Overview

Poland has grown rapidly over the last 25 years. The country’s gross domestic product (GDP) has doubled in size (measured in real times). GDP per capita (at PPP) has moved from 32% to over 60% of the Western Europe. Annual GDP growth between 1991-2008 equaled to remarkable level of nearly 5%. Today Poland is the eight-largest economy in the European Union in real GDP terms, with buoyant private sector, internationally competitive export-oriented companies, as well as well-educated and skilled people.

Strong economic growth has translated into significant welfare gains across the entire society, but benefits have not been shared equally. While Poland weathered the 2008 global financial crisis better than its neighbors, per capita income growth for the bottom 40 percent has fallen behind the growth rate for the entire population.

Moreover, a significant number of people in Poland is vulnerable to changes in economic circumstances. In recent years, Poland has also seen a moderate increase in the extreme poverty rate, which reached 7 percent in 2014. There is also a clear regional divide, with eastern and central sub-regions characterized by higher poverty than western sub-regions, while big cities, on the other hand, are areas with the lowest levels of poverty, providing scope to address poverty in lagging regions.

Poland’s challenge is to accelerate growth and make sure it is inclusive in the context of rapid population aging and accelerating technological change. The response to both challenges is to focus on policies to both boost productivity and enhance the opportunities for people to work. Investing in people, promoting a dynamic and innovative business environment, building supportive infrastructure and strengthening public sector institutions are important and mutually reinforcing ingredients. Investing in people, if done right, will help safeguard growth while the population ages, and ensure the benefits are shared among all citizens.

The World Bank Group’s role in Poland has changed over the years. In the 1990s and early 2000s, the World Bank Group had a large lending and analytical program in a broad range of sectors. With the country’s admission into the European Union (EU) in 2004, the situation changed significantly. In financial terms, IBRD’s annual lending represents a fraction of EU grants and European Investment Bank (EIB) operations.

The World Bank’s  Country Partnership Strategy for Poland (CPS) 2014- 2017 was presented to the Board in August 2013 and has the two-fold aim of: (i) fostering sustainable income growth for the bottom 40 percent of the population within the context of Poland's economic convergence process within the EU; and (ii) supporting Poland's emerging role as a global development partner. The WBG program is expected to remain very selective and demand-driven. It will rest on four strategic engagement areas, which are aligned with the "Europe 2020" strategic agenda of smart, sustainable, and inclusive growth and with the national development strategy. These four areas are:

  • economic competitiveness
  • equity and inclusion
  • climate action
  • Poland as a global development partner

The CPS is informed by the overall strategic goals of the World Bank Group. In a country like Poland, where extreme poverty is marginal, the WBG program is aimed at promoting shared prosperity - boosting economic competitiveness, economic growth in a difficult external environment,  and equity and inclusion in order to ensure that the benefits of growth are enjoyed by the bottom 40% of the population - and climate action, designed to support the sustainability of Poland's economic and social development. The CPS is also aligned with the Europe and Central Asia (ECA) Regional goals.

The recent lending program has been anchored around a successive programmatic series of Development Policy Loans in support of Government reforms in public finance, labor markets and social sectors, and private sector development. The new series is focused on resilience and growth and the first operation is scheduled to go to the World Bank Board on May 22, 2014. In parallel, the investment portfolio in the country has gradually shrunk, with only one project remaining under implementation (on flood prevention along the Odra River).

Analytical and Advisory Assistance (AAA) Program.  The World Bank program is largely based on “knowledge products” – analyses and advisory services, in part reimbursed by the Government. The authorities value their partnership with the World Bank as a way to access global knowledge in specific technical “niches” (e.g. on the Bank’s resolution framework, innovation and competitiveness, climate change modeling, infrastructure financing, etc.). This serves several purposes, including informing policy debates and facilitating the design or implementation of technical reforms.

Examples of such work include: 

  • support on Doing Business, which is provided across several ministries (on insolvency, contract enforcement, access to electricity, etc.);
  • dialogue on innovation and smart specialization, with a series of engagements with the Ministry of Infrastructure and Development, the National Center for Innovation and Development, the Polish Agency for Enterprise Development, and some regional authorities;
  • support to the development of a macroeconomic model to assess the economy-wide impact of climate change-related policy decisions;
  • analytical work on aging (healthy, active, and prosperous aging), and on savings and growth (in a context of aging);
  • support to the Ministry of Finance on issues such as forecasting for subnational governments and macroeconomic analysis as part of preparation for an eventual adoption of the euro;
  • development of financial instruments  in the energy efficiency and waste management sectors;
  • financial reporting (funded by the Government of Switzerland).

Poland joined the World Bank in 1946 as a founding member, and then withdrew in 1950 before re-joining the institution in 1986. The Bank provided significant analytical and advisory services, as well as (starting in 1990) substantial financial resources. This assistance has totaled $7.1 billion for 64 projects in areas such as environmental health, transportation and infrastructure, state-owned enterprise restructuring and privatization, energy efficiency and climate change mitigation.

There is a broad consensus that World Bank support was instrumental in supporting Poland’s successful economic transformation, its adoption of a market economy system, and its continued progress and economic and social growth since the early 1990s. This has translated into a large increase in incomes and living standards, in an environment of limited inequalities.

Recent results from knowledge services include:

Supporting Transition Toward a Low-Carbon Future
In late 2008, Poland engaged in implementing new EU policies on climate change mitigation: a 20% reduction in emissions by 2020, an increase to 20% for energy consumption coming from renewable energy, and a 20% improvement in energy efficiency. At the request of the government, the World Bank produced the report “Transition to a Low Emissions Economy in Poland,” which has been widely disseminated by the government. The analysis influenced the government’s Guidelines to the National Program of Greenhouse Gas Abatement in Poland, adopted in August 2011. Government officials and local experts have applied innovative, economy-wide models to address critical economic questions, such as carbon leakage and competitiveness and the distributional effects of climate policies.

Recent results from financial support include:

Bringing People Out of Isolation in Rural Poland
In rural Poland, relatively limited access to services has left some people isolated and excluded. The Poland Post Accession Rural Support Project (PARSP) has delivered assistance to selected rural communities and vulnerable groups—especially youth, the elderly, and the disabled— to directly tackle this isolation. Under the Social Inclusion Program (SIP), over 10,500 contracts worth €36 million have been signed with local service providers to provide innovative social services to marginalized groups, thereby strengthening the capacity of 500 rural social services offices.

New kindergartens, women's groups and village associations have sprung up with cooking demonstrations and folk dancing groups. There are new activities for the disabled—many of whom had not been able to participate before. There are music programs and sports for youth. Seniors go on outings to parks and museums. Villagers connect more with one another and the wider world. Projects do not only build roads or hospitals, they also build human connections and create inspiration for people to reach out to others and improve their lives.

Promoting Safe Polish Roads
As part of the Poland Road Maintenance and Rehabilitation Program, the World Bank supported the planning and execution of a drivers’ safety campaign and new road safety measures. The project worked to develop a sustainable and balanced safety system between drivers, pedestrians and road conditions.

New road signs, crosswalks and traffic lights were installed on some major Polish roads, along new local driveways that were built off the highways to make the lives of local communities easier. For example, thanks to some new local driveways children can get on and off school buses inside school property instead of dodging lanes of traffic. Crosswalks on some of the national roads are now brightly lit at night thanks to an innovative solar systems, allowing drivers and pedestrians to see better at night and reducing the number of car accidents.

In addition to promoting safety, the project improved roads, increased the effectiveness of staff responsible for fixing and maintaining roads and highways, and established funding for maintenance. The percentage of Polish national roads that are in good condition increased from 49% in 2005 to nearly 60% in 2011. The length of the road network that can handle heavy trucks has more than doubled, significantly exceeding its target.


LENDING

Poland: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments