Walking through a Polish city without rose-tinted spectacles

In the business world, everyone is paid in two coins: cash and experience. Take the experience first; the cash will come later.

Harold S. Geneen

 Attractive employers

When walking through a Polish city you will notice many nicely dressed women and men rushing to catch trams and buses. You will see some people driving cars. Most of these people are smart, well educated, they speak at least two languages fluently and read books, which helps them be better employees. They try to travel to know more about the world to develop themselves, which makes them better employees. They often work overtime and work hard and build a spotless professional profile, which makes them even better employees. And this great human capital is used mostly by foreign companies that at some point decided to move some of their sectors to Poland.

A classic example of a job adverisement on Polish job sites

A classic example of a job advertisement on Polish job sites

The first good point that is often emphasized by the Polish politicians is that foreign companies in Poland create jobs. They offer suitable positions for people who speak foreign languages. They allow young graduates to gain valuable experience in the corporate environment. Also, thanks to standardization of processes and years of experience in dealing with clients, employees in Poland can learn how to work more efficiently and how to provide excellent customer service. Young Polish people are willing to take up jobs in foreign companies as working in an international environment is considered as a huge advantage.

Click here to read the interview with Andrew Hallam, General Secretary of ASPIRE, on the trends and challenges for Poland as one of the upcoming destinations for the outsourcing industry
LG- a Korean giant

LG- a Korean giant

State Street is a U.S.-based financial services holding company

State Street is a U.S.-based financial services holding company

Volvo- a Swedish manufacturing company

Volvo- a Swedish manufacturing company

Samsung- a Korean multinational company

Samsung- a Korean multinational company

Deloitte- UK private company

Deloitte- a private UK company

IMG_5867

IMG_5845

Bosch- a German production company

Hays- a British company providing HR services

Hays- a British company providing HR services

E&Y- a British consulting company

E&Y- a British consulting company

Tui Travel- a travel company headquartered in England

Tui Travel- a travel company headquartered in England

Kia Motors- a Korean company

Kia Motors- a Korean company

Financial colonization of Poland

What has been happening in Poland for the last 20 years resembles the financial colonization that took place in some countries in the 90’s in Africa. In the early 90’s a dramatic transformation of the Polish economic model started to take place. The collapse of communism opened new opportunities for future Polish business men, but most importantly, for foreign capital. It needs to be admitted that the neo-colonization of Central Europe by the large western capital was successful in the case of Poland. How did it happen? The weakened structure of the Polish economic system played a crucial role. How does it affect the Polish economy nowadays?

– In the group of 100 largest companies in Poland about 15 are Polish;

– ‘The golden apple of business’ which is trade, is already mostly foreign-owned. In 2010 a new invasion of foreign chain stores started- small and large stores are built in small towns and apartment complexes. The possibility to franchise saves the owners of small local shops from bankruptcy. The perspective is very clear: the Polish private trade will be of a marginal importance at some point.

Carrefour- French chain stores are appearing around many corners

Carrefour- French chain stores are appearing around many corners

-Poland is regularly losing a large part of its National Domestic Product due to sending abroad most of its profits, foreign industry dividends, gigantic bonuses for the foreign personnel, and also manipulating the transfer prices.

-Traditional Polish telecom industry is in the hands of foreign companies

T-Mobile- an American telecommunications company

T-Mobile- an American telecommunications company

UPC- a Dutch telecommunications company

UPC- a Dutch telecommunications company

Orange- a French telecommunications company which aggressively took over 50% the Polish Telekomunikacja Polska SA

Orange- a French telecommunications company which aggressively took over 50% the Polish Telekomunikacja Polska SA

-The vast majority of the Polish industry has been lost. It includes transportation, mining, steelworks, shipyards, cars, sugar (Poland used to be the second largest exporter of sugar in Europe), textile (in Łódź), tobacco, alcohol, linen, arms and the entire sector of Polish investments abroad.

-Salaries in Poland are 4 to 7 times lower than in the other 18 UE member states.

-About 1.4 million of Polish people temporary work abroad as low-skilled labor. Around 27% of the emigrants have a degree, but only few of them work within their specialization.

-Salaries of the Polish employees in international banks in Poland are much lower than those of the foreign employees in the same positions.

-Nowadays only one bank in Poland is entirely Polish. The National Treasure has very small interest rates in the remaining three Polish banks. It took place after they were bought out by foreign capital. There is an interesting opinion of a Chinese economist Song Hongbing (2010): ‘Poland, Hungary, Russia, Ukraine- all of these countries experienced the loss of their own capital, which resulted in two decades of poor economic performance.’

China turns its eyes on Poland- Chinese ownership of the Polish Copper Company

China turns its eyes on Poland- Chinese ownership of the Polish Copper Company

The strategy of ‘colonizing’ Poland by the large foreign capital resembled, but was not identical with the one applied in Africa. Poland was much more industrialized with much higher production culture. On the other hand it did not have the mineral resources and exotic fruit of Africa. However, it has a more developed technology sector which could have been competitive with the Western one after a slight upgrade. With such a strategy China conquered world markets. According to Jacek Karpiński, an outstanding Polish inventor, the opinion that the low level of production in Poland would have led to its collapse anyways, is not justified. Therefore, an aggressive takeover mainly by Western European companies, was a competitive strategy which compromised Polish decision-makers. Polish entrepreneurs should have legally protected their business just as it was done in other countries, such as Canada. World Bank published a report  in 1999 which showed that all the analyzed transactions were hedged about with ‘commissions’. What is worse it showed that foreign investors could buy a favorable bill (for example for 3 million dollars).  Although later the case was reported to the Public Prosecutor’s Office, the World Bank refused to provide the proof explaining that the report was based on unanimous surveys. Many of the privatization cases could not be tracked due to the absence of court procedures. For many of the cases that could have been tracked because they followed the procedure, the trials took a very long time and they were eventually discontinued (for example the paper factory in Kwidzyń and Domy Towarowe Centrum in Warsaw). Already in 1996 a group of experts headed by Professor Zdzisław Sadowski asked the following question: ‘why do we have to import the products that we used to make ourselves?’

It is a classic example of how the lack of practice and experience leads to prodigality to such an extent that it crosses the barrier of social tolerance.

A Japanese bank offering services in Poland

A Japanese bank offering services in Poland

ING- a Dutch bank offering services in Poland

ING- previously Polish Bank Śląski, nowadays a Dutch bank offering services in Poland

Bank Pekao- originally Polish, nowadays is owned by various international investors

Bank Pekao- originally Polish, nowadays is owned by various international investors

Handlowy- an old Polish bank, nowadays 75% is owned by American Citibank

Handlowy- an old Polish bank, nowadays 75% is owned by American Citibank

IMG_5810

Alior is a bank in Poland established by Carlo Tassara SpA group which is a holding company that operates in the sectors of heavy industry, steel industry, ironworks, metallurgy, and production of electric power. The company was founded in 1938 and is based in Breno, Italy

Millenium- owbed by Banco Comercial Portugues from Portugal

Millenium- originally a Polish bank, now owned by Banco Comercial Portugues from Portugal

A German bank offering services in Poland

A German bank offering services in Poland

Sartander- owned by a Spanish group Banco Santander

Santander- owned by a Spanish group Banco Santander

Raffeisen is an Autrian Bank that took over 100% of the shares of the Polish bank Polbank EFG S.A

Raffeisen is an Autrian Bank that took over 100% of the shares of the Polish bank Polbank EFG S.A

BPH- General Electric is the main shareholder (90%).

BPH- General Electric is the main shareholder (90%). Credit Agricole- the French Financial Group took over 75% of the Polish Lukas Bank

Paribas- established by a French fianncial group and offering services in Poland

BNP Paribas- established by a French financial group and offering services in Poland

WBK- previously a Polish bank, now belongs to the Spanish group Santander

WBK- previously a Polish bank, now belongs to the Spanish group Santander

PKO- it is a Polish bank controlled by the government. Its 70%  is owned by various shareholders including Dutch ING and British Aviva

PKO- it is a Polish bank controlled by the government. Its 70% is owned by various shareholders including Dutch ING and British Aviva

50% of BGŻ is owned by a Dutch financial institution

50% of BGŻ is owned by a Dutch financial institution

A French Bank

A French Bank

This is a popular online bank established in Poland. Currently 70% is owned by German Commerzbank

This is a popular online bank established in Poland. Currently 70% is owned by German Commerzbank

Social response

The above information is crucial if one wants to understand why Polish people are heavily interested in digging through history, hungry for financial knowledge and upset about imperfections of the country’s economy.

It bothers people who do not speak foreign languages that they cannot find jobs.

It is advisable to be aware of certain social issues before coming to Poland to understand what kind of  comparisons may upset people. One American expat once said: I was having a conversation with someone and a visit to New York City came up. I mentioned how expensive it is there and the person seemed offended. I asked another person why and apparently it was because I was implying that Poland is cheaper. There were a few other instances where Polish people seemed a bit touchy about the perception that Poland is cheap or less developed than other countries’.

Abandoning communism was supposed to improve the quality of life up to the standards of the western countries and give economic freedom to people. The actual result was different. The domestic economic freedom is restricted by the laws and taxes imposed by the European Union and the standards of life can be improved mainly by giving up family life and leisure. This is the reason why many people feel that the current economic dependence is not any better or even worse that the economic exploitation during communism. There is a general feeling that many crucial decisions in Poland are made behind peoples’ back and the reason why this feeling is negative is that it visibly affects each individual’s wallet in the long term.

Manufaktura- a large industrial complex established by Izrael Poznański. During communism it bacame a property of the state.

Manufaktura- a large industrial complex established by Izrael Poznański. During communism it became a property of the state. In 1950 the works were named after Julian Marchlewski- a socialist  alleged to have worked in the factory as a dyer. From the early 1950’s, individual departments underwent modernization, and extensions were underway. New switching stations were installed, along with an external process water network system, fire protection system, sewage network, and machinery was replaced on current basis. The Company was the winner of numerous awards and honorable mentions.  J. Marchlewski Cotton Industry Works ‘Poltex’ maintained an outpatient, creche and a nursery. The factory sponsored the No. 2 Vocational Schools Trust, a canteen, so-called breakfast rooms, and departmental newsagent stores.  Many community and cultural institutions were established- the Company Culture Club, company cinema Popularne, library, Song and Dance Band, Technology and Process Improvement Club, and many others. The Company’s newspapers were published and the employees were offered to avail themselves of the holiday center near Spała and holiday and SPA resort in Ustka . In 1970 the Workers Allotment Gardens were established.  In the early 1990s, Poltex was put into liquidation. In 1996 the company was transformed into a creditor joint stock company, the major shareholders being the State Treasury, Bank Handlowy, Powszechny Bank Gospodarczy, Industry Development Agency and the Municipality of Łódź. A restructuring action plan was developed, which unfortunately failed and in June 1997 the production operations were discontinued.  IN THE SAME YEAR POLTEX N SP. Z O. O. WAS ESTABLISHED TO INITIATE SERVICE, INTERNATIONAL CHAIN STORES  AND HOTEL BUSINESS IN REVITALIZED HISTORICAL FACTORY BUILDINGS. IN 1999, THE FORMER INDUSTRIAL COMPLEX WAS SOLD AND BECAME THE PROPERTY OF A FRENCH COMPANY APSYS. THE WORKS TO BUILD THE MANUFAKTURA CENTER WERE LAUNCHED IN SEPTEMBER 2003. 

 

German Rossman cornered the local market of cosmetics stores

German Rossman cornered the local market of cosmetics stores

H&M stores are very common in Poland as it is one of few international fashion brands that offers fairly affordable prices

H&M stores are very common in Poland as it is one of few international fashion brands that offers fairly affordable prices

The long term effects of the lack of domestic capital and business is confirmed by the statistics.

The long term negative effects of the lack of domestic business freedom and a heavy dependence on the foreign capital is visible in this chart.

The forecast for other aspects.

The forecast for other aspects.

Voice from Poland

Key phrases: life in Poland , traveling in Poland , visiting Poland , jobs in Poland , economy of Poland

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