World Bank: Polands Success Is Remarkable, but Further Reforms Are Needed

Stocks and Financial Services Press Releases Wednesday March 22, 2017 09:13
WARSAW--22 Mar--World Bank

WARSAW, 21 March 2017 – Poland's economic ascent is remarkable, but further reforms are needed to meet citizen's expectations for faster convergence with the European Union, says the new World Bank report "Lessons from Poland; Insights for Poland".

"Poland is an outstanding economic and development success story, moving from middle-income to high-income status in record time," said Arup Banerji, World Bank Regional Director for the European Union. "If Poland wants to continue its ascent and meet the rising expectations of citizens, it needs to build on its reform successes - such as prudent fiscal policy - but also initiate new reforms around innovation and progressive labor market regulations and institutions."

How did Poland succeed? After the bold reforms of the transition from communism, Poland got its institutions right – rule of law, property rights, democratic accountability, and basic market institutions. It then used the EU accession process and subsequent EU membership to reinforce them.

A widely-shared vision of a socially responsible market economy provided reform continuity and consistency. Sound macroeconomic policies ensured stability and resilience. Poland was the only European country to record positive growth in 2008—the year of the global crisis—and to completely avoid a banking sector crisis.

Concurrently, the country successfully connected to global and regional markets, while ensuring competition at home. Efficient firms entered the market and created jobs. Workers became more productive thanks to reforms that raised education quality at one of the fastest rates in the OECD countries. Equally impressive were infrastructure improvements, supported by judicious use of generous EU structural funds; the length of motorways has almost quadrupled since the transition.

"Poland's economic growth was also inclusive for different groups of society, including the poorest, which resulted in poverty reduction from 51% in 2005 to 30% in 2014," said Emilia Skrok, World Bank Senior Economist and co-author of the report. "Better access to good education and thriving entrepreneurship with regulatory and institutional support from the government enabled social development and advancement for millions of people in Poland."

Looking Ahead

Looking ahead, the report provides several insights for Poland. First, better governance is needed to build more trust in government by making public services more client-oriented, transparent, and efficient, and involving citizens more directly in governing and public service delivery.

Second, sustaining a sound economy will now require creating fiscal space to deal with the increasing pressures coming from aging of the population and the inevitable decline of European structural funds for investment, as well as a more uncertain global context in future.

Third, ramping up infrastructure investments will allow citizens to continue reaping the benefits of trade.
Fourth, continuing to grow robustly will mean moving Poland up the global value chain by focusing on the quality of products and services and supporting innovation in a more concerted way.

"It's good that the government gives so much consideration to innovations. Without them further dynamic growth of Polish economy will be difficult to maintain," said Carlos Piñerúa, World Bank Country Manager for Poland and the Baltic States. "Other potential growth drivers should be kept in mind. The doing business agenda, more client oriented public services such as healthcare and education, and development of financial sector are the areas where Poland may do even better than before."

Finally, inclusive growth can be further boosted by continuing to expand investment in quality education and healthcare for all; striking a better balance between job security and labor market flexibility; supporting workers between jobs; targeting social spending to aging and vulnerable parts of population; and increasing the progressivity of the tax system.

The report concludes that Poland's vibrant political institutions need to work on rebuilding a broad consensus on the vision and economic strategy for the country - to meet the challenges of the future, while ensuring the long-term policy continuity that has served the country so well in the past.


Latest Press Release

Fitch Affirms Standard Chartered Bank (Thai) at #A-#; Outlook Stable

Fitch Ratings has affirmed Standard Chartered Bank (Thai) Public Company Limited's (SCBT) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) at 'A-' with a Stable Outlook. At the same time, the agency has affirmed SCBT's National...

Photo Release: KBank recognized as having the highest corporate brand value in the banking business category 2nd consecutive year

At Sukree Kaewcharoen Auditorium, the Stock Exchange of Thailand (SET), Ms. Kattiya Indaravijaya, KBank President, recently represented KBank to receive the "Thailand's Top Corporate Brand Values 2018" award in the banking business category from...

MicroBitcoin Open Source Community เซ็นสัญญากับสมาพันธ์แรงงานในเกาหลี เปิดโอกาสให้แรงงาน 1.5 ล้านคนได้ใช้เงินดิจิทัล

MicroBitcoin Open Source Community เซ็นสัญญากับสมาพันธ์แรงงาน Korea Association of Care Workers (KACW) เพื่อนำสกุลเงินดิจิทัล MicroBitcoin มาใช้ สัญญานี้ลงนามร่วมกันสามฝ่าย ได้แก่ MicroBitcoin Open Source Community, KACW และ Bluequotient...

MicroBitcoin Open Source Community Signs an Exclusive Contract with the Korea Association of Care Workers (KACW) to Expand its Usability to One and a Half Million Users

The MicroBitcoin Open Source Community has signed a contract with Korea Association of Care Workers (KACW) to adapt the MicroBitcoin blockchain network protocol. The trilateral contract was made between the MicroBitcoin Open Source Community, the Korea...

WICE establishes a joint-venture, EUROASIA TOTAL LOGISTICS, with its holding 40% of shares to provide cross-border transport services between China, Hong Kong

WICE establishes a joint-venture, "EUROASIA TOTAL LOGISTICS", with its holding 40% of shares to provide cross-border transport services between China, Hong Kong, and South East Asia with the expectation to achieve the first year's revenue at 200 million...

Related Topics