Poland attracted $4.1 billion in foreign direct investment in 2012, according to a report by the United Nations Conference on Trade and Development (UNCTAD). The Czech Republic, with just over a quarter of Poland's population, outperformed Poland by a wide margin, recording $10 billion in FDI in 2012.

Source: National Bank of Poland

Analysts say the main reason behind the Czech Republic's high FDI figures are its foreign investment-friendly policies. In 2012 the Czech government prolonged tax exemptions for investors, and made it easier for companies to get public grants.

Poland's relatively weak results prompted some finger-pointing, with blame assigned most frequently to Polish officials.

"We hear more and more often from investors that if Poland doesn't extend the life of its special economic zones [which are due to expire in 2020], they'll move to the Czech Republic or to Romania. Czechs are very active in this field; they hold many meetings with potential investors, and their public aid is better than Poland's," Urszula Solińska-Marek, president of the Wałbrzych SEZ, told Forbes.

Minister of Economy Janusz Piechociński responded to the criticism by saying that the government would look to extend the life of Poland's SEZs. He added the priority would be to attract and keep companies interested in long-term investments, hiring Polish workers and buying Polish raw materials.

Devil in the details

While not directly accused of underperforming, Poland's foreign-investment promotion body, the Polish Information and Foreign Investment Agency (PAIiIZ), tried to paint a rosier picture. The organization released data showing that even with less money invested, more jobs were created in Poland than in the Czech Republic.

"Taking into account only FDI managed by PAIiIZ, 10,000 jobs were created in 2012, compared to 5,000 created by its Czech counterpart," said PAIiIZ president Sławomir Majman in an interview with news agency IAR.

PAIiIZ also objects to UNCTAD's methodology. The latest report by the UN agency disregarded FDI figures as reported by the National Bank of Poland, which put the level of foreign investment at $5.6 billion.

Indeed, according to PAIiIZ, even this figure does not represent the true value of foreign investment in Poland, since NBP data does not take into account transfer pricing (funds that are channeled by foreign investors to their subsidiaries in different countries for tax reasons).

Economists say that if these funds were taken into account, the overall value of Polish FDI would rise to $12 billion.
Since neither UNCTAD nor the NBP take transfer pricing funds into account, PAIiIZ announced it would start collecting its own data.

Jacek Ciesnowski