Poland Ready to Blast Off

By McCrary, Ernest S. | Global Finance, September 1999 | Go to article overview

Poland Ready to Blast Off


McCrary, Ernest S., Global Finance


A decade of methodical preparation has led Poland through through a comprehensive privatization program that is restructuring the financial sector, attracting piles of foreign investment, and preparing the economy for a broad, new growth cycle.

Poland, after a full decade of methodical reforms, is entering a new stage of development that will place it squarely among the major European economies over the next few years. Membership in European Monetary Union is in the offing-probably sometime between 2002 and 2005 -and key reforms in the Polish economy are coming through as promised by the government of Prime Minister Jerzy Buzek.

"We've had some zigzags," says Piotr Mroczkowski, vice chairman and COO of Elektrim, a former state trading company and wire cable maker that has emerged as a player in Poland's telecommunications sector-- and has seen its market cap soar from $20 million eight years ago to $900 million today. "On the whole the system is working, regardless of who has been in power;' Mroczkowski says."The reforms are going forward and inflation is coming down. Growth this year is in doubt, but from 2000 onward the outlook is very good."

Yet the economy is growing twice as fast as the European average, and the telecom sector is particularly hot, since the partial privatization of former telephone monopoly Telekomunikacja Polska (TPSA) last year. The company is spending around $1.2 billion a year to modernize its systems and $1 billion a year is being raised abroad through bond issues for expansion and debt restructuring. The company is to get a strategic partner this year as the Polish Treasury sells another 25-30% of TPSA's shares. "A strategic partner will help us lower our cost of capital. We need this expansion because TPSA itself plans to install more than half the eight million new lines that Poland needs," says Donald Chodak,TPSA's CFO.

Netia, another new entrant into the Polish telecom market, listed on NASDAQ in New York at the end of July, raising $121 million for 21% of the company. Donaldson Lufkin & Jenrette Securities was global coordinator and lead manager of the transaction. "Poland is starting to look more like Western Europe for telecom activity," says DLJ managing director Tony Belinkoff, who worked on the Netia deal. "The economy and companies are maturing. Western capital will find Poland very attractive."

According to Adam Pawlowicz, president of investment promotion agency PAIZ, Poland received $6 billion in new FDI in 1997 and $10 billion last year. The total stood at $33 billion in June 1999, he says. Much of this is going into fields such as banking and insurance, preparing the way for an explosion in new financial services.

"You have to remember that the `central planning' period in Poland was fairly short, lasting only from 1949 until the early 1970's," says Marek Roman, CEO of consulting and investment management firm EVIP International in Warsaw. "Even then, small private businesses were allowed to exist and entrepreneurship never completely died out. The Communist Party actually looked for ways to reform. They failed, but at least people were allowed to study and travel abroad. That gave us an advantage, and made it easier to transform the system here."

Henryka Bochniarz, another consultant and economist who studied abroad-at the University of Minnesota-is also an outspoken defender of private-sector development. She served as minister for trade and industry in the second Solidarity government in 1991. Today she heads NICOM Consulting and is president of the new Polish Confederation of Private Employers, which has attracted more than 1,000 companies as members since it was set up in January.

"We're really in a transition period," Bochniarz says. "As a baby of the reforms myself, I can say that we're on the right track. But a lot of things could still destroy that. Some people still want to think in the old way, when the state was supposed to take care of everything.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Poland Ready to Blast Off
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.