krakow

Booze, girls and the Polish economic miracle

Poland is a land of mystery.

Perhaps the biggest mystery is how the country has somehow managed to survive to the present (albeit far from intact) while being stuck for one thousand years between Germany and Russia, too Slavic for the former, too Catholic for the latter.

The newest Polish mystery playing on my mind right now is this: how do people manage to survive in a country of now very European prices but still not European wages? But, somehow, they do, just like they managed under the communism, confounding the statistics. One possible answer is that people lie, therefore statistics lie too. Another answer is that the observation is not quite accurate: prices are European only in the bigger, tourism-oriented cities; conversely, a lot of people continue to subsist under constrained financial circumstances, particularly in villages and small towns where a large percentage of the population still live (and which the governing Law & Justice party successfully targeted with their populist cash splashes). There is a lot of truth to both the answers.

Big cities, like the capital Warsaw or the old capital Krakow, give the appearance of Western European prosperity, but the reality is always more complicated. For many, if not most, lives are more difficult and challenging than those of an average German or Dutchman. But the perception count, too. During my last visit, some 15 years ago, Krakow, for all its undoubted historical and cultural glory, still looked and felt like a poor country cousin to the Western European cities. It doesn’t any more. Having visited a number of comparable cities in the Netherlands, Belgium and Germany recently, Krakow stands up very well vis-à-vis Amsterdam, Ghent or Cologne, in whatever area you choose to focus on: transport, infrastructure, food, accommodation, shopping, tourism. So does Warsaw, and so do other major cities. As someone who has spent the first fifteen years of his life under the communism’s fifty shades of grey dreariness, it is satisfying to see Poland finally take its rightful and deserved place in the family of European nations. There is still plenty to catch up to, but the progress since 1989 has been immense.

What is the secret of Poland’s success? It is, after all, recognised next to the Czech Republic, Hungary and Estonia as one of the most successful post-communist economies of East and Central Europe. Poland was famously the only European country – certainly the only one in the European Union – to continue growing during the global economic crisis of 2008 and after. The shock and awe economic reforms of 1990—01 were early and brutal but they have also worked to set Poland on the right course, while so many other transitioning economies in the region lost their nerve and faltered. For all their other faults, the many different governments of the last quarter of a century have run a pretty tight economic ship. There is no doubt, however, that the funding flowing in from the European Union over the last 10 plus years has contributed a lot in some very visible ways, co-financing roads, railways, and many now an iconic public building.

And so, the European prices. For some reason Poland seems to have the most expensive concert tickets, whether it’s Justin Bieber or Metallica, yet gigs sell out in a flash. I was told about people who now shop for clothes in Paris rather than Krakow, because Paris is cheaper. A lot of people are doing quite well, a lot of people who are doing less well are somehow managing, and a lot of people who are not doing well are largely invisible. It’s not an exclusively Polish story at all, but it too perhaps is very European.

Gone are the days when Poland was very competitive for foreign tourists, with everything costing a third or a half at most of what it did back home. Yet this seems not to have scared off visitors. Mid to late September is no longer peak tourist season, with children having gone back to school and summer having by now well and truly gone on holidays, yet Krakow is bursting with tourists. In the historic city centre, you are as likely to hear a foreign language as you are Polish; countless local guides holding their poles (no pun intended) with little British, German, Spanish, Italian and other flags lead behind them groups of tourists like modern day Pied Pipers; a sort of stretch-golf carts and horse-drawn carriages seem more numerous on the streets than normal cars.

So, thankfully, it’s not just about the prices. Tourists will come for the sights and the experience, and for the decent, world-class tourist infrastructure. Like France, like Poland then. Groups of young and youngish men on stag weekends, for years attracted to cities like Krakow by beautiful women and cheap booze (and sometimes the other way around) are still here, but they are a drop in the ocean of overall visitor numbers. Polish women are still beautiful but they also now have a reputation of indifference to foreigners; the sort of a soft sex tourism has now moved east to countries like Ukraine or even Moldova. Booze is no longer as cheap, though it’s still cheaper than elsewhere.

Rising costs of living is not an entirely unfamiliar experience in Australia. For decades, our biggest national drawcard, in addition to the natural beauty and the quality lifestyle, was the fact that life in Australia was cheaper than in Europe, and particularly Great Britain. Those of us who work in or travel to Europe nowadays know that this is no longer the case. In some instances, Australia can be even more expensive, though not the Scandinavian expensive.

Polish wages will need to rise, not just in absolute terms but relatively between various professions. Young doctors still choose the option of at least a temporary migration because the state will pay them as much as one pays a house cleaner. This is the still-lasting legacy of communism, where manual work was valued, perhaps over-valued, and the white- collar work wasn’t; in any case, everyone was supposed to be equal. This had not worked under the “existing socialism” and it certainly does not work in a modern market economy, producing ridiculous distortions that are holding the country back from realising its full potential. Not surprisingly, hundreds of thousands, perhaps millions of Poles live and work overseas, where they can earn the multiple of what they can back home, and back home the shortage of workers have attracted some two million Ukrainians and Byelorussians to fill the vacancies. It is a novel experience to see foreigners wanting to come to Poland to work. Historical miracles never cease.

The anarchy and decline of the 18th century, 123 years of partitions, the Great War, the inter-war years’ crisis, the Second World War, and 45 years of communism, has done immeasurable damage to Poland. After three centuries of horror punctuated merely by dread, Poland is finally a normal country. There is still a long way to go, but what a ride it has been so far. Sto lat!

(Cover image copyright Arthur Chrenkoff)

Blogged on the Katowice-Lodz bus

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