MINISTRY OF REGIONAL DEVELOPMENT MINISTRY OF REGIONAL DEVELOPMENT P O L A N D

Poland prospects for development – contribution of structural funds

Jerzy Kwieciński

Undersecretary of State Warsaw, May 29, 2007 1

MINISTRY OF REGIONAL DEVELOPMENT

Poland – assets and weaknesses

Labor market Innovativeness Unemployment rate is systematically falling.

In February it stood at 14.4%.

Economy needs both: growth in B&R expednitures and strengthening of cooperation between science and industry 2

MINISTRY OF REGIONAL DEVELOPMENT

Poland – assets and weaknesses

Economic development

0 -2 4 2 8 6

GDP growth rate (in %) 2.6

3.8

5.2

7.0

6.2

7.1

5.0

4.5 4.2

1.1 1.4

3.8

5.3

3.5

5.8

-4 -6 -8

-7.5-7.0

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Environment and natural resources 3

MINISTRY OF REGIONAL DEVELOPMENT

Poland – assets and weaknesses

Human capital and entreprenurship Almost half of the population is below 35 years old Investment attractiveness According to the A.T. Kearney Agency Poland ranks among of the 5 best world investment locations 4

MINISTRY OF REGIONAL DEVELOPMENT

POLAND IN THE EUROPEAN UNION

EU-27 EU-25 EU-15 EU-10 EU-12 Poland Population (2005) millions 491.9

462.5

388.4

74.1

103.4

38.2

GDP Volume (2006) at market prices % billions of euro 100 10953.6

94.0 10852.8

79.0 10292.1

15.4

21.0

7.8

560.7

662.0

243.7

% 100.0

99.1

94.0

5.1

6.0

2.2

GDP per capita in 2005 at PPS euro 22500 23500 25400 .

.

11700 % 100.0

104.4

112.9

.

.

52.0

Poland – 7.8% of the EU – 27 population; sixth country in terms of population

5

MINISTRY OF REGIONAL DEVELOPMENT

Rate of GDP growth in the selected EU countries in the period 2003-2006

Country EU-27 EU-25 EU -15 Italy France Germany Great Britain Spain Poland 2003 1.3

1.3

1.1

0.0

1.1

-0.2

2.7

3.0

3.8

2004 2.4

2.4

2.3

1.2

2.3

1.2

3.3

3.2

5.3

2005 1.7

1.7

1.5

0.1

1.2

0.9

1.9

3.5

3.5

Source: Eurostat. Database – General Economic Background/Real GDP growth rate

2006 2.9

2.9

2.7

1.9

2.2 (f) 2.7

2.7

3.9

5.8

6

MINISTRY OF REGIONAL DEVELOPMENT

Gross Domestic Product

1989=100 180 160 140 120 100 80 60 40 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Poland Estonia Slovenia Hungary Slovakia Czech Republic Latvia Lithuania 7

MINISTRY OF REGIONAL DEVELOPMENT 2004 EU-27 = 100 Poland on average 50.7

Source: Eurostat. 2007

Regional Development and Raising of Territorial Cohesion

GDP Per capita in Voivodships (at purchasing power parity)

49.6

POMORSKIE WARMIŃSKO-MAZURSKIE ZACHODNIOPOMORSKIE

47.2

KUJAWSKO -POMORSKIE

39.4

PODLASKIE

45.4

37.9

MAZOWIECKIE

45.4

WIELKOPOLSKIE ŁÓDZKIE

76.8

LUBUSKIE

51.7

46.7

LUBELSKIE DOLNOŚLĄSKIE

Below 40,0 40,0 - 50,0 50,1 - 75,0 Above 75,0 35.2

43.6

OPOLSKIE

57.1

39.3

ŚLĄSKIE MAŁOPOLSKIE

43.4

PODKARPACKIE

35.4

8

MINISTRY OF REGIONAL DEVELOPMENT

LONG - TERM EFFECTS OF EU MEMBERSHIP FOR POLAND

Improved position of Poland on the global scene (political and financial credibility) Acceleration and strengthening of the reform process Influence of the Single European Market on the economy (GDP growth, productivity) Impact of the EU funds Improved national security and higher level and quality of life 9

MINISTRY OF REGIONAL DEVELOPMENT

IMMEDIATE EFFECTS OF EU MEMBERSHIP FOR POLAND

Growth in exports of foodstuffs and agricultural products Reduction of duties on 35% of the volume of imports Changes in the level of prices (in both directions) Improved consumer protection standards Widening of educational opportunities Poland’s eastern border became the EU external frontier Gradual opening of the EU labor market Participation in the EU decision making process 10

MINISTRY OF REGIONAL DEVELOPMENT

Strategic Programming System in Poland

National Development Strategy Voivodship’s development strategies NSRF

(executive plan)

Local development strategies Other financial & legal instruments Regional Operational Programmes National Operational Programmes and Regional Operational Programmes Executive plans Executive plans

International treaties and agreements. other financial and legal instruments

sectoral strategies Operational Programmes Executive plans 11

MINISTRY OF REGIONAL DEVELOPMENT

Poland as the beneficiary of the EU Cohesion Policy

For the 2004-2006 financial perspective Poland is receiving within the framework of structural assistance 12. 8 billions Euro (6% of the total EU assistance in that period).

In the period 2007-2013 Poland will have at its disposal 67.3 billion Euro for the cohesion policy, that is almost 1/5 of the total EU cohesion policy financing.

Financing of other fields will exceed 18 billion Euro. Co-financing is estimated at over 22 billion Euro. Altogether, the above-mentioned funds will reach about 108 billion Euro.

2007-2013 EU 80.7% Poland 19.3% 12

MINISTRY OF REGIONAL DEVELOPMENT

Country’s Development Directions 2007 - 2015

National Development Strategy 2007-2015 (NDS) - principal strategic document which delineates objectives and priorities of the development policy in the period 2007-2015 Main goal of the NDS Raise the level and the quality of life of Poland’s residents: individual citizens and families Priorities: 1. Growth of competitiveness and innovativeness of the economy 2. Improvement of the condition of the technical and social infrastructure 3. Growth of employment and raising of its quality 4. Building an integrated social community and its safety 5. Development of rural areas 6. Regional development and improvement of the territorial cohesion 13

MINISTRY OF REGIONAL DEVELOPMENT Distribution of the UE resources among operational programmes NSRF/NCS 2007-2013 (in Euro) OP Infrastructure and Development 41,5% OP Innovative Economy 12,3% OP Development of Eastern Poland 3,4% 16 Regional Operational Programmes 24,6% OP Techical Assistance 0,8% OP Human Capital 14,4% Pervormance Reserve 2,0% OP European Territorial Cooperation 1,1% NSRF = 67.3 mld EUR, Including national reserve For implementation (2% of the value of allocation) 14

MINISTRY OF REGIONAL DEVELOPMENT

Financing of transport investments EU resources 28.2 billion euro from the EU for expenditures on the transport sector until 2013 Programming instruments

Continuation of expenditures 2004 - 2006

• Cohesion Fund

1.7 billion euro

• European Regional Development Fund 1,2 billion euro

New Financial Perspective 2007 - 2013

• OP Infrastructure and Environment • Regional Operational Programmes • OP Development of Eastern Poland

20 billion euro 4.2 billion euro 1.1 billion euro 15

MINISTRY OF REGIONAL DEVELOPMENT

Regional Operational Programmes Priorities

VIII Social infrastructure 10.4% VIII Renewal of rural and urban areas 5.6% IX Reform of Employment 0.1% X Administrative capacties 0.2% XI Technical assistance 2.9% I Research, technological development, innovativeness, entrepreneurship 24.7% II Information Society 7.9% VII Culture 3.9% VI Toursim 4.8% V Environmental protection, counteracting threats 10.8% IV Energy 2.6% III Transport 26,1%

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MINISTRY Operational Program Development of Eastern Poland OF REGIONAL DEVELOPMENT

Priorities

million euro Priorities of OP DEP % share Public funds (85% EU+15% domestic) Community Financing Domestic public financing

I Modern Economy II. Voivodship growth canters 47.1% 19.6 % 1=2+3 1259.03

524.35

ERDF 85%

2 1070.18

445.70

Total 15%

3 188.85

78.65

III. Transport infrastructure 30.3% 811.41

689.70

121.71

IV. Technical Assistance 3%

Total 2007-2013 100%

80.25

2 675.05

68.21

2 273.79

12.04

401.26

17

MINISTRY OF REGIONAL DEVELOPMENT

Operational Program Human Capital Priorities

13% of funds for development of human capital Priority I.

TOTAL:

Employment and social inclusion

II.

III.

IV.

V.

VI.

Development of human capital and of enterprises’ adaptative potential High quality of the educational system Higher education and science Good governance Precaution. promotion and improvement of the health of productive age

VII.

Labour market open to everyone and promotion of social inclusion VIII. Regional human resources of the economy

IX.

X.

XI.

Development of education and competences in regions Partnership for rural areas’ development Technical Assistance

(EUR) 506 189 358 672 298 727 1 456 236 268 960 366 839 610 854 094 105 713 179 3 699 705 119 1 588 479 612 1 103 425 446 260 130 135 456 808 282 11 420 207 059 % 4.43% 5.89% 12.75% 8.41% 5.35% 0.92% 32.40% 13.91% 9.66% 2.28% 4.00% 100% 18

MINISTRY OF REGIONAL DEVELOPMENT

OP Human Capital

Financial allocation within OP Human Capital Rural areas 2,28% Education - regional 9,66% Regional human resources of the economy 13,91% Technical Assistance 4% Labour market open to everyone and promotion of social inclusion 32,40% Employment and social inclusion 4,43% Adaptability 5,89% High quality of the educationl system 12,75% Higher education and science 8,41% Good governence 5,35% Health 0,92% 19

MINISTRY OF REGIONAL DEVELOPMENT Impact of the NSRF on the rate of growth 4.00

3.00

1.59

2.00

1.00

0.00

0.00

0.00

-1.00

0.21

0.15

0.81

0.05

0.21

2.90

0.54

1.91

1.83

0.98

2.39

1.01

1.19

1.42

0.86

-1.15

-0.97

-2.00

-0.82

HERMIN (WARR) MaMoR2 (IBnGR) 0.50

-0.10

-0.13

-0.15

-0.63

-0.43

-1.07

-0.36

-3.00

-2.85

-4.00

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Difference between GDP rates of growth in the NSRF scenario and base scenario (without NSRF) expressed in percentage points 20

MINISTRY OF REGIONAL DEVELOPMENT Impact of the NSRF on unemployment rate 2.00

1.00

HERMIN (WARR) 0.00

-1.00

0.00

-0.13

-0.61

-2.00

-1.85

-1.48

-1.20

-1.02

-0.88

-1.50

-3.00

-3.01

-4.00

-3.69

-3.67

-4.46

-4.44

-5.00

-6.00

2006 2007 2008 2009 2010 2011 2012 -5.56

2013 2014 2015 2016 2017 2018 2019 2020 Difference between unemployment rate in the NSRF - based scenario and base scenario (without NSRF) expressed in percentage points 21

MINISTRY OF REGIONAL DEVELOPMENT Impact of the NSRF on the rate of GPD growth in the period 2006-2020 8% 7% 6.57% 6.21% 5.38% 6% 6.57% 5% 5.59% 5.40% 5.62% 6.98% 5.97% 5.94% 6.56% 4.22% 4.28% 4.34% 4.39% 4.45% 4.50% 4.55% 4% 3% 2% 4.03% 4.07% 4.06% 4.11% 4.17% 3.08% 3.30% Z NSRO Bez NSRO 3.57% 3.81% 4.07% 4.20% 1% 1.49% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 22

MINISTRY OF REGIONAL DEVELOPMENT

Scenarios of Poland’s attainment of the EU economic development level

*) EU-27 EU-15

Eurozone (12)

Average GDP growth rate in % 2001-2006 1,9 1,8

1,6

GDP per capita at PPS In EUR In 2005 r.

22500 25400

24900

Hypothetical GDP growth rate in Poland, with the assumption of the average rate based on the 2001-06 growth for the EU 3.5% 5% 6.5% 8% Year in which of Poland reaches respective GDP per capita level of: 2047 2051

2046

2027 2030

2028 Source: Date of the CSO, Eurostat, MRD calculations *) Doesn’t take into account the demographic changes and changes in the currencies’ purchasing power

2020 2022

2021

2016 2018

2017

23

MINISTRY OF REGIONAL DEVELOPMENT

Thank you for attention

24

MINISTRY OF REGIONAL DEVELOPMENT MINISTRY OF REGIONAL DEVELOPMENT P O L A N D

Ministry of Regional Development

ul. Wspólna 2/4 www.mrr.gov.pl

[email protected]

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