Did Poland Put its Economic Policy through a Sausage Grinder?

There's no denying that the people of Poland had it rough in the 20th century. Aside from having to eat bigos, their economy was hit by the double whammy of World War II and over 40 years of Soviet central planning. However, after the fall of the Berlin Wall, the Poles performed economic "shock therapy" by implementing the Balcerowicz Plan. The goal was to privatize industries, open up markets, and improve the living conditions for every citizen. By the end of the 90s, Poland was widely hailed as the biggest success story to emerge from the former Warsaw Pact states.

Despite all this, Poland's economy remains a paradox. As a member of both the WTO and EU, common wisdom dictates that Poland would be a model of free trade. Sadly, this is not the case. The Heritage Foundation reports, "Various non-tariff barriers are reflected in EU and Polish government policy, including agricultural and manufacturing subsidies, regulatory and licensing restrictions, and other market access restrictions." These policies have stunted foreign investment, which equals about 1% of their GDP. Additionally, their VAT is at a relatively high 22%, reducing the purchasing power of consumers by increasing the cost of supply. The VAT also makes exporting to Poland significantly less attractive, hurting trade in that regard. Nonetheless, Poland maintains very few tariffs and quotas, mostly on the agricultural products that employ almost a quarter of Polish workers.

Contradictions like that trading policy litter the Polish economic landscape. There is a mix of privatized and nationalized industry; GDP has grown while personal income has only slightly risen and unemployment remains high; and foreign investors legally may own 100% of a domestic business, but many industries have ceilings on foreign ownership. While there can be no doubting that Poland has made great economic strides through the past two decades, Poland must decide whether it truly wants free trade before it can continue on its economic journey.

Sources:
The Heritage Foundation
The CIA World Factbook