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ECONOMY |  |
The Polish economy at the beginning of the 21st century - it's not bad, but could be better
Wac³aw
Wilczyński
It was Poland that first managed to throw off the bonds of the system
which kept us lagging behind. Poland was also the first country to decide
on the radical transition from the centralised, discredited non-market
economy into an ordinary, modern market economy. Poland was again the
first to overcome the consequences of the clash between the old and the
new system and enter the path of fast economic growth. At the start of
the 21st century we are a country with good, convertible currency. We
are even slightly worried at the moment about a too high exchange rate
of PLN in relation to USD and Euro. We have largely managed to modernise
the structure of production, which in turn has lately enabled us to increase
the volume of export promptly. We have developed relatively modern services
in many fields. The private sector already generates 2/3 of the country's
gross domestic product. Contrary to grumbles of the discontented the standard
of living of most Poles is incomparably higher than 11 years ago.
Yet, there is no point in denying that our gross domestic product per
head is still four times smaller than that of the richest countries. The
obsolete sectors of our economy, such as coal mining, steel and armaments
industries as well as segmented and ineffective agriculture could not
endure the clash with the market economy. One of the consequences is a
high, 14% rate of unemployment. Even though it is much lower than in intensely
subsidised East Germany. In many respects Poland meets or nearly meets
the European Union convergence criteria.
And yet, gaps, lacks and weaknesses of our economy are still numerous.
As a country which is just growing rich we consume too much but invest
too little and produce not enough good quality, modern goods in demand.
The excessive import surplus of approx. 10 billion USD per year has an
adverse effect on our balance of payment. We save too little and get into
debt too easily. Although our budget deficit as well as public debt do
not exceed the European standards but the debt servicing costs (instalments
and interest rates) are very high and consume more than 10% of the budgetary
expenditure. The state can dispose of not 100% but only 86% of the budgetary
expenditure. Only now, the decreasing inflation rate will permit lowering
interest rates and costs of credit.
One of the main challenges facing the Polish economy at the beginning
of the 21st century is the improvement in the public finance and the elimination
of the budget deficit which generates new debts. Moreover, the budget
in Poland resembles too much that of the welfare state and does not sufficiently
support growth in the economy.
The challenges of the 21st century demand from us a fundamental improvement
in economic education and awareness. We should also develop a habit of
saving and investing. We will have to limit the welfare character of the
state and put more emphasis on the private sector. We will also have to
work on improving people's attitude towards the state perceived as the
common good and demanding loyalty from one hand and trust from the other.
We must develop our civic virtues, that is the capital of social trust.
A list of issues which need improvement is not short. However, we have nothing else to do but make up for the lost time. This is the condition of our membership in the European Union within the next few years.