- Title: POLAND-ELECTION/ECONOMY For many voters in Poland, economic growth is not enough
- Date: 23rd October 2015
- Summary: WARSAW, POLAND (FILE - SEPTEMBER 20, 2015) (REUTERS) VARIOUS OF OFFICES OF POLISH BANKS
- Embargoed: 7th November 2015 12:00
- Keywords:
- Location: Poland
- Country: Poland
- Topics: General
- Reuters ID: LVADYXZN3J6B3SERLY6N1CAG91GH
- Aspect Ratio: 16:9
- Story Text: Even though Poland's economy has grown by almost half in a decade, a large proportion of those who will vote in the parliamentary election on October 25 are unhappy with their share of the spoils of its transformation from communism.
Combined with a string of scandals that has tarnished the ruling Civic Platform, it is driving a shift in Polish politics to the left after eight years of centrist-led rule.
Voters may hand power to the eurosceptic Law and Justice party (PiS), which promises a bigger role for the state in the economy and a lowering of the retirement age.
"The vast majority of Poles are simple workers. Today they expect their rights to be respected and above all for their wages to rise, because wages in Poland are too low in relation to our GDP, they are inferior," PiS leader Jaroslaw Kaczynski said during a rally in Brzeziny, a town of 12,400 120 kilometres away from the buzz of capital Warsaw.
"Higher wages, more expensive work will force progress, innovation. We have to continue on this way, we have to achieve this success, which Poland deserves," he added.
PiS is seen getting 36 percent of the vote, according an opinion poll from IBRiS for the Rzeczpospolita newspaper, setting the scene for a coalition with one or more of the five smaller parties that could get into parliament.
Beata Szydlo, a trusted protege of Kaczynski, is set to take over the seat of prime minister from incumbent Ewa Kopacz.
To some Poles, new factories and residential areas that have popped up in the last decade are a sign of how foreign investment is key to their future prosperity.
To others, they are just one more glitzy business welcomed by a government that may have driven up economic growth but has left living standards for many people lagging behind, prompting about two million to seek work abroad.
"There were textile plants here, many plants were here. There is nothing now. Tailors are working secretly. Brzeziny used to be famous for its textile industry, but there is nothing here. People are picking garbage. We hope that this will change," said construction worker, Mieczyslaw Cierpisz, a resident of Brzeziny which was one of the biggest Polish tailoring centres in the 19th century.
"The big ones [farms] receive donations and can get by somehow. But the smaller farms are worse off, they don't have enough money for big tractors or other equipment," farmer Ryszard Polit added.
Polish GDP expanded by 46 percent in inflation-adjusted terms over the past 10 years. That makes it the steepest rise among the European Union's 28 member states, but per capita GDP is still lower than some of its central European peers.
Real earnings of Polish households, meanwhile, have risen more than 30 percent in the last decade but remain at less than a third of their German equivalent - good news for foreign manufacturers looking to set up shop, but frustrating for many.
Income inequality, which shot up with the end of communism in 1989, has now dropped to roughly the EU average, but one in 10 Poles willing to work is unemployed and more than one in four employees have temporary contracts, twice EU the average.
A significant share of these deals is known as "garbage contracts" because they offer bare bones benefits, have become a hot-button issue in the election.
Civic Platform's election slogan, "Strong economy, higher wages" seeks to address that concern, but the same IBRiS opinion poll predicted it would get only 26 percent of the vote, after winning more than 41 percent in 2007.
Confidence in the party has been dented by leaked audiotapes in which ministers and other officials could be heard in Warsaw restaurants cracking off-colour jokes, ordering expensive wine and speaking indiscreetly about colleagues and foreign leaders.
The party has focused on absorbing EU funds, attracting investors and reducing the fiscal deficit during its two terms in power, drawing criticism from some quarters for leaving politically sensitive parts of the economy unreconstructed.
"For Polish entrepreneurs the most important issues for years have been the elimination of several thousand harmful laws that have generated losses for Polish entrepreneurs going into billions of zlotys and higher than the Russian government's sanctions," head of the think tank Adam Smith Centre, Andrzej Sadowski, said.
Poland's likely new rulers could see their election as a mandate to reverse some market-oriented reforms.
Banking may be their first target. Despite warnings from outsiders, the PiS election program includes new taxes and a push towards more involvement of Polish capital after many Poles who were encouraged to borrow in Swiss francs lost out when the currency surged in January.
Another will be mostly foreign-owned supermarkets, says 'Polityka Insight' think tank economy analyst, Andrzej Bobinski.
"The two taxes which are most likely to be put in place are; one for large-surface shops - a two percent sales tax and the second one on bank assets. These are the two taxes we can expect with a high degree of certainty," he said.
A key factor in Poland is the unevenness of the economy, with unemployment near zero in western areas near the German border and pockets of extreme poverty and economic stagnation in the eastern PiS heartland.
Average monthly wages in the corporate sector may be just under 1,000 euros but about two thirds of Polish employees earn less than that, according to 2012 data, the latest available.
Critics say PiS exaggerates economic problems to win votes.
Poland still has the second highest level of state control in the economy among OECD countries after Turkey, and critics say PiS, which has combined talk of injustice with nationalist language, is fostering a communist-era mentality. - Copyright Holder: FILE REUTERS (CAN SELL)
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