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Exit polls taken after the recent local elections in Poland
suggest a moderate victory for the country's embattled right-wing
populist government.
The Law and Justice party, currently in power, took around a
third of the vote, a few points lower than its result in 2015, but
higher than in 2014. Civic Platform, the main opposition party, won
around a quarter of the vote.
Law and Justice has been fighting the European Union (EU) in
court over its attempts to reshape the judiciary to its liking,
sparking tension with Brussels, and the biggest crisis since Poland
joined the EU in 2004.
Beyond the politics, the tension between Warsaw and Brussels has
been exacerbated by a simple economic fact: Poland can afford to be
bolder in its foreign policy because it's a lot richer than it used
to be.
In 1989, per capita income in the Soviet bloc nation was under
$2,000. Today, it's over $15,000. Poland is a regional power with a
population of 38.5 million and a trillion-dollar economy, the
largest in Eastern Europe, and the seventh biggest in the EU.
A big slice of that wealth comes from exports. Polish exports,
in large part to fellow EU members, increased 18% during the first
seven months of 2018, continuing a pattern of strong growth.
Polish exports, every five years, 2002-2017
2002: $41.2 billion
2007: $140.5 billion
2012: $185.6 billion
2017: $231 billion
When Poland joined the EU in 2004, it was still a sleepy,
Soviet-style economy reliant on farming and heavy industry. Since
then, it's aggressively embraced market reforms, and taken
advantage of billions in EU funding for developing its rural
areas.
Poland, also a NATO member, is now a key regional player. It
borders export powerhouse Germany and the North Sea, where it has
Gdansk, a world-class container port.
Thanks to its geography, it's managed to integrate itself into
Germany's expansive manufacturing supply chains. Poland's factories
now produce and export large quantities of cars, furniture and
machinery of all kinds. During the 2009 financial crisis, Poland
was the only EU country to not fall into recession.
Top Polish exports, first seven months,
2018
Electric machinery $20.4 billion (+21%)
Cars, trucks and parts, $18.2 billion (+14%)
Electronics $15.7 billion (+15%)
Furniture $8.8 billion (+17%)
Plastics $7.7 billion (+24%)
Articles of iron and steel $5.1 billion (23%)
Gas and oil $4 billion (+24%)
Rubber $3.5 billion (+14%)
Meat $3.5 billion (+24%)
Wood and articles of wood $3.4 billion (+22%)
The presence of Germany, the world's top auto exporter by value,
has helped established Poland as a key cog in Europe's auto
industry. Besides hosting factories belonging to Fiat, Opel, Volvo
and others, the country has hundreds of parts manufacturers feeding
the heavyweights across the German border.
Polish car, truck and parts exports, first seven
months
2009: $11.5 billion
2010: $12.4 billion
2011: $14.7 billion
2012: $12.7 billion
2013: $13 billion
2014: $14.2 billion
2015: $13 billion
2016: $14.5 billion
2017: $15.9 billion
2018: $18.2 billion
Despite the current tension, Poland is unlikely to follow
Britain and try to exit the EU. That's where most of its exports
go.
Top destinations for Polish exports, first seven months,
2018
Germany $42.7 billion (+22%)
Czech Republic $9.7 billion (+18%)
UK $9.2 billion (11%)
France $8.7 billion (+19%)
Italy $7.2 billion (+9%)
Netherlands $6.8 billion (+18%)
Russia $4.5 billion (+19%)
US $4.2 billion (+20%)
Sweden $4.2 billion (+18%)
Spain $4.1 billion (+17%)
Meanwhile, Poland still relies on China and Russia as a source
of foreign imports. This year, it ramped up its orders of oil and
gas from Russia, cars and trucks from Germany, and toys, furniture
and clothes from China.
Top sources of foreign imports, first seven months,
2018
Germany $42.2 billion (+19%)
China $11.7 billion (+17$%)
Russia $10.8 billion (+36%)
Netherlands $8.7 billion (+14%)
Italy $8 billion (+14%)
France $6.4 billion (+17.7%)
Czech Republic $6 billion (+22%)
Belgium $5.8 billion (+15%)
UK $4 billion (+21%)
Spain $3.7 billion (+31%)
The increase in imports also points to Poland's increased
prosperity, and subsequent integration in, and dependence on, the
global economy.
In a recent editorial published in the Wall Street Journal,
prime minister Mateusz Morawiecki boasted that his country was the
first "in nearly a decade to graduate from emerging-market status
and enter the ranks of the world's developed economies."
Poland, he pointed out, "has joined countries such as the U.S.,
Germany and South Korea in the FTSE Russell index of advanced
economies. For Poland, the first country in East-Central Europe to
join the index, the distinction is the fruit of a long effort to
build a flourishing market economy on the ruins of the communist
system that the Solidarity movement helped topple in 1989."
This month, Mr. Morawiecki, already clashing with the EU, has
been embroiled over controversy surrounding remarks he was caught
making on tape. As his Western neighbors might tell him, in the
21st century a prosperous economy doesn't guarantee
political stability. Poland's parliamentary elections are next
year.
Posted 22 October 2018 by John Miller, Guest Blogger
The Trade Numerologist is IHS Markit's unique weekly look at global trade by award-winning journalist John W. Miller, formerly of the Wall Street Journal, using proprietary numbers from IHS Markit's Global Trade Atlas database, the world's most complete and accurate set of trade numbers.
What topic would you like the Trade Numerologist to cover? Email tradenumerologist@gmail.com with comments and questions.
