Breaking With Imitations of the Past

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Mateusz Morawiecki

About Mateusz Morawiecki

Mateusz Morawiecki is the deputy Prime Minister and Minister of Development and Finance for Poland. He was a member of the task force that negotiated the conditions of Poland’s accession to the European Union. From 2007-2015, he served as CEO of Bank Zachodni WBK. He graduated from the Wrocław University of Technology in history and business administration from the Central Connecticut State University.

As I look forward into 2017, I see great developmental opportunities for Poland. There is an opportunity for an investment boom whose range and significance will propel the Polish economy into the future, breaking with imitations of the past. We have laid a solid groundwork for fostering sovereign savings and encouraging solidarity in the consumption of growth fruits, whilst improving public finances at the same time. But looking at foreign circumstances, we must remember one thing: today, in the globalisation era, the only certainty is uncertainty.

There are dramatic changes occurring in the world. The basic economic assumptions, that have been in force for several decades, are being questioned. Still under shock, some of today’s elite are conjuring reality, whilst losing the feel for social expectations and economic trends. This has been perhaps best exemplified by the victory of Donald Trump in the US presidential election. He was a candidate who was initially given no chance of winning; he was confrontational with the elite; he denounced the neo-liberal economy dogmas, the impoverishment of the middle class, and the relocation of production outside the US, as well as the looming, worst-in-decades effect of automation and robotisation on the job market.

The title of one of the volumes of Bolesław Chrobry, a masterpiece by Antoni Gołubiew, says something new is coming. Even if its name is still unknown, it will definitely surprise everyone, actually, it already does. A mere eight years ago, the term “crisis” had financial connotations only, but today it is used in almost all spheres of public activity: from counter-terrorism, through military unrest, to the frustration stirred up by the ineffective tools of monetary policy and deepening social inequalities.

Additionally, this is added to by a major paradox of our time – the world’s economic growth (GDP) has hardly changed over the past years, whereas drastic headway has been made in terms of global economic development, namely with the Fourth Industrial Revolution (known as Industry 4.0). There are fundamental questions and no satisfactory answers in all these areas. From this perspective, we are in an interregnum.

The change that occurred in Poland a year ago, falls within the scope of the great changes that are going on throughout the world: reconfiguration, remodelling and the search for more efficient operating models that pay greater attention to social responsibility; models based on solidarity and community values whose target is far beyond just survival: lasting prosperity and fair distribution of wealth. This novelty in the Polish development policy draws inspiration from the origins of the “Solidarity” movement and further develops the historiosophical concept of Feliks Koneczny.

The Law and Justice (PiS) party, which rose to power last year, is different from the elite of the Third Republic. The guiding principle of all our policies is that economic growth should be inclusive, covering as wide a variety of social groups as possible. That is our goal; our axiom of economic development.

We are operating unprecedented social transfers. Not just the 500+ child benefit programme, but also other programmes: insurance for farmers, affordable housing for young people, support for miners, additional indexation of pension benefits, or free drugs for seniors. The cost of these measures in 2017 will amount to PLN 40 billion (€9 billion), and after the retirement age is lowered, to more than PLN 50 billion (€11.3 billion). 

We believe that these social transfers are a fundamental means of improving social equity. This is certainly a huge commitment, and in order to meet our budget targets, we must not only take care of economic growth by driving entrepreneurship, but also address the shortcomings of the tax collection system. Indeed, the VAT loophole, which is estimated to cause billions of zlotys to leak from the budget every year, is the result of the gross failures of the preceding government, who are currently in opposition. We will fix these step by step.

I have no doubt that the answer to the problems of today’s world is a more solidarity-based, sustainable and socially responsible economic system. The World Bank and even the International Monetary Fund IMF (see the study titled Neoliberalism. Oversold.) also acknowledge this. Following a time of change and turmoil in the world, it has become apparent that the economy and society are inseparable.

There is no economy without society, the latter being the key variable in the equation whose name is economy. At the same time, it is impossible to build a coherent society, where economy plays an integrating role in the social life, without abandoning the strongly oligarchical, Latin America-like economic model.

Europe should be united by economy, not ideology. Europe should grow stronger, but rather than deepening integration based on the existing model, it should be done by restoring a rational system of cooperation between the countries, while enhancing the role of national parliaments. Today, the more dogmatic the Eu is in dealing with superfluous issues, such as the notorious curvature of bananas, or ideological dilemmas that it is not its duty to resolve, the weaker it actually is.

The year 2017 will see important events that will shape the future of Europe: elections in the Netherlands, France and Germany. I hope that they will not bring anti-European extremists and isolationists to power, as this would lead to the fragmentation of the European Union.

It is already apparent that European utopians, who are closing their eyes to reality, stand no chances of winning. What is important in these elections, and especially in France, is the attitude to Russia. All these may carry new risks for Poland, possibly resembling the situation a century ago, when France and the other Western countries viewed the case of Poland through the prism of Russian interests.

If Europe has changed, this is also something that has happened after the Brexit vote. For us, Brexit meant that we need to work hard to encourage the Poles who have emigrated to the UK, and who are strong in experience and capital, to come back to Poland. We want them to return, to re-join their families.

Furthermore, the opportunity has arisen to attract dozens of large companies and this is already happening. In the last few months, we have managed to get Rolls-Royce, the world’s second producer of aircraft engines, to commit to making large investments in Ropczyce near Rzeszów.

Big financial institutions from the City of London are not only considering moving some of their activities to Poland, but are already doing so. This means new high-value jobs, particularly in the fields of risk management, IT, databases and project management. Within six months of Brexit alone, 15,000 new jobs were created in these segments. We can see it feeding back to us already. “Entrepreneurship, entrepreneurship, and again entrepreneurship,” as Mark Bisnow says. “It boosts employment, reduces poverty and drives innovation.”

IT talents are our national treasure, so we must do our best to attract IT companies. For example, we are watching observing Israel, a country that has built a highly innovative economy over the last 20 years. We are becoming a major player in the automotive industry, too, as we put together a significant cluster: Mercedes, Toyota, Fiat and Volkswagen have all decided to launch a greenfield investment project in Poland this year.

A damaging myth is thus debunked about the alleged outflow of foreign investors — quite the contrary — they are increasingly interested in investing in Poland. If we manage to quickly complete at least a part of the negotiations that are now under way, 2017 will be a successful year for the Polish economy.

 

The editorial is an edited version of the original article published on Wszystko, co najważniejsze in Polish. 

 

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The views expressed in this opinion editorial are the author’s own and do not necessarily reflect Emerging Europe’s editorial policy.

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