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Poland Foreign Investment
By the end of 1991, Poland had obtained US$2.5 billion
from
the World Bank and other international financial
organizations
and US$3.5 billion in bilateral credits and guarantees of
credit
from Western governments. In 1992, however, the limited
absorptive capacity of the country still restricted the
amounts
of foreign cash and credit that could be used. Only US$428
million was utilized in 1990, about US$800 million in
1991. A
significant increase was expected in 1992.
Poland's net balance of payments deficit, calculated as
the
difference between credits used and the amount paid to
service
the national debt, was more than US$1.3 billion in 1989,
US$312
million in 1990, and US$449 million in 1991. In the long
run,
even investment credits and continued growth of exports
could not
maintain a balance of payments equilibrium without a
substantial
inflow of direct foreign investments.
Cooperative enterprises with foreign firms also offered
access to advanced technology, better export trade,
improved
management and training, and attractive job opportunities
for
younger members of the work force. The first year of
postcommunist rule brought an initial surge of investment
in
which permits for formation of foreign companies more than
doubled. A number of United States, British, French,
Swiss,
Swedish, Dutch, and Japanese firms started Polish
enterprises.
Significantly, the share of permits issued to German firms
dropped from 60 percent in 1989 to 40 percent in 1990, and
that
figure was expected to remain at about 30 percent after
1991.
Despite the adoption of very liberal investment
legislation
in the middle of 1991, however, the year did not bring the
anticipated investment increases. In 1991 and 1992, major
inhibiting factors were real and perceived political
instability,
conflicting and slow changes in economic policy, a faulty
system
for taxation of foreign enterprises, and a steep decline
in the
GNP. In spite of the increase in registered foreign direct
investment projects between 1989 and 1991, the registered
foreign
capital involved in these projects was only US$353 million
in
1990 and US$670 million in 1991. The actual investment
amounts
were not more than 40 percent of those amounts. At the end
of
1991, some 4,800 partnerships operated with foreign
participation. Of these, 43 percent were in industry, 24
percent
in trade, and 6.6 percent in agriculture; about two-thirds
of
foreign ventures were concentrated in the economic centers
of
Warsaw, Poznan, Gdansk, Szczecin, Katowice, and ód
--meaning
that foreign investment was not benefiting many of
Poland's less
prosperous regions. Altogether, the foreign partnerships
generated less than 1 percent of Poland's total national
income
in 1991.
Data as of October 1992
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