Poland, Long an Economic Success Story, Losing Momentum

By Lee, Don | Pittsburgh Post-Gazette (Pittsburgh, PA), November 21, 2013 | Go to article overview

Poland, Long an Economic Success Story, Losing Momentum


Lee, Don, Pittsburgh Post-Gazette (Pittsburgh, PA)


WARSAW, Poland -

Michal Ruminski was 6 when his father took him through a local supermarket here. The store shelves were empty, except for some bottles of vinegar, but that was precisely the point. His father wanted the young boy never to forget the deprivations of living in a backward communist state.

Today, streets once patrolled by soldiers and armored vehicles now team with trendy cafes and tiny boutiques, not to mention grocery stores nearly bursting.

Mr. Ruminski, 39, a managing partner of a venture capital firm, can provide his wife and his own 6-year old son all the comforts of life. Their family vacations have included Africa, Turkey and the Caribbean islands.

More than three decades have passed since a strike at a Gdansk shipyard touched off a regional revolution, leading to 18 months of martial law in Poland and setting the stage for the eventual collapse of communism.

With the fall of the Berlin Wall in 1989, Poland and its neighboring Soviet states underwent a historic shift, embracing democracy and a market-based economy. Since then, Central Europe has been transformed by those political and economic reforms. And no former Soviet bloc nation has shined as brightly as Poland.

Poland's economy typically grew 4 percent to 5 percent a year. Even in the midst of the worldwide recession in 2009, the nation pushed ahead with growth of nearly 2 percent.

Now, however, Poland's economy, like that of its neighbors, has slowed. It faces many of the same problems bedeviling Western Europe and the United States - chronically high unemployment, aging populations and a sense of losing its way on the road to greater prosperity.

The Polish government is considering an overhaul of the nation's educational system, moving away from a U.S.-style focus on general studies to more of a German model emphasizing apprenticeships and vocational programs.

And Poland is making efforts, with European Union support, to modernize a transportation network that hasn't been upgraded since its days as a Soviet state.

Ryszard Petru, an energetic, widely known economist here, ruefully talks about his frequent trips to Wroclaw, a major industrial and cultural hub about 225 miles from Warsaw. "It takes five hours or longer by train and car; should be three hours," he said, speaking in fluent English. Though it's expensive, Mr. Petru said, he now has to resort to flying.

Whether Poland can keep up its success matters to the U.S., and not just because Americans like the imported Polish hams.

Long a key NATO member, Poland has been one of only a few allies that over the years has met or come close to the target of military spending of 2 percent of its overall economy. Given its location bordering politically volatile neighbors in Eastern Europe, Poland's stable democratic government plays an influential role in less-developed countries such as Ukraine and Belarus.

Poland's importance has increased as it has grown to become, by some measures, the sixth-largest economy in Europe, ahead of Belgium and Austria.

In a visit to Warsaw last week, Secretary of State John Kerry compared Poland's rapid rise to the economic rebirth of South Korea. He said he was looking to Poland to help the U.S. and the EU forge a trade pact, something that both sides said could sharply increase the flow of goods and investment. …

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