Our 20th place among the world's most developed economies went largely unnoticed in the media. Meanwhile, what we've achieved over the past few decades is an incredible success. But how do we keep it from being lost, and not be left with just a rope?
It's hard to get the impression that we're a happy and satisfied nation with what we've achieved. Politics and ideology divide us profoundly, but future generations will likely appreciate our contribution to the country's development in hindsight. After all, we now view the interwar period as twenty years of momentous change and investment, although if we asked Poles a hundred years ago how they lived, we would undoubtedly have heard the same complaints we still hear today.
Entrepreneurial Poland
When the economy collapsed in 1989 and reforms began, few people imagined that within just a few years we would become the region's economic tigers. The ambitious policies of Prime Minister Tadeusz Mazowiecki's government and Leszek Balcerowicz's painfully pro-market shock therapy were met with an enterprising society seeking freedom in every dimension, especially economically. The number of newly established entities was impressive. And although the closure of state-owned enterprises, most of them unprofitable and on the verge of bankruptcy, brought numerous social problems, in retrospect, it must be concluded that the effort was worth it.
Today, having been a member of NATO for 26 years and a member of the European Union for over two decades, we are becoming both a more prosperous country and a more prosperous nation. The question is, what's next?
Politicians and military officials warn that in two or three years, Russia could pose a problem for NATO's eastern flank, primarily for us. Without delving too deeply into geopolitical speculation about whether this will actually happen, it's worth returning to the Cold War, when the countries of the two military blocs engaged in an arms race for years. Despite numerous crises, such as the Bay of Pigs in Cuba in 1961, and in our region, such as the one in Hungary in 1956, in Prague in 1968, and in Poland during the martial law period introduced in 1981, fortunately, there has been no confrontation between NATO and Warsaw Pact countries. The Soviet Union invaded Afghanistan, but after several years of bloody fighting, it had to withdraw. Along the way, there were further invasions of Chechnya and Georgia, and now Ukraine, to demonstrate to the world the extent of the Kremlin's sphere of influence.
In his latest book, “War,” Bob Woodward cites data from American intelligence agencies, according to which Russia lost 87 percent of its pre-war army by 2024. This means that the country is significantly weakened militarily by the military operations conducted in Ukraine over the past three years and must rebuild its capabilities. Consequently, the economy is now refocused on arms production, as Moscow aims to restore the combat capabilities of its conventional forces as quickly as possible.
The news of Russia's war economy is particularly powerful in our national war trauma. However, it's worth remembering that redirecting economic potential to military needs means that many other sectors will not develop. Our eastern neighbor will not make significant strides in the technological race. Moreover, it was thanks to the United States and its space exploration and military development that the world received fleece, Gore-Tex, and the global GPS navigation system, which hundreds of millions of people worldwide use every day. Russia's armed forces, like its economy, are not advanced technologies; to put it simply, they are simply a matter of mass superiority.
Poland's spending of 4.7% of GDP on the armed forces is a response to these threats. We are purchasing equipment and trying to modernize the armed forces, but there is also another component crucial to our peace of mind. Just as after the September 11th attacks we accepted increased security measures at airports, and consequently longer checks during boarding, we now practically expect the government to spend hundreds of billions of złoty from the public treasury on armaments.
A new strategy is needed for years to come
We have good macroeconomic indicators. Our economic growth rate is the envy of many Eurozone countries, we have low unemployment, and relatively affordable taxes. While inflation is still a bit high, it's slowly approaching the National Bank of Poland's (NBP) target. We're certainly accumulating debt, but we accept it because that's the price of security. That's the current situation. And what about the future?
We won't maintain our position as the world's 20th largest economy by relying on the current engines of GDP growth. Poland won't be a viable large-scale assembly plant for foreign entities.
We need a vision. We need a strategy. We finally need good tactics for the coming years. Unfortunately, this is our Achilles' heel, and future generations of Poles are paying the price.
Scandinavians, Germans, and even Anglo-Saxons are good at planning and implementing things well. We can set ourselves a goal like joining NATO or the EU, achieve cross-party agreement, and achieve accession. The path to get there is certainly demanding, but it's a well-marked road, and achieving the goal isn't all that difficult. Determination and persistent pursuit of the goal are essential. However, trying to redirect the economy onto a new path isn't so simple.
Firstly, it's difficult to develop a strategy, because, as the saying goes, “two Poles get three opinions.” It's not only difficult to reach agreement within a single group, as we tend to divide ourselves, form cliques, and various sub-tables, but it's also problematic to create a broader front around a given issue. If the issue concerns such a crucial area as security, there's a chance for a reasonable agreement. However, when the issue concerns such a broad area as a new economic strategy, it's unlikely to succeed.
Politicians, unfortunately, know nothing about economics, have little experience running a business, let alone running their own. What does a professional politician, sitting in parliament for years, living in a bubble and completely in their own world, know about the economy, business, or global megatrends?
However, this does not absolve each successive government of the responsibility to develop and implement such a strategy. It is highly likely that if it begins to bear fruit, its successors will continue this work, at least in part, although history provides many examples that this is not certain.
Take, for example, the pension reform introduced by Jerzy Buzek's government, which introduced the Open Pension Funds (OFE). Subsequent governments failed to complete it and expand the PTEs' investment options to financial instruments other than government bonds. This led to growing debt, and Jacek Rostowski liquidated funds intended to provide an additional source of income in retirement. The current government lacks someone with the ability to project their imagination into the future a dozen or even several decades in the future.
Michał Boni was such a person in the previous PO-PSL government. We need a visionary not for deregulation, but for the country's development, based on emerging technologies and global megatrends, and able to recognize both global opportunities and threats. If this isn't a single person, then a team like the Task Force should be formed, not the National Development Council, which, convened 10 years ago by President Andrzej Duda, has no track record.
Dream team
While our weakness lies in our inability to build strategies, we have been proud of our remarkable people for centuries – scientists, inventors, creators, and entrepreneurs. There's Olga Malinkiewicz , the perovskite scientist, Sławosz Uznański , who just returned from a space expedition, Marcin Popkiewicz, who has a profound understanding of climate change and the need for transformation, and Adam Drewnowski , a California-based investor who invests in cutting-edge technologies. Such a team, supported by the best people in Polish business, such as Sebastian Jabłoński, founder and CEO of Respect Energy, and Ryszard Florek , founder of Fakro, the world's second-largest roof window manufacturer, could truly develop a sound, cross-party development strategy for Poland for the coming decades. These individuals not only know how to develop businesses in the thicket of Polish and global legislation, but also understand the specifics of the current global economic system. They recognize global trends and can identify opportunities for our country – neither too large, nor too small.
Regardless of whether Poland formally joins the G20 at the expense of removing Switzerland, which has just been overtaken, we need not only a new development strategy for the coming decades, but also cross-party consent for its implementation.
First, we need to transform our higher education system; the world has made rapid progress, leaving Polish universities behind, and not just in rankings. We need to change our migration policy because we need people to work, regardless of robotics and AI development. Energy is a vast field, and it's not limited to energy generation alone. We need affordable and distributed sources supported by storage systems with a smart grid. However, the construction of an energy system should respond to the needs of the economy—whether it's data centers requiring a constant supply of large amounts of energy, or technologically advanced industrial production requiring electricity during the day.
Mateusz Morawiecki, former Prime Minister and Minister of Finance and Economy in the United Right government, sought to escape the so-called middle-income trap. Despite the pandemic that gripped the world over five years ago and the subsequent invasion of Ukraine by Putin's forces, Poland is developing. Regardless of the threats we face, this does not exempt the current government, led by Donald Tusk , from creating and implementing a new development plan for our country. Just as energy is not just about energy production, defense is not just about tanks and guns. It is worth remembering that modern sectoral integration and technological development are dual-use areas, where the final solutions can be applied to both the military and civilian markets, thus increasing the added value of the economy.
The quote “you had a golden horn, you boor, and all you had left was a rope” from Stanisław Wyspiański's “The Wedding” is all too familiar, having been repeated too many times in our history. Maybe this time will be different?
