Poland’s role in Ukraine’s post-war reconstruction could be based on several elements. This includes the creation of new transportation and trade corridors leading through Poland; there is also potential for cooperation with the Polish construction sector and other Polish industries, according to International Finance Corporation (IFC) regional director for Central and Eastern Europe Rana Karadsheh-Haddad.
“[The role of Polish companies in the reconstruction of Ukraine] was one of the main topics of discussion with both government and private sector representatives during my visit to Warsaw. On the one hand, you host more than a million Ukrainian refugees, and on the other hand, your private sector has a great deal of experience in doing business with the Ukrainian side. In our view, Poland’s role in post-war reconstruction can be based on several elements. This includes the creation of new transportation and trade corridors leading through Poland – the conflict has already caused the seeds of these to be formed, and we are looking at opportunities to get involved in several projects. In addition, we see potential to work with the Polish construction sector and other Polish industries in rebuilding Ukraine’s economy,” Karadsheh-Haddad said in an interview with Business Insider Poland.
She reported that the IFC is looking at projects that take advantage of the geographic proximity of Poland and Ukraine.
“We are looking broadly – both at trade in raw materials, construction materials, grain or other products necessary for agriculture, and at the flow of services. Poland has a gigantic role to play here, and IFC is ready to support your private sector in taking advantage of this opportunity while supporting Ukrainian businesses,” the director declared.
She also pointed out that the Corporation now sees a number of factors that make its role in supporting the private sector and mobilizing capital in Poland growing.
“When we assessed the Polish economy, we found that it is relatively well-diversified and shows very high resilience to external turbulence. During the 2008-2009 global financial crisis, it did not fall into recession, and in the last five years it has recorded an impressive GDP growth rate of 4.1 percent. At the same time, the number of Polish residents at risk of poverty has dropped noticeably. This shows that your economy is doing very well, but one cannot overlook some challenges in its environment,” Karadsheh-Haddad said.
The first is the need to deal with inflation, which is partly the result of the unprecedented scale of public spending to support businesses and citizens during the COVID-19 pandemic, she pointed out.
“The second challenge is the geopolitical and economic threat to the entire region caused by the Russian invasion of Ukraine. The third remains the relatively tight labor market observed by the World Bank. Simply put, there are simply not enough workers to fuel economic growth. All of these factors combine to increase the risk of a slowdown in private sector activity. And it is in supporting this sector that we see a role for the IFC to play,” the director added.
She stressed that the data directly shows that the more investment in the private sector, the better the economic growth model looks.
“In Poland, this is still a challenge. In 2021, private sector investment was only 16.6%, while the EU average was 24%. Second, more emphasis is needed on innovation and digitization of the economy, which will increase productivity and efficiency while alleviating tensions related to the shallow labor market. Third, it is necessary to shift Polish industry toward higher value-added production, which will deepen the economy. The right response to these three challenges is crucial for Poland to bring its economy to the next level,” Karadsheh-Haddad concluded in an interview.
The International Finance Corporation is one of five organizations that make up the World Bank Group. It is the largest development institution dealing with the exclusion of the financial sector. Its activities are based not only on financing investments, but also on mobilizing capital and providing advice.
Source: Business Insider Poland and ISBnews
