RZECZPOSPOLITA, Interview with Marina Wes, World Bank Country Manager, Poland and the Baltic Countries
By Danuta Walewska, October 29, 2014
Rzeczpospolita: Poland ranks quite well in the “Doing Business” (“DB”) report published today. What are the reasons for that?
Marina Wes: This is indeed the case. Poland ranks 32nd in terms of ease of doing business, ahead of other countries in the region – Slovakia, the Czech Republic, Hungary. It is worth noting, that Poland has also ranked higher than a number of EU countries from outside the region. This proves, that the changes are on the right track. If we keep in mind that 189 countries were assessed for the purposes of the ranking, Poland’s result is really good.
Rzeczpospolita: Where should we seek reasons for that? Did other countries slow down their business environment reforms, or did Poland accelerate them?
Marina Wes: Poland has indeed embarked upon important reforms in three specific areas, however it was similar in previous years. Results we see today come from accumulation effect.
Rzeczpospolita: If we compare ease of doing business in Poland and in countries we compete with for investments, what specifically are we better at?
Marina Wes: “Doing Business” is not intended for foreign investors, although it is used as a resource containing information about legal regulations. That is why we know that entrepreneurs often use our report as credible source of information. So if a country is doing well in our ranking, it does have an impact on volume of investment.
Rzeczpospolita: To what does Poland owe the good ranking?
Marina Wes: The team preparing “DB 2015” has noticed three important reforms. First pertained to access to electricity, with lower cost of connection. Second – to registering property: it was made significantly easier, which also led to reduction of notary fees. Third: making export easier thanks to launch of a new terminal in Gdansk. This shows, how meticulously changes in business environment are analyzed using the new report methodology.
I would also like to emphasize, that changes in business environment are not a sprint, but a marathon. Poland has been improving business environment conditions for the past five years. You have been implementing important reforms year after year. Two years ago, Poland was even the fastest reformer of business environment globally. Some of the reforms had to settle in before they could translate to investment climate.
Rzeczpospolita: What should Poland do to rank better next year?
Marina Wes: When we look at individual indicators, it is very clear what needs to be improved in Poland, and urgently, too. To me personally, the most shocking one was the construction permits indicator, where Poland ranked 137th among 189 countries. However I know, that a new Construction Code is being prepared – at final stages actually – that will fundamentally change the regulation. Another indicator is registering a business. Here, Poland ranks 85th and simplifying business registration is one of main priorities for Polish authorities.
The third indicator is paying taxes. For this one, Poland ranks 87th, but – unless I’m wrong – new tax ordinance is being prepared. Improvement in those three areas is particularly important for business climate in Poland. It may also further advance the country in the ranking.
Rzeczpospolita: We are just about to begin the elections series, though, which is not the best time for reforms. Aren’t you concerned that those necessary – although simple – actions could become significantly more difficult because of politics?
Marina Wes: Structural reforms always suffer due to political cycles, although some are more sensitive to politics than others. However, we believe that in your case the reforms are not at risk. I cannot imagine that even during an election campaign anyone could question the benefits of a simplified procedure for business registration, and such a change is expected by the end of this year.
Rzeczpospolita: Methodology of preparing the ranking has changed. Do you believe we would have been less successful if previous methodology was still in place?
Marina Wes: I have not seen such comparisons. It is however beyond doubt that Poland has implemented important reforms, and it is visible in our ranking, even though “DB” is relative and place in the ranking depends not only on what the given country did, but on what the other countries did as well. Let’s go back to the marathon I mentioned, namely the distance between a country and the business ideal. Here we can see that Poland has improved its position from 73,36 points to 73,56 points. It’s as if a runner completed the marathon in less time than others. We don’t know what Poland’s place in the ranking would be if the old methodology was retained, but one thing is very clear: Poland has accelerated the reforms. And that’s the important thing.