PolandInternational Trade

Background History

-Poland is located in the northern portion of central Europe

-The capital of Poland is Warsaw.

http://www.cia.gov/cia/publications/factbook/geos/pl.html

Background History

Size: 312,685 km (slightly smaller than New Mexico) Land: 304,465 km Water: 8,220 km

Coastline: 491 km (Baltic Sea)

Terrain: Mostly flat, mountainous along southern border

Major Natural Resources: coal, sulfur, copper, and silver.

http://www.cia.gov/cia/publications/factbook/geos/pl.html

Background History

Population: 38,635,144 (2004) Age 0-14= 16.7% Age 15-64= 70.3% Age 65+= 13% Population Growth Rate: .03%

Hungary’s= -.26%, Czech Republic= -.05%, Germany= 0%, Belarus= -.09, Ukraine= -.63%, Lithuania= -.3, Slovakia= .15%

Life Expectancy: 74.74 years old

http://www.cia.gov/cia/publications/factbook/geos/pl.html

Government

Type: Republic Divided into 16 provinces President elected by open elections Bi-cameral legislature

Senate (100 seats)Sejm (460 seats)

http://www.cia.gov/cia/publications/factbook/geos/pl.html

International Trade

1945-1970: Communist government restricts trade to only Soviet countries.

Poland became very dependent on Soviet Union.

1971-1980: Government restricts all western European trade. 1981-1990: Poland becomes the fifth largest ship producer in the world.

Was most of Poland’s entire trade Export mostly to Soviet Union

1986- Poland amends laws and allows bonds to be sold to foreign investors.

State enterprises were allowed to issue bonds and join joint ventures with foreign investment.

Did not raise FDI enough to see any change

http://www.pbs.org/wgbh/commandingheights/lo/countries/pl/pl_trade.html

International Trade in Transition

1989- 2 tier banking system created The Law on Economic Activity

Small step to correct rising inflation

1990-1991: “Shock Therapy” opens up trade markets. Significant increases in FDI and Trade % of GDP Increased the previously falling real GDP Corrected the out of control inflation Laws making it safer for foreign investors were put in place

Foreign investors mostly only invested if they received management rights

http://www.pbs.org/wgbh/commandingheights/lo/countries/pl/pl_trade.html

Trade Organizations

PHARE signed in 1989 Designed to bring aid from European Communities to Poland and

Hungary Assist with political change and new markets First step in eventual admittance to EU

The Efta-Poland free trade agreement Signed in Geneva, Switzerland on 10 December 1992, came into

effect Sept. 1, 1994. Main Objective

To enhance the development of world trade by removing international trade barriers.

http://intl.econ.cuhk.edu.hk/rta/index.php?did=24

Trade Organizations

World Trade Organization July 1, 1995 Increase of Trade % of GDP after joining

European Union (2004) Poland’s foreign trade policy changed drastically after

joining the EU. Poland was in direct connection with the economically

successful western European Countries. Tightened tariffs and increased customs controls on the eastern

border which is the external border of the European Union.

http://www.pbs.org/wgbh/commandingheights/lo/countries/pl/pl_trade.html

Economics

Poland’s real GDP has steadily risen in the past 25 years since fall of Communism.

Drop between 1988-1990 from political instability.

Avg. real GDP growth Rate= 3.5%

Current real GDP growth Rate= 5%

Real GDP

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50,000,000,000.00

100,000,000,000.00

150,000,000,000.00

200,000,000,000.00

250,000,000,000.00

300,000,000,000.00

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

Year

Real

GD

P V

alu

e (

US

$)

Poland GDP

http://devdata.worldbank.org.proxy.lib.ohio-state.edu/dataonline/

Economics

GDP per capita growth (annual %)

(8.00)

(6.00)

(4.00)

(2.00)

-

2.00

4.00

6.00

8.00

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Year

An

nu

al G

row

th %

Poland

World

European Union

•Poland’s growth rate negative initially due to political and economic reform.

•Poland has had a higher growth rate annually than the world’s avg. and EU avg.

•Except 2001

•Direct relation with increase in real GDP

http://devdata.worldbank.org.proxy.lib.ohio-state.edu/dataonline/

Total Exports & Imports

Total Exports (2005) $ 92,720,000,000

31st largest in the world

Total Imports (2005) $95,670,000,000

28th largest in the world

http://www.cia.gov/cia/publications/factbook/geos/pl.html

Exports

Main Export Partners European Union- 70.5%

Germany- 30% Italy- 6.1% France- 6% UK- 5.4% Czech Republic- 4.3% Netherlands- 4.3%

Rest of World- 29.5% Russia, Hong Kong, United States

http://www.cia.gov/cia/publications/factbook/geos/pl.html

http://www.foreigntradeexchange.com/countries/poland.html

Imports

Main Import Partners European Union- 65%

Germany- 24.4%France- 6.7% Italy- 8.5%

Rest of World- 35%Russia- 7.3%China- 4.6%

http://www.cia.gov/cia/publications/factbook/geos/pl.html

http://www.foreigntradeexchange.com/countries/poland.html

Division of Trade

Division of Trade (2 major divisions) Merchandise Exports/Imports

Agriculture (raw materials) Crude materials except fuels, Livestock

Food Exports- Potatoes, fruit, wheat

Fuel Mostly from Russia Oil, natural gas

Manufactures Export- Machinery, transport equipment, other misc. manufactured items Import- Chemicals, medicine, cars/motorcycles

Ores & metals Crude fertilizers, minerals, scrap metal, glass

http://devdata.worldbank.org.proxy.lib.ohio-state.edu/dataonline/

Merchandise Exports/Imports

% of Exports $ Amount % of Imports $ AmountAgricultrue (raw materials) 2 1,075,237,600.00$ 2 1,365,444,200.00$ Food 8 4,300,950,400.00$ 5 3,413,610,500.00$ Fuel 4 2,150,475,200.00$ 9 6,144,498,900.00$ Manufactures 81 43,547,122,800.00$ 80 54,617,768,000.00$ Ores & Metals 4 2,150,475,200.00$ 3 2,048,166,300.00$ Other 1 537,618,800.00$ 1 682,722,100.00$

Total 53,761,880,000.00$ 68,272,210,000.00$

% of Merchandise Exports/Imports

% Merchandise Exports

2% 8%4%

81%

4%

1%

Agricultrue (rawmaterials)

Food

Fuel

Manufactures

Ores & Metals

Other

% Merchandise Imports

2%5%9%

80%

3%

1%

Agricultrue (rawmaterials)

Food

Fuel

Manufactures

Ores & Metals

Other

http://devdata.worldbank.org.proxy.lib.ohio-state.edu/dataonline/

Commercial Service Exports/Imports

Commercial Service Exports/Imports Computers/Communications and Services

International telecommunications, postal, construction, all services-financial

Insurance & Financial Services Freight insurance, life insurance, foreign exchange transactions

Transport Services Anything relating to the carriage of passengers or movement of freight

Travel Services Goods and services consumed by travelers

Lodging, meals

Commercial Service Exports/Imports

% of Exports $ Amount % of Imports $ AmountComputer, Communications 24 2,680,800,000.00$ 45 4,736,700,000.00$ Insurance % Financial Services 3 335,100,000.00$ 7 736,820,000.00$ Transport Services 36 4,021,200,000.00$ 22 2,315,720,000.00$ Travel Services 36 4,021,200,000.00$ 27 2,842,020,000.00$ Other 1 111,700,000.00$

Total 11,170,000,000.00$ 10,526,000,000.00$

% of Commercial Service Exports/Imports

% Commercial Service Exports

24%

3%

36%

36%

1%

Computer,Communications

Insurance %Financial Services

Transport Services

Travel Services

Other

% Commercial Service Imports

44%

7%22%

27%

Computer,Communications

Insurance %Financial Services

Transport Services

Travel Services

http://devdata.worldbank.org.proxy.lib.ohio-state.edu/dataonline/

Net Exports

Net Exports In Billions

-20

0

20

40

60

80

100

120

1999 2000 2001 2002 2003 2004 2005

Year

$ in

U.S

. D

oll

ars

Exports

Imports

Net Exports

Poland’s international trade has shown improvement in the last 4 years. Net exports are moving toward the positive while total imports continue to grow rapidly.

http://devdata.worldbank.org.proxy.lib.ohio-state.edu/dataonline/

Poland & Hungary

Poland & Hungary very similar paths of transition. Communism fell at almost same time (1989-1991) Both declared “shock therapy”

Hungary’s much more gradual Led to a slower and less effective transition initially.

Real wages plummeted in 1994-1995 bringing about a 2nd “shock therapy” Rebounded the economy

Poland’s shock therapy was effective very quickly Modern Governments

Poland- Republic Hungary- Parliamentary Democracy

http://devdata.worldbank.org.proxy.lib.ohio-state.edu/dataonline/

Unemployment (% of Total Labor Force)

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5.00

10.00

15.00

20.00

25.00

Year

% U

nem

plo

yed

Hungary

Poland

Inflation of Consumer Prices (annual %)

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100.00

200.00

300.00

400.00

500.00

600.00

Year

% In

flat

ion

Hungary

Poland

GDP Per Capita

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1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

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GD

P P

er C

apit

a

Hungary

Poland

GDP Compared Poland/Hungary

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Year

GD

P V

alu

e

Hungary GDP

Poland GDP

http://devdata.worldbank.org.proxy.lib.ohio-state.edu/dataonline/

Trade % of GDP

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50.00

100.00

150.00

200.00

Year

Tra

de %

of

GD

P

Hungary

Poland

FDI % of GDP (annual %)

-1.002.003.004.005.006.007.008.00

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

Year

FD

I % o

f G

DP

Poland

Hungary

http://devdata.worldbank.org.proxy.lib.ohio-state.edu/dataonline/