The BEST Guide to POLAND
Unanswered [5]  |  Archives [1] 
 
 
User: Guest

Home / News  % width posts: 26

Foreign investors fear Poland's instability


jon357 64 | 14,382    
13 Apr 2016  #1
"One of the great advantages of doing business in Poland had been that you could rely on a stable and predictable political landscape that was pro-business," says Ben Habib, managing director of First Property Poland, a fund manager with more than €300m in the Polish property market.

"It is interesting that throughout the credit crunch, Poland maintained its A-minus [credit] rating and within two months the new government managed to get downgraded."

ft/intl/cms/s/0/5f3773b2-f034-11e5-9f20-c3a047354386.html#axzz45fnrfjUu

Looks like this is becoming a bit of a pattern...
InPolska 11 | 1,821    
13 Apr 2016  #2
Foreign investors are no philanthropists so they won't mind leaving Poland and it won't be very good for Poles ;)
Levi 13 | 451    
13 Apr 2016  #3
One comes, one goes.

Not all foreign investors fear instability.

And some of them leaving (specially those under command of Mama Merkel that come to invest in more "Refugees ammenities" in Poland while kicking Poles from their own homes) are more than welcome to leave.
pweeg3    
13 Apr 2016  #4
Not all foreign investors fear instability.

Oh dear, thats bollocks
InPolska 11 | 1,821    
13 Apr 2016  #5
@Pweeg: yes "enjoy" ;) but as you know, he does not live in Poland so .... ;););)
OP jon357 64 | 14,382    
14 Apr 2016  #6
In business, everything comes down to the bottom line and the lack of new investment in Poland speaks volumes, as does the unfortunate reduction in credit rating.
Crow 143 | 7,416    
14 Apr 2016  #7
Western Europe hurry to isolate Poland and Poland too slowly opening for greater cooperation with the China, Russia and others who are interested. This is isn`t good.
G (undercover)    
14 Apr 2016  #8
Foreign investors that want the "stability" (like not paying taxes, getting subsidies that domestic investors have to pay for etc.) to go on -> feck them and their "investments".
OP jon357 64 | 14,382    
14 Apr 2016  #9
feck them and their "investments".

There speaks someone who is not among the 8% (and in reality far more) who are unemployed in Poland. Someone wanting to feed their family doesn't generally mind which country the capital for the company who might offer them a job comes from.
Grzegorz_ 51 | 6,170    
14 Apr 2016  #10
Someone wanting to feed their family doesn't generally mind which country the capital for the company who might offer them a job comes from.

Yes but in all countries with ambitions not to be banana republics, guys at the top think rather how to make domestic companies expand internationally, instead of begging "foreign investors" to come and use their people as cheap labour. Again, will you show me rich countries that have their economies based on "foreign investors" ? I'm waiting.
TheOther 5 | 3,693    
14 Apr 2016  #11
guys at the top think rather how to make domestic companies expand internationally

You'd need domestic products that are competitive on the global market for that to work.
delphiandomine 85 | 17,704    
14 Apr 2016  #12
guys at the top think rather how to make domestic companies expand internationally

You're not going to do that by nationalising them and filling them with Party loyalists, like PiS have done.

If you have ambitions of domestic companies expanding internationally, you help them to locate in the best locations (i.e., not Sanok) and you provide them with as much soft support as you can. For the money wasted on Autosan, they could easily have supported successful Polish transport companies such as Solaris and PESA instead.

Instead, PiS are going to force Polish towns and cities to buy from Autosan, meaning that the company will have no motivation to compete abroad or even to try. Meanwhile, Solaris will be shut out of their home market because of this.

PiS economics were already tried and failed miserably in the past.

Here's a clue : if PiS can't even run a horse stud properly and instead destroyed it within weeks, what hope do they have of running large companies capable of competing abroad? They haven't got a chance.
AdrianK9 6 | 369    
14 Apr 2016  #13
Oh dear, thats bollocks

Not true at all. Real investors balance their portfolios by risk - they have low risk, medium risk, and high risk ventures.

If that were true, I would've never had a single client when I was a commodity broker - one of the riskiest investments around.

Again, will you show me rich countries that have their economies based on "foreign investors" ?

Panama, Cayman Island, and all the tax haven countries' economies and new office construction is based on money laundering and local banking secrecy laws. These countries' citizens live pretty darn well. Although I guess those would classify as 'banana republics.' I remember in the late 90's I went on vacation to the Cayman Island and I was shocked when I heard the minimum wage was like $12 hour or something - 3x higher than the US at the time. Some other places live off foreign money too like where it's an enormous chunk of their economy like Trinidad, U.A.E, Hong Kong, Macau, Andorra, Lichtenstein, etc. Like Trinidad has over 100 billion of FDI stock yet the most recent annual GDP is around $30 bil. By comparison, Poland has around 140 billion of foreign stock but their most recent GDP figure was $1 trillion - so not a big percent of the economy when you consider the way some other countries are leveraged. I believe the US is actually the country with the most foreign investment - if we're going by total dollar amount.

Also, Poland is a very stable country to invest in - companies spend millions investing in far less stable environments.

China, Russia and others who are interested. This is isn`t good.

At least we have just signed a trade deal with Kazakhstan now - a country I am considering working in due to the high wages for expats and low taxes
Grzegorz_ 51 | 6,170    
14 Apr 2016  #14
You'd need domestic products that are competitive on the global market for that to work.

There are dozens of quite large companies that were built from 0 in post commie times, even with "foreign investors first" policy in place, one can only wonder what would happen without that mess. Now tell me, what would make more sense, spend 100 mln PLN to subsidise (cheap credits) export to Iran or spend that to "attract more foreign investors" ?

For the money wasted on Autosan

They "wasted" friggin 17 mln, less than Autosan's fixed assets are worth and the company will mostly produce components for defence industry, they won't even try to re-launch any large scale bus production, at least not anytime soon.
delphiandomine 85 | 17,704    
15 Apr 2016  #15
they won't even try to re-launch any large scale bus production, at least not anytime soon.

I hope they don't go near producing a single bus.

Producing stuff for the military is fine and well, the site in Sanok is pretty much ideal for that sort of thing - but please, no buses.
AdrianK9 6 | 369    
15 Apr 2016  #16
foreign investors first" policy in place

That thing was a disaster in many instances - people were buying multi million dollar factories for $300k-$400k down just so they could take out the expensive machines and sell them abroad. Then of course they'd promptly skip out on paying the remainder.

Poland is doing just fine with it's own labor force and the companies that already exist. Poland isn't one of those countries who's economy is entirely reliant on foreign investment. In fact, it plays a pretty small role in the grand scheme of things.

Poland has a over a 560 billion dollar economy by nominal GDP ($1 trillion is going by PPP), yes it is in part to FDI but that's played a tiny role overall. EU subsidies helped - but it's because Poland used them wisely. The entire total of foreign stock of FDI in Poland is $142 billion. Only 9 billion EU flowed into the country in 2014... Poland can certainly survive without more foreign investment... Actually, in that year Luxembourg and Holland invested the most - accounting for over 7 billion EU combined - and Austria and Sweden took out the most - 1.6 bil EU. We're growing over 3% a year - which is AMAZING for a developed European country. Poland was one of the only 2 country's where the IMF gave them a loan at a fixed rate - a loan that Poland didn't even want!
TheOther 5 | 3,693    
15 Apr 2016  #17
Now tell me, what would make more sense, spend 100 mln PLN to subsidise (cheap credits) export to Iran or spend that to "attract more foreign investors" ?

Depends how desperate you are for jobs and how fast you'd need them. Poland was in the lucky position to "export" a lot of its unemployment to the UK for example. What would have happened without the option for Polish workers to leave the country and work somewhere else?

There are dozens of quite large companies that were built from 0 in post commie times

The question is, could they compete on a global scale, and if not, what would it cost to get them there?
AdrianK9 6 | 369    
15 Apr 2016  #18
export" a lot of its unemployment

Poland has been doing that for decades - Poles went to all corners of the globe - South Africa, Libya, Brazil, Argentina, Germany, Russia, Kazakhstan, Austria, UK, US, Canada... the Polish diaspora is enormous. Although yes, the EU entrance certainly caused a lot of Poles to the UK. The cwaniaki would go to the UK, get citizenship, get disability, and go back to Poland. I know one girl who did that and actually got disability because she claimed she couldn't work due to carsickness - meaning she couldn't commute to work... and the UK government granted her disability! The same girl would tell her son to eat boogers in front of social workers and such so that they got more money for care.
OP jon357 64 | 14,382    
15 Apr 2016  #19
begging "foreign investors"

Why begging? If an investment is attractive and if the business environment is stable, the inward investment will come. If there is political instability as we are seeing now in Poland, it will not.
AdrianK9 6 | 369    
15 Apr 2016  #20
The question is, could they compete on a global scale, and if not, what would it cost to get them there?

Of course Poland can - we have the 23rd largest economy by nominal GDP (21st by PPP) and again, FDI represents a fraction of the overall economy.
TheOther 5 | 3,693    
15 Apr 2016  #21
Of course Poland can

Maybe there are a few companies now which can compete globally (can you name a few?), but definitely NOT in 1989/90. The GDR for example had a larger industrial base than communist Poland when the wall came down, and even they had hardly any industry that was worth preserving or survived the reunification for more than a few years.
Grzegorz_ 51 | 6,170    
15 Apr 2016  #22
can you name a few?

If you can't do that on your own, you shouldn't speak up what Poland should or shouldn't do.

but definitely NOT in 1989/90.

NOT in 89/90 but "foreign investors first" policy should have never gone that far and should have been totally phased out by early 2000's. It's the growth model for 3rd world countries that otherwise are not capable of building anything on their own, not for mid-income countries with ambitions to join the 1st league.
TheOther 5 | 3,693    
15 Apr 2016  #23
If you can't do that on your own, you shouldn't speak up what Poland should or shouldn't do.

What are you on tonight, Grzegorz? That was a rhetorical question.

Quote from WEF Global Competitiveness Report 2014/15:

"Poland's strengths include the size of its internal market, its financial market development and the efficiency of its labour market. Its weaknesses include the efficiency of its public institutions, its infrastructure, business sophistication and technological readiness."

pism.pl/events/conferences/How-competitive-is-Poland
AdrianK9 6 | 369    
15 Apr 2016  #24
Maybe there are a few companies now which can compete globally

I honestly don't know as I was in Poland just a few months ago but didn't really pay attention to that. However, I do know that Polish products are used all over. For one, I know Poland provides the EU and use to provide Russia with lots of agricultural products. I do know that they also produce various components - for one the intercooler on the SAAB I use to have said made in Poland. I do know that Malaysia and a few other countries also purchase Polish military equipment.

I do also know that the balance of trade, meaning exports and imports is almost 1:1 with just slightly more imports than exports - or at least it was when I looked it up a year or two ago when doing some research on Poland's economy and seeing what kind of salary I could expect if I expatriated to Poland.. unfortunately rather low untill I finish my MBA anyway...
OP jon357 64 | 14,382    
16 Apr 2016  #25
"Poland's strengths include the size of its internal market,

This is now being systemattically destroyed.

ts weaknesses include the efficiency of its public institutions, its infrastructure, business sophistication and technological readiness."

This is increasing here.
pweeg3    
16 Apr 2016  #26
Not true at all. Real investors balance their portfolios by risk - they have low risk, medium risk, and high risk ventures

And as you know, risk is inversely proportion to reward.

Oh dear, thats bollocks

By that, I mean that its bollocks for Poland because instability will result in a higher cost of borrowing. However, real very long term investors who directly provide jobs by building factories, rather than market trading speculators, get precisely nothing from higher risk.


Home / News / Foreign investors fear Poland's instability
BoldItalic [quote]
 
To post as Guest, enter a temporary username or login and post as a member.