Poland

IV

Economy

After World War II Poland adopted a Soviet-type socialist economy, and almost all important means of production, resources, transport, finance, and trade were nationalized. Private ownership was limited mainly to the agricultural sector, handicrafts, and certain services. Manufacturing became the dominant economic activity, followed by agriculture and construction. From the late 1970s Poland experienced considerable economic difficulties, resulting primarily from a series of poor harvests, unrest among industrial workers, lagging technology, rising inflation, and the highest debt to the West of any Communist-bloc nation. These economic problems, which worsened in the course of the 1980s, were responsible in large part for the collapse of the Communist regime and its replacement by a coalition led by Solidarity in 1989.

In December 1989, the government launched a reform programme designed to change Poland from a centrally planned to a free-market economy. The package called for a convertible currency, removal of virtually all price controls, imposition of wage controls, and privatization of many state-owned companies. State enterprises were changed into joint-stock companies, some of which were bought by foreign investors. Many of the remainder went bankrupt or were earmarked for eventual privatization. This restructuring led to a rapid rise in unemployment as formerly state-owned firms cut their payrolls in order to cope with the loss of subsidies. Poland’s gross domestic product (GDP) fell by 18.3 per cent in 1990-1991. The immediate decline of about one third in living standards was partially relieved by a new unemployment insurance system.

After the initial shock, the Polish economy began to rebound. GDP increased by 2.6 per cent in 1992, 3.8 per cent in 1993, and 5 per cent in 1994. Increasing industrial production, a fall in unemployment, declining inflation, and rising purchasing power all signalled that Poland’s free-market changes were working. By the end of 1993 about 40 per cent of the Polish workforce was employed in the private sector. In 2004 Poland has a gross national product (GNP) of US$232,931 million (World Bank estimate), or US$8,210 per capita. In 2006 the Polish budget included revenues of US$109,129 million and expenditures of US$122,476 million.

A

Agriculture, Forestry, and Fishing

Although Poland ranks as one of the leading European agricultural countries, it is chronically unable to meet its needs for food, feed grains, and vegetable oils. Under the Communist government, Polish agriculture was organized into both socialized and private sectors. Small private farms accounted for more than 70 per cent of all farmland and for 80 per cent of yearly agricultural production. Employment in the state agricultural sector fell from 700,000 in 1989 to less than 200,000 in 1994. The largest area of cultivated land is found in the Central Lowlands, but much of the best farmland is in the low plateaux and foothills of southern Poland. Climate limits the range of crops that can be grown, and periodic drought causes considerable fluctuation in yearly crop output. Farmers generally achieve low yields compared to those of other Eastern European countries. In 2005 about 17 per cent of the workforce was employed in agriculture, but it only accounted for 4.5 per cent of GDP (in 2006). The modernization and restructuring of the agricultural sector is one of Poland’s chief obstacles to full EU membership. The principal Polish crops are grain (rye, wheat, barley, oats), sugar beet, potatoes and other vegetables, apples, strawberries, currants, rapeseed, linseed, and tobacco. Annual harvests in 2006 included 7.06 million tonnes of wheat, 3 million tonnes of rye, 3 million tonnes of barley, 8.98 million tonnes of potatoes, and 11) million tonnes of sugar beet. Horses have become an important part of the agricultural economy; Poland is one of the world’s leading exporters of horses and horse meat, with Italy and France as the leading importers in the mid-1990s. Livestock in 2006 included 5.61 million cattle, 18.9 million pigs, 300,802 sheep, and 142 million chickens.

The annual roundwood harvest was about 32.4 million cu m (1,144 million cu ft) in 2006. About four fifths of the harvest consists of softwoods. About one third of the wood is sawn into timber, and the rest is used as pit props in mining, as fuel, or to make paper.

The Polish fish catch was 192,854 tonnes in 2005. Freshwater fish accounted for about 8 per cent of the catch. Since 1960 the major marine fishing activity has moved from the Baltic Sea to the Sea of Okhotsk, which now supplies about 75 per cent of the catch. Alaska pollack, herring, Baltic sprat, squid, and cod are now the main species caught. Major fishing ports are Świnoujście, Kołobrzeg, Darłowo, Ustka, Władysławowo, Puck, and Hel.

B

Mining

The mining industry employs about 3 per cent of the Polish workforce. Coal mining is the most important sector, and Poland ranks among the world’s leading producers of hard coal. Polish coal production has declined from some 266 million tonnes annually in the late 1980s to about 161 million tonnes in 2003. Poland is also a leading producer of native sulphur (2.4 million tonnes). In addition, the country produces substantial quantities of lignite, copper, lead, zinc, magnesite, and rock salt. In 2004 output of petroleum was about 5.95 million barrels, and of natural gas, 5.63 billion cu m (199 billion cu ft).

C

Manufacturing

Before World War II, Poland’s manufacturing base was dominated by the textile, iron and steel, chemical, processed food, and machinery sectors. In the post-war period, these industries were expanded, but other products, such as petrochemicals, machine tools, electronic equipment, ships, fertilizer, and copper, also were given emphasis. Industrial investment is concentrated in the older centres of Upper Silesia and in Warsaw, Łódź, and Kraków, but an effort has been made to introduce industry to smaller cities and rural areas. Annual output in the mid-1990s included cement, 13.9 million tonnes; crude steel, 11.8 million tonnes; passenger cars, 366,000; washing-machines, 419,000; and refrigerators, 585,000.

D

Tourism

Poland experienced a rapid increase in the annual number of foreign visitors in the 1970s, with 9 to 11 million people each year visiting the country between 1977 and 1979. Political unrest slowed the tourist boom, however, and in the early 1980s the annual number of visitors did not exceed 2 million; later in the decade the tourist trade rebounded. People from other Communist countries made up the great majority of the visitors, while West Germany was the most important source of tourists from the West. The number of tourists increased from 18 million in 1990 to more than 82 million in 1995, the vast majority of these being Germans, Czechs, and Slovaks on day trips for shopping, business, or family visits. Major attractions in Poland are the beach resorts along the Baltic Sea, the lake district, the Carpathian and Sudety mountains, and the country’s numerous historical sites and cultural institutions. Development of the Baltic Sea resorts has been hampered by a high level of pollution. The Polish Development Agency is undertaking a rapid expansion of the tourist infrastructure, adding luxury hotels and other improvements in about 300 locations nationwide. Tourism generated an income of US$5,720 million in 2006.