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POLAND - POLISH-SLOVAK BUSINESS ALLIANCES ARE INCREASING, THANKS TO FOREIGN INVESTMENT

Business barriers reflect geographic borders

THE TATRA Mountains are a symbol of Slovak pride and an important part of the national psyche. When a windstorm devastated the area in November 2004, the whole country mourned. But the Tatras are not the sole property of Slovakia. A portion of them belongs to Poland, and as such, they are also a symbol of Polish pride.

THE TATRA Mountains are a symbol of Slovak pride and an important part of the national psyche. When a windstorm devastated the area in November 2004, the whole country mourned. But the Tatras are not the sole property of Slovakia. A portion of them belongs to Poland, and as such, they are also a symbol of Polish pride.

While the mountains join the countries in some ways, they also serve as a natural barrier in many others. Andrzej Tymkowski, a senior officer at the Embassy of the Polish Republic and the head of the commercial department there, talked with The Slovak Spectator about the geographical challenges faced by the business communities that have grown up on either side of the Tatras' borders.

"The Tatras are spread along the entire Polish-Slovak border. It is a massive physical and psychological barrier that we have to overcome," he said.

Indeed, the physical barriers for those wanting to go from Poprad in Slovakia to Zakopane in Poland, the two most developed ski resorts in the Tatras Mountains, are immediately observable. It is impossible to take a direct train, and back roads are the only answer. The reason: Slovakia and Poland still lack a modern road and railway connection.

"Out of all our border crossings with all other countries, the Slovak-Polish border is the most difficult," said the attaché.

According to Tymkowski, if Slovaks and Poles succeed in improving the cross-border infrastructure, then "we will be able to say the conditions for the development of mutual relations are ideal. But I have to say, if we don't succeed, then business cooperation is only good at best".

Currently, foreign investors in both countries are motivating cooperation between Slovakia and Poland.

"The automotive industry is among the most important in terms of foreign trade between our two countries," said Tymkowski.

He added that Slovakia and Poland would have to wait before Poles and Slovaks invest directly into each other's countries. So far, both countries lack sufficient capital. Their focus is on attracting foreign investment, not exporting capital abroad.

"So far we do not have an official system of discovering how many joint Polish-Slovak businesses there are. If there are some, they are primarily operating in the area of distribution," Tymkowski explained.

As for what would deepen cooperation between Slovak and Polish businesses, the attaché said that an increased awareness of the procurement process might help. For example, state institutions in Poland and Slovakia could announce international tenders in which appropriate suppliers from both countries could compete. So far, however, the procurement process is not very transparent in either country.

But Tymkowski is optimistic: "The situation is changing. Although Polish companies are not the main suppliers in Slovak tenders, in many cases they are subcontractors."

He emphasized that Slovaks and Poles are becoming stronger business partners. Between 1993 and 2004, the foreign trade between the two countries increased eight times, going from $328 million (€273 million) in 1993 to $2.67 billion (€2.23 billion) in 2004.

Poland mostly reaches a passive trade balance with Slovakia, which means that Slovakia exports more to Poland than it imports. According to Tymkowski, Poland is not unhappy with this imbalance.

"If we count according to the number of inhabitants per country, Poland sells $200 (€167) worth of products to one Slovak customer, while Slovakia sells $50 (€42) worth of products to one Polish customer. From this point of view, we still consider our trade balance to be favourable."

Last year, Slovakia imported $1.137 billion (€950 million) in products and services from Poland, while it exported $1.524 billion (€1.27 billion) in products and services to Poland.

Currently, Poland is Slovakia's fifth largest business partner in terms of imports and exports. In 2004, Slovakia's exports to Poland represented 5.5 percent of its total; imports represented 3.9 percent.

Slovakia is Poland's 16th largest business partner when it comes to imports. Slovakia's imports represented 1.6 percent of Poland's total volume in 2004. From an export point of view, Slovakia is Poland's 13th largest partner, and represents 1.8 percent of its total export volume.

Tymkowski says it is difficult to predict the future development of Slovakia's and Poland's mutual foreign trade because of different methodologies used by both countries.

"While according to Polish statistical data, the Polish passive trade balance with Slovakia has been decreasing since 2001, the Slovak Statistics Office reports the opposite trend," he said.

Steel, iron and oil are the products most exported from Slovakia to Poland. Alternatively, Poland mostly exports vehicle parts, refrigerators and televisions to Slovakia. Food exports are on the rise, including Polish imports of bakers' products, cheese, chocolates, vegetables and fruit, as well as animal fodder.


One-sided tourist exchange


AS FAR AS tourists go, Poles are among Slovakia's biggest fans. They mainly visit the High and Low Tatras, hitting aqua parks, thermal springs and ski resorts. Insiders say that if Slovakia's standard of services increased, the country would attract Polish tourists in even greater numbers.

Slovaks mainly travel to the Mediterranean Sea, which is why they largely ignore Poland's Baltic Sea as well as its vast inland. Slovaks also ignore Poland's old towns, such as Gdansk, Gdynia by the Baltic Sea, Warsaw, Poznan, Wroclav and Krakow. Poland's most famous holiday resorts, the Mazurian Lakes on the Baltic Sea, for example, with 3,000 lakes and ample canoeing, yachting and cycling, remain virtually untapped by Slovaks.

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