POLAND’S LEADER HAS A NEW PLAN TO RESHAPE THE ECONOMY

Seeking a drastic change in Poland’s growth model, its new prime minister wants to reshape the European Union’s biggest eastern economy in the mold of South Korea or Japan, where governments and “national champions” drive expansion and rely less on foreign investment.

“I’d dream to be in the situation of Korea, which was poorer than us just a few decades back,” Premier Mateusz Morawiecki said in an interview in Warsaw. “Poland was in a communist environment and after one and a half generation, they are far ahead of us. So I wish the clock could be reversed.”

The reboot would do away with an economic blueprint adopted after the collapse of communism almost three decades ago across eastern Europe, which looked to western capital flooding into manufacturing to take advantage of lower wages and proximity to key markets. But since the Law & Justice party swept to power in Poland two years ago, the government has expanded its role with acquisitions from banking to energy, a tilt in economic policy that mirrored the country’s broader embrace of populism.

“Sometimes politicians are better at stimulating, and have to help in case of market failures or in areas like infrastructure,” Morawiecki said. “This is where state involvement is needed.”

Increasing the state’s role was a necessary step since private capital is too weak and cautious, according to Morawiecki, who once headed the Polish unit of Spain’s Banco Santander SA and became prime minister last December. That’s because Poland lacks the equivalent of Spanish construction giants or the kind of conglomerates that dominate South Korea’s economy, he said.

Source: Bloomberg

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