Sunday, 30 March 2014


Imagine an office (urząd) without petitioners (petenci). Imagine a school without pupils. Imagine a hospital without inpatients, or a health centre without the ill. A mind-boggling absurdity? From the times I was a student, I recall a conversation between two student office (dziekanat) workers both claiming their job would have been much nicer, if only they had not need to deal with students (ta nasza praca byłaby całkiem fajna, gdyby nie ci studenci). So much nicer would be a job of a clerk if only those obtrusive people did not come around. A work in a hospital would be much more rewarding, if personnel did not have to take care of those horrible patients. A work in school would be marvellous, if only teachers did not have to deliver classes to rowdy brats.

Smacks of absurdity? Not really. Each organisation, as it grows, goes through certain stages of development. With each consecutive one its structures are bigger, so they require more control, reporting, paperwork, etc. With time a profit-oriented organisation, i.e. a business no longer allocates all its resources towards attaining its core goal which should be making money. With time each company builds ancillary structures, which at first enhance specialisation and support front-line units, so that everyone can focus on doing their bit. As more time goes by, in order to keep the business together, companies set up more reporting / oversight / control functions. As the process carries on, fewer employees are focused on serving customers (i.e. looking after sources of revenues) and more employees are focused on dealing with internal affairs of an organisation. When the company is bigger, internal oversight structure are vital for keeping it going in line with a certain strategy, yet the question of proportions between so called front-office, middle-office and back-office is justified. The more of a company’s resources are directed towards back-office functions and the less towards front-office, the more mature the company is. But is it more efficient?

The term diseconomies of scale has not been coined without a reason. In an organisation’s development there is a point at which the organisation grows to unmanageable proportions, i.e. is too big to be run efficiently. This happens both in the government sector (which is more prone to such distortions) as well as in private sector, yet there probability of diseconomies of scale is strongly positively correlated with size. Overgrown bureaucratic structures no longer need customers to be have something to deal with. At the highest stage of this “internal focus” middle- and back-office staff can not see the forest through the trees. They no longer realise serving the customer who feeds them should be a top priority. The become so pre-occupied with processes, procedures, reporting and other self-oriented stuff that they forget those are the customers thanks to who they can earn a livelihood.

Oddly enough, such self-oriented organisations survive, albeit rarely thrive on the market. When an organisation reaches the highest stage of development (when it does not need customers to move on) it already has established a leading market position (often might be a monopolist) and superior reputation and switching costs for customers are high. These factors allow such company not to strive for many new clients and put little effort in retaining the existing ones. Moreover, front-office functions are never neglected. Employees who bring the company the bacon are property remunerated for securing revenues essential to cover costs of the bureaucratic structures. The inertia in such huge organisations can last years and such wicked corporations do not fall apart. Senior executives often realise what is wrong and launch initiatives aimed at reinstating customer focus in organisations they run. The frequent upshot is that an organisation focuses on pursuing the programme rather than on customers…

Some time ago I took part in a series of workshops aimed at streamlining and leaning process in my company. As the workshops developed and participants came up with new ideas, the picture which emerged showed clearly the customer is actually necessary to feed us with documents we could hand over from one to another, fill in to several systems, create reports, etc. The role of a customer is boiled down to a creature which sets the bureaucratic machine in motion. Once it gains momentum, it busy with document circulations, internal analyses and reports so that the customer drops to the bottom of its list of priorities. One day when the group of workshop participants was in top form and devised plenty of ideas how to improve workings of our company, I held back for a moment, examined what had been put forward and without second thought asked an inconvenient question “but where’s the room for customers in what we design?”. I poured cold water on my fellows, the silence came into the room. They all stared at me. I realised I could have overstepped boundaries, as dissenters are not flattered in corporate capitalism. To my surprise, no one denounced me, my remark turned out to be quite productive and changed the course of works during the next workshops.

After over three years of working in the same place, I am growing weary of my current job. Or to be precise, I have had enough of my employer and how my company is run. I do take pleasure in what I do and perform my duties zealously, so the symptoms do not signify burn-out, but I am frustrated with prospects my employer and I have, or rather do not have. My employer is a part of a huge corporation with operations in most countries in the world. My diagnosis of the problem they have with their Polish recalcitrant subsidiary is that the operating environment here differs from those in other CEE countries. The corporation refuses to compromise and adjust its doing-business guidelines to specifics of the Polish market. They fail to recognise the simple rule “shape up or ship out”. They neither shape up, as consistently they fail to discern the Polish market is not malleable and will not alter to meet their expectations, nor have the courage to divest of the defiant business which totally does not fit the rest of the corporation. Customers are lost, profits are shrinking and prospects of turnaround are miniscule, because the organisation is so big that the decisions as effect of which the company could get up from its knees would have to be taken by decision makers who could not point Poland at the map, not to mention basic understanding of peculiarities of the Polish market. Thus my job is dead-end, but owing to inertia of overgrown corporations I will hold it down for a while. In the meantime I keep looking for a better one, mindful of the risk of falling out of a frying pan into the fire. As long as I am not redundant, the pressure is limited. And if they decide to fire me, there is golden parachute waiting for me by the end of this year. If it accompanies the lay-off, putting me out of misery looks like an appealing option.

Sunday, 23 March 2014

When spring takes over

Apparently the timing of my end-of-winter pronouncement last week could not have been better. The weather has turned astonishingly clement as for the last decade of March and brought temperature typical for late April rather than period near spring equinox.

I took a day off on Friday to make the most of almost-summer-like weather. Instead of staring at computer screen in the office, I indulged in some rearrangements and tidying-up in the garden and around the house and vacuum-cleaned the car after winter. The temperature on Friday afternoon topped +22.4C but failed to beat the temperature record for March in Warsaw, set exactly 40 years earlier, of +23.0C. The coldish wind was taking the gloss of the warmth and unless you moved a lot, T-shirt only was insufficient to keep you comfortable.

Yesterday the next dose of physical exercise was taken in. Swimming pool in the morning, then, after a break for exam study portion, I dragged the bike out of the garage, to get it ready it for the cycling shakedown. Temperature was slightly lower than on Friday, but the wind eased off and sunshine did not cease, hence the weather could rarely be more perfect for taking a bike for a first ride.

I resolved to venture through the nearest forest. After covering some distance up the cycling path running parallel to ul. Puławska, I spotted a huge traffic jam, far worse than what I experience there around 7:00 a.m. on my way to the factory. In early mornings on weekdays the traffic is dense, but not nearly stationary as yesterday in the afternoon. Truth be told, deep down I felt some sort of superiority to miserable folks stuck in their tins, while I, pedalling on my bike, had the advantage of overtaking them almost effortlessly. This year I should finally try out cycling to P&R Ursynów on days when I can dress to work casually and the weather is conducive (no rain and not too warm, nor too humid). I realise my requirements are exorbitant, but the whole sport has to be sweat-proof. If I cycle slowly and it is not too warm, chance of breaking sweat are minimised.

Curious too see what had brought cars to standstill, instead of turning to ul. Jagielska, I carried on straight ahead to behold a police car, a trailer car and motorcycle lying on the road. There was no ambulance in sight, so I thought the motorcyclist had just fallen over. As I found out later at home, the motorbike rider had collided with an Opel Astra and had been taken to hospital with some injuries almost two hours before I turned up at the scene. I must openly admit I have little tolerance for raging motorcyclists. Surely, there are good and bad motorcyclists, just as there are considerate and inconsiderate drivers. Those who ride according to rules usually do not grip my attention, while those speeding, showing off riding on rear wheel only or slaloming between cars in pace dangerous even if drivers peek frequently in mirrors spoil reputation of motorbike users’ community and making them being dubbed “organ donors”.

Having passed the accident spot, I turned right onto ul. 6 Sierpnia. Now a puzzle. What event which had taken place on 6 August (and in what year) is the street named after? The tarmack ends after several hundred metres and you enter the forest. The path being the extension of ul. 6 Sierpnia was quite empty, I came across some walkers, runners and other cyclists, but the perpendicular path, formally ul. Moczydłowska, running from Kabaty to ul. Jagielska, was chock full of people.

I marked my presence in this place for the first time, so I was absolutely unaware I would run across such farm around the northern end of the forest. Judging by photo only, I would safely bet it could have been taken somewhere beyond Suwałki, as it resembles farmlands I saw in those areas. In fact, the dilapidated, but not derelict farm lies less than a mile away from one of the poshest districts of Warsaw, Kabaty and had it not been a part of forest nature reservoir (which entails stringent restrictions in development = probably no chance of getting a planning permission + a gate preventing vehicles from reaching the property) would have been worth millions.

As the forest ends, you come across a technical track that runs from the Radom rail line to the maintenance depot of the Warsaw underground. Railcars rarely can be witnessed here, but this is where most avid spotters could spot new underground trams being shunted towards the depot. Yesterday, the track fulfilled a role of a leisure route.

Before turning around to set off home, I cycle around the western end of Kabaty. Development in this area is dominated by detached and terraced houses, blocks of houses prevail in the distance, closer to the underground line. The residential area is a wonderful place to live. It combines rural character of vicinity of the forest and proximity of infrastructure (underground station and hypermarket less than a mile away from there). All the virtues of living here are reflected in property prices which are likely to resist a conceivable overall downward trend in Warsaw (it is notable when property prices decline, the biggest adjustment affect worse locations, while those better tend to hold strong). Upon looking at property advertisements, I estimated I am some one and a half million PLN short of moving here, assuming the cheaper option, i.e. buying a plot of land, dividing it in two and putting up a semi-detached house, rather than purchasing a house on secondary market. Never hurts to have dreams, even if for the time being they are totally out of reach.

Sunday, 16 March 2014

Winter timeline 2013/14

The departing winter is definitely the mildest of those documented in form of weather diary posted on this blog. On average, it was warmer than average and less snowy than average, but its proper stint, lasting some three weeks, gave us all a rough ride. Double-digit frosts persisted for the whole third decade of January, gusty wind brought down perceivable temperature even to ghastly –30C. We had two incidences of freezing rain in temperature of some –5C, but did without heavy snowfalls. Much earlier than in 2013, the time to declare the winter is over, has come.

I must sadly admit my camera, although in full working condition, has spent last months in a drawer, even with a battery disassembled. I somehow did not feel the need to take snap, did not carry it along, hence the timeline will only be supplemented with links to fellow bloggers’ posts, evidencing spells of weather from the recent months.

Hot summer swiftly gave way to gloomy and chilly autumn. First frost was recorded on 4 October 2013, when temperature in Warsaw dipped to –2.0C. Second and third decade of October were in turn warmer than average, with month-time high of +21.7C on 27 October 2013.

November 2013 went down in history of weather in Warsaw as almost frost-free. First sub-zero temperatures were noted in the last week of the month and not a single snowflake was witnessed. Temperature averaged out +5.6C, 0.2C colder than a year earlier and notably warmer than long-term average of +3.2C.

4 December 2013
Snow begins to fall around 9 p.m. and doesn’t melt, some 0C.

5 December 2013
Not a trace left after yesterday’s snow. Slightly above zero over the day. A first winter storm is setting in.

Ghastly attack of winter. Temperature slightly below 0C, wind chill of –10C, gusty wind, snow showers and occasional blizzards. 4 centimetres of white powder manage to paralyse the traffic, leaving roads and pavements treacherously slippery.

Still blustery, yet the hurricane is wearing off. Little or no flurry, temperature above zero over the day. The storm has wreaked havoc to several households across the country. Mine has not had full electricity (2 out of 3 phases not working) for the second day.

8 December 2013
Glorious winter. Sunshine from dawn to dusk, no colder than –5C, but not above freezing as well. Full electricity supply resumed at 3:40 p.m. Snowfalls begin in the evening

9 December 2013
+4C in the morning. No trace of yesterday’s snow. Gloomy autumn returns.

10 December 2013 – 15 December 2013
No point in writing a diary. Every single day is grey, short, miserable and, weather-wise, depressing – slightly above zero all the time, fogs lingering, not a single sunbeam lighting up the shortest days of the year.

16 December 2013 – 19 December 2013
Frosty at nights, above zero during short days. More frequent than intermittent spells of sunshine lift spirits. No sign of winter in long-term forecasts.

20 December 2013

21 December 2013 – 22 December 2013
For a change, sunny, with southerly winds and day-time high of +5C on Saturday and +8C on Sunday. Only length of the day reminds it’s winter actually.

23 December 2013
One day when it gets dull, despite no sunshine (and no rain as well) it is well above zero.

24 December 2013 – 26 December 2013
The annual weather pattern is a Christmas thaw – last year after wintery pre-Christmas weekend (double-digit frost, cloudless skies) temperature shot up from –4C on Christmas Eve morning to +5C in the evening. Last Christmas with actual winter (both snow and subzero temperatures) was observed in Warsaw in 2002.
2013 Christmas will be not only one of the warmest (day-time high nearing +10C), but high temperatures, unlike in most years, are accompanied by clear skies and sunshine. Lovely ;-)

27 December 2013 – 30 December 2013
What’s the point in writing the winter timeline, if there’s no winter???

31 December 2013
-5C in the morning… Chill makes itself felt after several abnormally warm days. Still, it’s not the proper winter.

December 2013 was very warm. Average temperature in Warsaw was +2.4C (vs. long-term average of –0.7C). Much warmer than a year ago, but 0.2C colder than in 2011 and 1.6C colder than record-warm December 2006. Stats:
- month-time high: +10.5C on 28 December 2013 (unsurprisingly, around Christmas)
- month-time low: –5.5C on 10 December 2013 (as for the low, very high)
- the warmest day: 26 December 2013 (daily average of +7.4C, funnily enough, 26th day was also the warmest in December 2012, when temperature averaged out +5.6C)
- the coldest day: 10 December 2013 (daily average of –2.5C, while on the colder day in December 2012 it was –12.5C)

1 January 2014 – 11 January 2014
Over that period:
- temperature did not drop below 0C (except for five hours between 3:00 a.m. and 8:00 a.m. on 2 January 2014, when temperature hovered between –2C and 0C),
- not a single snowflake fell,
hence no winter.

12 January 2014,
above zero, yet windy and sleet making any outing unpleasant. A gentle spell of winter sets in.

13 January 2013 – 14 January 2014
Temperature fluctuating around zero, yet without falling snow. Wind chill makes it a few degrees below zero.

15 January 2014
In the morning – ugly autumn, +1C and drizzle. Over the day rain turns into snow and temperature drops. In the evening it’s –3C and some three centimetres of snow linger on the ground. Not really ghastly. Roads are properly salted and traffic is no worse than usual, but pavements are a different story – most resemble ice rinks… One more time pedestrians are second category citizens, inferior to motorists.

16 January 2014
Yesterday’s snow has settled, not a single snowflake drops from the sky. Below zero. Winter, mild. Flurry in the evening.

17 January 2014
Three centimetres of white powder have accumulated overnight. Roads are anything but clear. Over the day temperature rises from –3C to slightly above zero around midday. Snow turns into icy rain, then regular downpour. Fortunately, the ground has not frozen up and fallen water does not freeze as well.

18 January 2014
Another snowfall-free, foggy day with subzero temperatures.

19 January 2014
How I wish abundant flurry could come over only during weekend. First little snow blizzard hits on Sunday morning and despite –5C turns into freezing rain. This rare phenomenon happens when a warm mass of air comes over the colder one. Ghastly, roads and pavements are damn slippery.

-6C and freezing drizzle. Infrequent spell of weather wreaks havoc with transport – roads and pavements covered with black ice, cars users who keeps their vehicles in the open air have to scrape a thick layer of ice off windows, some have problems getting into cars. Some trains are stationary due to iced wires.

21 January 2014
-8C all the time, wind chill of –20C. Grisly, but at least nothing precipitates from the sky. A cold snap is in the offing.

22 January 2014
Double-digit sub-zero temperature for the first time this winter, -11C in the morning, three degrees warmer during the day. No snow, less gusty wind.

23 January 2014
Chill getting serious. –15C at the crack of down, temperature peaking in single-digit frost in the sunny afternoon, plummets after sunset, back to –15C at 10 p.m.

24 January 2014
Day-time low of –17C, but around 4 a.m. By the time most people set off from their warm dwellings, temperature goes up to –16C. In the afternoon it fails to creep up above –10C. Glorious sunshine all the time, but chilly wind persists.

This might be the coldest morning this winter. –18C in Warsaw, one degree colder in the suburbs. Still five degrees warmer than in early February 2012. Sunny all day. Snow showers to come on the next day, while frost should turn single-digit. Two major scenario for early February. Either balancing between thaw and mild winter or record-low temperatures blown in by powerful Siberian high pressure system.

26 January 2014
Flurry began yesterday in the evening and continues for the while day. Slightly warmer – around –10C. In such temperature snow is light and crisp so clearing is easy.

27 January 2014
Flurry in the morning. Flurry in the evening. Between –10C and –7C, wind chill below –20C.

28 January 2014 – 31 January 2014
Weather pattern stays the same – between –15C and –10C at night, day-time highs between –10C and –5C, gusty wind intensifying the perception of chill (even below –30C, the cold is piercing). Intermittent light or not snow showers add to misery… I’ve had enough… On the last day of the month, snow depth reaches 21 centimetres.

January 2014 was normal. Average temperature in Warsaw was –2.6C (vs. long-term average of –1.9C). Mean temperature fails to exhibit contract between first 10 days of the month when temperature was abnormally high (average temperature +4.1C) and last 11 days of the month of the other extreme (average temperature: -10.3C) Stats:
- month-time high: +9.9C on 7 January 2014
- month-time low: –17.5C on 25 January 2014
- the warmest day: 10 January 2014 (daily average of +7.1C)
- the coldest day: 25 January 2014 (daily average of –14.8C)

Getting better. Single-digit frost at sunrise and howling wind is fading. Over the day sunny and temperature climbs towards –2C. Feels balmy.

2 February 2014
Relapse of freezing drizzle. –3C from dawn to dusk. Roads and pavements are again covered with thin layer of ice.

3 February 2014 – 7 February 2014
Thaw comes over. Over the whole week nights bring single-digit frosts, days are sunny and with temperatures above freezing. Getting warmer day by day. A few centimetres of snow linger by the end of the week.

8 February 2014
First frost-free night since four weeks. In the gloriously sunny, spring-like afternoon temperature peaks almost double-digits. No winter on the horizon, at least within the fortnight. And then? Last year in mid-February I thought any recurrence of winter would be short-lasting and fussy weather proved me wrong.

9 February 2014
Skies clear up before midday and day-time high reaches +8C. Pre-spring in the air…

10 February 2014 - 28 February 2014
Winter has fallen back for good. Over that period temperature does not drop below –5C, not a single snowflake is witnessed over the capital of Poland. The biggest mounds of frozen, dirty snow disappear after a week of thaw. Mornings of 23 February 2014 and 24 February 2014 bring picturesque freezing fog confining visibility to less than 100 metres. Bad weather for holidaymakers during the winter break in Warsaw (falling this year in the second half in July). Futile is the search of snow in Poland.

February 2014 was (only) slightly warm. Average temperature in Warsaw was +1.8C (vs. long-term average of –1.0C), higher than over recent 5 Februarys, but far from +3.6C reported in 2002 or +3.1C in 2008, not to mention record-high +4.6C measured in 1990. Stats:
- month-time high: +10.8C on 18 February 2014
- month-time low: –10.1C on 4 February 2014
- the warmest day: 20 February 2014 (daily average of +5.3C)
- the coldest day: 1 February 2014 (daily average of –5.8C)

First half of March 2014 fetched not a single scene of winter. Five mornings, precedent by cloud-free nights, greeted Warsaw with little frost (was no colder than –4C), but in the second decade, when warm mass of air from south-west drew in, temperatures in the afternoon reached +14C several times. The current weekend is blustery in chilly, but out of line with forecasters’ warnings, sleet was not witnessed in Warsaw. The coming weeks might still bring night-time frost or maybe even short-lasting snow showers, but the last gasp of winter was actually breathed over a month ago. Roll on spring and may such mild winters occur more often!

Sunday, 9 March 2014

It’s all about the money...

And if it’s not about the money, most probably it’s about the power (unless also a woman is at stake) and in such context we should consider the recent events in Ukraine and in Russia.

The latter, as the fellow blogger Michael notices, is a hollow country. Its economic prosperity, reliant on ample, but finite resources of natural gas and crude oil, lacks sustainable foundations for economic growth and thus is fragile. Unfortunately, Western Europe is largely dependent on supplies of commodities from Russia, which drives its indulgent stance towards less and less civilised regime of Russia. Economic misery is though not what the nation of Russia fears. Over centuries of suppression by autocratic or totalitarian rulers, they persevered many periods of privation and are capable of withstanding another one. If supplies of gas and oil to Western Europe are cut off, they would wait it out, while the Western Europe would give in. More than bread, Russians need circuses. And more than circuses, they hanker after the great empire. They hark back to times of Soviet Union, leader of two meaningful political and military blocs in the world. They want their empire back, this is one of the reasons, why Mr Putin’s recent actions are popular with 80% of the Russians. Propaganda in the media does its bit, but even without it, many Russians perceive their president as the one with a historical mission to restore the might of the Soviet empire. By attempting to take over Crimea in a manner kind of similar to what was being done by Hitler in 1939 with the part of Czechoslovakia, he wants to make the history, as the one who would bring back to Russia the territory which over the centuries was a part of different realms and actually long could you quarrel who it belongs.

Regarding the Crimea issue, the uttermost question is “why now?”. The Russian majority have inhabited the peninsula for over 20 years since Ukraine regained independence and they would get on with the Ukrainians, enjoyed autonomy, no one heard of any meaningful clashes between Russians and Ukrainians. Being mindful of Russian propaganda machine, I would ask whether Crimea residents (true or recently resettled from Russia) are seizing opportunity to break free. If so, the most likely explanation is that they are grabbing opportunity of weakness of the Ukrainian state, for which they should not be condemned, if we bear in mind Poland gained independence in 1918 thanks for weakness of other countries. If so, they should break away with their own hands and establish a separate country, without any help from Russia.

Let’s face the truth, the Ukraine is weaker than ever over last two decades. When I look at the make-up of the new government, I’m not particularly fond of those people. When names of new ministers were read out in Maidan, the crowd booed some of them, little support was given to Yulia Tymoshenko who declared she would run for presidency in oncoming elections. The key problem of the country is that the heritage of the Orange Revolution has been squandered. The disillusioned nation chose, in democratic elections, Mr Yanukovych for president. Swapping a pro-Russian cabal for a pro-European cabal might change the direction in which Ukraine drifts, but will not move the country forward. I lean towards the opinion that none of the 100 richest Ukrainians should run the country, if it is to take a turn for the better. The wealth distribution in the Ukraine indicates the country is close towards the third world than to Western Europe. The small upper crust, hundreds of tycoons are holding billions of dollars in assets, while more than ninety percent of citizens every month struggle to make ends meet. There’s no, even fledging, as in Poland, middle class there and little prospects for such to emerge.

As an economist, I remain very sceptical about bright future for the Ukraine. The country lacks elite that could run the country and lacks sound institutional framework (rule of law, property rights protection, transparent legal system, etc.) that could spur economic growth. Politically unstable and, let’s face it, uncivilised countries need to offer high rate of return to attract to foreign investor, to compensate for higher risk; the risk which in worst case might materialise if foreign investors’ assets are confiscated in Russia.

Poland, to support Ukraine, is to grant development loans to its Eastern neighbour. As a guy who deals with creditworthiness evaluation, I would prefer a more straightforward move, i.e. giving them money, as we should not expect to recover it, or we should lend it and beforehand estimate what percentage of debt will be relieved. Ukraine lacks capacity to repay the debt. Of course, the foreign loans could be granted for pre-defined purpose of building institutional framework, but in free credit markets, lenders have right to control whether borrowers use loan proceeds for the stated purpose, and if not, call back loans.

We also should note money was what pushed Ukraine into the arms of Russia. The European Union gave little financial support to the Ukraine, while Russia offered this poor country a huge relief in form of much cheaper natural gas and financing public debt, not disinterestedly, but to expand its sphere of influence. With this all in mind, it should not come as a surprise Ukraine drifted towards Russia.

I hope the Crimea blustery does not develop into a full-blown military conflict. I consider this option unlikely, because it does not pay off for anyone. Mr Putin, using his soldiers “wearing uniforms that can be bought at any shop” will carry on with his muscle-flexing campaign, weak Ukraine will do nothing and EU leader will keep on expressing their deep concern over inconsiderate misconduct of the Russian president, fearing overstepping boundaries could spoil economic relations between their countries and Russia.

Sunday, 2 March 2014

PiS-owska economic agenda

Judging by the timing of my postings and delay with which I refer to topical problems, it may seem I am slow off the mark. So instead of writing about mounting Ukrainian crisis, which gets closer to the verge of military conflict, I will refer to the headline-hitting, newly-published agenda of the leading oppositional party.

The document sets out to diagnose the current state of Poland as the utter downfall, to which Poland was plunged under the feckless rule of prime minister Tusk and names the current misery as “system Tuska” and then delineates how, when PiS headed by its leader, JarKacz, take over power, to lift Poland up from this misery and make the country thrive.

I am generally wary of all quick fixes – sort of easier-said-than-done solutions that would turn the country around within mere a few years, make it a land of milk and honey, inhabited by prosperous people, with expanding economy and well-run, efficient government. As a matter of principle, I give such diagnoses a miss. It takes little to make out what is wrong, it takes more wits to pertinently identify reasons why something does not work properly and the biggest challenge is to come up with feasible ideas to set things right.

I deliberately leave out what has been said by numerous critics of the agenda, i.e. PiS politicians promise to spend billions of zlotys, but fail to show how it is going to raise the money for: allowances for families, decreasing pension age, huge investments, health service, tax credits for entrepreneurs and in the meantime reduce public debt. I do not believe in policy of working miracles, because only a miracle could make ends of this agenda meet and I suppose no economically literate recipient of this document (or JarKacz’s speeches) would put stock in hollow promises as his whole story does not even appear to hang together. Even advocates of PiS policies admit widespread giving-out smacks of populism, but over-promising is an ordinarily used tactics even in mature democracies.

I will do my best to dissect all agendas of all political parties whenever they appear, and they should spring up in abundance before 2015 parliamentary elections. As PiS came up with its agenda first, its file came under fire first. I make no claims to be an expert in all areas of life, I generally know little about health service or military forces, but have some notion of economics and as a banking sector employee, am quite well-versed in its workings and limitations, therefore in my analysis I will focus only in the “Economy” section and drill down only some of those paragraphs I am capable of assessing.

The general diagnose on the current state of Polish economy (pages 73 – 74) is that it is stuck in low-growth trap, from which it can break out by unleashing the untapped development resources, with the help and co-ordination of the government, which should pro-actively engage in pursuit of economic policies.

The growth resources are simple and complex. The former are money Poland will receive from the EU funds and… (page 76)

Poza funduszami unijnymi maksymalnie uruchomimy znaczne środki własne i oszczędności przedsiębiorstw państwowych oraz wykorzystamy nadpłynność banków.

What are the „own funds” and how are they [PiS] going to make use of state-run enterprises’ savings and banks’ overliquidity? This all reminds me of acquisition of Lithaunian Mozeiku refinery by PKN Orlen in 2006, the purely political (buy it to spite the Russians) decision, taken, as with hindsight proven, without properly carried out due diligence. The refinery was purchased for 2.34 billion USD in 2006, while in 2013 PKN Orlen was weighing up whether to divest of the Lithuanian operations for 125 million USD. In the meantime, between 2007 and 2011 the oil producer recognised massive impairment losses, reflecting the fact the refinery was purchased well above its fair value. The business failure came to a pass also because, in the act of revenge, Russians cut off the pipeline running to the refinery due to a breakdown in July 2006, while negotiations regarding the purchase were still under way. This did not dissuade Polish decision-makers from pressing ahead with the purchase. Then, in 2008, Lithuanian railroads ripped off tracks running to the refinery, rendering it useless for months, as there was no infrastructure between the facility and the port in Klaipeda. The Lithuanian business began to break even in 2012. The estimated loss to the Polish taxpayers, counting in purchase of assets above their fair value, operating losses, costs of debt service and missed opportunities is estimated at 20 billion PLN, more than 2% of Poland’s general government debt. There are ample examples of flawed decisions on acquisitions made in the private sector, but there costs of management’s inflated ambitions (chief driver of such transactions) are borne mostly by the company’s shareholders, not by taxpayers.

I dread to think how the PiS government intends to crack down on overliquidity in the Polish banking sector. Is it going to coerce banks to lend money?

Zastosujemy także pozabudżetowy mechanizm inwestycyjny z zaangażowaniem aktywów spółek Skarbu Państwa, w tym spółki Polskie Inwestycje Rozwojowe i Banku Gospodarstwa Krajowego, a także specjalistyczne mechanizmy wspierania inwestycji, np. na wzór LTRO (Long Term Refinancing Operation – program Europejskiego Banku Centralnego) i programów proinwestycyjnych na Węgrzech.

Does the author know what LTRO consists in? The definition provided towards the bottom of page 76 does not closely match what I found through search engine. This is not an investment-supporting programme, but a liquidity-enhancing measure and is aimed at helping out banks having too many illiquid, poor-quality assets. Polish banks neither struggle liquidity squeeze, nor have portfolios of badly-performing assets, what is then the reason for application of such measure? As it was rightly noted, Polish banking sector has a problem of excess liquidity, totalling to 30 billion PLN.

When it comes to the banking sector, credit expansion towards SMEs is to be facilitated by guarantees issued by the state-owned bank (BGK, page 77)

Wzmocnienie możliwości gwarancyjnych polskiego BGK w granicach od 65 do 100 mld zł w latach 2015 – 2021 będzie rozwiązaniem bezpiecznym, niewymagającym nakładów ze strony państwa i neutralnym dla budżetu.

When making such move, you should be aware of two facts. Firstly, a bank which lends to a business against a guarantee issued by BGK bears effectively credit risk of BGK, because if a customer defaults, the bank has a claim on the guarantor. This means commercial banks need to have credit limits for BGK, which although not regulatory capped, are in practice limited by ceilings will be imposed by banks’ internal policies. Secondly, issuing guarantees necessitate raising equity to meet capital adequacy requirements, what, assuming BGK stays 100% state-owned, means the government would need to inject money to pay-in the capital, thus making the sentence above from the PiS agenda true, only if current own funds of BGK give enough headroom to issue guarantees in aforementioned amounts. On pages 77 and 78, the document says…

Polscy przedsiębiorcy prywatni ulokowali na rachunkach bankowych (w postaci lokat długoterminowych) środki rzędu 200 mld zł. Jest to znaczny zasób rozwojowy, a państwo ma obowiązek działać na rzecz jego uruchomienia poprzez stworzenie systemu zachęt inwestycyjnych w systemie podatkowym. W przygotowanym Prawo i Sprawiedliwość projekcie ustawy o podatkach dochodowych (PIT i CIT) znalazły się rozwiązania pozwalające na 100-procentową amortyzację nakładów inwestycyjnych w roku ich poniesienia, a w przypadku wydatków na badania i rozwój – nawet na podwójne odliczenie. Szacuje się, że po wejściu tych rozwiązań w życie w ciągu najbliższych 6–7 lat wspomniana kwota 200 mld zł będzie przeznaczona na inwestycje.

During my 3-years’ career I have never seen any company which put its excess money on bank deposits with term longer than 3 months. And mere tax credits are not a cure for businesses’ reluctance to invest. I could argue with more of the statements above, but as both the author of this part of the agenda as I lack strong backing in favour of our assertions, such argument would get us nowhere. Let’s turn to page 79 then.

Kolejnym instrumentem kumulowania złożonych zasobów rozwojowych będzie udomowienie banków. Będziemy wspierać działania upowszechniające polską własność w sektorze bankowym. (...) Pierwszym jest przyrost organiczny, czyli szybszy rozwój banków krajowych poprzez rozwijanie akcji kredytowej i zwiększanie depozytów. Drugi sposób polega na zakładaniu i rozwoju nowych instytucji opartych o kapitał krajowy. W tym celu muszą zostać wprowadzone preferencje dla małych instytucji, w tym spółdzielczych. Trzecim sposobem jest przejęcie banków opartych o kapitał zagraniczny przez podmioty krajowe zaliczane do sektora finansowego, w których Skarb Państwa ma znaczące udziały. Udomowieniu banków będzie towarzyszyła rozbudowa polskiej bankowości o zasięgu lokalnym typu hipotecznego, spółdzielczego lub kas oszczędnościowo-kredytowych. Udomowienie banków zwiększy zaangażowanie polskiego sektora finansowego w rozwój gospodarczy, szczególnie poprzez akcję kredytową, w tym udzielanie kredytów inwestycyjnych.

„Domesticating” the banks is not an entirely new concept. Of course, proportions of capital ownership can be changed by organic growth, but in line with previously mentioned capital adequacy requirements, in order to extend more loans, you need to shore up banks’ equities. How would it be ensured that holders of such equity would be only Polish entities? In order to overtake the risk-averse banks run from their head office abroad, lending standards would also have too be loosed, running the risk of severe losses in the economic downturn. Takeovers executed by state-owned banks are the most controversial idea. Firstly, it decreases competition and even without effective merger which could be blocked by competition watchdog (recall incomplete merger of Pekao and BPH in 2007?), control over the banking sector could be concentrated in one pair of hands. Secondly, it would cost billions of zlotys and if political goals are set above sound business reasoning, state-owned banks are likely to pay over the odds for their targets.

These are just a few examples of flawed or undoable concepts from the economic agenda of PiS. Apart from them it contains several questionable ideas, transferring free-market mechanism of economic self-regulation to the hands of the government and several good ideas, which, if properly implemented, could unleash potential of Polish small and medium companies and make business environment in Poland more friendly. Nevertheless, the approach to the economy is too statist for me. Too many control and co-ordination mechanisms are put forward. The government, whose areas of control or regulation are too wide, is unlikely to be lean, i.e. cheap and efficient.

I am looking forward to newly-released economic agendas of main political parties in Poland. When they are published, I promise to pick out incongruities and share them with you.