Economic and Commercial Section
\nJakarta, 2002.10.02
\nEmbassy of Poland<\/p>\n
Kiri-kanan - bendera kedua negara<\/p>\n
Poland - A Trade Partner for Indonesia<\/p>\n
The last decade of the previous millennium has seen Poland
\nemerge as the best example of dynamic and successful economic and
\npolitical transformation and, at the same time, as the fastest
\ngrowing economy of Central and Eastern Europe.<\/p>\n
Few countries in the world have experienced such a steady
\ngrowth during this period. According to the economic report on
\nPoland published by OECD last year: \"The success of Poland's
\neconomic transformation comes from a well-orchestrated
\ncombination of sound financial policies and perseverance with
\nstructural reforms.\"<\/p>\n
The present transformation of the Polish economy is aimed at
\nstrengthening of the market mechanisms and institutions. The
\nnation's economy has been opened to all forms of economic
\ncooperation with foreign partners. As the result, Polish
\ncompanies are becoming increasingly profitable and foreign trade
\nis booming.<\/p>\n
These factors, together with the stability of the Polish
\ncurrency (zloty) in relation to Euro and the US Dollar, have led
\nto creation of many attractive investment opportunities for
\nforeign capital. The end of the first and most important stage in
\nthe process of transformation - begun in 1989 - will be marked by
\nan entrance to the European Union, which is widely expected to
\ntake place in 2004.<\/p>\n
During the period of transition, real GDP annual growth rate
\naveraged 5 percent. In the year 2000 it amounted to 4.1 percent,
\nslowing to 1.0 percent in 2001, mainly as an effect of economic
\nslowdown in Poland's major export markets. GDP per capita has in
\n2001 reached approximately US$4,600, or US$9,600, if an
\nadjustment for purchasing power parity is made. Total value of
\nGDP in 2001 amounted to US$176.3 billion. Inflation was brought
\ndown to single figures (1.2 percent August '02-to-August '01) and
\nstrong consolidated private sector was created.<\/p>\n
Prospects for the future are good as well. Inclusion into the
\nEuropean Union will likely provide an additional impetus to
\nPolish economy, accelerate a process of integration into the
\nlargest homogenous market in the world and enforce a faster rise
\nin productivity in the competitive Union environment.<\/p>\n
The political and economic integration with the European Union
\nis one of the strategic goals of Polish policy. To become a
\nfully-fledged member, Poland must not only continue to develop
\nand transform its economy but also make its legal and economic
\nframework compatible with the rules of the EU.<\/p>\n
Creating favorable conditions for attracting foreign direct
\ninvestment to Poland has been of paramount importance to Polish
\ngovernment. During the course of the last decade, total foreign
\ninvestment and investment commitments in Poland have already
\naccumulated to US$56.8 billion. The record year was 2000 which
\nalone has contributed FDI valued at US$10.6 billion. The largest
\nvalue of investment was placed in the manufacturing sector,
\nparticularly in the automotive industry, food-processing,
\nproduction of non-metal goods and electrical and optical sector.<\/p>\n
Financial services, transport and communication, trade and
\nconstruction have also attracted large amounts of foreign
\ncapital.<\/p>\n
Inflow of foreign capital helped to accelerate the
\ntransformation of the economy, speed up the privatization
\nprocess, stimulate economic growth and modernization of economic
\nstructures, especially in industry and trade, inspire development
\nof new technologies, increase productivity and develop modern
\nmanagement as well as better organization of production.<\/p>\n
Looking from another perspective, foreign capital is willingly
\nflowing to Poland because of its reputation as a booming and
\nstable market, with a good record of macroeconomic management,
\nhighly educated workforce, good industrial infrastructure,
\ndynamic demand and comparative advantage in relative labor costs.
\nIn view of these factors Poland is likely to remain for some time
\nthe regional leader in attracting FDI transfers.<\/p>\n
Contemporary Poland has a very strong private sector - its
\nshare in the country's economy is constantly rising, owing both
\nto the privatization of state-owned enterprises and to creation
\nof new private companies. So far, since 1990, more than 10,000
\nstate enterprises have been transferred into private hands. By
\nthe end of 2000 private sector has accounted for 70 percent of
\nthe GDP and it is estimated that by 2005 this share will further
\nincrease to 85 percent. The number of companies participating in
\nthe international market has dramatically risen from less than a
\nhundred foreign trade operators in late eighties to over one
\nhundred thousand business entities today. It is estimated, that
\nmore that over 84 percent of total import and almost 84 percent
\nof export is already being handled by the private sector (data
\nfor the year 2000).<\/p>\n
Foreign trade is an important factor in Poland's economic
\ngrowth. The share of trade exchange in the GDP has grown from 35
\npercent in 1990 to 52 percent in 2000. Last year total exports
\nwere valued at US$36.1 billion and imports reached US$50.3
\nbillion.<\/p>\n
This year exports have continued to grow, while value of
\nimports remained stable. European Union countries are the main
\npartners of Poland in foreign trade. Their share in total Polish
\ninternational commerce accounts for about 65 percent. Germany is
\nthe main single trade partner - it is the destination of 33
\npercent of Poland's overall exports and the source of 24 percent
\nof Polish imports - followed by Italy, Russia and France. The
\nabove figures prove the high quality of \"MADE IN POLAND\" products
\nand their competitiveness.<\/p>\n
The commodity structure of Polish export offer underwent
\nprofound changes in recent years, marked by the shift from
\nagricultural and primary exports to labor-intensive manufactures.<\/p>\n
Nowadays, Poland sends abroad not only steadily increasing
\nquantities of various engineering products, such as motor cars,
\nships, boats, civil engineering machines and electrical equipment
\nbut also textiles, furniture (the second largest exporter in
\nEurope), footwear, packaging machines, as well as rich variety of
\nfood products.<\/p>\n
The well-deserved sense of accomplishment should not prevent
\nus from recognizing many challenges that Poland must still face.
\nThose include foreign trade imbalance and relatively high level
\nof unemployment. The only way to meet the former challenge is
\nthrough increasing the export capacity of the economy by securing
\nmore investment, even better technology and higher productivity.<\/p>\n
The latter is a natural effect of transformation from large,
\nineffective state-owned enterprises to economy run by more
\nefficient private companies and should be resolved eventually
\nwhen the workforce undergoes necessary retraining and becomes
\nabsorbed by the fast-developing private sector. However, the
\nsocial implications of even temporary unemployment cannot be
\noverlooked.
\nPoland - Indonesia economic relations<\/p>\n
Indonesia is an important trade partner of Poland in South-
\nEast Asia region. The mutual trade turnover shows steady growth
\ntendency. In 1998 it reached the value of US$208.0 million, in
\n1999 - US$209.0 million, in 2000 - US$219 million and in 2001 -
\nUS$195 million (according to Polish statistical data).<\/p>\n
Long tradition of commercial relations between the two
\ncountries saw Indonesia exporting to Poland mainly agricultural
\nproducts and raw materials, such as natural rubber, coffee, tea
\nand spices.<\/p>\n
This commodity structure has undergone profound changes in
\nrecent years. The share of chemical compounds and
\ntelecommunication equipment in total Indonesian exports to Poland
\nis rising every year. Man-made yarns, garments, cloths, footwear,
\nrattan furniture and paper products are also exported to Poland
\nin large quantities.<\/p>\n
On the other hand, Polish companies supplied to Indonesia
\nvarious kinds of machinery, civil engineering equipment,
\nchemicals, steel products, powdered milk and electrical
\napparatus. The commodity structure of Polish exports to Indonesia
\nis rather stable, while Polish purchases from Indonesia become
\nevery year more diversified.<\/p>\n
Unfortunately, a considerable part of trade transactions
\nbetween Poland and Indonesia is executed by intermediary
\ncompanies from other countries.<\/p>\n
Polish businessmen consider Indonesia an attractive market
\noffering great prospect. Producers and exporters alike are
\nlooking for new opportunities to supply mining, electrical,
\nagricultural and food processing equipment, machine tools,
\npackaging machinery, power generation equipment, various kinds of
\nchemicals, including fertilizers, herbicides and insecticides as
\nwell as technology, all of which are in demand in contemporary
\nIndonesia.<\/p>\n
High-quality \"MADE IN POLAND\" products can still be offered at
\nvery competitive prices, thanks to comparative advantage in labor
\ncosts.<\/p>\n
Polish business is keen to acquire new trade partners in
\nIndonesia and establish more direct relations with individual
\ncompanies.<\/p>\n
The legal framework provides firm basis for further
\ndevelopment of trade and economic cooperation between Poland and
\nIndonesia. In 1974 the countries signed the trade agreement, in
\n1986 an agreement on the development of economic and technical
\ncooperation, and in 1992 two agreements - on avoidance of double
\ntaxation and on promotion and protection of investments.<\/p>\n
Polish customs regulations offer a considerable advantage to
\nIndonesian exporters entering the Polish market. The present
\nsystem of customs duties is in line with GATT and WTO principles,
\nand provides differentiated customs rates according to the
\ncountry of origin. Indonesian products enjoy lower tariffs under
\nthe General System of Preferences (GSP).<\/p>\n
In fact, almost all agricultural commodities imported from
\nIndonesia may enter Polish market without payment of customs duty
\n(zero tariff). In order to be eligible for such preferences,
\ncommodities must be sold directly to Poland.<\/p>\n
Indonesian businessmen interested in starting their activity
\non the Polish market will find many attractive opportunities.
\nThey may easily open a representation office or find a partner to
\ncooperate with. Therefore, Poland is expecting more and more
\nIndonesian companies to visit Poland in the future, searching for
\ntrade and business opportunities. The best opportunity to get
\nacquainted with the Polish export offer and also to present
\nIndonesian products to many potential customers is to participate
\nin international trade fairs and exhibitions organized in Poland.<\/p>\n
Polish companies offer many business and cooperation
\nopportunities for interested Indonesian partners, especially in
\nsuch areas as: steel industry, shipbuilding industry (including
\nconstruction of tankers, container ships, LPG and LNG ships, Ro-
\nRo and passenger ships, fishing boats, patrol and rescue boats),
\nunderground and open-cast mining equipment, chemical industry,
\nmachine-tool industry, building and construction machinery, food
\nprocessing plants and environment protection equipment and know-
\nhow.<\/p>\n
The prospective purchases from Poland may also include such
\ngoods as: fertilizers, pharmaceuticals, processed food, powdered
\nmilk, measuring instruments, agricultural machinery, railway
\nequipment, energy sector equipment and fire-fighting and rescue
\naircraft.<\/p>\n
In order to explore new areas of bilateral trade and to
\nstrengthen economic cooperation between Poland and Indonesia,
\nmore direct contacts between business circles are required, as
\nwell as becoming more familiar with each other's economies. Then,
\nno doubt, mutual trade will grow to the benefit of both of our
\ndistant (only geographically) countries.<\/p>",
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"sponsor": "Okusi Associates",
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