Investment climate in a potential new EU member state : a case study of Poland

Abstract

With the collapse of communism and the fall of the Berlin Wall, former communist countries were forced to transform their economies into a free market economy. As countries in western democracies having developed their economies to a high level of development, former communist countries had to implement economic reforms to rapidly modernize their economies to the same level within a short period of time. Poland, one of the former communist countries, had successfully implemented economic reforms and development programs to integrate itself into the world economy. Poland's strategic location as bridge between Western and Eastern Europe, coupled with its abundant natural resources and a potentially large market had made Poland a favourable candidate to gain membership into the first European Union's enlargement to Eastern Europe. However, Poland still has to adapt itself to comply with various economic conditions to meet European Union's requirements for new membership. The author aims to study and analyze the changes which took place during various stages of political and economic reforms from the period after the collapse of communism in 1989 until present and its potentials and problems on becoming a new member in the European Union. The study also focused on the investment environment which included legislations relating to investments, the taxation system, investment incentives and whether Poland could attract foreign investments. From the study, it was concluded that democratization in Poland had been successfully implemented alongwith a free market economy. Poland's integration into the European Union by the year 2000, hence into the world economy, together with the current legislative provisions on investment would transform Poland into a favourable and attractive investment area.