Poland

Katie Preisler

Poland's freedom score: 68.6%; World Rank: 42

Poland vs. United States (Poland/US)

  • Population: 38.5 million/316.4 billion
  • GDP: $817.5 billion/16.8 trillion
  • GDP Growth %: 1.6%/1.9%
  • GDP Per Capita: $21,214/$53,101
  • Unemployment: 10.4%/7.5%
  • Inflation: 0.9%/1.5%
  • Foreign Direct Investment: -$6037.7 million/$187.5 billion

Legal System

They are making slow progress on fighting their corruption. The legal system of Poland protects the right of their people to gain and get rid of property. Their judiciary is independent; however, the courts are known for taking a long time on a decision on a case. They take slow actions on the concern of corruption. In terms of the efficiency and intelligibility of Poland's legal system for investors, it was concluded that disputes between other nations on the matter of business, damage it's attractiveness for FDI.

Competitive Markets

Poland is mostly ethically homogeneous, but the number of foreign investors among immigrants grows each year. Polish law is favorable to foreign entrepreneurs because they offer investors various forms of state aid. Employers don't have to pay social insurance on these 'junk contract' workers they have. This means that the lowest level of pension is received upon their retirement. Foreign investors help Poland work the best because they create more competition within the government for the best goods and services.

Limits on Government Regulation

Germany is Poland's main trading partner today. Poland joined the EU in May 2004. Before that, it traded through the (CEFTA) which included Hungary, the Czech Republic, Slovakia and Slovenia. It is the founder of the World Trading Organization. They have in place the common external trade tariff. Poland's major imports are goods needed for industrial and manufacturing. Their exports include machinery, furniture, organic foods, motor boats, planes, hardwood products, clothing, shoes, and cosmetics. Many Polish exports to the U.S. receive tariff benefits under the GSP program. However, it is less dependent on external trade than most other countries.

An Efficient Capital Market

The Capital markets of Poland are expanding. Private banks make up most of the financial sector, but the the government still controls a little bit of ownership. When the communist government fell, Poland tried to loosen the restraints or restrictions of the economy. They changed from a centrally planned economy to a mostly market based economy. When changing into a market based economy, the government made some banks private, recapitalized some, and presented legal reforms to make the sector competitive.

Monetary Stability

The Polish banking market is one of the biggest in the Eastern Europe area. A report by Credit Suisse says that Poles are the second wealthiest, after the Czechs, in Central Europe. When the European Union opened a labor market, over 2.3 million Poles emigrated abroad for higher wages and to escape global recession. Since so many people migrated elsewhere, the average wages for workers remaining, increased. Poland was the only country a part of the European Union to avoid the recession indicating its economic stability.

Low Tax Rates

Government spending in Poland increased from 78957 PLN Million to 91262.10 PLN Million in 2014. From 1996 to 2014, government spending in Poland averaged 48713.35 PLN Million. Individual income tax rates can get up to 32% and corporate taxes can get up to 19%. They also have a value-added tax as well as a property tax. Tax revenue is about 20.1% of domestic income overall. Public costs equal 42% of national production. Public debt is 57% of GDP.

Free Trade

Being a part of the European Union, they have a 1% average tax rate. For the most part they are open to external trade; Poland treats foreign and domestic investors as equal. The European Union is Poland's largest trading partner accounting for 79% of exports and 64% of imports. Import trends show a decrease showing a good sign that has helped the trade deficit of Poland in 2009. Trade and investment are ideal in Poland. It still takes about a month to start a business, but the cost of licensing agreements is much lower.
Polish Coal Miner Protests: Anger over government plans to consolidate mining industry

Polish protest over Coal Mine

The Kosovo government wants to take control over the Trepca mining complex because of a harsh response from Serbia. So, Polish government wanted to shut down unprofitable coal mines. Workers and unions protest the takeover of these mines which at one point employed 20,000 people. After 10 days, Poland's Prime Minister reversed the earlier plan to close the pits. It is estimated to cost the government up to $740 million.

Fun Fact about Poland's Economy

For the past 5 years, Poland's economic freedom has went up by 4.5 points; this is the largest improvement around. They are making strides in increasing the finical freedom and freedom from corruption.