The most important factor at this time is what is going to happen next with the pension system. Investors expect to learn more about the direction that changes will follow. Even though the announcement was shocking, the market managed to catch up, which is a positive sign for the future… Moreover, the Polish economy is getting over the slowdown, which, combined with signs of growth coming from the Eurozone, support our equity market. International investors will soon pay more attention to emerging markets due to their low valuations from which WSE indexes may benefit as well. The policy of low interest rates in Poland constantly supports equities in comparison with bonds or bank deposits.”

Member of the Board at KBC TFI says that there are visible signs that the Polish economy is getting out of the recent slowdown. An improving global equity market combined with impulses from the eurozone is likely to support the domestic equity market.

photos: Krystian Maj (Forum), KBC TFI, Ene

Jarosław Antonik,

year, are buying up shares and pushing equity prices even higher. The summer has also proved to be a busy one in terms of initial public offerings (IPO’s). Seeking to capitalize on recent equity rises, companies have been encouraged by experts to list their companies on the WSE. In June 2013, the main list of the WSE welcomed the arrival of Tarczyński S.A., a foods company, and Platinum Properties Group S.A., a real estate firm which was previously listed on NewConnect. Also seeing the move was Lithuanian based AviaAM Leasing AB, with its debut on 28 June 2013 making it the 54th foreign company listed on the WSE. The value of the IPO of this international holding engaged in commercial aircraft acquisition, leasing and trade was 112.15m zł, ranking it the second biggest new listing in Warsaw in 2013 after the IPO of Polski Holding Nieruchomości. AviaAM Leasing has decided that the Warsaw Stock Exchange will be the only trading market for its shares. The latest ‘new arrivals’ were pharmaceutical company Global Cosmed S.A. and logistics provider OT Logistics S.A., bringing the total companies listed on the WSE to 444, with 12 joining up through September 2013. The new listings are the result of a strategy by the WSE aimed at strengthening the international position of the Exchange by increasing the number of issuers, especially foreign ones. By doing so, the WSE aspires to remain the strongest trading floor in the region of Central and Eastern Europe. In doing so, it has recently expanded the index of companies listed on the main floor to include 10 additional ones: LPP, Cyfrowy Polsat, ING BSK, Alior Bank, Azoty Tarnów, CCC, Enea, TVN, Netia and Boryszew. Sectors

represented in the composition of the WIG20 and soon to be WIG30 are: banking, raw materials, fuels, energy, retail, Like each summer, August was dedicated chemicals, telecommunications, IT, conto the publication of mid-year financial struction, foods, insurance, media and reports for many WSE-listed companies. metals. The publication of the new WIG30 Even though data from the domestic econ- index will begin on 23 September and the omy released in the first half of the year WIG20 will continue to be published until had investors worried, many companies 31 December 2015. Some small and managed to show better than expected medium sized companies will benefit results. Some of these companies, pri- from these changes, with a number of marily from the banking sector, positively companies being upgraded as the enlargesurprised investors. The results were not ment of the main index portfolio implies bad given the worst economic slowdown an increase in the number of participants in recent history, with experts betting on in the mid-cap index – mWIG40 – and the hefty gains as soon as the Polish economy small-cap index – sWIG80. As of March 2014, the Warsaw Stock Exchange will accelerates. begin publishing WIG50 (in the place Small and mid-sized companies from of mWIG40) and WIG100 (in the place of the WIG index continue to peak, adapt- sWIG80) indices. ing faster than larger blue chips to any changes in the market, positive or nega- The reasons behind the creation tive. Investors, hoping to capitalize on of the new indices are the continued expectations of a better second half of this dynamic changes in the market. Since

BUSINESS REVIEW

the introduction of the WIG20 in April The Warsaw Stock Exchange will an1994, Poland’s economy has undergone nounce the composition of the portfolio of a transformation and the Polish capital the new WIG30 index on 23 September 2013. The new index reflects better sectorial divermarket and the Warsaw Stock Exchange sity of the market, improves overall liquidity have recorded rapid growth. During this and stimulates growth of the derivatives marperiod the number of companies listed ket. The companies whose shares make up on the main market increased to 444 the WIG30 will represent 13 different sectors. from 24, and the capitalization of domestic companies rose to nearly 540bn zł from 8bn zł. Such staggering growth in both the amount of companies listed stakeholders…” says Adam Maciejewski, as well as market capitalization had to be President of the WSE Management Board. reflected in the architecture of indices Echoing Maciejewski in support of the on the WSE, officials at the WSE point new approach is Antonik, stating, “It is a out. Furthermore, the changes are likely good decision and approach. The equity to stimulate additional growth of individ- market is developing constantly. Some market players have complained that ual market sectors. there are no interesting blue chips in the “The changes to the main stock market WIG20. Now it is going to change, as fresh indices are intended to better reflect the air runs into the index. Among new memcondition and size of our market and to bers there are some ‘success stories’…” stimulate its development. This should improve liquidity on the equities mar- Aside from such changes, the Warsaw ket and – in the long term – stimulate Stock Exchange has chosen what is supthe derivatives market. We have carried posed to be an idle summer to announce out extensive domestic and international its new alliance with Aquis Exchange, consultations, as making such extensive the proposed pan-European equities and historic changes requires particular trading exchange. Aquis is planning attention and care for the interests of our to go live in October 2013, subject to

On 19 August 2013 the Warsaw Stock

Exchange (WSE) and Aquis Exchange Limited (AE), a pan-European equities trading exchange based in the UK, became business partners. In doing so, the WSE signed an agreement to purchase a 30% equity stake in AE.

regulatory approval from the British regulator, the UK Financial Conduct Authority. The WSE will acquire shares representing 30% of the total vote at the Aquis Exchange General Meeting and the same share of the company’s dividends. Moreover, the WSE will have the right to nominate two non-executive directors to the Aquis Exchange Board of Directors. The total value of the transaction is £5m, which will be covered by WSE’s financial reserves. The investment aims at diversifying the Group’s revenue stream and strengthening its international position in the global financial markets. All of this should reinforce the Warsaw Stock Exchange as being the financial epicenter of Central and Eastern Europe. by Agata Nałęcz

BUSINESS REVIEW

Monika Rozlał

is a freelance journalist covering the Polish economy and stock market. She previously worked for 12 years as an economy reporter for Bloomberg News in Poland.

Leszek Balcerowicz,

accuses the government of playing with the OFE part of the national pension system just for the short-term sake of rescuing the budget.

BANKING & FINANCE SECTOR

Busy summer on financial markets While some Poles took advantage of the late summer sun, many within banking were putting in long evenings behind desks. Managers at PKO BP, Poland’s largest bank in terms of assets, began consolidation work as the bank sealed an agreement in mid-June for the takeover of Nordea Bank AB’s Polish assets, including Nordea Bank Polska. The Polish giant, in its largest acquisition to date, will pay 2.83bn zł for the bank, which itself is an insurance and leasing company. The costs of consolidation are estimated at 215m zł with the state-controlled lender increasing its assets after the purchase by 16% to 229bn zł. By adding an additional 136 branches to its already sizeable network of 1,200 retail banks, PKO BP hopes to solidify its position as a frontrunner in Poland’s competitive banking sector. Additionally the bank hopes to make use of Nordea’s licence and set up a mortgage bank. The merger is to be completed by early 2014. Management at Getin Noble Bank was probably just as busy digesting yet another acquisition, its third in less than a year. The 200m zł deal saw Getin absorb all of the private banking assets of DZ Bank Polska, which it bought shortly before the summer season kicked off. Other Polish lenders might have not had a lot on their plates, but plenty of food for fought as Rabobank announced at the very end of June that it may sell its 98% stake in Bank Gospodarki Żywnościowej (BGŻ). The Dutch investor had been probing the market to sell its majority stake in

the bank, allegedly unhappy with BGŻ’s 11th position by assets in the Polish banking industry. Among likely candidates for a possible takeover are Bank Pekao, Credit Agricole, BNP Paribas, Getin and ING. Holding things back is the Polish Financial Supervision Authority (KNF), with the agency supposedly reluctant to see more big mergers this year in the red hot banking sector. Chairman of the KNF, Andrzej Jakubiak, said in June that the agency expects Poland’s 10-15 largest banks to change their shareholding structure through attracting new investors rather than consolidation. Indeed, putting banks aside, the banking watchdog itself had a busy summer this year. In a draft law published in July by the Ministry of Finance on the prudential supervision of the financial system, a council is to be set up made up of members from the Ministry of Finance, Poland’s Central Bank, and the KNF, with the aim of strengthening financial system stability and reducing the odds of a financial crisis. According to the draft law, a Systemic Risk Council (RRS) will be set up in due course, though its creation has sparked furore from the KNF. Indeed, with such an arrangement in place, the KNF would lose its major tool for overseeing the banking sector in its ability to issue recommendations on lending policy and risk management. The regulator has spent recent months fiercely defending its right to issue recommendations, arguing that the proposed change could elevate risk in Poland’s financial system and is also against the trend observed in the EU. The National Bank of Poland, which is expected to play a vital role in the RRS, joined the dispute over marginalisation of the KNF’s position, with Governor Marek Belka saying that depriving KNF of this power would be unjustified.

photos: Szymon Laszewski (Forum), Piotr Malecki (Napo Images / Forum)

Andrzej Jakubiak, head of the Financial

Supervision Commission, at his office. His agency expects Poland’s 10-15 largest banks to change their shareholding structure through attracting new investors rather than consolidation

the entire Polish capital market, including Warsaw’s bourse, would lose its leading position and appeal in Central Eastern Europe.

Given recent events, however, this is unlikely. At the beginning of August, Seeing no rest either were the crusaders after a two-month break, the Ministry for retaining the status quo of privately of Finance offered 3-5bn zł two-year managed pension funds known as Otwarte T-bonds to investors. The demand topped Fundusze Emerytalne (OFE). In a never- 9bn zł, which encouraged the Ministry ending saga, the government has declared to boost the supply to 5.7bn zł. The notes that it planned to conclude the pension were selling like hot cakes with a quite system’s capital part overhaul by the reasonable yield of 2.96%, and the majorend of August. Deputy Finance Minister ity were purchased by foreign investors, Wojciech Kowalczyk confirmed that the and not Polish OFE. three options of the pension system’s capital part overhaul presented in June were Despite this, Forum Obywatelskiego still being taken into consideration. These Rozwoju (FOR), a think tank founded included liquidation of the Treasury by former NBP Governor and Finance bond-portfolios held by privately man- Minister Leszek Balcerowicz, warned that aged pension funds (OFE), which would a takeover of OFE assets by ZUS could allow them to trim public debt, as well allow political nominees to take seats on as two scenarios which essentially give supervisory boards of companies listed on Poles the freedom to choose between the WSE. “Any worsening of the condition ZUS or private pension funds. Each of of public finances will translate into radthe scenarios was lambasted by critics ical reduction of pensions paid by ZUS,” who argued that if powerful market play- Balcerowicz said at a press conference last ers like OFE pension funds were crippled, month. by Monika Rozlał

MERGERS & ACQUISITIONS

Another year of wait & see Although the 2012 & 2013 dealflow fig- The 2012 year saw a number of high ures in Central & Eastern Europe have profile M&A deals in Poland, mainly from avoided the downturn seen in major the financial sector, such as the acquisition of Kredyt Bank by Santander and TUiR Warta eurozone markets, those hoping for a by Talanx. The largest private equity transacsudden boom in M&A activity across the tion in Poland in 2012 was the EUR 400m sale region may need to exercise some more of LuxMed, the leading provider of healthcare patience. This seemed to be the message services in Poland to UK's BUPA. of Mergermarket’s Central & Eastern European M&A and Private Equity Forum 2013, which recently brought together the region’s corporate finance and private remains an attractive destination for buyequity community in Warsaw. The event outs because it continues to offer the type saw M&A practitioners, investment bank- of growth prospects the "Old Europe" ers, heads of corporate development and can no longer sustain. Although far from private equity investors assess the current the mind-blowing scale of the economic state of the CEE M&A market and discuss convergence one can witness in China their projections for the near future. or India, countries like Poland or the Czech Republic still have a great deal of The general mood was that of "cautious catching up to do before they reach the optimism", with the "wait & see" approach living standards of their European peers. dominating most discussions. Although This explains why the consumer goods the European economy seems to have & retail sector attracts so much attention avoided the worst-case scenario, drift- from private equity buyers - the growth ing onto somewhat calmer waters, and scenarios and metrics are much clearer despite abundance of liquidity on the than elsewhere. Another key issue, also financial markets, private equity investors demographic in nature, is the fact that and corporate buyers are still iffy about many CEE entrepreneurs who established acquisitions, whereas the potential sellers their businesses shortly after the fall are not particularly eager to sell. "There is of Communism, are now nearing retirestill a lot of uncertainty in the boardrooms, ment, which makes the question of sucCEO confidence is low, and the occasional cession increasingly relevant. The panel noise about certain transactions falling on family business and M&A, where PE through tends to get blown out of propor- practitioners and entrepreneurs discussed tion," is how one senior investment banker the challenges and opportunities involved described the situation on the buyer in such projects, was one of the highlights side. As for the sellers, amid record low of the Forum. interest rates, many seem to be lacking a clear idea of what to do next with the In telecommunications, a sector that saw some major deals in Poland not so long potential proceeds. ago, market insiders are not expecting That explains why a vast majority of deals much M&A action soon simply because that do get done are the so-called "familiar few can make sense of it at the moment. transactions" that typically involve inves- Amid persisting uncertainty with regard tors increasing their stake in a business to the dominant technology, business they know and understand. A good exam- model, profitability, and regulatory enviple of this trend was Generali’s takeover ronment, big buyers prefer to wait for the of the central European insurance group LTE and fibre network rollouts in key PPF. The Italian group had been involved markets, such as Poland, to reach a critical in the business for years and hence the mass, before making any further moves. transaction risk was low. So far this year The potential is certainly there, however, as many as 82% of all CEE M&A deals as Europe’s TMT market still remains have been strategic buyouts with financial fragmented compared to the US, and investors representing the remaining 18%. consolidation seems inevitable, with only As far as investor origin is concerned, they a handful of TMT conglomerates expected represent mainly European capital, with to remain on the market long-term. very few overseas buyers. One big question seems to be how to attract Asian and Another sector that received some American investors, and according to extra attention at this year’s event was experts, a period of sustained stability in healthcare, put in the M&A spotlight by the market and series of successfully final- BUPA’s recent takeover of Polish outized, large transactions, are needed to set patient care company Lux Med. One of the stage for big buyouts. Meanwhile, the CEE’s most active buyers in the segment few opportunities available across the at the moment is the Czech-Slovak priregion are there for local private equity vate equity company Penta Investments, buyers and strategic investors to grab. which is building regional healthcare and pharma retail businesses. Penta’s The one word that came up in many dis- representatives shared their insights cussions and in various contexts was on the challenges involved in health"demographics." For one, Central Europe care projects, but their overall message

BUSINESS REVIEW

was rather encouraging. Investors interested in CEE’s healthcare sector should certainly be prepared to adopt a longer than usual investment horizon, with 7-10 years in Penta’s case being the necessary minimum, but the long-term rewards can be worthwhile. However, the regulatory risk remains high in CEE, even if longer time frames as well as geographic diversification help to reduce it to some degree. When it comes to the most attractive segments of the healthcare market, hospitals seem to be the number one target, with some 30-40% of them in the red and public owners running out of ideas on how to subsidize them for much longer. A significant portion of CEE’s hospital segment, which receives roughly a half of the region’s total healthcare spending, seems bound to be privatized in the coming years, so huge opportunities certainly exist for the more daring and for the patient. On the financing front, things are said to be looking up, with banks being "back in a lending mood," as one senior banker put it. There is, however, much less appetite for risk, with certain industries facing difficulty raising capital for strategic projects. The energy sector for instance - including renewables, which used to be the hottest thing only a few years ago - has lost its appeal, as the US shale gas revolution and dropping prices of green certificates made bankers allergic to financing the development of power industry projects. Difficult access to bank credit in recent years has fuelled a spectacular growth of the high-yield debt market. The latter remains reserved, however, only for the largest transactions. With Polish banks sitting on piles of cash, PLN-denominated high-yield bonds would be a welcome development, according to some panelists, but for now this still seems to be a song of the future. With printing presses at central banks in the US and Japan still working at full capacity, the markets remain liquid, but the question on everyone’s mind is when this global experiment in quantitative easing will end and what impact it will have on financing. The good news for Poland is that there should be more than enough domestic funding to keep local investors busy. Some uncertainty remains, however, as the markets are yet to make sense of the planned changes to the country’s pension system. Some market insiders argue that the Polish government’s decision to nationalize treasury bonds held by the OFE pension funds, at the same time encouraging the latter to invest more aggressively in stocks and corporate bonds, may in fact stimulate M&A activity, while others fear stagnation. by Lech Kaczanowski

Lech Kaczanowski

is the editor of Poland Today's weekly newsletter, Business Review+. From 2002 to 2013 he covered business and economic news from Poland for Sweden's Bonnier Group and other Nordic media. A former Open Society Institute Fellow at Duke University in North Carolina, Lech has degrees in economics, sociology, and journalism.

BUSINESS REVIEW

Tim Bridgman,

British-born, Łódżbased, a teacher/ trainer specialising in digital technologies and cross-cultural business communications, has become a keen observer of the needs of BPO/ Outsourcing from his students as well as from the city in which he resides.

BPO SECTOR

BPO Poland looks to India for investment and leadership In June this year all eyes in the Polish ITO/SCBPO sectors were on the ASBL conference in Łódź where special guests included Marek Belka and Jan Krzysztof Bielecki. The conference featured speakers representing IBM, Hewlett Packard, PwC, Capgemini and Infosys amongst many others. There were discussions on topics ranging from management, optimizing business processes, to cultural diversity, and the conference finished on the upbeat note concluding that SSCs now represent the most dynamic sector in Polish economy. However, two months earlier than the ASBL conference, in April 2013, another conference took place of equal significance to the main Polish outsourcing sectors but receiving significantly less public attention. Organised by Polish Roadshow Polska, the conference was entitled the ‘VIII Polish Outsourcing Forum’ and the reason for this lack of interest can be assigned to the remarkable fact that this event took place not on Polish soil, but nearly 7,000 km away in Bangalore, India.

Key Terms:

ITO – Information Technology Outsourcing SSC – Shared Services Centres BPO – Business Process Outsourcing ASBL – Association of Business Service Leaders in Poland

population and tax incentives providing opportunities for foreign SSCs to come in and set up. But while over the last 4 years the ITO/SSC/BPO sectors collectively created the fastest growth in the Polish economy, BPO represents only a fraction of this success. Hence the VIII Polish Outsourcing Forum in Bangalore, India.

photo: Filip Jesionek

The new Infosys Green Horizon office

building, the highest standard office building in Łódź, is located in the heart of the future Łódź university main campus area to entice graduates into the BPO sector.

The rise of the Polish ITO/SSC/BPO sectors is now common knowledge confirmed by this year’s Tholons 2013 Top created in the community (the IT sector Outsourcing Destination rankings plac- created 2). This occurred due to the high ing Kraków in the 10th position in the incomes paid to BPO employees being world (11th in 2012). But further examina- put back into the system as BPO employtion of these rankings reveals India’s near ees adopt similar lifestyles to their westcomplete dominance of the outsourcing ern clients. For example it was found that industry with 6 of the top 7 outsourcing insurance penetration in Indian BPO destinations in the world located in India workers exceeded 80% while the coun(Manila in the Philippines is 3rd) and top try average was 5%. Then there is transportation, office developments, catering, position awarded to Bangalore. training and so on. The Indian BPO sector India’s outsourcing success would have alone now employs over 1 million people. been unthinkable a mere two decades ago. On the back of a century contain- Back in Poland, the ABSL conference ing occupation, border conflicts, eth- this year gave the total figure for employnic war and Bhopal, the country was left ment in the Polish ITO/SSC/BPO sectors with poor international trade relations, as 100,000, a figure estimated to rise up inadequate domestic infrastructure, and to 125,000 by end of 2013. Much of this is national industries riddled with corrup- the result of Poland’s strong IT graduate tion. Under such conditions, the fact that India managed to sustain its educational The Indian Example. The story of the desystem was a remarkable achievement, velopment of the BPO sector in India is also but even this seemed to have backfired as the story of the rejection of traditional Indian values and management techniques many emigrated abroad. While appear- business in favor of new approaches. In the 1990s India ing disastrous at the time, this brain drain relaxed international trading regulations and in many ways marked the turning point became open to business. Within a decade as Indians abroad become known as reli- a thriving IT sector took off which, combined able, educated and hardworking, an inter- with advances in digital communications, led ITO contracts that further expanded into national public relations scoop that could to services and support contracts. As India’s not have been achieved any other way. ITO reputation grew foreign corporations It created the trust needed to start the out- began setting up SSCs to take advantage of the lower labor costs in many other areas sourcing revolution. Past research on the BPO sector in India and the effect it has had on the nation make fascinating reading for other developing nations. In 2008 it was estimated that for every one job created in the BPO sector in India, an additional 4 jobs were

of business services. At the same time India began developing its own companies focus on improving on the services offered within these foreign SSCs. 20 years on, the BPO sector is the pride of India’s economy and with market valuations of BPOs rising greatly, many foreign SSCs have been purchased by domestic Indian BPOs.

In Poland, the city most committing its future to the arrival of modern BPO facilities is Łódź, so it should come as no surprise to find that the Łódź council along with Aspire and PwC formed the three main organising partners of the Bangalore event. In 2013 statistics estimate that there were 9,500 employees in Łódź-based BPOs and the city is investing heavily to increase this. Łódź was first alerted to this opportunity back in 2006 when Indian giant Infosys BPO’s purchase of the Philips SSC turning it into the centre of their Polish operations. Infosys BPO is now going from strength to strength, awarded best large company at the 5th European Economic Forum (Lodzkie 2012), and moving to the Infosys Green Horizon building in Łódź in 2013, built by Skanska and marketed as ‘possibly the best building for business services in Europe.’ The Łódź presentation in Bangalore was given collectively by the Łódź city council, Infosys BPO and Skanska and was entitled Łódź C Example of a Successful BPO Investment in CEE. It highlighted Łódź's potential as a location for foreign investment, Skanska’s expertise as a partner in property development and finally Infosys BPO as a successful model for operations in Poland. It is this last issue that is perhaps most interesting. Through the purchase of a major SSC, the Bangalorebased Infosys found a fast track into the Polish BPO sector and other homegrown Indian companies are now poised to follow. Wypro (Warsaw), KPIT Cummins (Wrocław), HCL (Kraków), WNS Global Services (Gdynia), ZenSar (Gdańsk) all represent examples of Indian companies wishing to expand into Poland. But meanwhile, with the exception of Comarch in Kraków, Poland is still yet to establish any of its own domestic BPO players. An issue which is now sending a Polish city to India not just for investment, but also in search of the management and leadership it cannot find elsewhere. by Tim Bridgman

ENERGY

EIB curbs new coal power plants

Maciej Szczepaniuk

photo: Mariusz Szacho (Forum)

In an effort to support investment within According to PSE, the national power renewable energy, energy efficiency, and grid operator, the energy grids throughout the European energy sector will Union, the European Investment need to replace over Bank (EIB) has adopted new guide6,600 megawatts of lines for lending. According to the bank, electricity generation capacity by 2020. whose mission is to work with other EU institutions in implementing EU policy, these sectors are expected to require the most significant investment in coming years. Euracoal, the new lending criteria will likely have a negative effect on the EU The bank’s decision outraged compa- economy. Sympathizers to the coal indusnies within the coal industry that are try argue that the sector today accounts affiliated with Euracoal (Europejskie for a considerable portion of total investStowarzyszenie Węgla Kamiennego ment within the energy sector, and i Brunatnego). Amongst those most likely is a huge driver of employment. Many to be affected in Poland are giants PGE, also argue that the EIB is taking sides and the largest Polish utility, and Kompania is not doing the job it is designed to do. Węglowa, the largest coal producer “The Bank is supposed to reflect EU polin the EU, who are both willing to build icy, but by setting an EPS, it appears to be coal power plants. Unfortunately for leading EU policy. This is not democratic those within the coal industry, the new because at no point has the Bank’s deciguidelines for lending are based on emission been subject to scrutiny by elected sion performance standards (EPS), which representatives – it is a decision taken by strongly favour gas over coal for the elec- officials,” says Ricketts. tricity generation sector. “The presented [guidelines] of 550gCOs/kWh can be met Hoyer and those within the EIB disagree. by any gas power plant, but by no coal or “Coal or lignite fired electricity will not, lignite power plant,” said Brian Ricketts, under present technical standards, be able to meet the emission performance standSecretary General of Euracoal. ards,” said Hoyer in a written reply to a Some of those against the new guidelines letter from Paweł Smoleń, President of are beginning to play on the fears of Poles Euracoal. “Coal plants can have carbon arguing that the country will experience emissions below the EPS in certain conregular blackouts. According to PSE, the figurations,” he said. Some options for national power grid operator, the energy coal and lignite plants with acceptable sector will need to replace over 6,600 carbon emissions include high-efficiency megawatts of electricity generation away coal and lignite power plants, which ultifrom coal, towards gas fuelled energy mately produce heat and power together capacity by 2020. The reason behind the (CHP), plants that capture and store huge need is that most new capacity pro- CO2 emissions (CCS), and coal and ligjects planned by the Polish state controlled nite power plants fuelled with renewable utilities, as well as private investors rely sources like biomass. on coal. Only a handful of new projects consist of gas fired units. It is clear that gas In the case of Poland, there are many will not be able to fill the gap in electric- old CHP plants that could potentially ity supply. However, according to the EU, be replaced, and these projects remain gas is expected to remain a transition fuel eligible for EIB loans. However before to a low carbon energy system. any work begins, “we will have to wait and see what the EIB classes as CHP, “Significant long-term investment across as there are few heat loads of sufficient size Europe is essential to achieve our energy to match the largest modern coal plants. and climate targets and maintain a techno- And large is preferred over small logical lead,” said European Commissioner because the highest overall power genfor Energy, Günther Oettinger last month eration efficiencies come with scale,” in Brussels just after new lending crite- explains Ricketts. ria were tabled. “The EIB plays a valuable role in financing public and private sec- On 16 August 2013, President Bronisław tor investment in energy infrastructure Komorowski signed amendments to and supporting projects that contrib- Poland’s Energy Act, which are being ute to achieving EU energy policy goals. called the “little three-pack”. The update The new guidelines provide a framework of the Act followed the Commission’s for continuing this contribution over March referral of Poland to the EU Court the years ahead,” added Oettinger. of Justice concerning Poland’s failure to transpose a 2009 directive on renewDespite uplifting words from able energy sources. Poland is facing Commissioner Oettinger, the talk doesn’t fines of over €133,000 per day for this help the industry’s walk. According to failure to transcribe. According to Polish

BUSINESS REVIEW

environmental organizations affiliated with the Climate Coalition, the “little three-pack” will not be enough to stop the Commission’s infringement action. Robert Rybski, co-author of the analysis and ClientEarth lawyer warns that adoption in the form accepted by the Polish President would probably not lead to withdrawal of the action from the Court of Justice. He suggests that the only way to avoid the threat of heavy fines now is for Parliament to quickly adopt a good law on renewable energy sources. According to Deputy Prime Minister Janusz Piechociński, the Renewable Energy Sources Act will be sent to the President for his signature before the end of the year. Piechociński noted that he had agreed on the matter with Prime Minister Donald Tusk and pointed out that the government has agreed on a support model for the renewable energy sector. The Ministry of Economy intends to scrap “green certificate” based support within a few years and move to an auction system based on guaranteed tariffs. This means that support for electricity generation will not be nearly as strong as it has recently been. In June, LNG, a Polish national company created to build the LNG terminal in Świnoujście, reported that construction had been delayed by nearly four months, but still expects to finish works before the scheduled opening in July 2014. The surge of bankruptcies in the construction industry in 2012, was the main reason for the delay. However, it is now possible that the opening of the new terminal could be pushed back even further due to a government proposal that would shift 100m zł from the 2014 budget into 2015. The LNG terminal in Świnoujście is set to allow the import of about 5bn cubic metres of liquefied natural gas per year. by Maciej Szczepaniuk

covers energy sector news including mining, privatisation and transport for Dziennik Gazeta Prawna. He also appears as a commentator on TV Biznes, the first Polish-language television channel on economic issues. He worked previously as a city-reporter for Rzeczpospolita for five years.

52 BUSINESS REVIEW

START UP

A Baltic type of Elegance

Poland Today profiles a new Polish start up every month, as part of our commitment to supporting entrepreneurship in Poland. If you would like us to consider your company for a profile, or you know of a company you think should be considered, please contact us through www.poland-today.pl

Andrew Nawrocki

photo: Admiral Boats

Founders of Admiral Boats S.A.: Andrzej Bartoszewicz and Wiesław Kleba – displaying one of their boats

As our readers know, each issue of Poland Today looks at a specific voivodeship in Poland, and presents interesting insights and stories from the region. Aside from being the guest editor of this issue, I am also a regular contributor, writing about business startups. Although typically we try to present startups that are on the younger side and no older than 12 months, we are making an exception this month. And here is why. Admiral Boats, a publicly listed company since 2010, is a threeyear old company that is on a meteoritic rise. In an industry that is hugely capital intensive, few, if any, companies can boast of growing their business nearly 10-fold in two years. Well, Admiral Boats can. Specializing in the construction of small and medium sized yachts, the company produces nearly 1,000 boats a year. Led by two passionate yachtsmen from the Tri-City area, Wiesław Kleba and Andrzej Bartoszewicz, the company aims to become one of Europe’s largest and most successful yacht makers. With over 900 sailing-related companies registered in Poland as of 2012, rising to the top will be no easy feat. Located almost exclusively in northern Poland, the industry produces slightly more than 25,000 boats a year, the majority being motor and sail boats ranging from 6m to 9m in length. While only a handful of these yachts will stay in Poland, the bulk of this industry exports its products abroad (nearly 95% of 2012 production was exported). Destinations range from Russia to the United States, with the most

production going to Western Europe and The two decided to combine their skills Scandinavia. The same goes for Admiral and experiences and funnel their energy Boats. With over 60% of production going towards their shared passions sailing and to three countries, the Netherlands (35%), boating, and started cooperating as early Norway (20%), and England (6%), the as 2007. “The very first year was a chalcompany is eager to enter warmer mar- lenging one, as we desperately needed kets along the Mediterranean. “We are funding in order to keep up with rising excited about our future, having grown orders,” claims Bartoszewicz. That is from sales of 4.8m zł in 2010 to 40m zł in why the company decided to go public in 2010, listing its shares on New Connect. 2012” says CEO Bartoszewicz. The decision seems to have paid off hand“Our yachts are getting more and more somely, with the share price rising from exposure in a highly competitive mar- an original 85 groszy per share to over ket, and we are only now beginning to 1.30 zł. “It is clear that investors are confienter southern Europe as interest grows dent in our future and buy into our vision from dealerships located along the of building a company that produces some Mediterranean coast,” adds Bartoszewicz. of Europe’s best boats,” adds Bartoszewicz. Indeed, what differentiates Admiral Boats And this confidence is clearly seen in rising from many of its Polish competitors is orders, especially for the company’s bestthat the company sells its boats straight seller, the Oceanmaster 630. With a priceto dealerships rather than to customers tag of about 62,000 zł, the Oceanmaster directly. This strategy has proven success- has proven to be a hit for small families ful, with Bartoszewicz adding that, “deal- around Northern Europe. Aside from erships know best what customers want, providing a spacious deck that allows for as they deal with most customers directly, a crew of eight members, the boat also and they then pass that information on to provides comfortable sleeping for two us.” By having close relations with deal- people as well as a sea toilet. Helping erships and through them understanding attract customers is its sporty yet elewhat customers are looking for, Admiral gant shape, a rare combination for boats of such size. And this is precisely why Boats seems destined for success. Admiral Boats is recording its strongest Although both Kleba and Bartoszewicz year so far in 2013. The company conhave experience in the yacht indus- tinues to add a flavor of elegance to any try, their backgrounds are very different. demand brought forward from dealerKleba built a successful grocery franchise ships that cater to their local customin the Tri-City area (Gdańsk, Gdynia, ers. Indeed, Admiral Boats may not Sopot) before selling it in 2009, while be the biggest shipyard yet in Poland, Bartoszewicz had experience working but its boats certainly make a lasting in banking and the shipping industry. impression. by Andrew Nawrocki

BUSINESS REVIEW

54 HISTORY

Eyewitness: On 4 June, 1989, communism in Poland ended Smiling actress says what the stern-faced journalists could not

Joanna Szczepkowska

photos: Maciej Biedrzycki (Forum), J.Szczepkowska's archive

has been a prominent figure in the arts for over thirty years. She has starred in and directed countless theatre and film productions as well as authored poems, plays, books, and articles for magazines.

On 28 October, 1989, Joanna Szczepkowska risked her career as an artist to take on the important journalistic task of announcing that “on 4 June, 1989, communism in Poland ended.” The statement referred to the success of the opposition in the first free elections in Poland, the implications of which the media at the time did not care to acknowledge. Though she was speaking months after the results of the election, her statement was unprecedented and confirmed that principles of democracy and free speech would be respected in Poland.

“I remember everything about 28 October. Despite the time of year, the weather was pleasant enough for me to walk to my interview, which gave me plenty of opportunity to think along the way. My intentions were a closely guarded secret that I had kept entirely to myself. I knew that the message needed to get out and I did not want anyone to try and stop me from being the one to get that message across. I knew those closest to me would discourage me for fear of my safety, and I expected that my friends in the opposition would ask me to give a long and conflated statement or tell me to not say anything at all and wait for a more appropriate moment. I, however, had a feeling that it was “now or never” and that the words that needed to be spoken should be as simple as possible.

No turning back My hesitation only came when I arrived at the studio. This was when I realized that there was no turning back. I knew, of course, that I could wind up in prison or that they may try to destroy my career as an artist. I thought to myself that if they did that, then it would mean that I am wrong and that communism

is not over. If I remained unscathed, then that would mean that we finally had the freedom for which we had been struggling for so long. The problem I perceived at that time was that we had won the first free elections in Poland but everything had remained grey and sad in our country. What was more important for me than my career or my immediate well-being was the need for Poland to finally get a taste of the happiness that was felt in Berlin when the wall fell or that was evident in Czechoslovakia where people toasted their freedom with champagne in the streets. I felt that my words had the potential to prove that we really could speak freely and that it was time to celebrate our victory. I had been sure that my interview would be broadcast live but they actually recorded it less than half-anhour before the show was aired. Once

My words had the potential to prove that we really could speak freely

I had said the words the first time, the woman interviewing me quickly ended the interview and the producer came by and requested that we do a second take due to what he called “technical problems.” The second take was more difficult than the first and I had to interrupt the interviewer to get my message across again. But despite my own frustration for having to work my words into the interview a second time, as well as the interviewer’s frustration at my persistence, the second take was similar to the first and was ultimately allowed to air.

HISTORY

Interviewee becomes the interviewer There is much speculation as to why they let my words into the broadcast but I think the real answer is quite simple and in line with what I had expected before the interview. The truth of the matter was that the news that I had announced had been long overdue yet needed to be said. The members of the old order were not going to make the announcement themselves but they were no longer in a position to actively fight against the realities of what had happened in our country in June. I could not help but smile as I swapped roles with my interviewer and announced the end of the regime, which she so aptly represented with her cold and indifferent expression. From what I hear, following our interview, she soon changed her line of work.

Surprising criticism Though it may be surprising to foreign audiences, since 1989 and even today, I have frequently been criticized by people who say that, “communism isn’t over.” These people usually argue that the status quo has not changed due to the fact that many former communists today enjoy positions of power and great wealth, which they gained by taking advantage of favourable circumstances during the political transformation. Others are discouraged because they never expected for there to be so much divergence of opinion about the shaping of our country following the end of the old order and even consider the political changes to be detrimental rather than positive. I myself am in the minority of optimists in our country. I believe that the fact that we can openly complain about the former communists today means that something has indeed changed. The greatest discord is preferable to being forcefully silenced. The diversity of opinion in Poland is for the first time able to be freely demonstrated in the open. I consider this a positive development. It is, after all, what we were fighting for all along.”

interviewed by Piotr Narel

Warsaw, 28.10.1989. Joanna

Szczepkowska’s smile was in stark contrast to the rigid expressions of the newsreaders seen on state television during the communist era.

56 HISTORY

It happened in… October Oslo, 5 October 1983, announcement that Lech Wałęsa had been awarded the 1983 Nobel Peace Prize

Danuta Wałęsa

accepts the 1983 Nobel Peace Prize on behalf of her husband, Lech, on 10 December 1983 in Oslo. In a statement read by his wife, he said the award confirmed ‘’the vitality and strength’’ of the outlawed Solidarity union movement.

Lech Wałęsa

listens to the Nobel Peace Prize award ceremony on the radio back home in Gdańsk. He decided not to go himself in case the communist authorities would not let him back into the country.

The story of

Lech Wałęsa is noth- award, however, is almost certainly ing if not well known. The shipyard the 1983 Nobel Peace Prize, bestowed electrician-turned-activist who co- on him at the height of the cold war. founded the Solidarity movement and We come from the safe vantage point became the first President of post- of hindsight. Back then it took huge communist Poland is the most famous courage to dare poke a finger in the Polish person alive. While his reputation eye of the seemingly mighty commuaround the world has always been high, nist system. Wałęsa decided it was his popularity in Poland dipped dra- too risky to travel to Oslo himself. matically in the second half of the He might not be let back into the country. 1990’s, but has been climbing steadily So his 35-year-old wife Mirosława – betever since. Poles have come to recog- ter known as Danuta – went to Norway nize that while he may be imperfect, with their son Bogdan and accepted the and sticks his foot in it fairly regularly, prize on her husband’s behalf. “I think he’s unique in the national pantheon of those who paid with their lives for loyand one of a dwindling band of genuine alty to Solidarity” she said, on his behalf. global living icons. His defining achieve- As Egil Aarvik, Chairman of the Nobel ment is to have been a catalyst in the Committee, said during the ceremony: defeat of communism. As he memora- “His voice has never been stronger bly remarked, your granny may not be nor reached further than it does now.” cool, but you wouldn’t be here without The communist authorities were her. Wałęsa has received numerous henceforth dealing with a global icon. international accolades. His greatest by Richard Stephens

photos: Scanpix / Forum, Wojciech KryĹ&#x201E;ski (Forum)

58 LIFESTYLE

For better, for worse A US-Polish expat’s return from Hong Kong

Set in a peaceful

residential area of Gdynia, Willa Ludwinia is an original art nouveau home, with 6 cottage-style suites overlooking the forest. The villa is famous for serving home-made breakfasts in the flowerfilled garden or near the fireplace.

In Sopot, just

steps from the sandy beach, the Art & Business Centre “Zatoka Sztuki” is a unique spot offering stylish rooms with floorto-ceiling windows overlooking the Baltic Sea, a beach club, art studios, and a concert room all together.

photo: Dominik Kulaszewicz

I have travelled widely both for work

Charlton Dwight,

who is half Polish and half American, has worked on three continents. He started as a research analyst based in London and now heads up the Hong Kong office for CognoLink, a global independent research company. Charlton is a graduate of McGill University in Montreal and King’s College London. He is an avid traveler.

and pleasure, but returning to Poland, the home of my father’s family, is always exciting. It’s been fascinating to watch Poland throw off its Russian veil over the last 20 years, and even more exciting to see one of my favourite coast lines sizzling with energy. At 30, perhaps the reason why I am so drawn to anything “coastal” is that I have spent nearly half of my life living near a coast. I was born in Baton Rouge, Louisiana, about 100 km north of the Gulf of Mexico. Over a period of three decades I have lived in the US, Mexico, France, Ukraine, UK, Canada and now in Hong Kong, where I work at a boutique independent research firm. In Hong Kong, I practically live, work, and play within a few hundred feet of the water. It goes without saying that I’m a fan of the sea, and love being outdoors. I try to make it back to Poland at least once a year to visit friends and family – and our home in Olsztynek (ideally located near a lake in Mazury). In my visits, I make sure to visit the TriCity area, ensuring that I get to all three cities at least once every few years. This time the main reason for my visit was to visit old friends and to meet some new additions to their families. So on a hot Thursday evening in midAugust, I drove up to the coast with a school friend who lives in Warsaw, whom I hadn’t seen for some time. We set off in the afternoon and the first thing I noticed as soon as we left Warsaw was the tremendous improvement in the system of roads, especially as we entered the Warmia Voivodeship. In awe of the apparent progress that Poland has made since joining the European Union, I was excited to see the changes at our destination.

amazed to see vast crowds illuminated by brilliant light. It was impressive to see how Sopot had transformed itself from the once small seaside resort I remembered from my childhood into a major holiday destination. Apart from the blinding bright lights, hitting me like waves from all directions, were the foreign tongues that filled the air. Still suffering from jet lag, I felt the way I often feel on business trips abroad – confused, disoriented, and nearly lost. Within a span of five minutes I must have heard five different languages, maybe more. A significant change from the uniform Polish of the past. As we walked up towards the Sopot pier – or “molo” – I was also slightly disappointed with the change in architecture. Indeed, none of the buildings on or near the main square projected the historic Baltic architectural Bright lights tradition that I remembered. Rather, Our first destination was Sopot, arriving surrounding me stood highly modern, late at night, and staying just a stone’s glass-infested temples geared towards throw away from the bustling street of the consumer, or tourist. In my opinion Monte Cassino, which runs from the an important opportunity had been top of the town almost down to the sea. missed to create a unique public space One of the first things that hit me was – one that could have supported and the bright lights and bustling energy celebrated the region’s history. of the place. As soon as I unpacked, my friend and I went for a walk to sur- Food and fun vey the 40,000 strong town. When we As the evening wore on, we were joined emerged onto the main square, just by a group of friends and ventured to south of Monte Cassino, I was again a new restaurant close to the Sopot pier.

TRICITY: GDYNIA The business hub of the Tri-Cities, Gdynia is the headquarters of domestic and international firms. Amongst them are Prokom SA (Poland’s largest IT company), Hartwig Gdynia SA (one of the largest Polish freight forwarders), and Swedish bank Nordea. It is also home to the region’s tallest and most exclusive office/residential building – Gdynia Sea Towers.

After some trouble having our orders taken due to the place being packed to the brim, the food and drinks started to flow. I was amazed by the vast number of customers packing themselves into the small area circling our table. The food was surprisingly good – Spanish tapas – and the local beer incredibly tasty. As the evening progressed the guests started mixing with each other, turning the event into an entertain-

TRICITY: SOPOT Although the smallest of the Tri-Cities,

Sopot is unquestionably the social and cultural centre. With a population of barely 40 thousand, Sopot opens its doors each spring and summer to a flock of Polish and international tourists. Known for its sandy beaches and great nightlife, the small city offers an unforgettable time for visitors. Be sure to check out the ‘molo’ – or pier – the longest wooden pier in Europe stretching 515.5 metres.

LIFESTYLE

“It was impressive to see how Sopot had transformed from the once small seaside resort I remembered into a major holiday destination.” ing social exchange with about 3 different languages being spoken at any one time at our table alone. And all of this within what used to be – at least as I remembered it - a small, quaint town. After a long dinner that must have lasted for at least three hours, the entire party moved to Zatoka Sztuki, an artsy beachfront outdoor restaurant/lounge at day and disco club at night. We attended a party hosted by the Sopot Match Race and sponsored by several high profile Poland-based companies. Guests included Polish celebrities and a number of foreign professional sailors competing in the event. The mood was friendly and became progressively more energized fuelled by the free Polish vodka courtesy of Belvedere. After a few drinks and some light dancing, we headed home, eager to get some rest for the following day of sightseeing in Gdynia and Gdansk.

My friends and I walked around the historic yet run-down area, and took some snapshots of the first - railway station of Gdańsk on ul. Toruńska. After a quick sandwich and a cool drink, it was refreshing to see the sun dip below the horizon. After a bright and festive weekend full of energy and noise, I was happy to finally get some silence and see darkness fall upon the Tri-City area.

TRICITY: GDAŃSK Capital of the Pomerian Voivodeship, and

Poland’s principal seaport. With a population of close to half a million, Gdańsk is the centre of the country’s fourth-largest metropolitan area (which includes both Gdynia and Sopot). Home to Lech Wałęsa and the Solidarity movement of the 1980’s, Gdańsk today is well known for its shipbuilding and petrochemical industries.

For a busy weekend in Gdańsk, our

friends at HotelGateWay.pl recommend Holland House Residence, a historical manor house in the old town once inhabited by the Hanseatic merchants.

by Charlton Dwight

photos: Jan Włodarczyk (Forum), Sebastian Kocon (Forum), Kacper Kowalski (Forum)

Gdynia & Gdańsk After a late night, I woke up the next morning with a slight headache, but nothing too bad. Indeed, coastal air has some healing magical ingredient to it. After a light breakfast, we hit the road and decided to visit both Gdynia and Gdańsk within a day. Arriving first in Gdynia, we checked out the pier, witnessing a fleet of Mexican sailors visiting the city, who were later to hit headlines for getting into a beach fight with some rowdy locals. After lunch with a friend on the beach and a quick game of volleyball, we packed up once again, and headed towards Gdansk. When we got to Gdańsk, we decided to visit a part of the city – the ‘Dolne Miasto’ district – that tourists normally don’t venture into, which is now being revitalised by city authorities. The district is far from trendy, but appealed to me after the bright lights of Sopot.

60 FOOD

What Truffles? Polish mushrooms offer more Mushroom season is just beginning; it’s worth getting out there

Pickled forest mushrooms are

a Polish specialty, particularly popular served alongside traditional Polish charcuterie. One can find them easily in food stores, but it is also easy to prepare them at home.

Magdalena Kasprzyk-Chevriaux is an attorney

and food blogger with a passion for cooking. She has worked at the European Court of Human Rights in Strasbourg. Magdalena strives to promote Polish culinary traditions abroad and to revive long-forgotten recipes, sometimes by organising special foodie events in Poland. She is the author of the culinary blog tastycolours. blogspot.com

Soup made with

fresh forest mushrooms is a seasonal favourite of many Poles, in particular those made with porcini and boletus. Especially during mushroom season, any restaurant worth trekking to will have one on the menu.

No more than 30 years ago, nearly every family had a cupboard of jarred homemade food French and Italian truffles are recognized by haute cuisine as being the ultimate delicacy in the diverse world of mushrooms. Although known for their pungent taste, prices can be truly jaw-dropping. For instance, in 2007 a record white truffle from Tuscany weighing 3.3 lbs sold in Hong Kong for nearly $330,000. Despite all the hype surrounding the Truffle (with a capital ‘T’ I might add), certainly the diversity and even great taste of Polish forest mushrooms give the truffle a run for its enviable position. And with autumn now fully upon us, mushroom pickers are descending upon Poland’s forests, tip-toeing around the goodness that the country has to offer. Poland is rich in forests, which cover about 29% of the country. Given that most of the forests are state-owned, Poles are able to enjoy them as they please. Thanks to a relatively humid cli-

mate and diverse undergrowth around prawdziwki), boletus badius (podgrthe country, Poland’s soil is perfectly zybki brunatne), milk cap mushrooms formed to give rise to a diverse array (rydze), parasol mushrooms (kanie), of mushrooms. And with their unique suillus (maślaki), and leccinum (kozaki, and extraordinary aroma, it’s no wonder koźlarze). One thing to note though, Poles look forward to autumn to add before you rush out to your local bazaar them to soups, salads, meats, or simply, - be sure to buy from vendors with to cook them on their own. a mushroom selling license. If uncertain, you can always experiA mushroom ence Polish mushroom magnificence at for every occasion a restaurant. During the season, many Around this time of year, farmers food restaurants in Poland tinker with their markets (like the legendary Stary menus by adding mushrooms. One Kleparz in Kraków) offer a wide range restaurant particularly well-known for of fresh wild mushrooms. Although its use of mushrooms is Gdańsk-based the season is short, lasting no more Metamorfoza. Aside from serving a killer than two months, the diversity of burnt oak bark-infused forest mushmushrooms that Polish soil can spurn room soup, the restaurant is known is phenomenal. Indeed, with dozens for its use of organic Polish ingredients of different types of edible species, sourced only from local producers. it’s difficult to run out of options. Though Indeed, the tradition of locally produced varieties clearly exist, the most popular and homemade preserves dates back are chanterelles (kurki), ceps (borowiki, hundreds of years and was an essential

Milk cap mushrooms fried in butter: a simple,

delicious, seasonal side dish which is very quick and easy to prepare at home.

Thanks to a relatively humid climate and diverse undergrowth around the country, Poland’s soil is perfectly equipped to give rise to a diverse array of mushrooms part of Polish culinary culture. No more than 30 years ago, nearly every family from all walks of life had a cupboard full of jarred homemade food. From pickled vegetables and mushrooms to jams, juices, and homemade liquors, everyone in the household had a favorite preserve. These foods and drinks were an important part of the monotonous winter diet in a poor communist country with frequent food shortages. Indeed, such food not only served as an excellent side to many dishes, complementing a variety of main meals, but in hard times served as the main meal itself. Though the tradition is still followed by some families (mainly in rural areas) it is increasingly seen bottled up and sold on store shelves. With less and less time available to most working families the time consuming process of making preserves has been tapped by entrepreneurial business people. For a sweet taste of tradition head over to Krakowski Kredens, a chain of stores owned by Alma Market, which specializes in traditional Polish foods.

Mushrooms here, there, and everywhere in between

MILK CAP MUSHROOMS FRIED IN BUTTER Ingredients: Serves 2 as a starter 300 g fresh milk cap mushrooms 60 g (two tablespoons) butter salt and pepper to taste Delicately clean mushrooms. Scrub the stems to remove soil. Rinse mushrooms under cold water. Separate stems from caps. In a saucepan, slowly melt the butter over minimum heat (do not stir). Remove from heat and skim the foam off the surface. Spoon the butter into a bowl. Discard the milky sediment. In a hot large frying pan, heat butter, add mushrooms, making sure not to crowd the pan so they cook evenly. Fry them on each side for about 4 to 7 minutes, depending on the thickness of the cap, until the juices have been released and reabsorbed - when frying over high heat, they should not release a lot of juice - and the caps are cooked through. Add salt and pepper and serve immediately with slices of country bread. A shot of some renowned well-chilled Polish vodka certainly won’t hurt, either.

Whether bought or personally plucked from the moist Polish soil, in what dishes can you expect to find mushrooms this season? Aside from delicious mushroom soups typically served in bread bowls and mushroom pierogi served with cabbage, the variety of dishes and combinations is wide ranging. One of the most popular ways to prepare mushroom is to pickle them in a mixture of boiled water and white vinegar with the addition of aromatic spices like bay leaves, juniper berries, allspice, onions, and mustard seeds. This Polish specialty is traditionally served as a side dish, often as an accompaniment to cold hams, pâtés and sausages. In some regions in the south, like Podhale, one can find milk saffron mushrooms, which (as opposed to pickled mushrooms) are preserved in brine, like sauerkraut. Also very popular is the use of dried mushrooms (such as porcini and boletus), which have an extremely intense aroma and are widely considered to have an even more powerful flavour than Italian porcini mushrooms. Boletus mushrooms are widely known as one of the most noble species of mush-

rooms, and for that reason are very expensive. Dried mushrooms can also be stored and used later as one of the basic ingredients in the preparation of the Christmas Eve dinner. According to tradition Poles do not eat meat for Christmas and instead substitute it with fish as well as many mushroom dishes. For instance, dried mushrooms (earlier soaked in water) are used as a stuffing for pierogi and cabbage rolls (gołąbki). Let’s also not forget that Poland’s national dish bigos, a hearty stew with cabbage and pork, also requires the addition of dried boletus. Not all mushrooms are suitable for drying, however. Some are only good when consumed fresh. One example of this is the local seasonal specialty, fried milk cap mushrooms (rydze) which are popular in the south of the country. Widely recognized amongst foodies as one of the greatest delicacies of the mushroom kingdom, these carrot-coloured, sometimes slightly red mushrooms, are easier to buy in the south of the country. Be sure to avoid boiling or drying this delicacy. Their flat and wide caps are ideal for frying or grilling. You’ll need to use clarified butter as opposed to regular butter to fully enjoy their slightly nutty taste. They’re delicious with a good slice of sour dough bread.

by Magdalena Kasprzyk-Chevriaux.

61 FOOD

Food markets in Poland offer a

wide range of fresh forest mushrooms, with market staples including boletus and chanterelles.

SPORTS

Fire in the ring Sport in Poland is evolving in some unexpected ways

In the last five years,

Michał Dzida is a British educated Polish sports journalist. He is the editor-inchief of Sportowy Obiektyw. He has been for five years with Super Express and worked as an expert for UK TV channel Sports Tonight Live. Among others he has published in Ekstraklasa Magazine and Four Four Two.

Poland has seen tremendous development in terms of its sports facilities, mostly visible in the construction of its football stadiums. The main impetus being the Euro 2012 for the creation of national and municipal stadiums, many smaller cities have followed suit. Stadiums in Białystok (254m zł investment) and Zabrze (200m zł investment) are in the making. Recent additions in places like Lublin and Gliwice are already packing in fans. In terms of stadiums, Poland can compete against the very best in Europe. Too bad it can’t say the same in terms of its football clubs. It’s been 17 years since a Polish club has qualified to play in the elite Champions League. Current Poland champions, Legia Warsaw, ninetime title-holders, hoped to break this curse. Just reaching the competition’s group stage can result in a windfall of as much as € 20m, or roughly the annual budget of nearly half of Poland’s top-tier clubs put together. After being eliminated by Romania’s Steaua (1:1 away and 2:2 home), Legia will now compete in the Europa League, where they will be lucky to earn a third of what the Champions League offers.

Polish boxing hoping for a KO

Artur “The Pin” Szpilka in the run up to the second round of his duel with Mike Mollo, which ended in a KO.

It’s a different matter with boxing, where slowly but surely Poland is making significant headway. Although football remains Poland’s sport of choice, boxing has seen an increasing audience in the past few years. In the middle of the night on 16 August, ratings on Polsat Sport spiked as Polish heavyweight prospect, Artur “The Pin” Szpilka fought off Mike Mollo at the U.S. Cellular Field stadium in Chicago. Szpilka knocked out ”Merciless Mike” in the 5th round of this heavily anticipated rematch. The 24-year old fighter draws huge publicity, not only in Poland, but also amongst Poles abroad. Aside from being a beast in the ring, Szpilka’s life-story is one of a kind and may one day serve as the perfect script for a Hollywood blockbuster.

“The Pin” Artur Szpilka grew up on the rough side of town in Kraków, where he was involved in football hooliganism. He was discovered by Władysław Ćwierz, a boxing trainer from Kraków, after Ćwierz heard of Szpilka’s abilities

in fighting other hooligans from oppos- “In the 1960s, thanks to Olympic and ing teams. Encouraged by Ćwierz to put World Cup medals, we witnessed the on a pair of gloves and test his abilities so called golden era of amateur boxing. in the ring, Szpilka agreed, and was Everyone had a chance, not like these offered boxing classes in Ćwierz’s club. days” says Jarek Soroko, a well-known Szpilka developed quickly, showing nat- boxing trainer, who has mentored many ural abilities and a deep-rooted desire boxing champions, including former to fight. After a few years he turned world champion Tomasz Adamek. professional, starting first in cruiserweight, and eventually moving to the A new field of favourites heavyweight class. In 2009, though, Growing even faster than boxing Szpilka was arrested a day before a in Poland is MMA, or mixed martial dual with Wojciech Bartnik. During arts. The sporting major event here his subsequent two-year prison term is called KSW (Konfrontacja Sztuk for assault in a nightclub, Szpilka put on Walki). Since 2004, the organizers some weight and trained hard, allowing have developed KSW as the biggest him to turn heavyweight upon release. MMA event in Europe. The 24th KSW Szpilka left prison in April 2011 big- gala took place on 28 September ger and stronger than before. While in in Łódź. This event featured fights prison, he gained about 20 kilos and by Mariusz Pudzianowski, touted as an even tougher attitude. His story has the strongest man in the world, who attracted widespread support, with the faced Sean McCorkle, native of Indiana boxing world impressed with his skills, in the USA. The victory was decided style and speed in the ring. So far he by the judges. Pudzianowski won his has earned 16 wins, 12 of which came revenge against McCorkle, who had by way of knockouts. Indeed, Szpilka come out on top the first time the two may be Poland’s future heavyweight squared off. Paweł Nastula, who won Olympic gold in Atlanta 1996 in judo, title contender. Despite Szpilka’s success, amateur lost to Karol “Coco” Bedorf, who preboxing has a serious financial shortfall. viously defeated British fighter Oli Indeed, sporting authorities in Poland Thompson. Recently Poland has gained do little to support coaching staff. another new favorite of heavyweight Boxing classes are privately funded, calibre. Paweł Fajdek, a 24-year old so it’s difficult for less well-off families hammer thrower, won gold at the World to find the money to pay for training. Athletics Championships in August 2013 in Moscow, becoming the youngest champion in the history of this competition. Fajdek won the only gold medal for Poland in Moscow. The other two medals came in the form of silver, from Anita Włodarczyk, a female hammer thrower, and Piotr Małachowski in the men’s discus throw. After Moscow, the attention of Polish sports fans traveled to New York for the US Open. Tennis player Agnieszka Radwańska aimed high after having reached this year’s Wimbledon semifinals. The same for Jerzy Janowicz, often compared to the legendary American player John McEnroe for his aggressive on court demeanour. Unfortunately, both Janowicz and Radwańska were quickly eliminated-Janowicz in the first round, and Radwańska in the fourth. In September, Radwańska defeated Russia’s Anastasia Pavlyuchenkova to win the KDB Korea Open, her third singles title of 2013. by Michał Dzida

Szpilka’s trainer first heard of his skills fighting hooligans from other teams

photo: Fotex / Forum

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CULTURE

Fall into Poland’s cultural life A roundup of music, cultural and artistic events coming up this autumn around the country.

CULTURAL ROUND-UP

Hurry up or you’ll miss...

Damien Moran

is an Irish writer who has contributed to the Irish Times, The Sun and TheJournal.ie. His satirical travel book about Euro 2012 reached no. 1 in Ireland last year. Based in Warsaw since 2006, he speaks Polish. He is online editor of poland-today.pl.

Sundays with Chopin in Warsaw’s Royal Łazienki park run till 29 September, so consider timing your stroll to merge with exquisite renditions of the Polish maestro’s compositions. Free admission, concerts are from 12-4pm. The Warsaw Cutural Crossroads Festival from 26-29 September, with the tent festival taking place in front of the Palace of Culture and Science. Expect to hear music from 10 islands and four continents - including Maorian beats and the new section ’Sounds Like Poland’ showcasing the best of Polish and worldwide ethnic music.

Bookworming with Nike nominees

Toruń-born astronomer

Mikołaj Kopernik (1473 - 1543) also somehow found time to be a mathematician, canon lawyer, classics scholar, polyglot, economist and diplomat.

Dating back to 1860 and having

survived World War II, Poland’s popular Zachęta gallery currently holds around 3,500 pieces and scores another first with Open GLAM.

Here’s a daily reading event for you until Poland Today’s winter edition! Buy and start reading one of the 20 titles nominated in a variety of genres for the prestigious 16th Nike (pron. Nee-kay) award ceremony taking place on 5 October. Last year’s victor - ”Książka twarzy” (Face-book), saw Marek Bieńczyk take home the Nike statuette and a handsome sum of 100,000 zł for his literary essay. This time round, for the first time, women writers make up half of the nominated authors, which include Justyna Bargielska’s ”Bach for my baby” and Tadeusz Lubelski’s ”Historia niebyła kina PRL” (The Non-existent History of Poland’s Communist Cinema).

Ground control to Major Tom

On the 540th anniversary of Nicholas Copernicus’ birthday and 470 years since the publication of ”On the Revolutions of the Heavenly Spheres, ” Warsaw’s Congress Hall will be transformed into the biggest planetarium in the world on 25 October. Through the sounds of Gustav Holst’s ”Planets”, played by over 100 artists from Sinfonia Iuventus Orchestra and accompanied by Warsaw’s Politechnic University choir, the audience will be shuttled on a musical voyage beyond the edge of earth, visiting each of the planets in the Solar System, passing by the heavenly stars and through the entire galaxy. Tickets 49-89 zł., free admission for kids under four.

No socks and sandals, please!

The most fashionable weekend in the Polish calendar, one may undoubtedly expect both the bizarre, beastly and beautiful to grace the catwalk during this year’s Swiss Embassysponsored Warsaw Fashion Weekend, taking place from 4-6 October at Centrum EXPO XXI (Prądynskiego 12/14), featuring acclaimed Swiss fashionistas. Style guru Tomasz Jacyków will be on hand to lambast fashion faux-pas and heap praise on particularly exceptional designs from the offerings of over 150 fashion houses and designers. Tickets available from 50-250zł.

photos: Jakub Ostalowski (Fotorzepa / Forum), Kean Collection (Getty Images)

65 Primetime Warsaw 2 Developing a sustainable European metropolis

February 2014

Building on the success of our first conference about Poland's capital, we bring you all the major issues, and opportunities, in Central Europe's pre-eminent city.

đ Warsaw's development in a time of tightening city

If you have any questions or would like more information please contact Richard Stephens, at richard.stephens@poland-today.pl or mobile +48 694 922 898.

photo: Krzysztof Freszel

đ đ đ đ đ

and district budgets, as the national government looks to reduce payments to local authorities The financing of city infrastructure development. Urban planning at the district and city-wide level Is Warsaw too big to try to attract BPO investment? What are the trends & issues in the office, retail, residential and hotel sectors? Creating attractive public spaces in and around commercial properties The rise and rise of Wola: prospects for Warsaw's most dynamic district

66 CULTURE

Warsaw Film Festival: October 11-20th

Kicking off as a small-scale, albeit ambitious student event twenty six years ago, the Warsaw Film Festival has since grown in leaps and bounds. Four years ago it was bestowed with the accolade of becoming one of only 14 events wordwide recognized as international film festivals by the International Federation of Film Producers Association. The top director can look forward to a 100,000 zł. prize. From modest origins of barely a dozen foreign guests to over 100,000 native and foreign attendees in recent years, it is definitely „the go-to event” in October.

Culture through your cursor

And last but not least, click in around-the-clock to Ninateka.pl and discover the recently-updated treasure trove of full theatre performances, films, operas, concerts, photo series, classics of Polish animation, documentaries and short films by the masters of Polish cinema. Offering free access to a collection of over two thousand audiovisual materials, some videos include English subtitles while all material is from legal sources.

Silly Philharmonics

Czerwone Gitary

in June 1969 at the VII National Festival of Polish Songs in Opole. Bernard Dornowski, Seweryn Krajewski, Jerzy Skrzypczyk, Krzysztof Klenczon.

Touring Poland starting on 12 October, this band of troubadours first hit the Polish scene with 32 episodes of ”classical music for the 21st century” on TVP, a unique award-winning live show where they were able to hone their skills by merging top-notch instrumentalists, vocalists and humourists. Pianist and co-founder of this modern troupe Waldemar Malicki, adoring his vast array of statuettes on a bar counter, once remarked to colleague Jacek Kęcik: ”Now, in accordance with Bolshevik tradition, they have rewarded us, and soon they will execute us.” Set aside 100-200 zł. for entrance.

OpenGLAM

A new way of thinking about the mission and functions of cultural institutions and the use of their resources is hitting Poland thanks to Zachęta Nationa Gallery of Art, Wikimedia Polska and Centrum Cyfrowe Projekt. The first ever openGLAM (Galleries, Libraries, Archives, Museums) conference in Poland takes place at Zachęta (pl. Małachowskiego 3) on 11–12 October. Inspired by Wikipedia’s initiatives towards free and open culture, this conference is a significant event for all interested in the future of Polish GLAMs. www.openglam2013.pl

Four guitars, four seasons

For the first time in their almost 50-year history, on 16 November iconic Polish group Czerwone Gitary will be harmonising their classic hits with the enriched sounds of the Tri-city Symphony Orchestra. Another major score for the Palace of Culture and Science’s Congress Hall. Tickets 70-160zł. Concert starts at 6pm.

Over 25 fashion shows and celebri-

ties like Zosia Ślotała, Natasza Urbańska and Natalia Kukulska await you this year at Warsaw’s premiere fashion event.

Among the 29th annual Warsaw Film Festival’s

features this year are Sebastian Buttny’s Heavy Mental, a frank portrayal of the moods and spirit of contemporary 30-year-olds living in Poland.

NAZWA DZIAŁU