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OPINION

What is the Business Climate in Poland's Big Cities Today

Marcin Piatkowski

March 6, 2014

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This question will be answered by the Subnational Doing Business index. It will be the first such ranking.

Today, the World Bank is presenting to Marshals its new initiative – Subnational Doing Business ranking. Previously, such ranking was maintained for Poland on the country level and essentially reflected the climate in its largest business centre – Warsaw. In spring 2015, we will find out what the conditions are for business in each voivodeship capital. The research covers 18 cities.

“It will be transparent, coherent and comparable information for entrepreneurs. Thanks to the methodology being consistent with the global Doing Business ranking, Polish cities may be compared with cities abroad, for example, Wroclaw with Prague, Krakow with Bratislava,” Marcin Piątkowski, Senior Economist, the World Bank, explains.

In his opinion, it may affect some business decisions. If it turns out that, for example, you can do everything quicker and cheaper in Łódź or Kielce than in Warsaw, then maybe it is better to establish your company there?

“I think that Poznan will rank in the top five of the most business-friendly cities,” Leszek Wojtasiak, former Vice Marshal of the Wielkopolskie voivodeship , says. “In our region, entrepreneurship has always been greatly valued and managers can count on friendly attitude and tolerance of authorities.”

In case of Poland’s capital, although nobody has said that out loud, it is probable that Warsaw might rank at one of the last places. It has the highest number of companies, the highest number of cases to deal with, sometimes really complex ones, the highest number of officials, etc.

In the subnational ranking, four categories will be taken into account – the time needed to incorporate a limited liability company, the time and cost of obtaining a construction permit, registration of a property, and resolution of economic disputes.

“It is very important that results of this research are based on information received directly from the private sector, which shows us what is most important for entrepreneurs – how laws function in practice,” Piątkowski stresses.

The World Bank expects great variations of the results, in particular in relation to the effectiveness of economic courts and dealing with construction permits. In those areas entrepreneurs report highest number of complaints and see them as barriers for development. Differences may result, for example, from a given authority dealing with high number of cases, the degree of their complexity (which may be favourable for centres that are not deemed economic leaders), but also effectiveness of the work of officials or judges, their attitude towards clients, etc.

“You often hear that obtaining a construction permit in a city takes, for example, a year, and that you have to wait another year for a hearing. But it is only intuitive knowledge. Thanks to our research, companies and local authorities will have first-hand, reliable information,” Piątkowski says.

That is why this Subnational Doing Business ranking may motivate Marshals, as managers of their regions, and presidents of the cities to make changes.

“It is like with the global ranking. When you treat it constructively, just like the Polish government did a few years ago, the ranking may be used to implement new mechanisms improving the business climate. Local authorities will be able to see how their regions stand in comparison with the rest of the country and take appropriate actions to increase their competitiveness. Such actions are essential for development of small and medium-size enterprises which are crucial for economic development on the local level,” Piątkowski states.