Poland - Foreign investment



Prior to World War II, considerable foreign capital was invested in the Polish economy, particularly in petroleum and mining, which were mostly foreign owned. A nationalization decree in 1946 confiscated enemy properties and nationalized Poland's industries, eliminating foreign investments completely. The decree provided for no compensation procedures and foreign governments involved negotiated directly with Poland. The first joint venture with Western counterparts (one Austrian and one US company) was formed in early 1987 to build a new airport terminal in Warsaw. In mid-1991, there were 4,100 foreign registrations, worth $506 million, and in 1993 another $2 billion in foreign investment entered Poland. Among the industrial companies sold to Western interests were Polam-Pila (lightbulbs) to Phillips, Polkolor (TV sets) to Thomson, Pollena-Bydgoszcz (detergents) to Unilever, and Wedel (confectioneries) to Pepsico Foods.

In 1996–97, Poland continued to invite foreign investors to help the government turn some of its banks and oil, arms, and telecommunications companies over to the private sector. In October 1996 President Aleksander Kwasniewski stated that the government's campaign to shed costly state-owned enterprises had been successful, with the private sector now accounting for about 70% of the goods and services produced in the economy. Total foreign direct investment (FDI) had reached nearly $27.3 billion in 1998. FDI inflow in 1998 was $6.3 billion, up from nearly $5 billion in 1997, and increased to $7.2 billion in 1999, undeterred by the effects of the Russian financial crisis. Annual FDI inflow peaked at over $9.3 billion in 2000, having grown at an average rate of 44% a year since 1991 to 2000. Total FDI stock was over $42 billion in 2000. In 2001 and 2002, the economic slowdown, and, particularly, the worldwide decline in foreign investments, helped reduce annual FDI inflows into Poland to $8.3 billion in 2001 and to $6.06 billion in 2002. Cumulative FDI as of 2002 was $61.45 billion.

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