As the PiS government stages a splendid conference to boast of plentiful attainments of its first year in charge of Poland, I feel obliged to tack on some facts to remind of and underline the most recent success stories credited to this government and contributing to the outlook of blindingly bright future for Poland
Poland’s GDP grew by mere 2.5% in 3Q2016, falling short of economists’ consensus of 2.9% and being the worst readout since late 2013. The figure is just a preliminary estimate by stats office and has not been broken down into components, but judging by the trend observed in recent quarters, the drop in investments could have been the main factor behind the meagre expansion. Mr Morawiecki, Poland’s Development and Finance Minister (and deputy prime minister) claimed the slowdown was temporary and upheld his ministry’s forecasts of 3.4% GDP growth in 2016 (to make it happen, the Polish economy would need to expand by approximately 5% in 4Q2016 on simplifying assumption there is no seasonality, but by all accounts by more than 4%).
I have no idea why the former CEO of Santander-owned Bank Zachodni WBK belies reality. I only wonder whether he knows he is in the doghouse or so deeply believes the policies he pursues are appropriate. Whichever supposition is right, I am kind of sure with such figures budget deficit is likely to rise above 3% of GDP in 2016. Mr Morawiecki is somewhat right while assuring GDP is not the uppermost measure of economic well-being, but in the same interview he stresses importance of investments for the Polish economy. The problem is however that in the meantime investments are falling back.
Fortunately the bright spark of the Polish nation, an ordinary deputy Jarosław Kaczyński (balancing on the verge of paranoia) has found a scapegoat to take the blame for poor GDP growth – these are entrepreneurs linked to opposition who halt their business plans and give up on profits they could make just to spite the government.
Yields on Polish 10-year bonds have soared above 3.5%, meaning their price is the lowest since over 2 years. Partly to blame is the victory of Donald Trump in the US presidential election which led to more uncertainty on financial markets. The choice made by Americans is cherished by advocates of the PiS government. I hope they have noticed it has twofold impact of Poland’s debt service costs, via increased yields at which new government bonds are issued and via higher balance of debt denominated in foreign currencies (PLN has depreciated against major currencies recently).
This week the lower house of the Polish parliament passed a draft law reinstating pension age of 60 for women and 65 for men, thus reversing the retirement age increase brought into law by the previous PO-PSL government in 2012. While governments across the world raise the pension age and tackle inevitable demographic changes to sustain the proportion of labour force to those receiving benefits from the public purse, Poland takes a step back while the bill will be paid in the next decades. The only bright side I discern is that benefits for early retirees will be low enough to effectively discourage people from pensioning off.
When it comes to pursuit of PiS’ economic agenda, the fewer promises they keep, the better for the economy (not necessarily for social spending beneficiaries, especially multi-child poor families receiving the 500plus child allowance). Having the choice between two evils, I prefer they get busy with dead-end Smolensk religion whose cost (except for pain for families of crash fatalities) is thousands times lower than of “reforms” mentioned above. By the way, preliminary results of late president Kaczynski and his wife’s autopsy indicate a transport accident as death cause, the only thing in question is whether the plane capsized before hitting the ground.
Time passes by and level of absurdities around soars. The day before yesterday PiS politicians commemorated the 14th anniversary of Lech Kaczynski taking office of mayor of Warsaw. I hence put forward official celebrations of Lech Kaczynski:
- being born in 1949 (18 June),
- finishing studies in 1971, receiving PhD in 1979 and doctor habilitowany titles in 1990 (dates to be ascertained),
- getting married in 1978 (27 April),
- becoming a minister of justice in 2000 (12 June),
- being appointed the governor of Najwyższa Izba Kontroli in 2001 (14 February),
- being elected the president of PiS in 2001 (29 May),
- being sworn in as president of Poland in 2005 (23 December),
- telling a drunkard to go away in 2002 (spieprzaj dziadu) (4 November).
Also on Friday came to the light news of prosecutors from Gorzów Wielkopolski who have been chasing after Hanna Zdanowska, mayor of Łódź since February 2016 and accused her of loan frauds, allegedly committed in 2008 and 2009. Oddly enough a bank which granted a loan has not filed any charges against Mrs Zdanowska and the loan, as each and every fraudulent loan, has been repaid… This is one of first examples of PiS-controlled prosecutors clumsily attempting to sling mud at politicians of opposition.
On Friday I attended a conference during which one of renowned speakers told despite not just a flash in pan, populism will wear down, as any other ideology. Neoliberalism and neokeynesianism have worn down and have had destructive influence on economies in last stages of their prevalence; the same path will be taken by populism. The only worry we should all have at the back of our heads is that damages inflicted to societies and economies by populists will be more painful.
But as the speaker said, we have to let things drift. Populism will not be eradicated by educated minorities. These must be masses, currently enchanted by populists that will have to realise they would have been double-crossed. It will take time and involve a price to pay, but after we persevere it, a better world might emerge. Or our civilisation might conceivably wind down irreversibly, a scenario which I have feared over the past months.