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Factba.se: Australia DFAT Country Briefs - Poland
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COUNTRY BRIEFS


OVERVIEW

Poland, also called the Republic of Poland, has a population of approximately 38.1 million (2009 est), the 6th largest in the European Union. Poland is bordered by Germany to the West, the Czech Republic and the Slovak Republic in the South, by Ukraine and Belarus to the East; Lithuania, the Russian enclave of Kaliningrad, and the Baltic Sea lie to the North. The principal centres of population are Warsaw, Krakow, Wroclaw, Lodz and Poznan.

Poland celebrates its National Day on 3 May.

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POLITICAL OVERVIEW

Under the Polish Constitution, the legislative authority of the Republic is vested in the Parliament, composed of the Sejm (lower house of parliament, 460 members) and the Senate (upper house, 100 members). Executive authority is shared between the President and Prime Minister (appointed by the President). Three new tiers of regionally-based local administration were introduced in 1999: 16 voivodships (provinces), 308 poviats (counties; and 65 cities with the legal status of a poviat), and over 2000 gminas (municipalities).

The President is elected by popular vote for a maximum of two 5-year terms and is Head of State, Commander in Chief of the Armed Forces and represents Poland in the international arena. The President has the right to veto legislation, although his veto may be overridden by a three-fifths majority vote in the Sejm.

The most recent Presidential elections were held on 4 July 2010 and were won by Bronislaw Komorowski (former Speaker of the Sejm). Presidential elections were held early due to the tragic death on 10 April 2010 of former President Lech Kaczynski, who died in a plane crash in Russia on his way to a commemoration of the Katyn massacre, along with many high-ranking Polish civilian and military officials and prominent members of the Polish community. Komorowski defeated Jaroslaw Kaczynski, twin brother of the deceased Lech Kaczynski, winning 53 percent support from voters. Komorowski is from the governing Civic Platform party.

The October 2007 parliamentary elections saw a victory for the (then opposition) Civic Platform (PO) which gained 41.4 per cent of the popular vote (209 seats). The Law and Justice Party (PiS), which led the previous government, received 32.2 per cent of the vote (164 seats). The Liberals and Democrats Alliance (LiD) and the Polish People's Party (PSL) were the only other parties making it into the Parliament with 13.2 per cent (53 seats) and 8.9 per cent (31 seats) of the votes respectively. PO proceeded to form a majority governing coalition with PSL, with Donald Tusk, leader of PO, taking over the Prime Ministerial office in November 2007. Within the coalition, PSL holds 3 portfolios out of 18, including economy and agriculture. The next parliamentary elections are scheduled to be held in autumn 2011.

Poland was a founding member of the World Trade Organisation (WTO) in 1995 and became a member of the Organisation for Economic Cooperation and Development (OSCE) in 1996, following the success of a radical economic reform program. It joined the North Atlantic Treaty Organisation (NATO) in 1999, and, following finalisation of negotiations with the European Union (EU) in December 2002, Poland joined the EU in May 2004.

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ECONOMIC OVERVIEW

The global economic crisis did not affect Poland as seriously as its neighbours. Real GDP growth contracted to 1.7 per cent in 2009 (down from 5.0 per cent in 2008), though Poland was the only EU country to record positive growth in this year. The IMF forecasts real GDP growth to rise to 2.7 per cent in 2010. Inflation was at 3.5 per cent in 2009 and is forecast to increase to 2.3 per cent in 2010. Poland is one of the few emerging economies to still enjoy stable credit ratings.

Foreign Direct Investment (FDI) flows into Poland were close to €7 billion in 2009, down from €11.1 billion in 2008.

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BILATERAL RELATIONSHIP

Australia maintains an Embassy in Warsaw. Visa and migration issues are handled by the Department of Immigration and Citizenship's office in Warsaw. Austrade is also represented in the Australian Embassy in Warsaw. Poland is represented in Australia by the Polish Embassy in Canberra. Poland has also established a Consulate General in New South Wales and Consulates in Queensland, Victoria, South Australia and the Northern Territory.

Former Minister for Foreign Affairs, the Hon Stephen Smith MP, visited Poland in October 2009. During his visit, Mr Smith and Poland's Minister for Labour, Jolanta Fedak, signed the Australia-Poland Social Security Agreement. The Hon Alan Griffin MP, then Minister for Veterans' Affairs, visited Poland in September 2009 to represent Australia at the 75th anniversary of the outbreak of World War II. The former Minister for Defence, the Hon Joel Fitzgibbon MP, also visited Poland in February 2009 to participate in NATO talks on Afghanistan hosted by Poland. Former Minister for Climate Change and Water, Senator the Hon Penny Wong, visited Poland in December 2008 to lead the Australian delegation to United Nations Climate Change negotiations. South Australian Premier, the Hon Mike Rann MP, attended the associated Climate Leaders summit in Poland at the same time.

Bilateral agreements between Australia and Poland include: Investment and Promotion and Protection Agreement (1991); Double Taxation Agreement (1991); Extradition Treaty (1999); Air Services Agreement (2005); a Joint Communiqué on Cooperation in Environmental Technologies, Goods and Services (2006); Social Security Agreement (2010).

The Polish community in Australia plays an important and active role in the overall relationship. According to 2006 census figures, about 164,000 people of Polish ancestry live in Australia, nearly half of them born in Poland. The Polish community is active in promoting people-to-people contact and commercial and academic ties through a number of community organisations, bilateral business councils and institutes. Several famous Australian landmarks, including Mt Kosciuszko, were named by Polish explorer, Paul Edmond Strzelecki.

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BILATERAL ECONOMIC AND TRADE RELATIONSHIP

Poland has growing potential for Australia's commercial interests. Direct merchandise exports to Poland in 2009 were around A$23 million, while imports from Poland were worth A$370 million. Australia's major export items to Poland in 2009 were medicaments (including veterinary) (around A$5 million) and aircraft, spacecraft and parts (around A$4 million). In 2009, Australia's major imports from Poland included specialised machinery and parts (A$68 million) and furniture, mattresses and cushions (A$36 million).

There are increasing opportunities for Australian wine, foodstuffs, meat, sheepskins, education, IT, environmental and waste-management technologies in Poland.

The total value of Australian investment in Poland in 2008 was estimated at A$570 million. The number of major Australian investors in Poland has risen from just two in 2005 to more than a dozen in 2008. Amcor Polska (the Polish operation of the Australian packaging company Amcor) represents Australia's biggest commercial operation in Poland. Australian companies are active across a wide range of industry sectors and commercial undertakings in Poland with many companies establishing distributor and agent networks. Australian companies are active in the financial services, packaging, building and construction, education, engineering, ICT environmental services, franchising and mining technologies and services sectors. The rapid development and increasing disposable income base also mean Australian wine exporters are actively capturing a growing share of this market.

Macquarie Bank is currently managing a global infrastructure fund that has invested in DCT Gdansk, a deep sea container port in Gdansk, Poland. The total investment is valued at about €180 million (A$311 million) and one of the largest investments in Poland. Bravura Solutions, a supplier of software systems and services to the banking sector, has recently established a presence in Warsaw and interest by Australian firms in Poland as a strategic gateway to the European Union is strong. Given Poland's large resource base, particularly coal and copper, and the need for continuing infrastructure developments opportunities exist for Australian companies to supply services and technologies to both these sectors particularly in traffic management and road planning, energy and gas (coal bed methane and unconventional gas). Continuing reform of the heath sector should also allow Australian companies potential for increased exports of medical devices and investment in the private hospital sector. There is potential for growth in Australian investment in these and other areas as the Polish economy further expands, incomes rise and demand diversifies.

For advice on doing business in Poland, see Austrade's website (http://www.austrade.gov.au).

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EXPORT OPPORTUNITIES

Education and Training

In 2009, there were 2306 enrolments by Polish nationals in education institutions in Australia, with preference for vocational training and English language courses. Hospitality, tourism, business and IT are also popular. This makes Poland our fifth largest education market in Europe. Growing demand for post-graduate studies and vocational courses should ensure continued interest in Australian education and training services. Increased collaboration on science and technology and joint research initiatives between institutions is a priority for Austrade's development of this sector. Austrade, works closely with the education sector to build sustainable growth and branding for Australian education through missions, seminars and targeted media coverage.

Infrastructure

There are opportunities for government and privately funded projects to improve road, rail and environmental facilities. Poland is planning a major expansion of its highway network, which is in poor condition relative to other neighbouring countries. Opportunities exist for Australian investors and experts in PPPs (Public Private Partnerships) as this business model has just been fully legislated. Poland as well as Ukraine will be hosting the European Soccer championships in 2012 (Euro 2012) and this should boost investments and infrastructure projects in Poland. Spending associated with Euro 2012 is said to drive economic growth by 1 per cent annually.

Sporting facilities infrastructure

Construction and modernisation is planned for 6 stadia in Poland with an estimated investment of €30 - €100 million each and seating capacity for 45,000. The projects will including new roofing, enlarged car parks in addition to infrastructure developments in surrounding areas both residential and commercial. The estimated value of these projects and investment in sporting facilities alone is €1.2 billion.

These projects will include ICT and transport solutions:

ICT

-- Security (access control, monitoring, etc)

-- Ticket sales management

-- Transport management (public transport, parking etc)

-- Safety (road safety, health etc)

-- Events management

Transport

-- Roads, railroads, waterways, airports

-- 1000 km of motorways

-- 1500km of dual carriageways

-- Modernisation of 1,500 railway connections

-- Construction of 8 airports

Information and Communication Technology

The Polish IT market is in a long-term uptrend, developing at a stable and sustained pace. In 2007 it expanded by 25% (in US$ terms), making it the fifth consecutive year of double-digit growth. Austrade is currently promoting Australian IT expertise in such areas as road safety (RedflexPly Ltd), intelligent transport solutions and contactless smartcards but also in niche segments such as asset management and planning solutions. Communications technology for the mining sector is also providing opportunities for Australian suppliers.

Environment Products and Services

A Joint Communiqué on Cooperation in Environmental Technologies, Goods and Services, signed by the then Minister for Industry, Tourism and Resources, the Hon Ian Macfarlane MP, and the Polish Minister for Environment, Jan Szyszko, came into effect on 17 March 2006.

The Communiqué provides for the development of cooperation between Australia and Poland in the field of environmental technologies, goods and services. When Poland acceded to the European Union in 2004, it became eligible to receive substantial assistance from the EU Cohesion Fund to upgrade its environmental infrastructure, practices and technologies. Poland sees Australia as an alternative source of these technologies from its traditional suppliers in the EU and the United States.

The arrangement facilitates the acceptance of Australian environmental technologies, goods and services by Polish purchasing authorities. As a result Australian exporters will be able to assist local Polish authorities in improving their environmental infrastructure, practices and technologies to meet EU requirements. Areas of collaboration covered by the arrangement include:

-- environmental impact assessment and management of the environment

-- pollution monitoring and reduction

-- management of hazardous chemicals

-- ozone protection through alternative technologies

-- conservation and sustainable use of biodiversity

-- development of technologies, goods and services for environment protection.

Waste management and green energy sectors present a particular opportunity. The Polish Government has recently approved the National Municipal Wastewater Treatment Programme. By the year 2015, the sewage system will have been extended by 21 thousand km and 1163 wastewater treatment plants will be built, developed and/or modernized. This will present niche business opportunities for Australian partners with the relevant technologies and know-how.

Aerospace and Defence

There are opportunities for Australian companies to supply defence equipment to Poland as it sets about meeting its NATO obligations and modernises its defence forces.

Mining and Minerals Coalmine Rehabilitation

With the imminent privatisation of a number of mining enterprises in Poland, Austrade commenced opportunity-scoping work with several Australian companies. A comprehensive Mining Sector Report was prepared by Warsaw Post for the Queensland Government outlining specific areas of opportunity, potential partner enterprises/ mines and tenders. In March 2010, Austrade led a trade mission of Australian companies offering technologies and services to the coal sector in major Eastern European countries, including Poland. Coordinated by Moscow and Warsaw Posts, the mission saw eight representatives of Australian industry meet with major coal companies, business partners, research organisations and government agencies in Poland, Ukraine and Russia. The mission achieved significant commercial interest and generated media exposure for Australia's innovative mining technologies.

Oil and Gas

Poland is attempting to find and document resources of 6 billion tonnes of oil and about 40 billion cubic meters of natural gas. Currently, there are about 90 active exploration sites. This is part of an aggressive policy by the Polish Government to rebuild its domestic oil and gas industry and could open up some potential new business matches for Australian companies.

In addition, the recent emergence of technologies to make shale gas extraction commercially viable has resulted in strong interest in Poland about the possibility of significant shale gas reserves. Estimates range from 150 to 300 billion cubic metres of shale gas reserves in Poland. There is significant interest from Australian and international companies in exploration to confirm reserves and exploitation possibilities.

The support of government bodies and the ramping up within the oil and gas industry in Poland could create partnering opportunities for Australian businesses with the relevant know-how and technologies, interested in linking up with Polish businesses seeking international partners.

Textiles, Clothing and Footwear

Leather, coarse wool tops, skins and hides offer opportunities.

Wine

Australian wine exports to Poland have increased markedly over recent years. This is from a low base and there is still significant growth potential in the market. A number of Australian wineries are committed to Poland as an emerging market that has the potential to reach high levels of consumption in the following years.

Franchising

Poland represents a substantial market for Australian innovative franchising concepts. A number of Australian concepts are already represented in the market including Gloria Jean's, Cartridge World and No Wet.

The rise in disposable incomes and entrepreneurs with strong amounts of capital means opportunities for Australian franchise companies. Austrade has been active in raising the profile of Australian franchise industry through strategic alliances with the local Franchise Association and the use of a local language website to promote greater awareness of Australia's industry.

Trade Successes

Australian company Mincom was successful in supplying asset management and mine planning software to Europe's largest opencut lignite mine located at Belchatow.

Australian company Entech has won contracts in Poland for its technology in thermal treatment of hazardous wastes. SUBARU IMPORT POLSKA Sp. z o.o - an exclusive Polish importer of Subaru cars, signed a contract to implement the DNA PROGRAM (DataDotDNA VIN product) - developed entirely by Australian Company DATADOT Technology Ltd. - Macquarie Bank has made 11 significant investments in Poland including the development and management of a deep sea container port at Gdansk.

The Macquarie Group Property Fund (MGPA) holds a 70 per cent interest in the luxury apartment project in Warsaw valued at around A$390 million. MGPA also has a joint venture with London and Regional Properties Ltd to purchase a prime 40 storey office building in Warsaw.

Macquarie Countrywide Trust is purchasing 5 shopping malls in Poland with a total value of around A$377 million.

Macquarie Goodman is developing a logistics centre and warehouse in the Pomeranian free economic zone at Torun.

Macquarie Capital Alliance Group (MCAG), in conjunction with other Macquarie related entities, has taken a 53 per cent stake in the Netherlands-based European Directories which has 50 per cent ownership of Polskie Ksiazki Telefoniczne (PKT).

Australian Opal Property Development (The Meydan Group) acquired post industrial areas in the city of Lodz, to be converted to trendy residential warehouse style living and luxury apartments. This investment also involves export of Australian services and capabilities in architecture, design, property development and sales.

Sydney based Beach House Films produced the internationally acclaimed commercial for Zywiec beer, Poland's flagship brand.

Bovis Lend Lease is currently managing nine projects for companies in Poland including Apsys, Electrolux, LG electronics, Neinver, and Parkridge CE Retail.

Amcor will build its third factory in Poland, costing around A$36 million, to manufacture packaging from foil for the food market.

Redflex was awarded the tender for supply of enforcement traffic management system in Trynczn which should pave the way for more municipalities implementing the technology.

More examples of successes are posted on the Austrade website (http://www.austrade.gov.au) .

TradeWatch Contacts

If you would like more information on trade and economic conditions in Poland, please e-mail the Department of Foreign Affairs and Trade: Tradewatch@dfat.gov.au (mailto:Tradewatch@dfat.gov.au). If you would like more information on specific export opportunities in Poland, or more information on export assistance, follow the link to the Austrade website (http://www.austrade.gov.au).

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Last Updated: October 2010

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