Surviving the war and the looming crises
The war in Ukraine has fueled many fears – those related to an energy crisis, inflation, stagflation, and taking care of millions of refugees. Poland is at the forefront of countries that have ‘cushioned’ this unexpected blow to global politics and the economy. We have talked with H.E. Rafal Perl, the Ambassador of Poland to Serbia, about these topics, as well as the cooperation between Poland and Serbia in economy and culture.
Poland has been taking the highest number of refugees from Ukraine. How is the country coping with the Ukrainian refugee crisis?
So far, over 2.3 million people fleeing Russian aggression crossed the Polish border, with the vast majority of them being citizens of Ukraine. Since we are dealing with the fastest-growing refugee crisis since the end of World War II, this number is growing rapidly – at its peak, it was over 100,000 people a day. It is difficult to predict precisely how many of them will remain in our country, but according to preliminary estimates, most likely60-70 percent of the total number will stay in Poland. It is worth noting that systemic actions by the Polish state and government are accompanied by a huge scale of solidarity and willingness to help by our society, which is involved in countless, bottom-up aid actions. In Warsaw itself, where 450,000 Ukrainian citizens arrived (of which around 300,000 will stay for longer), the actions of state and local authorities are supported by over 10,000 volunteers. Inhabitants of the Polish capital gave over 5,000 flats and houses to refugees from Ukraine, and thousands of refugees found shelters with Polish families, which welcomed them, offering help and care. Seriously ill Ukrainian children from oncology hospitals and hospices who – due to the risk of air bombings, artillery and rocket fire – had to leave Ukrainian medical facilities and were evacuated by special sanitary trains, were sent to Polish hospitals. The main goal of comprehensive legal solutions adopted in Poland at the beginning of March this year was to provide refugees from Ukraine with conditions for a dignified life and create optimal conditions for them to work, proceed with education or necessary medical treatment during their stay in our country. Each citizen of Ukraine entering Poland directly from the territory of this country after February 22 is and will be able to legally stay in Poland for the next 18 months, whilst obtaining free access to the labour market, public health system (including reimbursed drugs), education at all levels (including higher education) and social benefits on the same terms as Polish citizens. Additional budgetary funds will also be allocated to direct financial support for refugees, local governments and Polish families hosting fugitives from Ukraine.
As a result of the war in Ukraine and sanctions against Russia, the world is facing a new economic crisis, just as we are emerging out of the coronavirus-induced crisis. This is especially true of Europe. Also, Poland has strong economic cooperation with Russia, Belarus and especially Ukraine. What will the Polish government do to mitigate the effects of this crisis?
There is no doubt that the Russian aggression against Ukraine, the sanctions introduced, the increase in the prices of energy carriers, fertilizers and food will have a negative impact on the global, European and Polish economies. Preliminary forecasts indicate a probable weakening of the economic growth rate (from projected over 5% of GDP to 3.5%), possible further increase in inflation, a decrease in investments, and also a weakening of our national currency. It is worth emphasizing that, in addition to internal consumption, the key driver of our country’s economic development for years has been trading with European Union countries, in particular the sale of goods manufactured in Poland to EU countries, which accounted for as much as 75% of the value (213.8 billion EUR in 2021) of our exports and 55% of imports (EUR 154 billion). Trade with the countries of Central and Eastern Europe accounts for 5.8% of exports and 8% of imports, respectively.
“So far, over 2.3 million people fleeing Russian aggression crossed the Polish border, with the vast majority of them being the citizens of Ukraine, 450,000 in Warsaw alone”
In 2021, Russia was the 7th country in terms of the value of exported goods from Poland (for comparison, Polish exports to Germany were more than 10 times greater) and the 3rd country in terms of imports (import-export coverage remained below 50%). By active protective measures aimed at mitigating the effects of the current economic turbulence, the government of the Republic of Poland intends to make extensive use of the positive experiences related to the reduction of the effects of the crisis caused by the COVID19 pandemic. Among the first decisions already made are: enabling a direct payment method (calculated per hectare of crops) for farmers affected by an abrupt increase in the price of fertilizers, which should limit further food price increases and limit inflationary pressure. Special support will also be given to companies that have so far directed their production mainly towards the Russian and Belarusian markets. The further increase in the country’s energy security is also of key importance – thanks to many years of strategic diversification of supply sources (including the construction of an LNG terminal in the port in Świnoujście and the Baltic Pipeline project, which will receive gas from Norway as early as in 2023), by the end of this year our country will be able to completely abandon purchases of Russian gas. In this context, the construction of another LNG (floating) terminal, which will be located in Gdańsk, is also planned.
Russian invasion has unified the EU but quarrels still exist, while Poland insists on applying its own solutions. Is the EU’s threat to cut funds available to Poland realistic?
Information appearing periodically in the public space about the possibility of blocking funds by the European Commission under the so-called EU Instrument for Reconstruction and Increasing Resilience (being the EU response to the COVID19 pandemic) intended for our country, is the aftermath of a legal dispute between the Republic of Poland and the European Commission under European law (under the so-called Article 7 procedure), which has been ongoing for several years now and related to the reform of the judiciary in our country. In this case, we are dealing with a very complicated legal matter, concerning, i.a., interpretation of the EU treaties and the issue of the division of competencies between the community and member states, which has also become part of a political or even ideological dispute.
“Preliminary forecasts indicate a probable weakening of Poland’s economic growth rate (from projected over 5% of GDP to 3.5%), possible further increase in inflation, a decrease in investments, and also a weakening of our national currency”
It seems that the current conditions, which prioritize the need for the maximum unity of the EU (including the increase of effectiveness of cooperation between member states and EU institutions) and a fundamental redefinition of European priorities will allow for the final resolution of this legal dispute, which in the face of the current threats is of a secondary nature.
What can Serbia and Poland do to enhance the existing cooperation in the new circumstances and generally speaking?
Our bilateral political and economic relations are very good, although they should certainly be intensified and deepened. I think that our cultural, historical and even geographical proximity should be adequately reflected both in the high frequency of contact at the highest political level, as well as in cooperation in the field of economy and on the expert level. As leaders of economic development in the Central European region and the Western Balkans respectively, and countries whose economies are export-oriented, I believe we can achieve a lot in particular through bilateral economic cooperation. The dynamic growth of bilateral economic exchange (which in 2021 reached almost the value of 2 bln EUR) is accompanied by the growing interest of Polish entrepreneurs in the local market. The disruption of global supply chains, as well as the limitations caused by the COVID19 pandemic, resulted in a significant reorientation of the directions of interest of a number of Polish companies that are looking for new economic contacts in the European market (especially outside the EU). In this context, we note, i.a., increased activity on the part of entities from so-called “green technologies” (especially in the field of sewage treatment and waste disposal), the great advantage of which are modern technologies available at an affordable price and the experience of building pro-ecological infrastructure practically “from scratch”.
Can the experiences of the Visegrad Group help the aspiring transitional nations of the Western Balkans?
Over the last thirty years, the countries of the Central European region, including the Visegrad four – the Czech Republic, Hungary, Poland and Slovakia, have undergone a huge evolution: from poor post-socialist countries struggling with the collapse of a centrally planned economy to countries that remain firm supporters of free economic competition within the EU and active participants in the decision-making process within the Community. Thanks to the consistent efforts of individual countries and cooperation within the V4, we managed to achieve the goals that in the mid-nineties seemed very distant: membership in the North Atlantic Alliance, and then (May 1, 2004) the joint accession of the Visegrad Four to the EU.
“The dynamic growth of bilateral economic exchange (which in 2021 reached almost the value of 2 bln EUR) is accompanied by the growing interest of Polish entrepreneurs in the local market”
Political success would not be possible without the success of economic reform efforts – together with the steadily growing GDP and the inflow of investments, the region of Central Europe has become one of the “flywheels” of the European economy. According to statistics, V4 is the 4th largest economy in the EU and the 5th largest exporter in Europe. In addition to our recent experiences related to the difficult socio-economic transformation and the complicated process of accession negotiations with the EU, the cooperation of the Visegrad Four remains a good example of the added value created by regional cooperation. In this context, like V4, we assess very positively and support all initiatives aimed at the development of this type of cooperation in the Western Balkans.
As two Slavic nations, we had rich cultural cooperation, especially during the Interbellum period and during Socialism. After 1991, the ties between our two countries somehow weakened, which is a real pity. Can we do something to enhance our cultural cooperation and to get to know each other better?
Public opinion polls commissioned by our Embassy and carried out at the end of last year show that the vast majority of Serbian residents (84%) express a generally positive opinion about our country. Unfortunately, the more detailed data on the level of knowledge of Polish culture, art or Polish artists do not fill us with such optimism, to put it mildly, pointing to the need to multiply efforts in this area. In addition to the continuation and further development of cyclical cultural events, such as the annual Chopin Festival (its 11th edition will be in autumn this year), the Polish Film Festival “Wisła”, support for academic and student exchange (NAWA and Erasmus), or a relatively wide presence of Polish literature on the local market (thanks to excellent Serbian translators, Serbs read not only the works of 5 Polish Nobel laureates but also many young, talented Polish writers and poets), we must certainly look for new ways to reach Serbian “hearts and minds”. One of our innovative ideas is broad cooperation with gifted Serbian young artists who know best how to convey their message to their peers. Thanks to the good relations with the Belgrade Faculty of Fine Arts and Faculty of Applied Arts, last year we created an animated film dedicated to the first Polish Olympic medalist and a mural in the oldest music school in Serbia, depicting Fryderyk Chopin. This outstanding Polish composer was also the “hero” of our campaign in Belgrade public transport addressed to the general public. In my opinion, in addition to creativity, new ideas, and considerable financial resources, we also need a lot of… time and a lot of motivation, because we are dealing with a long-term process, where it is difficult to count on quick and spectacular results.