Polish Migration

Sad Face of Migration

Poles do not want to live in cities any longer and people are making their escape. The newest report on the makeup of Poland’s population in 2012 by the Central Statistical Office (GUS) has just been released. Poland’s current population is 38.5 million and about 15.2 million live in the countryside, while around 23.3 million live in cities. Last year, 244,000 people moved to the countryside, which is 35,300 more than people who moved in the opposite direction. This data does not only apply to Warsaw as, according to official data, 6,368 people moved to the capital last year. Cities, however, have nothing to worry about with regards to depopulation as the majority of citizens who decided to abandon crowded urban areas are actually moving to suburbia and other areas around cities. Polish people are migrating mainly due to economic reasons. The high level of unemployment (13.4% at the end of 2012) is even higher in the eastern regions of Poland (for example, 21.2% in Warmia and Mazury). People are therefore looking for job opportunities in other parts of the country. However, many Poles continue to move abroad with Germany, Great Britain, Italy, Ireland and the Netherlands being the most popular destinations. The vast majority of Poles leave in search of a better salary, although some claim that that it is for family reasons, while others wish to study abroad. In 2012, the population of Poland fell by approximately 5,000 people when compared with the previous year. This means that 1 in every 100,000 citizens has left the country. However, it is thanks to migration abroad that Poland has not been so badly hit by the global economic crisis. In the years 2004-2010, Polish emigrants sent more than EUR 30 billion back to Poland. Interestingly, over exactly the same period, Poland received EUR 16.5 billion in EU subsidies.
Wp.pl

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Rich Get Richer, Poor Get Poorer

Polish Development (Wyborcza.pl)

The eastern part of Poland still lags behind western Poland but there are glimmers of hope. Rzeszów and Lublin have shown that after years of isolation it is still possible for provincial towns to shine. According to Poland’s Central Statistical Office (GUS) only a few regions have shown positive GDP growth. These ‘positive’ regions include those surrounding Warsaw, Gdańsk, Łódź, Wrocław and Poznań. Certain areas and regions have managed to do little in the years 2000-2010. Szczecin typifies this with only a 14.3% over this ten-year period. What is more, poorer regions have faired worse than richer regions in this leaner time meaning that the divide between the rich and poor has widened. The growth of Silesia has also slowed due to the fact that one of its major advantages – motorways – is no longer unique. Infrastructure across the whole of Poland has improved with thousands of motorways and roads being built in the last decade. Silesia is no longer the land of the best infrastructure. A major positive point, however, is the fact that Poland’s growth is not, like in the Czech Republic, Hungary or Slovakia, centred on only one city yet spread across the major centres mentioned above.
Wyborcza.pl

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Poland Takes 1st Place

Polish Roads

For 10 years, Poland has been the EU’s leader not only with regard to the number of fatalities on the roads but also regarding costs that the country bears from road tragic accidents. In 2008, one casualty ‘cost’ PLN 1.47 million. Since 2000, this amount has doubled. According to the World Bank, road accidents make up 2% of the GDP. This includes not only direct costs of the accidents themselves but also lost production possibilities of the people who have died. As statistics show, most casualties are people between the ages of 15 and 45 and 80% of are males. Therefore, Poland loses the most productive members of society. As the Independent Laboratory of Economics at the Road and Bridge Research Institute (SPE IBDiM) has calculated, 1,000 km of highway will lower the number of fatalities by 200 individuals and injured people by 1,300 a year. Traffic on highways is better organised and this, in turn, means a lower number of accidents. The experience of other EU countries shows that a decent infrastructure, speed cameras and strict fines for those who break rules can enable a significant reduction of road accidents.
Dziennik

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Where’s The Crisis?

Things Getting Better

Economists have recently been expecting the worse but public spending is up, unemployment is falling and there are no signs of any encroaching crisis. Economists are in shock after the Central Statistical Office (GUS) published its latest results. Unemployment fell by 0.3% in June and production rose by an astounding 6.4% which came as a great surprise to economists who expected a rise of around 4%. The figure of 6.4% has exceeded all expectations and, together with falling unemployment, bodes extremely well for the future of the Polish economy. What is more, these positive results are having a positive effect on the Polish złoty which has gained value in the past few days.
Wirtualna Polska

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Roads Will Be Built Someday

Road to Nowhere

According to the Regional Development Ministry, the A1 highway connecting Toruń and Stryków near Łódz should have been constructed within the 2008-2010 period. “Should have been” are the key words here as construction work is yet to begin – tenders are still in progress. Chances are that the highway for which nearly PLN 2.2 billion of EU funds has been allocated will be completed by the end of 2012. Unfortunately this is just one of the many examples of road projects throughout Poland plagued by severe delays. Between 2007-2013 the EU budget for Poland, EUR 28 billion, was earmarked for the modernisation of roads, railroad lines and energy networks.

This was undoubtedly a huge figure, equal to the total subsidy amount for Italy. Approximately EUR 10 billion is to be used to pay the construction costs of new highways, expressways and ring roads. It is already clear that the EU funds are not being allocated appropriately. Huge amounts are due to be lost unless agreements related to investments that are to be carried out within the next two years are concluded in a timely manner. The delay period of several road projects already exceeds 6 months, many a few years. Some of those future investments with delayed completion deadlines will no longer be covered by EU’s 2007-2013 budget therefore new negotiations will be necessary. Why is the Regional Development Ministry issuing lists of investments with unrealistic deadlines? Are huge funds that could in theory be used immediately for emergency-type purposes such as anti-flood projects being blocked by road investments that cannot be carried out in time? Adam Zdziebło, the regional development deputy minister was not available to answer these and other questions.
Gazeta Wyborcza

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Will ATMs Disappear?

Fewer Holes in Walls?

MasterCard is about to lower the ATM interchange fee by 50%. This decision will mostly impact independent ATM providers and, indirectly, bank customers also. Every time one takes cash out of an ATM using a MasterCard card, our bank pays MasterCard PLN 3.50 and later that amount is transferred to the ATM’s owner. From April 1st, the fee will  be either PLN 1.20 or 1.60 depending on the type of card we use. In order for market balance to be maintained Visa should also take a similar step but so far it has refused to provide any clear information as to its plans. Visa’s decision will be crucial to the future of the ATM market in Poland, mainly due to the fact that it is by far the most popular card in the country. If Visa follows MasterCard and their fee also goes down to PLN 1.30, independent ATM operators such as Euronet or Cash4You will be forced to accept a huge drop in profits, even as high as 50-60% which may naturally lead to the ATM network shrinking. Euronet, the largest operator, has threatened to de-install as many as 700 ATMs. They have already removed 30. A further consequence of this tactic may be limited access to cash in general. The role of banks would then increase as they would be likely to invest in the expansion of their own ATM network. Those banks would then be able to impose certain conditions on banks which do not have such an infrastructure and charge higher fees for using their ATMs. Banks and ATM owners are all in agreement on the fact that it is very difficult to predict what the market will be like if the anticipated changes take place.
Gazeta Wyborcza

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No Flood Insurance

Flooding - What's the Risk?

After heavy snowfall over the winter, floods now pose a serious threat throughout Poland. Not everyone wants to or has the necessary funds to buy an insurance policy that will offer protection against flooding but those who have decided to attempt to buy one are finding it problematic. Some insurance companies have stopped issuing policies, other have significantly raised their prices. Companies such as Warta have adopted a different, more unusual approach. “Our insurance salesmen are allowed to postpone the day the protection takes effect if a flood is either absolutely certain or very likely to take place in a certain area,” says a Warta employee. This means we can take out an insurance policy and pay for it immediately but the actual coverage will begin a month later. If our house is flooded prior to the start date, the insurance company will not provide any compensation to cover our losses. Compensa has stopped selling policies altogether and comments that “the risk of flooding has become too high”. It is probable that other insurance providers will soon adopt the same approach and either withdraw them completely or dramatically raise prices. Hestia is one of the few companies that has yet to introduce changes. “Our clients can still take out a policy at a regular rate, regardless of where they live. We are monitoring the situation and may make amendments to our sales policy if we consider it necessary in the near future,” says a Hestia representative. It appears that two weeks ago all or most insurance agents, irrespective of what company they are employed by, were instructed to carefully verify the flood situation in areas where the risk is highest before issuing any policies.
Gazeta Wyborcza

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Changes in Retirement Funds

Making Money?

A serious change in the Polish retirement system is here to stay. Most of our pension contributions will stay in the Social Insurance Institution (ZUS) because the Ministry of Finance wants part of the contributions, which have so far been transferred to the Open Retirement Funds (OFE), to remain in special accounts in the ZUS. As much as PLN 13 billion annually is at stake here. The Ministry of Finance admits that the main aim of this move is to reduce the public deficit. How it will work? Currently, our pension contributions go to the Social Insurance Fund and from there part of the money is transferred to the Open Retirement Funds. Nevertheless, the Polish government wants to change it so that only 40% of the hitherto contributions are passed to the OFE and the remaining 60% of the PLN 22.5 billion of the annual contributions that has so far been remitted to the OFE would stay in the Social Insurance Institution in special accounts. This is the part that the Open Retirement Funds are currently obliged to invest in safe treasury bonds.

Why does the government wish to introduce this change? If this PLN 13 billion remains in the ZUS, the State Treasury will not have to issue bonds for this amount. This sum is equal to 1% of the GDP, whilst Poland has to reduce the public deficit to a level below 3% of the GDP by the end of 2012. Should pensioners worry about this change? Mr Rostowski, the Minister of Finance, reassures everyone that they do not have to be concerned. What is more, he claims that leaving the money in the ZUS will bring more profit because at present the OFE charge commission on this part of  the contribution. “The Open Retirement Funds collect premiums for this money as if it was not a 100% safe investment, but rather a risky market decision. It would be better if this money stay in the pockets of future pensioners,” says Mr Rostowski. According to the Ministry of Finance, profits can amount to as much as PLN 500 million annually and, what is more, the interest rate of the special account in the ZUS will be equal to one of the bonds. Representatives of the Open Retirement Funds have a different opinion and they are worried that if the government takes the money away from them, this may result in a change in the investment strategy into a more aggressive one, which in turn may lead to diminution in future pensions.
Dziennik

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PKP Declares Bankruptcy

End of the Line?

Polish State Railways (PKP) are facing a tragic situation. PKP Regional Railway Services, which for many Polish people is their only connection with civilisation, will soon cease to exist. The Supervisory Board wants the Management Board to declare bankruptcy within a week. As a consequence, only small railway companies and Intercity will be left. The Supervisory Board wants the Management Board to declare the bankruptcy no later than on 6^th November 2009. According to the monthly Rynek Kolejowy (Railway Market), the aim of the bankruptcy is to facilitate reaching an agreement with the obligees and the future re-establishment of the company from scratch. However, there is only one problem, i.e. pursuant to provisions of the Bankruptcy and Recovery Act as of the 8th September 2000, every company that was established on the basis of this Law cannot declare bankruptcy. Due to the fact that PKP Regional Railway Services was set up pursuant to this Act, attorneys of the company have a tough row to hoe because they have to declare insolvency of a company which cannot legally go bankrupt. If PKP Regional Railway Services collapses, this will be a tragedy for numerous passengers because many trains will cease to shuttle to and from small towns cutting them off entirely from the outside world.
Dziennik

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Dilmah to Open T-Bars

Poland - New Market?

The company Gourmet Foods, which imports and distributes Dilmah tea, will open a “t-bar” in Warsaw, the first outlet of a new tea shop chain. It is highly probable that the first t-bar will be opened in Warsaw this year. Gourmet Foods plans to develop the tea house chain under the name “t-bar”. “For the time being, we will establish only one tea shop and if customers like the idea, we will open other outlets. In the future, we would like to create a chain of tea houses in Poland,” says Mr Paweł Dudziak, communication coordinator of Gourmet Foods. If we manage to succeed, t-bars will be the first chain of tea shops in Poland, similar to those which already exist on the coffee market. As Ms Agata Zarębska, analyst of the food service market, notes, currently there are only independent tea houses or chains such as, Czas na herbatę (Tea Time) in Poland, which specialise mostly in selling tea to go. “In our shops, customers will be able not only to drink tea, but also eat and read, whilst the sale of take-away tea will just be an additional element of the business,” explains Paweł Dudziak. He also adds that the idea will most certainly turn out to be a success. “After analysing the hitherto sale of Dilmah tea, we are sure that t-bars will prove to be a success, especially since similar tea houses have already been operating in all the bigger cities in Europe, for instance, in Milan or France,” says Paweł Dudziak.
Gazeta Prawna

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