Tag Archives: shock therapy

Going for Broke: Puerto Rico ‘Starts US Bankruptcy Race’!


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The New Shock Therapy: Why Poland Needs Another ‘Miracle’

With Europe, the European Union and the eurozone increasingly synonymous with economic stagnation and contraction, one of the few bright spots in recent years has been the former communist state of Poland, a nation which is generally regarded as one of the more successful models of post-1989 transformation. A nation with a vibrant industrial sector – items such as computer monitors, snowmobiles and vehicle parts constitute significant chunks of its contemporary export mix – Poland has managed the transition from an economy characterised by outdated infrastructure and dysfunctional state-owned enterprises in a manner that has become a ‘miracle’ model: relatively swift (though reasonably orderly) economic liberalisation or ‘shock therapy’ produced a slump followed by two decades of growth and considerably greater prosperity.

These days, however, Poland is evincing most if not all the signs of a jammed-up economy that have become familiar in large parts of Western Europe: export orders have plummeted, companies are receiving the best part of a thousand CVs for one entry-level position and the government coffers – the epitome of generosity when it came to preparing for and co-hosting Euro 2012 with neighbouring Ukraine – seemingly exhausted and unable to  ameliorate the situation.

For a country which has known nothing but rising material living standards since the early 1990s, this is bound to raise questions which even the traditional Polish combination of enterprise and emigration cannot necessarily answer. With the eurozone unlikely to fiscally bloom anytime soon and mass structural unemployment – a scourge of the Polish economy even in the good times – likely to lead to serious social unrest, now may be the time for Poland to consider radical steps to maintain economic momentum:

1. A Russian Rapprochement? For perhaps entirely understandable reasons, Polish elites and grassroots alike have defined post-communist Poland as a Western-orientated state, with NATO membership in 1999 and EU accession in 2004 viewed as historic and positive developments. Yet while the Russian Federation may have little to offer Poland politically, economically it may represent a significant opportunity for many Poles on an individual level: a linguistically similar country whose vast oil wealth is once again making it into a regional if not world power. Poland may look to the Turkish example in this regard: despite traditionally frosty relations with the world’s largest country, Turkish workers and companies have carved out a significant niche for themselves within Russia during the past decade.

2. The Globalisation of Poland. As the sixth-largest economy in the world’s largest trading bloc, Poland has become an attractive prospect for a new generation of immigrants: an estimated 10,000 Vietnamese now call Poland home, with nationals of countries as diverse as India and South Korea now beginning to form settled communities in a country which has historically been a major exporter – rather than importer – of labour. Incentives to attract at least some of the best and brightest prospects from Asia and perhaps further afield should be seriously considered by present and future Polish administrations.


Filed under Economic Development