Economy Situation in Poland before and after EU Funding - Dissertation Example

?Running head: ECONOMY SITUATION IN POLAND BEFORE AND AFTER EU FUNDING Economy situation in Poland before and after EU funding Insert Insert Grade Course Insert Tutor’s Name 31 March 2011 Outline Introduction Literature review Research methods Conclusion Works cited Economy situation in Poland before and after EU funding Introduction Poland’s history is filled with transformations as well as many changes. These transformations have been attributed to reinventions of both political and economic forms. Over the years, the Poles have been discussing on the appropriate form their country sees best likely to fit in. Intensive debates have arisen that focus on the character of the Polish economy’s transformation and the society at large. It is from these debates that Poland has reinvented itself, thus attaining the title of a modern European state that possesses a liberal political system that is democratic and sustainable market Economy (Cox and Myant 1). According to Bache, Poland has a record of the largest entrant to the European Union in the year 2004. In 1989 after the era of communist had ended, Poland undertook a territorial restructuring period. The membership position held by Poland in the European Union has helped the Poles to restructure as well as uphold their economy (Bache 73). One of the greatest success story attributed to the post-communist transformation in Poland is the high rate at which the small as well as the private companies are emerging over the last 20 years. 69% of employment as well as 60% of turnover are among the benefits of the small and medium sized enterprise to the Polish economy. The entry and the exit levels of enterprises, whose large percentage is the small ones, are higher in Poland than the average EU (Organisation for Economic Co-operation and Development 11). Literature Review Poland’s economy before the EU funding Europa publications Limited indicate that before its incorporation into the European Union, Poland had at the time had a population of about 40 million people. In addition to this, Poland was relatively poor especially in terms of aggregate, as their income per head was a third of the EU’s average. Poland provided incentives to non European members e.g. the special tax concession provided to Korean car manufacturers (Europa publications Limited 3). The Polish government had established an agency prior to joining the EU in the year 2000. The aim of this agency, which was known as the Polish Agency for Enterprise Development (PARP), was to offer active support to entrepreneurs in Poland thus improving the country’s economy. The main function of the PARP was to manage the funds of entrepreneurship that were granted by the state. This agency upon incorporation to the European Union also mandated was with the task of managing funds granted by the EU for entrepreneurship (Organisation for Economic Co-operation and Development 131). In the year 1997, Poland had already experienced continuous economic growth that lasted for five years. This was attributed to the reduction of industrial output during the transition period. Crucial steps had been undertaken to ensure that inflationary pressures experienced in 1990s were eliminated. In addition to this efforts had been made in redirecting Poland’s exports away from old communist bloc and towards the EU markets (Europa publications Limited 62). In the late 1970s, Poland had suffered an economic crisis. Its external finances indicated vast deficits of payment as its domestic economy fell in disarray. Poland had to find a way of arresting the situation before it could get out of hand as the interests were accumulating. The Authorities then decided on the modernization and investment strategy as the way forward (Marer et al 3). Dramatic changes in Poland have always caught the attention of the world. In 1989 the government in power transformed the existing centrally planned economy into a free market. In 1990 the price controls in majority of the products were scraped off. These were some of the fundamental changes that were needed in order to make the industries in Poland to be competitive in the world market (Stelson and National Research Council 1). Poland has undergone a period of when the major economic issue was the distribution of the numerous products in the market to the stores. The dilemma of whether a private market could grow in the economy was replaced by issues that indicated that suggested that the private market may have overcome the ability of the public sector to offer social services that are crucial to a capitalistic community (Jackson et al 1). Poland being a former Soviet bloc is attributed to have arisen from the bottom and start experiencing growth again as it was the first to surpass its level of real per capita income of1989. Its growth of industrial production was noted in 1992 being a post socialist European economy. Poland growth is said to have started from a very low point after the economy’s had initially declined. It later slowed down to as low as 1 percent in the early 2003 (Rosser 338). Poland’s economy after the EU funding Poland attained the chance to have a say in the European economy as well as politics in 1 May 2004 when it joined the EU. In addition to this, Poland has its own members of European parliament and has attained full access to the funds of the EU that are granted at various sectors that include economic related issues. The Polish economy has largely been boosted by the increase of job opportunities as Poles can work in any other EU member country if they wish (Nicholas and Trembicka-Nicholas 1985). One of the strategic goals achieved by Poland is the integration with the EU. This has been viewed as an anchor of the process of transformation. Integration on the other hand incorporates adjustments to the particular rules of European Union’s legal system, market and involvement in EU policies. Poland, which is in the list of funded countries, uses these operations to further their transformation (Tang 1 & 2).According to the Organization for Economic Co-operation and Development, One of the major challenges faced by Poland is the trade-off that exist between a chance of external aid that is massive from EU funds and the potential risk of incorporating aid driven approaches instead of long term development strategies. Since its incorporation to the EU regional development, budget of the EU has risen significantly as polish was categorized as objective region 1(Organization for Economic Co-operation and Development 101). Organization for Economic Co-operation and Development (OECD) has alleged fears that on exhausting all the EU funds, Poland will have no alternative but to search for new resources. Although some of the projects in progress will be through, new resources will be required to sustain the existing efforts (OECD 60). Incorporation of Poland in the European Union has made this nation to acquire attractive financial ratings as well as lowering the political risks involved. The country has become a destination of amazing business and an investment opportunity with the only thing remaining is ensuring proper use of the EU funds (Bostyn 43). According to Rapra Technology Limited, Poland has an attractive environment of undertaking business activities both as a domestic and as a foreign investor. One of the attractive business measures used to attract investors in the business industry is the fact that foreign share holding and Polish firms are treated the same in regards to their operations. This is because in Poland the rule of similar treatment in all entities applies (Rapra Technology Limited 5). In 1 May 2004, Poland marked a crucial turning point in its history in regards to its political as well as economic perspectives. This turning point was attributed to its accession to the European Union in the same year. Not only does the 75 percent of the GDP is locally produced by local private sector but also the economy has integrated perfectly with its fellow counter parts in the European Union. The situation in Poland is suggested to be much better in the current state than back then before its incorporation into the European Union (Organization for Economic Cooperation & Development 9). Research methods Information on the economy of Poland before and after EU funding is collected from the numerous books published and as well as the articles that can be accessed through the net. A wide section of information on Poland is considered. The information is narrowed down to the information that deals with the economic situation, activities and strategies that define Poland’s economy as a whole. In this case the Nonequivalent Before and After Design is used to undertake the research as the two situations of Poland’s economy before and after the EU funding are likely to be different even before the commencement of the study. In this research two situations of the Poland’s economy have been created and their differences noted down. Qualitative as well as quantitative data have been used to elaborative indicate the economic situation in Poland in terms of percentages of unemployment and turnover. Conclusion Poland is one of the former Soviet bloc members that have undergone both the highs and the lows in its economy. In 1979-1982 the its national income fell by over a quarter while its per capital consumption fell by almost one third. The per capital consumption is attributed to the population’s high growth rate. In addition to this the economic crisis experienced in Poland was highly linked to the existing social and political tensions that existed at the time. These factors contributed to one of the longest and the deepest economic crises in the post-war economic of the world. The problem of indebtedness is pointed out as one of the barriers on the path of Polish economic recovery. In order to comprehend the past political and social aspects of the polish economic situation cannot be separated (Sachs 1 & 2). Some of the structural changes to be undertaken by the Polish government should include restructuring the enterprises as they have a huge impact in terms of employment to the economy. The restructuring should be in form of vast management assistance so as to help them adapt to the new market (Brainard and Perry 131). The EU has had a major impact on the economy of Poland as the funds attained from EU are used for development purposes which brings a positive result to the Polish economy. However it is suggested that the Polish government should be prepared with new resources should the EU funds exhaust. Works Cited Bache, Ian. Europeanization and multilevel governance: cohesion policy in the European Union and Britain. Maryland, Rowman & Littlefield Publishers. 2008. Bostyn, Frank and Boystun, Andriy. Ownership and privatisation in Poland: governance implications of Poland's Accession’s to European Union. PA, Grant Publishers. 2002. Brainard, William and Perry, George. Brookings Papers on Economic Activity: Macroeconomics. Washington D.C., The Bookings Institution. 1990. Europa Publications Limited. Eastern Europe and the Commonwealth of Independent States. London, Europa Publications. 1999. Europa Publications Limited. Central and South-Eastern Europe 2004. London, Europa Publications. 2003. Jackson, Edgar et al. The political economy of Poland's transition: new firms and reform governments. NY, Cambridge university press. 2005. Marer, Paul et al. Creditworthiness and reform in Poland: Western and Polish perspectives. Indiana, Indiana University Press. 1988. Myant, Martin and Cox, Terry. Reinventing Poland: economic and political transformation and evolving national identity. NY, Routledge. 2008. Nichols, Jeremy and Trembicka-Nichols, Emilia. Poland. London, Evans Brothers. 2005. Organization for Economic Cooperation & Development. Cutting Red Tape Administrative Simplification in Poland: Making Policies Perform. Chateau de la Muette, OECD Publications. 2011. Organization for Economic Cooperation & Development. OECD Economic Surveys: Poland 2006. Chateau de la Muette, OECD Publications. 2006. Organization for Economic Cooperation & Development. OECD territorial reviews: Poland. Chateau de la Muette, OECD Publications. 2008. Organization for Economic Cooperation & Development. Poland. Chateau de la Muette, OECD Publications. 2004. Organization for Economic Cooperation & Development. SMEs and entrepreneurship Poland 2010: key issues and policies. Chateau de la Muette, OECD Publications. 2010. Rapra Technology Limited. Doing plastics business in Poland 2005 Conference: International Conference. London, Rapra Technology Limited. 2005. Rosser, Barkley and Rosser, Vschernaya. Comparative economics in a transforming world economy. Massachusetts, Massachusetts Institute of technology. 2004. Sachs, Jeffrey. Poland's jump to the market economy. Massachusetts, Massachusetts Institute of technology. 1993. Stelson, Thomas and National Research Council. Poland's transition to a market economy: prospects for energy efficiency and conservation. Washington D.C, National academy Press. 1994. Tang, Helena. Winners and losers of EU integration: policy issues for Central and Eastern Europe. Washington D.C, International Bank for Reconstruction and Development/ THE WORLD BANK. 2000. Read More