INTERVIEW. Prof. Krysiak for AWPE: The British are wondering what models they can draw from Poland

The British press, as well as the Dutch press, published articles praising Poland for its economic development and the conditions for doing business. How do you assess whether there are really reasons to be satisfied?

Prof. Zbigniew Krysiak: Yes. These are not the first such voices and they have strong foundations. They result from very specific economic analyses. Anyway, these and earlier statements result from diagnoses, opinions, analyzes of experts, so they are not emotional reflections of random people. When we look at the data, numbers, and when we compare four parameters: the average wage, the minimum wage, capital per capita and GDP per capita, if we look at the increase in these values during the Tusk rule and the rule of PiS, then the increase in these values is several times higher under the rule of PiS in relation to the rule of PO in a similar period of time. This is one thing. The second thing, when we compare the same parameters to Germany, is that under the rule of the PO, the dynamics, these increases were the same as in Germany, so we did not catch up with Germany, we were even retreating. On the other hand, the dynamics of these parameters under PiS is from several to several times higher than what is happening in Germany, so we are catching up with Germany. And of course we will not catch up with them in two or three years, but the most important thing is that we are catching up, that we are not moving away, that we do not have the same distance. So it’s not just GDP per capita, because this parameter is a very inadequate measure. We need to look at how salaries are growing, and the most important thing in all this is how the capital in the household, i.e. real estate, deposits, shares, other assets, is growing, because this shows to what extent economic growth, indirectly, from rising salaries average citizen benefits. There are poor countries, for example in Africa, where GDP per capita is very high, and there is poverty all around. The measure of GDP, production, includes profits that flow out of the country, profits made by international corporations, by German companies.

The economic policy of the Polish government has led to a situation where there is a fairer division and leaving these profits in the country. Vat mafias are also still being prosecuted. VAT mafias were not small hurdles or small businesses, but organized schemes to rob the budget of VAT taxes organized by large, important international companies.

This opinion of the British is another voice confirming that we are going in the right direction, that even in a situation of pandemic and crisis, inflation, we have the lowest unemployment in Europe, we have stable growth. It should be emphasized – and this results from hard data – that in the group of small families, with small children, the increase in disposable income is about 50 percent higher than in the case of small families. Disposable income is our salaries minus taxes, subtracting social security contributions and sickness contributions. In large families, this disposable income increased by 80 percent. This is amazing, because it shows how fair, solidarity sharing of this earned national wealth is redistributed, which in turn leads to a more even economic level of households and people. And let’s remember that tools such as 500+ or pensions are of an investment nature – as a result, this money is used for purchases in Polish small, medium and micro-enterprises, i.e. those very often associated with households. These purchases generate revenues and profits in these companies. These are mostly Polish companies, so this capital is retained in the country. By increasing purchases from domestic companies, we enrich, for example, German companies less. We are aware that these economically weaker households manage these funds rationally, e.g. from 500 plus or pensions.

One more important thing needs to be said, that during the rule of Prime Minister Morawiecki, ZUS revenues increased dramatically. Under Tusk, these revenues from ZUS contributions covered only about 50 percent expenditure on pensions and disability pensions. Currently, the proceeds from ZUS contributions cover almost 90% of the expenditure on pensions and disability pensions. That means it balances out pretty well. We remember that at the same time it was related to the reduction of the retirement age. The opposition claimed that lowering the retirement age would cause a problem with public finances, and the opposite happened, because Tusk raised the retirement age and the hole in the ZUS budget widened. It looked gruesome.

When all these numbers, all these parameters are shown, we see that this management, economic and monetary policy is solidarity-based. It is not like it was in the past that the profits flowed only to the richer, making them more and more wealthy, which was deadly for the economy. The economic model becomes very inefficient when there are such large differences. Among other things, also then, during Tusk’s rule, outflows to German companies were huge. If they were balanced from the EU funds, Poland should receive twice as much, or even two and a half times more than it received. Thus, we can see that the profits flowing to Germany were much greater than what flowed from the EU’s treasury to Poland. Such an arrangement of the economic model was a good deal for the Germans in the past. It is publicly known that 80 cents flowed to Germany from every euro invested. Return rate of 80%. this is a lot – everyone would like to have such an interest rate in the bank.

Poland has been compared to “Asian tigers” when it comes to development. Is it really that dynamic?

It is very dynamic. As for the “Asian tigers”, the growth range is 4-8 percent. We were at the level of 6-4 percent. Now, in these generally weaker European conditions, it will be slightly less this year, but if we compare the growth dynamics of Poland to Germany, our dynamics was 4-5 times higher in recent years. So you could say that this is a very big difference. However, the very phrase “Asian tigers” from the perspective of growth dynamics is legitimate, but – I would like to emphasize – from the perspective of the model itself, not necessarily. We are characterized by a more civilized economic model. In Asia, it does not have a solidarity character. I compare what is happening in Poland to socio-economic solidarity, where the need to balance the economic potential of various entities is looked at. And it has nothing to do with socialism or giving away. It is the creation of such instruments that will be a lever and will drive the economy.

As we said, this 500+ is spent in enterprises, they have higher profits, and therefore have more capital for investments. These investments, in turn, create further opportunities not only for the company itself, but for its employees, and the employees in these Polish small and medium-sized companies are family members. Therefore, from the perspective of the type of economic model, we are definitely more of a prospective system. The world is talking about a serious deficit of the previous systems, or the liberal, even free market economy, the so-called social – it also no longer has its strength, effectiveness. I think that Poland is at the forefront, and the accent that you put on, this opinion of Great Britain, confirms it very strongly. Please note, the UK is a global economic leader. When the British say that in the near future the average potentials per capita or per household in Poland will be higher than in Great Britain, it means that this effect comes from a completely different concept.

British capitalism is not like a social market economy. This is market liberal capitalism. Not neoliberal, because neoliberal economics is an ideology, so it has nothing to do with science or practice. It seems to me that the British pay attention to this not only to praise or distinguish Poland. The British are very goal-oriented, very practical. If they talk about it, it means that they are thinking very hard about what to do at home, or what models they can draw from Poland, so as not to stand still, not to go backwards. It seems to me that the conclusion for the British is that the effect of the good condition of the Polish economy results from the model of socio-economic solidarity.

Considering all this, can we expect that Poles from the West will start returning to Poland and run businesses or look for employment here?

They’ve been back for a few years now. What’s more, foreigners come to us – not only as part of the so-called mixed families. We are already seeing that many Westerners are setting up businesses here. It means that these conditions are better than there. This scale is getting bigger and bigger. This is also due to the fact that our taxes are objectively or relatively the lowest. At the same time, the cost of living is lower than in many other countries and there are more civilized working conditions. In Poland, it is not only in agglomerations that there is a decentralization. People in the West are looking for something like that to have a job like you have, for example, in a big city, and that you can do it in the comfort of a garden, forest, or far from civilization. This is what happens in Poland. Models of functioning in the West or in agglomerations – which Trzaskowski and Tusk were aiming for in order to concentrate life in agglomerations (they even said that this model is a copy from the West) – are definitely less employee-friendly. Migration to cities is separation from family, it is destroying relationships, it is leaving this small homeland where someone was born and raised – be it in Lubelskie, Podkarpacie or Lesser Poland.

These returns of Poles are related to this. They notice that these trips abroad cost them a lot, often divorces, broken families. Overall, from the perspective of so called professional career, there wasn’t much he could do in his career. At the moment, we have high technologies in Poland. We are looking for more and more specialists, IT specialists. We have competitive wages in jobs that someone used to work abroad. And the general climate is definitely better, which is often emphasized by foreigners that it is much safer in Poland.

This was also mentioned in this article in the Sunday Times.

There is a high culture in Poland, relations with Poles are very good. We also have a high level of education at universities, etc. The unfortunate situation in Ukraine also meant that the help given to Ukrainians by Poles spread throughout Europe and the world. This became an impulse for Poland to become popular. Previously, there was little interest in Poland. Now, when this interest is growing – people come, check and this is confirmed. At the same time, the mentality or style of government by the predecessors – be it the left or the Civic Platform – was such that only what was outside of Poland was considered better. It was a servant style, on the knees. There has been peope ashamed of Poland – there are actors who said that he was ashamed to speak Polish on the street.

And here it turns out that the West wants to follow our example.

Yes. It turns out that it’s just the opposite. You must not be ashamed of your mother, even if she is already a very old, sick old woman. People in Western Europe are often ashamed to have children – they murder them – and they are ashamed of old people, because only the young and the rich have room. This leads to the fact that the economic criterion begins to be preferred. When elderly, sick people are killed, some people say that it will be a relief for the budget, for society, for the family – over there in the West. Fortunately, not in Poland, because we in Poland have a different culture and other nations can and will learn this too. And maybe because of this they will return to some kind of normalization.

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