Republic of Poland

Rzeczpospolita Polska



Located in Central Europe, Poland is bordered on the west by Germany, in the north by the Baltic Sea, in the north-east by Russia and Lithuania, in the east by Belarus and Ukraine, and in the south by Slovakia and the Czech Republic. Poland covers a total area of 312,685 square kilometers (120,728 square miles), making it slightly smaller than the state of New Mexico. The capital city, Warsaw, is situated in the center of the country.


The population of Poland was estimated at 38,653,912 in July 2001. In 2001 the birth rate stood at 10.2 per 1,000 and the death rate at 9.98 per 1,000. After a period of uninterrupted growth that began in 1946, the population registered a slight decrease of 0.03 percent in 2001, reflecting a net migration rate of 0.49 people per 1,000. Negative population growth is expected over the next few years, before an upward turn that should see the population reach 39,065,000 in 2015. These projections could change with the arrival of immigrants of Polish descent from central Asian countries such as Kazakhstan, a law having been passed in 2000 to facilitate such immigration .

In 1990, Poland's population was primarily of Polish European descent (97.6 percent). Small minority groups included Germans (1.3 percent), Ukrainians (0.6 percent), and Byelorussians (0.5 percent). Prior to World War II (1939-45) the population of Poland was multi-ethnic, but 5 years of Nazi occupation resulted in heavy loss of life, and it is estimated that more then 6 million Polish citizens—soldiers and civilians combined—were killed. The heaviest losses were suffered by Poland's Jewish population, the vast majority of whom perished in extermination camps. Many citizens of Polish descent also died in concentration camps, labor camps, prisons, or during forced labor. The demographic profile of Poland at the end of World War II demonstrated the effect of the war on population distribution: by 1945, the number of young men and women who could have been expected to produce children was considerably diminished, although a subsequent baby boom partially improved the situation.

In 1999, approximately 19 percent of the total population was aged 14 or younger, while 12 percent were older than 64. The majority of people live in urban areas. Life expectancy for men is 69.1 years, significantly shorter than for women (77.7 years). Thus, while the genders are more or less equal in number between the ages of 14 and 64, among people aged 65 and older women outnumber men. Despite a well-organized health care service, compulsory vaccination programs against major childhood diseases, and public health information, substantial numbers of Poles die prematurely of smoking-related illnesses. Alcohol consumption has decreased in the past decade, with low alcohol beverages preferred to spirits, but the Polish diet favors red meat, dairy products, and

animal fats. Accordingly, Poles are subject to coronary heart disease, diabetes, and certain types of cancer, all of which are thought to relate to the nation's eating habits. In recent years, emphasis has been placed on the development of healthy eating and physical exercise as a preventive measure against such illnesses.



The mining sector employed 271,000 workers in 1999, representing 2.8 percent of the workforce. Since 1995, however, the employment decreased in this sector by 27.5 percent. Mining accidents were a constant threat and resulted from gas explosions, gas poisonings, or rock collapsing on miners working underground.

Coal mining has been a traditional employer of thousands living in the regions of Upper and Lower Silesia. Poland has long produced in excess of 140 million tons of coal annually. In 1999, the country mined 112 million tons, placing it seventh among the top 10 world coal producers. New coal fields were brought into production in eastern Poland in the 1980s, but the decreasing importance of steel production and coal exports led to the reduction of the number of mines. In 2000 the government offered coal miners an incentive program encouraging early retirement and re-training because of the diminishing profitability and efforts to reduce the environmental degradation in Silesia, the primary coal mining region.

Poland is also mining lignite, used as a fossil fuel for power generation. The 1999 production was 60.8 million tons, about 10 percent lower than in 1990. Large lignite deposits have been mined in central Poland around the town of Konin and in the southwestern corner of Poland near Turoszow, where the borders of Poland, Germany, and the Czech Republic come together. Because lignite contains less energy per unit of weight than coal it is chiefly used in the immediate vicinity of the mine for power generation. Poland was the world's fourth largest lignite producer in 1999.

Sulphur mines are located in the area of Tarnobrzeg, northeast of Cracow, near the Vistula river. Poland is the third largest sulphur producer in the world and produced 1.247 million tons in 1999, roughly a quarter of what was produced in 1990. Sulphur and sulfuric acid are major exported commodities. In western Poland, around the town of Lubin, copper is mined. In 1999, the region produced 28.388 million tons of copper ore. High quality copper is smelted there as well as other ores typically found with copper such as silver. Poland was the world's eighth largest copper producer in 1999 and copper is a major export commodity, but the slowing world demand does not encourage further expansion of mines in Poland. Sodium chloride, or salt, has been mined for centuries in Poland and some of the world's oldest salt mines can be found in Wieliczka near Cracow. Today Poland continues to mine salt mostly in the central plains. In 1999, Poland produced 4.128 million tons of salt. Natural gas reserves are significant and several fields are being operated on plains in central and western regions. Oil reserves are limited and satisfy only a fraction of the domestic demand.


The manufacturing sector has been undergoing major restructuring since 1990. Following the changes in the political and economic system, many industries were forced to compete on the market rather than having their production and prices set by the government. Many plants found it difficult to compete on the basis of quality and cost-effectiveness. After a period of attempts to adjust, many plants closed because they were using obsolete technology or because they lost their primary markets. The closings most affected the heavy industry producing machinery and equipment for the mining industry, steel mills, smelting, shipbuilding, and railroad equipment.

Steel manufacturing continues at modernized mills near Cracow and in Silesia in southern Poland. Demand for steel comes from the automotive industry and shipbuilding. Several car plants including the Italian Fiat and GM are located in Silesia. Daewoo operates a plant in Warsaw, while Volkswagen operates a new plant in Poznan. Between 1990 and 1999, car production increased by 244 percent. The shipbuilding industry, although considerably smaller than in decades past, continues to build vessels in Szczecin, Gdynia, and Gdansk located on the Baltic Sea. After a period of adjustment in the mid-1990s, the shipbuilding industry increased production in the late 1990s. The rail car industry shrunk substantially, but a plant continues to produced modernized equipment in Wroclaw. Large demand for steel is represented by the construction industry. Besides steel, Poland also produces aluminum, lead, and zinc.

Silesia is also the center for coke produced from coal and crude petroleum processing. Plock, located in central Poland, refines crude oil imported from Russia, and a refinery in Gdansk processes oil imported by sea from the Middle East and Africa. Fuel oil, gasoline, and lubricants are some of the products produced by the oil processing industry.

Fertilizers are produced at several locations. Phosphorus fertilizers are produced near Szczecin, while a plant in the town of Pulawy, southeast of Warsaw, produces nitrogen fertilizers. Another fertilizer plant is in Tarnow, east of Cracow in the southern part of the country. Fertilizer production increased in the late 1990s despite a decrease in the domestic demand for fertilizers caused by the decrease in food consumption and imports of competitively priced feed components.

The chemical industry produces a number of goods, including sulfuric acid, synthetic fibers, synthetic organic dyes, and caustic soda. The production of plastics increased by about 50 percent between 1995 and 1999, while synthetic rubber production decreased slightly. Chemical industry plants are located in Silesia and several major cities. Lacquer product production increased substantially during the 1990s. The production of tires for cars more than tripled between 1990 and 1999 in response to the increased demand resulting from increased car ownership.

The production of construction materials showed mixed trends in the 1990s. This is the result of dramatically changing technology using different materials, lighter constructions, and new insulating materials. Although the production of cement increased, plate glass production shrunk. Also, brick production decreased by nearly one-half.

Lodz and surrounding towns in central Poland have been for more than a century producing high quality yarn, fabrics, and ready-to-wear clothing. However, once price controls were lifted and the large market represented by the Soviet Union disappeared, the industry was forced to reduce production and employment. Many female workers were laid off because, with the outdated technology and relatively high labor costs, some textile factories were unable to compete with goods from Asia and Central America. Textiles are also produced in the city of Bialystok in the northeastern part of Poland.

The production of consumer durables is located in major cities. Poland increased the production of refrigerators, automatic washing machines, computer systems, and electronic calculating equipment and television sets in the 1990s. The increase in the production of television sets amounted to 687 percent between 1990 and 1999. The production of furniture increased by 334 percent during the same period.



Poland's retail sector had been severely under-developed by central planners. The allocation of resources by the Soviet-backed regime gave priority to industrial development and, under the fixed-price system, made retailing a secondary concern. Furthermore, with private property ownership perceived as highly undesirable, the only companies that could operate retail stores were state-owned or cooperative enterprises. Three major organizations were virtual oligopolists (businesses which greatly affect the market by virtue of the scarcity of other businesses) in the retail sector. Two of them were transformed cooperatives: one operated grocery stores in towns and cities, and the other dominated retailing in rural areas. The government planners distributed goods according to priorities set by the government administration and in response to political influence rather than in response to the needs and actual demand.

The transition to a market-oriented economy at the end of 1989 led to the rapid re-birth of the private retail sector. Within a couple of years almost all retail trade was privatized. The old distribution system collapsed, and a new system slowly emerged. The instant effect of price liberalization and the introduction of private property was the increase in the number of retail outlets. Initially, new outlets were mostly small grocery stores, but over time specialty stores appeared, including clothing stores, shoe stores, drug stores, books and paper product outlets, stores with electronics, home furnishings, and others. The number of grocery stores continued to increase in the late 1990s, although at a decreasing rate. In 1999, the number of grocery stores was 16 percent higher than in 1995, but in 1998 the number of new stores increased by only 159, reaching a total of 147,366.

The newest trend in the retail food sector is the emergence of supermarket chains. In the first half of the 1990s, large supermarkets located in the largest cities. Although some of them were established by foreign retail corporations, others were operated by Polish entrepreneurs. Knowing the needs and preferences of Polish consumers, Polish chains located in residential neighborhoods or in areas of dense housing. The stores were medium size, offered self-service areas and serviced meat, fish, and bakery departments. In recent years, a number of large supermarkets has been constructed on the outskirts of large urban areas. They located at the intersections of major highways and depend heavily on shoppers traveling in their own vehicles. Given the rapid increase in car ownership, these new stores appeal to the new and growing middle class. Because these stores are largely operated by chains from Germany, France, Belgium, and other countries, they also brought with them the new concept of the hypermarket, which sells both groceries and non-food items ranging from cosmetics and detergent to clothing and household items.

Retail shops employed 1.35 million workers in 1999, or 13.9 percent of all employed in the economy. The employment in this sector increased by 20 percent between 1995 and 1999. However, the next few years will bring a restructuring of the food retail segment because large supermarkets operating for long hours had begun to force the closure of small shops in their area. Therefore, some jobs will be transferred from small owner-operated shops to large corporate-owned supermarkets. The process will vary across regions reflecting variability in population density and income.


The rapidly increasing number of cars in Poland led to the development of a new service sector that includes car dealerships, repair services, and gasoline stations. Car dealerships numbered 13,453 in 1999 and increased by 28.6 percent between 1995 and 1999. However, the growth rate decreased substantially over this period, reflecting the saturation of the market and the slackening demand for new cars. Although Poland's new car demand was the highest in Europe in 1998 and 1999, sales figures for 2000 were substantially lower. Increasing gasoline prices caused by higher energy prices worldwide and excise taxes made ownership less attractive. Furthermore, the increase of the short-term interest rates by the National Bank of Poland to curb inflation increased the cost of credit used by the majority of buyers to finance a purchase.

The number of gasoline stations continues to increase at a healthy pace. Between 1995 and 1999 the number increased by 42 percent. The growth in 1999 alone was almost 5 percent. With the construction of new highways and the establishment of new shopping centers on the outskirts of towns, the demand for gasoline will continue to grow. Also, the anticipated growth in cross-country transit traffic will encourage the construction of new gasoline stations in the near future. Many of the new stations are built by international corporations, e.g., Shell and BP, and include a convenience store and a fast food restaurant. McDonald's Corp. in particular joins many gasoline retailers located at major highways.


The banking industry was underdeveloped at the end of the 1980s. Credit was used to finance government investment projects and was provided by state-owned banks. Credit for consumer spending was very limited. Housing cooperatives constructing and maintaining apartment complexes received government-subsidized credits. Since the change in government, the private banking industry has emerged and foreign banks opened branch offices.

The financial sector employed 287.4 thousand people at the end of 1999, 2.9 percent of the workforce and more than the mining industry. Employment grew by about one-fifth between 1995 and 1999. Revenues from operations increased for the comparable period of time by 268 percent. The gross profit rate of financial service businesses amounted to 15.5 percent in 1995 and dropped to 7.1 percent in 1999. However, the net profits were 9.9 percent in 1995, 4.2 percent in 1998, and 4.5 percent in 1999. Credit and debit card use has increased dramatically and ATMs have been installed in public access areas, facilitating customer use of their money.

In 1999 and 2000 a number of foreign banks increased their presence in Poland. Also, several major mergers were concluded strengthening the banking sector and increasing its capital. Foreign portfolio investment in Poland increased from US$9.4 billion in 1995 to US$14.2 billion in 1999. The foreign portfolio investment can choose between the bond and the stock market. In recent years, because of the growing economy, the stock market offered very good returns.


This sector was particularly underdeveloped prior to 1989. The government was not interested in such investment because, under the system of controlled food prices, there was no economic incentive to operate restaurants. Instead, the government-owned companies, schools, universities, and hospitals operated cafeterias. Eating privileges were tied to employment or enrollment in the school program. The majority of cafeterias served the main meal of the day at mid-day. The food was often perceived as lacking taste, but it was convenient, saving the trouble of shopping and cooking upon returning home.

The restoration of private ownership encouraged a large number of entrepreneurs to open eating establishments. At the end of 1999, the number of restaurants was 73,099, and about 95 percent of them were privately owned. The distribution of restaurants by type indicates that the most popular among consumers and entrepreneurs were self-service restaurants, which represented 44.3 percent of all restaurants at the end of 1999. Food stands were the second most prevalent type of food service facility, representing 39.1 percent of all establishments, but their number grew very slowly between 1995 and 1999. Tablecloth restaurants represented 8.8 percent of all restaurants, but their number increased by 24.4 percent between 1995 and 1999. This growth is most visible as these restaurants locate in prime shopping or tourist areas. The fastest growth was among cafeterias, whose numbers expanded 36.4 percent between 1995 and 1999. The revenues in the food service sector as a whole doubled between 1995 and 1999. The growth was generated mostly by food sales rather than by alcohol sales.


Slightly over 89 million foreigners visited Poland in 1999. The growth was fully attributable to the growth in visits of citizens of neighboring countries, who represented 95.4 percent of foreign tourists. However, the short-term trends in the direction from which tourists arrive is changing. In the second half of the 1990s, the number of Ukrainian, Lithuanian, and Belarusian visitors increased, while the number of tourists from Slovakia, the Czech Republic, and Russia decreased. Czech and German tourists dominate the tourist traffic in Poland. In 1999, 53.8 million tourists came from Germany and 13.5 million tourists from the Czech Republic. The number of visiting German tourists steadily increases.

Tourists arriving from countries not bordering with Poland come mostly from the Netherlands, the United States, Sweden, Hungary, Italy, and Great Britain. Among them, the number of American tourists showed the largest gains between 1995 and 1999. Although Poland offers great tourist sites for those interested in history or nature, the climate is not conducive to all types of activities sought by tourists. The large, sandy beaches of the Baltic Sea are wonderful for walking, but sun bathing and swimming are reserved only for summer months.

The expanding hotel sector and improved quality of accommodations and service will eventually attract more tourists. The hospitality industry (hotels and restaurants) employed a total of 158.3 thousand people in 1999, or 1.6 percent of the workforce. This figure grew by more than 24 percent since 1995, showing a robust expansion of the sector. With improving access through a better highway system, faster train service, and more air connections, the tourist industry is poised for moderate growth.


Poland has no territories or colonies.


Economist Intelligence Unit. Country Profile: Poland. London: Economist Intelligence Unit, 2001.

Embassy of Poland, Washington, D.C. <http://www.polandembassy.org> . Accessed September 2001.

Holmes, Leslie T., and Wojciech Roszkowski, editors. Changing Rules: Polish Political and Economic Transformation in Comparative Perspectives. Warsaw: Institute of Political Studies, Polish Academy of Sciences, 1997.

National Bank of Poland. <http://www.nbp.pl/home_en.html> . Accessed September 2001.

OECD Economic Outlook. Paris: Organization for Economic Cooperation and Development, Vol. 68, December 2000.

Polish Official Statistics. <http://www.stat.gov.pl/english/index.htm> . Accessed September 2001.

U.S. Central Intelligence Agency. World Factbook 2001. <http://www.odci.gov/cia/publications/factbook/index.html> . Accessed September 2001.

U.S. Department of State. FY 2001 Country Commercial Guide: Poland. <http://www.state.gov/www/about_state/business/com_guides/2001/europe/index.html> . Accessed September 2001.

Wojtaszczyk, Konstanty Adam, editor. Poland in Transition. Warsaw: Dom Wydawn, ELIPSA, 1999.

—Wojciech J. Florkowski




Polish zloty (Z). One Polish zloty equals 100 groszy. There are coins of 1, 2, 5, 10, 20, and 50 groszy, and 1, 2, and 5 zlotys. There are notes of 10, 20, 50, 100, and 200 zlotys.


Machinery and transport equipment, intermediate manufactured goods, miscellaneous manufactured goods, food and live animals.


Machinery and transport equipment, intermediate manufactured goods, chemicals, miscellaneous manufactured goods.


US$327.5 billion (purchasing power parity, 2000 est.).


Exports: US$28.4 billion (f.o.b., 2000). Imports: US$42.7 billion (f.o.b., 2000).

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