Thomas White Global Investing
Global Players

Global Players

March 2010

Donald Tusk, Prime Minister, Poland

“We have become a great, proud country.”

— Donald Tusk, during celebrations marking two years of his government, 2010

For most countries, 2009 was an economic nightmare. But for Poland it was a year of miracles. Under the keen eye of Prime Minister Donald Tusk, Poland not only steered clear of the financial crisis but also climbed above the Netherlands to become the sixth biggest economy in Europe, even registering a GDP growth of 1.7%.

Tusk’s cautionary approaches coupled with Poland’s robust internal demand tided the country over the crisis. When the recession set in, Tusk wasted no time. He introduced a stimulus package worth $30 billion in December 2008, which he called, “a stabilization and development program.” Aimed at stepping up bank guarantees, providing loans to small and medium enterprises, and promoting renewable energies, the package is a testimony to Tusk’s liberal and pro-business propensities.

In 2009, while other nations struggled to shore up their finances, Poland’s GDP per capita actually increased from 50% to 56% of the EU average. Poland ended 2009 with a flourish, recording a growth of 3.1% of the GDP in the fourth quarter, surging above expectations, as a frail zloty and improving demand from the Euro-zone bolstered exports. The Polish economy is now expected to grow 3% in 2010 and unemployment figures are slowing down.

In the past, Poland had long neglected its businesses, which were choking with bureaucratic red-tape. The country had ceased to be a commerce-friendly place. Since his election in 2007, Tusk, the co-founder of the center-right Civic Platform party, has been the face of change in the Polish economy with his pro-business, freemarket-oriented policies and transparent approach. Tusk has freed the business environment from state intervention and bureaucratic snares, making Poland more accessible to foreign investors.

For a country used to opaque policies and scheming politicians, the affable and diffident Tusk arrived on the scene like a breath of fresh air. Poland had been in the grip of the Kaczynskis, known as the “terrible twins,” whose Law and Justice Party had swept voters in the 2005 polls. Jaroslaw Kaczynski, Tusk’s predecessor, and his identical twin Lech Kaczynski, whose presidential term ends this year, had quickly become infamous for their frosty demeanor toward Poland’s European neighbors, particularly Germany. Opinion polls taken during the 2007 elections revealed that 80% of Poles were extremely dissatisfied and embarrassed with their government.

With Tusk’s arrival, amendments such as online tax filing and speedier customs clearance have been set in motion. In addition, Tusk’s script has included a few significant changes including pay hikes for teachers and modernizing the Polish army. He has also tackled some of Poland’s long rankling worries, primarily the country’s creaking infrastructure. For the past 20 years, Poland’s infrastructure, like its businesses, had been trapped in the cat and mouse game of bureaucracy, with many significant projects trundling to a stop. But Tusk’s government has begun working with renewed zeal, keeping aside $35 billion to improve Polish roads. Tusk has promised Poles that nearly 1,250 miles of highways will be in place by 2012, the year Poland co-hosts the European football championships.

Although the strain of bringing Poland to this stage shows on the 53-year-old Tusk’s haggard face, his apparent weariness and mild manners belie a steely decisiveness. Perhaps this toughness comes from his modest background. Tusk, the son of a carpenter, was once an anti-communist student leader prior to championing the Solidarity movement. Later, he set up an industrial painting business, which involved working for up to 16 hours a day in inclement weather to meet deadlines. “Donald knew how to run a company, just as he knew how to be a worker,” his close friend Jerzy Borowczak commented to AFP.

Tusk brings the same determination to the table in his management of the country. Currently, one of the Prime Minister’s top priorities is securing Poland’s adoption of the euro currency. But first, the country must meet a key requirement –Poland has to flatten its public deficit from 6.3% in 2009 to 3% of the GDP by 2012.

Tusk is up to the task. His assessment of the country is simple and free of bias. “Poland is quite a mediocre country in some regards. The only natural resource that we have, and with which we can compete, is freedom,” he tells TIME. And it seems that for now at least, Tusk has become the torch bearer for that freedom.





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