Corruption and nepotism, which had thrived throughout communist Central and Eastern Europe for decades, continues to this day.
Though attempts to unmask high-level corruption have improved, as demonstrated by the recent resignation of Sports Minister Mirosław Drzewiecki due to evidence presented by the Central Anti-Corruption Bureau (CBA), the majority of graft takes place at the local and municipal levels. This has long permeated Poland’s local justice system, tax authority, contract procurement, and university entrance and grading practices.
However, unlike their Warsaw counterparts, local officials lack the required resources and personnel to address these challenges head on.
According to Transparency International’s 2008 Corruption Perceptions Index, Poland ranks 58th out of 180 countries surveyed. Among Central Europe’s EU members, it outranks only Romania and Bulgaria, two countries that have been openly criticized, even financially reprimanded by the EU for their inability to adequately tackle corruption, fraud and organized crime.
Recent events in Poland not only highlight the severity of the problem, but demonstrate that repercussions go beyond politics. Specifically, high levels of corruption negatively affect a country’s economic progress and development. For one, perceptions of corruption serve as disincentives for investors considering opening or sustaining business operations in Poland.
At a time when financial institutions and multinational firms are increasingly risk averse, higher corruption perceptions in Poland may make it increasingly expensive (and more competitive) to tap global capital markets or attract foreign direct investment.
Both the Polish government and the EU need to take a more active role working with local and high-level officials in setting clear metrics for success. Poland must require greater transparency and follow through with legal enforcement, otherwise it risks not only its political, but also its economic legacy.
Now that the Obama White House has officially scrapped plans for an Eastern European Missile Defense shield (on the 70th anniversary of the Soviet invasion no less!), many have been left to wonder if there is anything the US could or should do to redeem their standing in the eyes of many slighted Poles and disillusioned Czechs. In short, the answer is yes. And it comes in the form of greater economic engagement.
For many Poles, the missile defense system symbolized more than just the promise of military and geopolitical security. It also brought the prospect of long-term economic stability, in the form of American trade, capital and foreign direct investment. Along with ground based interceptors, came expectations of increased defense knowledge sharing, military equipment sales and logistics support by both Polish civilian and military personnel.
While US-Polish defense cooperation is far from finished, there has been a clear shift in US priorities. However, there are still opportunities to further US-Polish ties through greater economic cooperation, particularly in the manufacturing, IT and environmental technologies sectors. Both US and Polish small and medium-sized enterprises (SMEs) stand to benefit from improved trade relations and expanded export markets. This is especially true for US manufacturers – many of them located in the recession hit Midwest – struggling to compete with cheaper producers in Asia.
According to the Polish Information and Foreign Investment Agency (PAIiIZ), the US ranks 6th in terms of FDI in Poland – behind Germany, France and even Luxembourg – making up only five percent of Poland’s total. Equally, Poland’s exports to the US do not even place it in the top 15.
Thus, both countries have a lot to gain economically and therefore politically. President Obama and Secretary of State Clinton should be more aware of this, especially since both have roots in Chicago, a city well-known for having the one of the largest Polish (among other Eastern European) communities in the US.
