An idea for Eastern Poland: infrastructure, investments, innovations - 27-09-2017
Photo by PTWP

“Sustainable development requires that Poland's eastern provinces catch up, which requires investment, in particular in infrastructure”, wrote Poland's President Andrzej Duda in his letter to participants in the Eastern Economic Congress that opened on Wednesday. The debate at the Congress supported the diagnosis.

“Without infrastructure development we will not be able to act as the gateway to the East”, said Jerzy Leszczyński, Marshall of the Podlaskie province at the opening session of the Eastern Economic Congress in Białystok.

Indeed, until recently the poor condition of transport infrastructure has been a development barrier in Eastern Poland. Poor connections to other parts of the country discouraged potential investors. However, changes have been constantly on-going.

“We have seen great progress in Eastern Poland with respect to infrastructure”, said Wolfgang Munch, deputy director of Poland's Department, Directorate-General for Regional and Urban Policy of the European Commission, at the opening session of the Eastern Economic Congress in Białystok. “Transport channels have been developed in that part of Poland with other regions and also with the entire EU”, commenting on the most recent infrastructural investments in the region, including the S8 express road and recommissioning the Warszawa-Białystok railway line after modernisation. Other activities are planned.

The region also has prospects for international cooperation on a regional as well as global scale. This is being facilitated through such investments as the Via Carpatia, Via Baltica and the New Silk Route transport corridors.

“It is good that Via Carpatia has started taking shape as the European corridor has hitherto been only a dream. We are trying to convince the European Union to classify the corridor as a priority project”, added Jerzy Leszczyński, while Jacek Socha, a partner at PwC, stressed that apart from the construction of Via Carpatia it will be of primary importance that the government’s plans concerning the Central Transportation Hub are successful. “This will mean that cities from Eastern Poland - within two hours’ drive - will gain access to a large airport and within a further two hours be within reach of almost every place in Europe”, he said, adding that the success of the project will be very important in determining the role of Eastern Poland as a gateway to the East.

Not only infrastructure

“We have constantly been tracking investments in infrastructure”, stressed Munch, and he added: “Infrastructure in itself is not the sole factor making Eastern Poland a world-class region. Other steps are required as well”.

What are they? First, it is necessary to rely on what already exists in Eastern Poland and what remains insufficiently appreciated. “We know that in Eastern Poland we have world-class universities, we have innovations that more and more frequently enter the mainstream of the world of business. It is no longer low wages that are the region’s advantage. There are many countries where wages are lower”, said Wolfgang Munch. “In the new budget perspective, we want to focus on entrepreneurship and innovation. We need to focus more on the university and encourage cooperation between the world of science and local business. The change has already become noticeable”, he continued.

The changing economic model was also discussed by Jan Mikołuszko, Chairman of the Supervisory Board of Unibep. “Polish entrepreneurship is being restructured”, he said. “We can see the model for economic development change. The model that relied on very cheap labour is definitely over; businesses whose activities were dependent on that must re-define their future”, he added.

In Jacek Socha’s opinion, if low wages were the sole competitive advantage, Eastern Poland would have no rivals. “Those provinces have the highest unemployment rates and the lowest wages”, said the partner in PwC. However, he stressed that development requires a well thought-out strategy. “Will development over the next 10-20 years consist in copying the existing forms of industry at a time when we are entering the world of digitalisation and mobility, which will require other tools and competences?”, he asked.

Cross-border cooperation

Much room in the discussion was devoted to cross-border cooperation. 

“The gateway to the East is hardly used. Over the last 10 years, exports to Russia, Ukraine and Belarus have halved. Over the same time, production grew twofold in comparison to total exports”, said Sławomir Sosnowski, Marshal of the Lublin province.

This was confirmed by Jerzy Leszczyński. “The West is the core business partner of Eastern Poland. The goods that are produced here we sell primarily to Germany, the UK, the Czech Republic and Scandinavian countries”, he said. And what about the East? “The future lies in the East - both in terms of trade and investments”, he answered.

In the opinion of local authorities, more intensive support for cross-border relations could become more useful.

“For those of us who live in Eastern Poland the Eastern Partnership is also important - the way the EU's peripheral regions are supported. We feel the shortage of funds for projects carried out jointly with our eastern partners”, said Sławomir Sosnowski.

In response, Wolfgang Munch encouraged more activity. “We in Brussels are not aware of the actual challenges that you are facing. What we can do most is to read reports. The initiative must be on your part. This is what the cohesion policy is for. It is up to you to select projects, to select counterparties”, he said.

There are also other possible directions for expansion. Investments in the Serbian Republic of Bosnia and Herzegovina were encouraged by Petar Djokić that the country’s Minister of Industry, Energy and Mining, who made a presentation before the debate. “In our country, investors are protected by law due to the EU compliant Act on Protection of Foreign Investments and as a result we pursue advantageous fiscal policies with a 10 percent income tax and 17 percent VAT, as well as attractive labour costs, which means overall the most advantageous conditions for investment in the region”, he argued. “We are aware of the importance of regional cooperation for the future of Europe”, he added.

Eastern Economic Congress - young in years but high in prestige

So, what is the plan for Eastern Poland? “The future is in our hands. As entrepreneurs, we should be convinced that we can. If we are convinced that we will be able to use our location, others will support us”, said Jan Mikołuszko.

“We have to believe in ourselves, be innovative and use what Europe has to offer”, said Wolfgang Munch.

How to convert beautiful slogans into specific business tools? The Eastern Economic Congress is a good place to look for answers to these questions. “The Eastern Economic Congress is an initiative that remains young but already has high prestige”, stated President Andrzej Duda in his letter to Congress Participants.

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