Overview Of The Economic Growth Of Poland Economics Essay

Overview Of The Economic Growth Of Poland Economics Essay Polands economy looked bleak during the 1980s. Few would consider Poland as a business hub due to its low economic growth and soaring inflation rate (Nuti, 1986). Fast-forward to the 21st century, Polands economy has changed tremendously. It is not just the only European country to survive the current recession but it is still experiencing rapid growth  [1]  . What could have possibly instigated Polands this drastic change in the time span of only 2 decades? This essay will use the PESTLE  [2]  analysis to understand the positive force that initiated the economic growth and also examine the causes that might hinder Polands future economic growth. Porters Diamond will be used for the critical evaluation and support of the PESTLE analysis. Political Reform The fall of communism in 1989 had led to vast improvements in Polands economy. One might disagree with that because the event took place over 20 years ago, however, the effect of political change does not happen overnight and there would be a time lag involved (Gillespie, 1999). The most significant change after the fall of communism is in stabilising the country. Poland is the 29th politically most stable country with the index score of 4.5 (Economic Intelligence Unit, 2009). This provides a sense of security for investment and business, for example, if Poland is in an unstable situation akin to the current Libyan crisis, people would avoid investing in the country. In contrast to a communist state, a democratic country allows the voice of people to be heard, and their opinions and views to be realised. Citizens in democratic countries tend to have greater respect for the leaders they chose for themselves compared to otherwise. For example, in a company, a bottom-up leadership has a better effect than a top-down leadership because workers would respect the leader and this allows employees to bring out best of their skill set and experience. Similar principle applies for macroeconomic levels. Additionally, a democratic country is highly likely to prosper due to reduced frictional social interactions among citizens (Kariel, 1956). Furthermore, the Polish government has developed a radical program known as the Shock Therapy to curb hyper inflation. Poland was once ruled under a planned economy system. Shock Therapy is a transition from a planned economy system to market economy. It is a sudden release of price, followed by the removal of subsidies and large scale privatisations of previously publicly owned companies (Murell, 1993). This program has both short and long term effects. The planned economy provided employment to almost every citizen but with inflation rates of around 600% (Cottarelli Szapà ¡ry, 1998), low wages and severe shortages of basic necessities. This Shock Therapy suppressed the hyperinflation and stopped the food shortage (Haggard Webb, 1996). However, all these problems are only short term problems. The ideal result lies in the long term measure. One of the key reasons of why Poland economy growth has been so steady in the past few years was because of its market economy (Kornai, 2000). This has provided opportunities for small service firms to contribute to Polands economy (Nunnally, 2010), which was unachievable during the communist era. Market economies encourage international business because the barriers to entry are lowered increasing the opportunity for success and lowering sunk costs. Poland also has excellent relations with foreign countries allowing it to benefit from several advantages such as enjoying tax free zones within the EU since joining it in May 2004 (Papazoglou, Pentecost, Marques, 2006). This is important because imported goods within Europe are cheaper, hence lowering production costs. Another vital factor of entering the EU is curbing the high unemployment rate. Since adopting the free market policy, Poland has high unemployment rates  [3]  . By joining the EU, Polands unemployed workforce is able to look for jobs outside Poland. Lowering unemployment rates is crucial in reducing social problems and creating a better environment for investors. Economic Advantages In addition to political factors, economic factors have also enhanced economic growth. The first step was implementing a floating exchange to curb hyperinflation (Sachs, 1996) which, in addition, helped Poland to survive the current economic crisis by facilitating economic adjustments. During the economic crisis, the Zloty depreciated against the Euro and Sterling. This meant Polish goods were more competitive than European goods both at home and abroad. One might think that there are so many countries with lower exchange rates, so why would investors invest in Poland? The answer lies in the nature of its currency- Zloty is very stable as a currency  [4]  , it only oscillates within a certain range. This is very important for a business because cost of production would not fluctuate and there would be less uncertainty. Investors tend to avoid the risks arising from uncertainty and the Zloty provides a sense of security to businessmen and investors. In planning to adopt the euro i n 2015 (Dnevnik.bg, 2010), Poland will be forgoing the competitive advantage of its currency. To evaluate, this is a good option as the global economy grows as the Euro will provide more advantages (Gulde, Kahkonen, Keller, 2000). Many things have changed since the transitional period of Poland. Polish people have become richer over the years and Poland is one of the richest nations, second only to the Czechs in the Central Europe (Credit Suisse, 2010). Also, an average Polish is three times richer than an average Russian (Jedrzej, 2010). Their wealth leads to strong domestic consumption within Poland  [5]  which led to strong economic growth especially during the recession. Export based countries, such as Singapore, suffered greatly during the recession. The impact of the recession is less in the case of Poland because the domestic market within Poland is large and accounts for more than half of Polands market. Although it is hard to believe, the initial high unemployment rate also boosted economic growth. Polish people are highly educated with 99% of their citizens being educated (TradingEconomics, 2009). Skilled and educated workers tend to be more expensive. However, due to the high unemployment rates, labour costs in Poland are comparatively lower than other countries, such as Germany. This is a strong selling point for investors abroad. These investments are crucial because it has reduced unemployment rates and increased economic activity in Poland, subsequently enhancing economic growth. FDI has increased steadily since 1995 with the exception of 2008 and 2009 due to global economic crisis (United Nation Conference of Trade and Development, 2010). It has boosted economic activities greatly. Other than a cheap but skilled labour force, Special Economic Zones established by the Polish government has also attracted foreign investors. At present, there are 14 Special Economic Zone in Poland (KPMG, 2009). Different areas have different geographical landscapes allowing wide-ranges of businesses to be set up. These areas provide opportunities for tax exemption. The amount of tax exempted will depend on the size of the investment (Nam, 2004). The Special Economic Zones have attracted investors from all over the world, in particular investors from the EU as the benefits are greatly to their advantage to invest. The regulations are more flexible and they share the same benefits as Polish firms. These, combined with the stability exchange rate of Zloty, have attracted FDI from the EU as all investors stand an equal chance. Porters Factor Conditions Although Poland has enjoyed steady economic growth in recent years, there are still a few factors hindering their growth, for example, having poor transportation systems. Having good infrastructures enables a country to fully utilise their resources efficiently and effectively boosting the economy. Therefore for Poland to improve on their economic growth, they must improve on their infrastructure. In my opinion, the infrastructure would not be a concern because Euro 2012 will be held by Poland and funds had been provided by the EU as an aid to improve on their infrastructure (Szafranko, 2010). Evaluation As previously mentioned, political stability is key to economic growth but there are factors that unsettle Polands stability such as corruption  [6]  . This is a significant disadvantage, for instant, if the government invested in a  £10million project but due to corruption, only  £2 million is injected, the project would either be substandard or incomplete due to the amount of money lost. Furthermore, safety will also be a key concern due to the substandard undertakings. With this kind of uncertainties, investors will have their doubts when investing in the country. However, Poland has taken several measures to reduce corruption, and with more effort, corruption can be reduced. Besides that, the countrys high unemployment rate can also be a concern for the country  [7]  . While it is true that the high unemployment rate saved Poland during the recession, it cannot be a long term plan for the country. A high rate of unemployment would cause stress within the country and crime rate would increase causing instability. Furthermore, it would also prevent the country for optimising their resources. Despite the current high unemployment, recent reports show that the unemployment rate is steadily decreasing over the years  [8]  . Conclusion In conclusion, there are many factors driving Polands economic growth such as political stability and stable exchange rates. Polands external competitiveness has been tested by the rise of the BRIC, notably China. There are numerous reasons why Poland has been able to attract large volumes of FDI, one of which is the Special Economic Zones with tax exemptions lowering business costs. Sound macroeconomic policies have sharpened Polands competitive edge and positioned it well to seize opportunities from joining the EU, therefore attracting more FDI leading to further growth. The main difficulty Poland now faces is corruptions. However, the extent to which this has affected Polands economic growth is hard to determine but the pull factors of economic growth outweighs this problem. There is also room for supplementary improvement to further boost the economy especially the developments of infrastructures. Nonetheless, the growth for Poland is sure to progress with the adoption of Euro an d Euro 2012. Critical Reflection The PESTLE analysis allows clear insight of the country in the macroeconomic level. The political and economic aspects of the PESTLE provide a clear framework on how it affects the economical growth and the extent of the influence. However, the usage of PESTLE is limited to the present and does not give a wider picture of the future such as Poland is planning to adopt Euro in 2015. Under some circumstances, analysing the PESTLE is insufficient in certain aspects such as the infrastructure in Poland. Nevertheless, the Porters Diamond Factor Conditions are used to complement the weaknesses of this issue. However, both models fail to address one major factor, the regulatory factor given in the STEER  [9]  analysis which is important given the recent financial crisis. Furthermore, in my opinion, safety of a country is important as well. Safety is indispensable because it provides certainty for foreign investors. Although the PESTLE analysis is widely used and it provides information on various factors, I think a new model that incorporates more factors should be introduced. There are many factors driving Polands economic growth, however, the level of contribution of each factor is uncertain. One might wonder how Hungary suffered from a different fate from Poland despite both having floating exchange rates. In my opinion, it is not just the floating exchange, but the different factors that complement each other that exist only within Poland to have boosted Polands economic growth. Lastly, research was made based on recent statistics for data accuracy. However, sources from research using resources that date back to 20 years were also used. The results are important because this data provides an insight to the initiation of Polands economic growth after the downfall of communism. Some resources are subject to biased views, making it impossible to obtain a perfectly accurate reasoning. Mixed responses can be seen regarding the countrys progress. According to local Polish people in the university, it is said that Polands economy is not very promising. However, according to other reports, the results say otherwise. In my opinion, Polands progress is very promising but the government should provide more social benefits to the local Polish to prevent outward migration which may lead to brain drain. Bibliography Business Monitor International. (2011). Poland Infrastrucuture Report Q1. Warsaw: Business Monitor International. Cottarelli, C., Szapà ¡ry, G. (1998). Moderate inflation: the experience of transition economies. Hungary: International Monetary Fund. Credit Suisse. (2010). Poles getting rich quickà ¢Ã¢â€š ¬Ã‚ ¦. Warsaw: Global Wealth Report. Dnevnik.bg. (2010). Bulgaria, Romania, Poland, Czech Republic to adopt euro in 2015 analysts. Sofiaecho , 50. E, P. M. (1990). The Competitve Advantage of Nations. Harvard Business Review , 73-93. Economic Intelligence Unit. (19 March, 2009). Viewsfire. Retrieved 2011 April, 4, from Viewsfire: http://viewswire.eiu.com/site_info.asp?info_name=social_unrest_tablepage=noadsrf=0 Eurostat. (6 April, 2011). Poland Unemployment Rate. Retrieved 7 April, 2011, from Eurostat: http://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=132.STS.M.PL.S.UNEH.RTT000.4.000 Eurostat. (6 April, 2011). Real GDP Growth Rate. Retrieved 7 Aptril, 2011, from Eurostat: http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=tableinit=1plugin=1language=enpcode=tsieb020 Gillespie, P. (1999). Too early to say if 1989 was a liberation or a revolution. World News , 16. Gulde, A.-M., Kahkonen, J., Keller, P. (2000). Pros and cons of currency board arrangements in the lead-up to EU accession and participation in the Euro zone. International Economic Review , 173. Haggard, S., Webb, S. B. (1996). Voting for reform: democracy, political liberalization, and economic adjustment. New York: Oxford University Press. Jedrzej, B. (13 October, 2010). Poles are at the forefront of nations increasingly rich. Retrieved 7 April, 2011, from Gelda Waluty Finanse, FT: http://forsal.pl/artykuly/458053,polacy_sa_w_swiatowej_czolowce_bogacacych_sie_narodow.html Kariel, H. S. (1956). Democracy Unlimited: Lewins Field Theory. The American Journal of Sociology , 280-289. Kornai, J. (2000). Ten Years After The Road to a Free Economy: The Authors Self-Evaluation . SSRN , 29. KPMG. (2009). A Special Economic Zone in Poland. Warsaw: Invest in Poland. Laposte. (4 January, 2010). Polands Consumptio. Retrieved 7 April, 2011, from Laposte. McKEEVER INSTITUTE of ECONOMIC POLICY ANALYSIS. (December, 2004). POLAND: Economic Policy Analysis. Retrieved 7 April, 2011, from McKEEVER INSTITUTE of ECONOMIC POLICY ANALYSIS: http://www.mkeever.com/poland.html Murell, P. (1993). What is shock therapy? What did it do in Poland and Russia? Post-Soviet Affairs , 111-137. Nam, C. W. (2004). Types of Tax Concessions for Attracting Foreign Direct Investment in Free Economic Zones. Munich: Center for Economic Studies and Ifo Institute for Economic Research. National Bank of Poland. (7 April, 2011). Exchange Rate Archive. Retrieved 7 April, 2011, from National Bank of Poland: http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=tableinit=1plugin=1language=enpcode=tsieb020 Nunnally, S. (2010). Economic Growth And Low Labor Costs Make For Attractive Investments. Articlesnatch , 1. Nuti. (1986). Hidden and Repressed Inflation in Soviet Economies:Definition, Measurements and Stabilisation . Contributions to Political Econo , 37-82. Papazoglou, C., Pentecost, E. J., Marques, H. (2006). A Gravity Model Forecast of the Potential Trade Effects of EU Enlargement: Lessons from 2004 and Path-dependency in Integration. The World Economy , 1077-1089. Sachs, J. D. (1996). Economic transition and the exchange-rate regime. The American Economic Review , 147. Szafranko, E. (2010). Evaluation of a Possible Development of the Transportation Network in Poland Supported by the EU Funds. Olsztyn Economic Journal , 357-379. TradingEconomics. (2009). Literacy rate; youth total (% of people ages 15-24) in Poland. Retrieved 7 April, 2011, from Trading Economics: http://www.tradingeconomics.com/poland/literacy-rate-youth-total-percent-of-people-ages-15-24-wb-data.html United Nation Conference of Trade and Development. (22 July , 2010). World Investment Report 2010. Retrieved 7 April, 2011, from Invest in Poland: http://www.paiz.gov.pl/files/?id_plik=13224 Appendix Appendix 1 Polands economic growth has been steady with the exception of the economic crisis in 2008. Source: Adapted from (Eurostat, 2011) Appendix 2 PESTLE Analysis In this essay, I utilised the Political and Economical factors in the PESTLE analysis. The PESTLE analysis provided me a clear framework to facilitate my research on the essay. Appendix 3 Polands have high unemployment rate. However, over the last few years, unemployment has been decreasing steadily. C:UsersNicoDesktopunemplo.png Source: Adapted from (Eurostat, 2011) Appendix 4 The Polish currency, Zlotych had depreciates against the Euro from 2008 to 2009 which caused the Polish currency to be more competitive in the market. Low currency value reduces the cost of borrowing hence it attracts investors to invest more in the country. Furthermore, the exchange rate is very stable, making it a reliable currency. Source: Adapted from (National Bank of Poland, 2011) Appendix 5 Polands domestic consumption is much bigger than the export. The high domestic consumption is one of the reasons that allowed Poland to enjoy a positive GDP despite the current economic crisis. Source: Adapted from (Laposte, 2010) Appendix 6 Polands is generally stable politically with the exception of corruptions. Source: Adapted from (McKEEVER INSTITUTE of ECONOMIC POLICY ANALYSIS, 2004) Appendix 7 Porters Diamond Factors Condition The Porters Diamond factors condition analyses nations position in factors of production (E, 1990). From there, the key opportunity and threats can be highlighted clearly. In this case, the infrastructure is examined because it is the weak link in Polands economic growth. However, Poland infrastructure has been growing steadily (Business Monitor International, 2011). Appendix 8 STEER Analysis The STEER analysis is the updated version of the PESTLE framework. The main factor that differentiates STEER from PESTLE is the regulatory factor.

Localism and Hoover’s views on goverment

Localism- the policy whereby problems could best be solved at local and state levels. Reconstruction finance corporation- urged by hoover to be passed; gave more than a billion dollars of government loans to railroads and large businesses trickle-down economics- theory held that money poured into the top of the economic pyramid will trickle down to the base Bonus Army.How did Hoover’s views on government influence his response to the depression? While not believing in charity by the government, Hoover did try an dhelp the economic mess that began during his administration. He gave much of his money to charity and encourage Americans to do the same. He broke with republicans and did away with the taxes that had been placed on citizens during the Coolidge administration. He thought that would allow for more income being spent to help the economy rebound. He spent $500 million a year on public works and government programs to build or improve government properties.The most famous was the Hoover (Boulder) Dam. Congress established the Reconstruction finance corporation (continued by FDR) which created an agency to help banks, railroads, and other key businesses to stay in business thus helping the economy. All of these things could not stem the tide of the economic collapse. Hoover believed in a balanced budget and not pumping government money into the economy. He believed in rugged individualism, and relied on the individual, the churches and private charities, and the state governments to handle most of the economic help that was needed.What facts show that Hoover’s policies to reverse the depression failed? Hoover left office with the economy at the depths of an unprecedented depression & with 25% of the labor force unemployed. To many out of work americans, the president became a symbol of failure. Some people balmed capitalism, while others questioned the responsiveness of democracy. Many believed the American system was due for an overhaul. Busi nesses often did not use the loans they recieved to hire more workers.4. How did MacArthur’s tactics in removing the Bonus Army affect Hoover’s political future?President Hoover ordered MacArthur to â€Å"surround the affected area and clear it without delay.† MacArthur brought up troops and tanks from Fort Myer, Fort Meade, Fort Washington and Fort Howard. After the bonus seekers refused to leave, Hoover eventually ordered the army to forcibly remove them. The marchers collected in a single area and Hoover ordered the siege stopped, but Mac Arthur continued the assault. Eventually 55 were injured, one woman miscarried and one man who was already sick died. Roosevelt milked the event for all its worth during the campaign of 1932 and suggested that he would have done better. (The Marchers were not actually owed any money, but hoped to pressure the government into giving them an advance on tehir pension.)

Provide Support to Maintain and Develop Skills for Everyday Life Essay

1.1 A skill is simply something someone can do. There are various different means and methods to maintain the skills depending on the individual and the lives they wish to live. If it is to keep their home clean different methods such as signs with instructions on what needs to be done in each room, a Rota, or maybe even just being shown how to do the task at hand. If they are having difficulty with bathing they may need someone supporting them to help them maintain their personal hygiene, aids such as hand rails, special access baths etc. Giving an individual a walking aid to help them maintain their Independence with mobility, a scooter or possibly a guide dog. Approaches to skill development Should be based on factors such as type of skill, capacity, ability, living situation and there personal outcomes. 1.2 There are various reasons why support may be needed to regain or develop skills such as lack of ability or understanding of how to perform skill, lack of confidence, lack of opportunity to develop skills, physical disability, old age, social isolation, mental health, learning disability etc. 1.3 Maintaining, regaining and developing skills can benefit individuals in various ways. It builds on self worth and self-esteem, ensures there are more opportunities and helps regain confidence and independence working towards an altogether better well being and quality of life. 2.1 Skills for life are actions or activate that enable people to live as independently as possible. These may include personal hygiene, eating, preparing meals, dressing and undressing, mobility and transfers i.e. from bed to chair, taking and handling of medication, managing money, using technology, shopping for groceries or clothes. Working with others to  identify skills for everyday life that the individual needs to be supported with will give you a better overall view on their needs. Speaking to family members, friends, colleges, doctors, mental health team, to get everyone input will help your understanding but mainly sourced from a person’s questionnaires and P.C.P tools. The importance of P.C.P planning is that it starts with what someone can do and then looks at where there are gaps where the person may need support. See P.C.P tools attached. 2.2, 2.3, 2.4, P.C.P tools attached 3.1 To help someone maintain or develop skills through active participation is very important. This can help improve their self-esteem and give them more independence. If you have an individual who had a poor diet and cannot cook, giving them information about healthy choices and letting them pick which foods they would like. If someone has no culinary skills it is important you do not cook alone for them and get them involved so they pick up these skills. This could be by you showing them how to peel one potato and having them doing the rest and then showing them how to cook them, the individual could write down these steps so they can be used in the future.in the case of the client I key work we have supported him in learning how to complete a balanced diet shopping list by presenting options suggested to him by his nutritionist in a list then using that list whilst shopping enabling him to have healthier options whilst maintaining his choice and control Unit 311 Provide support to maintain and develop skills for everyday life 3.2 I always give positive and constructive feedback to help encourage the individual and so they can progress in their new skill. If they want to cook a new meal they haven’t done before you could remind them that they have cooked the ingredients before but in a different recipes and reassure them how well they did. If they were to cook a piece of steak that got slightly burnt and overcooked your constructive criticism could be in future to keep it at a lower heat but it was a great first try. I also do regular case studies, reviews and 1-1’s to help show evidence on what affects this has  had on the individual, how they feel and to enable us to promote active participation in a reflective/positive way. 3.3 The actions to take if an individual becomes distressed and unable to continue are to offer reassurance that the person will not come to harm, communicate that you understand their distress, say how well the individual is doing with the everyday skill, seek advice or assistance from a senior colleague, make sure the individual remains safe, suggest stopping the activity. Stopping the activity should normally be an option after other options have been tried. The distress the individual experienced should be recorded, reported so the care plan and if necessary reviewed. 4.1 You need to decide with the individual and others involved in the plan what criteria and process is for evaluating the support. If this individual has aims they needed to reach such as: the individual needs to gain culinary skills and they need to have support bathing. When it comes to the evaluation you need to see if these aims have been met.   Has the goal been achieved? If not, how much progress has been made? How effective is the care to date? Are different forms of care needed? How will this care be provided? 4.2 When i have my agreed role of the goal that needs to be reached i need to evaluate it and decide if anything needs to be changed. If i was to support someone with a physical difficulty and their skill that needed developing was keeping their home clean and it was agreed you would go their twice a week to motivate and support them. When it comes to evaluating the outcome to see if my role is working and i decided that the individual is struggling keeping on top of their housework and i decide this method isn’t working. I need to work with others to decide what can be put in place to make it easier from the individual. 4.3 When i evaluate and discover that a part of the plan isn’t working i revise this. If they were struggling with pushing the hoover and heavy duty chores around the house it could be agreed they could have home help in three times a week to do the chores that are more psychically demanding and they could do easier tasks such as washing dishes, general tidy. This would help them reach their goal and still be acclivity participating.

The Effects Of Inflation On The Economy - 1129 Words

Decades ago, many economists did not believe that inflation –the escalation of prices that makes the money to be less valuable in the market- (Newnan, Eschenbach, Lavelle, 2014) could rise together with unemployment because they stood in the wide belief of a direct relation between economic growth and employment. That is to say that when the nation’s economy is in its healthy moments, the rate of unemployment will decrease, and in the other part the inflation will increase because people have more income, so, they will be willing to spend more. Moreover, people thought that increasing of inflation allowed the economy to grow. Therefore, if inflation reduced, the unemployment would be raised, and consequently, the economy of the country†¦show more content†¦In that way, not only the need of goods will drive the labor force to its pleasant stage, but it will also force prices to escalate simultaneously (Aspromourgos, 2012). Although the Keynesian-economic policy is wrong in the present view, it was not until the 1970s when an unknown phenomenon emerged in the United States that its ineffectiveness was proven; for the surprise of many economists. The phenomenon was defined as â€Å"stagflation,† and it consists of a â€Å"period [in which both] unemployment and inflation rise at the same time† (Barsky and Kilian, 2004, p.131), and it was caused by primary the combination of shock in oil prices and unsuccessful monetary policies. Actually, there are two theories that try to explain the possible causes of the 1970s stagflation. On one hand, experts believe that the attempt of policy makers to control the fluctuation of inflation that the nation faced in the previous years to the stagflation might have led to the unintended consequences. For example, when the federal government put in place restriction monetary policy to avoid a rapid growth of the nation’s economy that would turn the inflation down; the inflation was up as a result of the over money supply that the central bank applied during the 60s following the Phillips curve. Thus, the excess stimulation or liquidity caused the high inflation rate that the restriction was intended to bring down. Unfortunately, this restricting actions did not shift the inflation