WBJ #30-31 2013

Statistical nightmare

Facing the world

The black market: drug trafficking, prostitution – all will soon have to be included in Poland’s GDP statistics

Poland’s first facetransplant patient goes home

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VOLUME 19, NUMBER 30-31 • AUGUST 5-18, 2013 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

LOKALE IMMOBILIA

Since 1994 . Poland’s only business weekly in English

Hope for H2

COURTESY OF PA¸AC ROZALIN

REAL ESTATE

• Historic hotels investment • Warsaw office market • Atrium topped out 15-17

Switching off TVN CNBC will be going off the air by the end of this year. TVN wants to replace it with a “better” version of its 24-hour news 7 channel, TVN24

Plus: • LOT vs Boeing • Pope coming to Poland • Polish-Lithuanian relations

Could the Polish economy be set for a rebound in the second half of this year?

SHUTTERSTOCK

In this issue News . . . . . . . . . . . . . . . . . . . . . . .2-5 Business . . . . . . . . . . . . . . . . . . . .6-7 Interview . . . . . . . . . . . . . . . . . . .8-9 Opinion & Analysis . . . . . . . . .10-11 Cover Story . . . . . . . . . . . . . . .12-13 Lokale Immobilia . . . . . . . . . .15-17 The List . . . . . . . . . . . . . . . . . . .18-19 Markets . . . . . . . . . . . . . . . . . . . . .20 Sports . . . . . . . . . . . . . . . . . . . . . . .21 Lifestyle . . . . . . . . . . . . . . . . . . . . .22 Last Word . . . . . . . . . . . . . . . . . . . .23

12-13

Summer PO-litics

Taxes for strikes

After a rough start to the summer, Prime Minister Donald Tusk looks set for a big win in elections for his party’s leadership 3

As unions threaten a general strike this fall, the spotlight falls on how much their leaders make – and who pays their salaries 4

NEWS

www.wbj.pl

PKP plans expansion State-owned railway group PKP plans an expansion of its activities despite having to undergo restructuring first, Puls Biznesu reported.

According to an outline of the company’s new strategy, it should have a revenue of z∏.19.5 billion in 2015. By then, PKP plans to have at least half of its z∏.4 billion debt paid off. The group’s costs should fall by z∏.1 billion and amount to z∏.18.4 billion in 2015. ●

presented was “flimsy.”

When announcing the verdict, judge Pawe∏ Dobosz said that the court was still unsure of why the former police chief was killed. Convicting the suspects would have been an “unfair” verdict, he added.

The judge also directly criticized prosecutors working on the case and Poland’s entire prosecution system.

The announcement of the verdict and the judge’s words started a new wave of criticism directed at the Polish prosecution system and at Prosecutor General Andrzej Seremet in particular. Justice Minister Marek Biernacki, who rebuked the prosecutor general’s annual report earlier in July, told news station TVN24 that the judge’s comment after

Kamila Wajszczuk

98 was the number of Polish companies that declared bankruptcy in July 2013 compared to 75 in the same month of 2012, Euler Hermes Collections announced.

z∏.8.18 billion was the total net profit of the Polish banking sector in January-June 2013, 0.6 percent more than in the first half of 2012, the National Bank of Poland reported.

€143.5 billion

was the value of Polish exports in 2012, 4.9 percent more than in 2011, according to calculations by the Central Statistical Office.

Quote of the Week “[Finance Minister] Rostowski is proposing the nationalization of private property.”

Former justice minister and current Civic Platform MP Jaroslaw Gowin, referring to an expected move by the government to divert assets held in private pension funds to the state-controlled Social Security Institution.

Figures in focus Young and looking for work Seasonally adjusted youth (under 25s) unemployment in selected EU member states (%, as of June 2013) 60 58.7*

56.1

55.6

50 39.1

40

On WBJ.pl

*Highest in EU **Lowest in EU + data for April, 2013

36.1 27.4

30

25.7

23.8

20.7

20

0 Ita ly Slo vak ia Po lan d Fra nce Un Swe ite d K den ing do m+ Cz ech Re pu blic Ge rm an y

EU leaders often use the word “reform” nowadays.

But is there a single blueprint for a nation’s economy to grow? Log on to WBJ.pl for an analysis by Jean Pisani-Ferry, economic advisor to the Prime Minister of France.

18.1 7.5**

10

Is there a recipe for economic success?

ati a

Poland’s second largest utility Tauron signed an agreement with stateowned Bank Gospodarstwa Krajowego (BGK) to carry out a corporate bond issue worth z∏.1 billion.

Proceeds from the bond issue will be spent on Tauron’s strategic investments, the company said. The issued bonds will be guaranteed

by BGK. Their maximum expiry period will be 15 years.

A not-guilty verdict in the high-profile case of the murder of a former police chief has raised questions about the competence of prosecutors in Poland and reignited debate on the necessity of reform in Poland’s prosecution system.

General Marek Papa∏a, then a former top chief of Poland’s police force, was shot dead near his Warsaw home in June 1998. Investigators were never able to find those responsible for the killing. While some suspect Mr Papa∏a was assassinated, others thought he was simply killed by people attempting to steal his car.

On July 31, a Warsaw court found two men not guilty of inciting Mr Papa∏a’s killing.

The trial had lasted 11 years.

Judges said that the evidence

the verdict seemed a natural reaction to the circumstances.

Commentators suggest that the system requires more reform. The last changes were made in 2010, when the office of prosecutor general was separated from that of the justice minister.

Main opposition party Law and Justice used the events to attack the government of Prime Minister Donald Tusk.

The party’s leader Jaros∏aw Kaczyƒski said at a press conference the government should be held responsible for prosecutors’ work, and therefore the entire prosecution system should again be under direct supervision of the justice minister.

The Prime Minister agreed that changes in the system were necessary, but defended Mr Seremet and prosecutors’ autonomy from politicians.

“However there is no doubt that the autonomy of prosecutors cannot be understood as an exemption from hard work, common sense, determination and high standards,” he was quoted by the Polish Press Agency as saying.

Mr Tusk also said that he has scheduled a meeting with Mr Seremet to discuss the situation. “I will also discuss his report with him and the conclusions arising from that report,” he added.

51.1 was the Purchasing Managers’ Index (PMI) reading for Poland’s manufacturing sector in July, according to HSBC and Markit. A score over 50 indicates improving business conditions in the sector.

in

Tauron to raise z∏.1 billion via bond issue

Poland’s prosecution system

Cro

Investment fund Innova Capital may be interested in buying both the Wirtualna Polska and the O2.pl online news portals, Rzeczpospolita reported.

The asking price for Wirtualna Polska was initially z∏.500 million, but is now said to be no more than z∏.320 million. The O2.pl group could be worth z∏.180 million.

Numbers in the News

Sp a

Innova Capital to buy Polish portals?

IN THE SPOTLIGHT

ce+

August 1 marked the 69th anniversary of the outbreak of the Warsaw Uprising. During the 63day conflict hundreds of thousands of people were killed and 700,000 were expelled from the city.

Warsaw itself was reduced to rubble. In a recent poll carried out by the Homo Homini Institute, 34 percent of respondents said they felt it was the most important insurgency in Polish history.

AUGUST 5-18, 2013

Gre e

Anniversary of Warsaw Uprising

SHUTTERSTOCK

2

Source: Eurostat

Company index Apple..........................................17, 23 KGHM ................................................4

Calendar

Bank Gospodarstwa Krajowego ......2 LOT ....................................................6

August / September AUGUST 16-19 PRIDE OF POLAND 2013 AND ARABIAN HORSE DAYS

Web:

Each summer the Janów Podlaski Stud farm, established in 1817, hosts Arabian Horse Days. This year’s event will feature several horse shows, parades and two auctions: the Pride of Poland auction and Summer Arabian Horse Auction.

Janów Podlaski, Poland www.janow.arabians.pl

22

PROFESSIONALS IN WARSAW

Event:

A meet-up of expats living in, or new to Warsaw, with WBJ and Invidia HR as partners of the event.

Restaurant Kameralna, Warsaw meetup.com/Professionals-in-Warsaw

Event:

Location:

Location: Web:

Location: Web:

The International Air Show will be held in Radom for the 13th time. It will celebrate 95 years of Polish aviation.

Bank Zachodni WBK ......................13

Radom, Poland Airshow.sp.mil.pl

Boeing ..............................................6 Carrefour ........................................13

Markit ............................................2, 6 Microsoft..........................................10 NBC Universal ..................................7

Castorama Polska ..........................15 Noble Securities SA ........................20

SEPTEMBER

CBOS ................................................3

3-5

ECONOMIC FORUM

CBRE ........................................15, 17

Event:

Citi Handlowy ............................12, 20 Panattoni ........................................15

Web:

The 23rd annual Economic Forum is the most important meeting of political and economic leaders in Central and Eastern Europe.

This year’s theme is: “Towards a New Deal.”

Krynica, Poland forum-ekonomiczne.pl

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INVESTING IN POLAND 2014 CONFERENCE

Event:

The conference will mark the launch of the 2014 edition of Warsaw Business Journal Group’s Investing in Poland annual publication. It will feature panel discussions examining investment conditions and incentives, with one panel focusing on outsourcing as the major investment trend in Poland.

TBA wbj.pl

Location:

24-25 AIR SHOW 2013 Event:

Asus ................................................23 Kompania W´glowa ..........................4

Location: Web:

P.P.H. Post´pu ................................15

Colliers International......................15 PGE ....................................................5 Czerwona Torebka ..........................15 PGNiG ................................................6 Docdata............................................15 PKP....................................................2 Energa ..............................................5 PKP Cargo ........................................4 Ernst & Young ................................13 Poczta Polska....................................4 Euler Hermes Collections ................2 Polskie Inwestycje Rozwojowe ........5 Google..............................................23 Querton DM ....................................15 Historic Real Estate Agency ..........16 Skanska Property Poland ..............15 Hollister ..........................................17 T-Mobile ..........................................21 Homo Homini ....................................2 Tauron................................................2 HSBC ............................................2, 6 Innova Capital....................................2 TNS Polska......................................12 ITI Group............................................7 Warsaw Chopin Airport ..................15 Jones Lang LaSalle ........................16 X-Trade Brokers..............................20

NEWS

AUGUST 5-18, 2013

www.wbj.pl

3

Politics

Summer shake-up in ruling party In June this year, Prime Minister Donald Tusk and his Civic Platform (PO) party were clearly on the defensive.

Voter surveys were showing opposition Law and Justice (PiS) well-ahead of PO, and speculation was rife that the nationalist party would return to power after having led a governing coalition from 20052007.

After PiS scored a series of significant victories in recent local elections and pollster CBOS showed the government’s approval rating plummeting to 19 percent in June, the prime minister was under significant pressure.

To add to Donald Tusk’s troubles, Jaros∏aw Gowin, a popular former justice minister whom Mr Tusk dismissed from his post in May this year, threw down the gauntlet and challenged the PM for leadership of the ruling party.

Some in the media started talking of an “all-out war” in PO. The party is currently

holding internal elections, in which party members will directly elect a new leader.

Another Tusk turnaround?

But fast-forward two months and the PM now seems to be on course to actually consolidating his power within PO while his opponent Mr Gowin seems doomed to an embarrassing loss in the party’s election.

Although the former justice minister has embarked on a nationwide tour criticizing the ruling party for departing from its “sociallyconservative and free-market roots,” he cuts a lonely figure at most gatherings and has failed to win the backing of any major PO politician.

There appear to be only two PO MPs willing to support him openly. In July Mr Gowin was accompanied by his party colleagues John Godson and Jacek ˚alek in abstaining from a vote on the government’s proposed suspension of fiscal rules in order to be able increase public spending.

Most of Mr Gowin’s criticism of Prime Minister Tusk has been on the economic front. He has described the

COURTESY OF KPRM/FLICKR

With a leadership election scheduled in Civic Platform this summer, the political scene will be affected regardless of who wins

Donald Tusk is fighting to keep his grip on power government’s plans to divert assets held in private pension funds into state-controlled ones as the “nationalization of private property,” deeming it “socialism.”

The ‘ignore him’ strategy The PM, on the other hand, has adopted a strategy of publicly ignoring Mr Gowin and stopped mentioning him by name altogether. Adam Szejnfeld, a PO MP who supports Donald Tusk staying on as party leader, confirmed the tactic saying in late July that “any mention of Mr Gowin’s name by the prime minister

only boosts [Gowin’s] position.”

Mr Tusk has also ignored Mr Gowin’s invitation to a debate on the issues. Instead, Mr Tusk has gone on the offensive, meeting with PO members nationwide.

After one such meeting in the Zachodniopomorskie voivodship, a ruling party stronghold, PO MP Magdalena Kochan told reporters that “over 90 percent of this region’s party members support Mr Tusk as party leader.”

And while the PM’s numbers are still hardly impressive, his government’s approval rat-

ing rose from 19 percent in June to 25 percent in July, according to pollster CBOS.

PO comeback?

The standing of the ruling party itself also seems to be improving. At least two polls taken in mid-July showed PO narrowing its gap behind PiS to 2-4 percentage points.

Meanwhile, it is an open secret that PO is courting MPs from the third-largest party in parliament, Palikot’s Movement (RP), in an effort to guarantee its parliamentary majority were Mr Gowin to quit the party along with his

allies after the August party vote. In recent months, four MPs have quit RP and formed a parliamentary caucus, which generally votes with the ruling party in parliament.

After MP Dariusz Dziadzio left RP to join the new caucus in July, RP leader Janusz Palikot said that “PO is trying on the one hand to keep its parliamentary majority and on the other to break up the only real alternative to their party, which is Palikot’s Movement.”

The Civic Platform-Polish Peoples’ Party ruling coalition has 235 MPs in the 460-member parliament, giving it a slim majority. If Mr Gowin were to quit PO together with Mr Godson and Mr ˚alek, the four-MP caucus could become kingmaker and key to the PM holding on to his parliamentary majority.

An RP member of parliament who asked to remain anonymous told WBJ that PO is continuing its efforts to lure more MPs away from the party. And so even though Donald Tusk looks likely to remain leader of Poland’s ruling party, he will no doubt have a whole new set of variables to deal with come autumn.

Remi Adekoya

Domestic

Medicine

Suspected domestic terrorist fit to stand trial

First Polish face transplant patient leaves hospital

Brunon K., charged with plotting to blow up the Polish parliament, has been declared competent to stand trial by psychiatrists After a six-week observation period, psychiatrists have deemed Brunon K. (surname withheld due to Polish privacy laws) fit to stand trial for plotting to blow up the Polish parliament building.

The suspect, who was a lecturer at the Agricultural University of Kraków, has been in custody since his arrest in November 2012.

Charges against him also include inciting others and conspiring with them against Poland’s constitutional authorities, illegal weapon ownership and weapons trade.

Prosecutors have defined his actions as characteristic of terrorism, meaning that Brunon K. could face a 15-

year sentence behind bars.

The chemistry lecturer allegedly aimed to drive a car packed with explosives into Poland’s parliamentary building in Warsaw, while the president, prime minister and MPs were all in attendance.

Prosecutors claim that the suspect is a nationalist and anti-Semite who felt that “the country was headed in the wrong direction because all leading governmental positions were occupied by “foreigners” and not “true Poles.”

However, a group of people he was in contact with were infiltrated by undercover operatives, and explosives, detonators, firearms, ammunition, body armor and other items have now been seized across the country in connection with the case.

Also in late July, Marcin K. was arrested on suspicion of being part of the same plot to blow up the parliament building. The man is suspected of being an accomplice of

Brunon K. During a search of his home, police found half a kilogram of TNT, other explosive materials, several pieces of weaponry and significant quantities of ammunition.

Marcin K. admitted that he illegally owned and produced weapons, ammunition and explosives but claims that being a gunsmith is his hobby.

Breivik made ‘mistakes’ A source from the investigation into the activities of Brunon K. told TVN24 that the suspect had examined Norwegian killer Anders Breivik’s car-bomb attack on government buildings in Oslo and had concluded that the Norwegian made a number of “errors.”

“He said that Breivik had made mistakes, and that he wouldn’t have made them because his [attack] would have been better,” the source told TVN24. Anders Breivik killed 77 people in Norway in a bomb and gun attack in Remi Adekoya 2011.

The 33-year-old man hopes he’ll be able to live a normal life Poland’s first face transplant patient was discharged from hospital at the end of July.

The 33-year-old man left the facility just 11 weeks after the life-saving procedure was performed, the shortest recovery time for such an operation yet recorded, according to the doctors who performed the transplant.

The patient, identified only as Grzegorz, can breathe on his own, see, eat, taste and speak, although doctors explain that it will take him several months before he regains full mobility of his facial muscles. Still, the pace of Grzegorz’s recovery has been remarkable. Doctors attribute this to the patient’s “courage and determination.”

The surgery, performed back in May, was the world’s

first face transplant performed under life-threatening conditions. Face transplants are complicated and usually require extensive preparation over a period of months or years. However, a team of doctors led by professor Adam Maciejewski at the Institute of Oncology in Gliwice, where the operation was performed, had to act quickly as the patient’s life was in danger. The operation took over 24-hours and involved transplanting the majority of the patient’s face and a large part of his facial skeleton.

Grzegorz was injured in an accident while cleaning a stone-cutting machine. Most of the man’s face was torn off.

Now he is beginning a long and difficult journey to return to normal life. He already announced in an interview with TVN24 that he wants to get back to work in the near

future. Doctors have said his return to work will be possible, but that he will have to avoid certain types of work environments in order to prevent possible infection.

“Working in agriculture, where he could catch fungal infections from the soil is out of the question,” said professor Maciejewski.

He will also have to take immune-suppressing medications for the rest of his life, avoid large gatherings and contact with sick people.

Even his dog had to be removed from his home because it was a potential source of infection.

It was the first such surgery performed in Poland. The first face transplant ever was performed in 2005 in France.

So far more than two dozen entire or partial face transplants have been performed around the world.

Jacek Ciesnowski

4

NEWS

www.wbj.pl

AUGUST 5-18, 2013

Labor unions

Union leaders’ salaries under scrutiny

Poland’s three biggest trade unions have announced that they will hold a general strike on September 11, in opposition to government-supported changes to labor laws that would introduce more flexibility for firms in calculating work time. The unions argue that the changes would harm employees because they could be forced to put in long work days without overtime pay.

The leader of the Solidarity union, Piotr Duda, said that the protests could last for

weeks or even months, although currently the strike is scheduled for four days.

In response to the threats, the ruling Civic Platform party has gone on the offensive and commissioned a report on the activity of trade unions and the costs they generate. The report is expected to show what power the unions actually have and how much they cost the state.

For example, Polish media have reported that stateowned copper miner KGHM employs 43 union representatives full-time, costing the company z∏.10 million a year.

In other companies, such costs are even higher and can amount to as much as z∏.30 million – such is the case for coal miner Kompania W´glowa.

Keep your coffin here Polish law states that companies must pay union representatives’ salaries. Since unions are prevalent in state-owned companies, this effectively means that taxpayers are footing the bill – and therefore are also paying for work stoppages and disruptions to services like public transportation.

The companies also pay for other union expenses, such as office and facility rental. The union at state-controlled postal service Poczta Polska has been given a special storage room where it keeps equipment used for demonstrations against the company.

That equipment includes a coffin that strikers carry during protests.

There are other anomalies.

Daily Dziennik Gazeta Prawna

SHUTTERSTOCK

Unions oppose new work-time calculation rules, but the government is fighting back by highlighting the benefits their leaders receive

The Solidarity trade union striking in Warsaw last year reported that a train driver and union representative for rail cargo transportation provider PKP Cargo earned z∏.33,000 in one month – more than the monthly salary of the company’s CEO. Representatives also often

receive numerous bonus payments. For example, the toppaid union representative at KGHM earned z∏.275,000 last year. The figure included an annual bonus, advance payment on another annual bonus, two additional monthly

salary payments, two “anniversary” awards, various payments from the bonus fund and additional bonuses for Poland’s national miners’ day and national steel workers’ day, according to the newspaper.

Civic Platform argues that legislation regarding unions should be changed so they maintain themselves on membership fees alone, and that union leadership’s salaries should be made public.

In response to those proposals, union leaders suggested that all salaries should be made public, from CEOs to low-level employees, including the salaries of journalists and government workers. Experts have said such disclosures would violate employees’ privacy.

Jacek Ciesnowski

Bomb parts used in Bulgarian terrorist attack may have come from Poland Bulgarian daily Trud reported in late July that some elements of a bomb that exploded at the airport in the country’s fourth-largest city of Burgas in July 2012 were smuggled to the country from Poland. The newspaper claims that the detonator and a

remote control device came by train from Warsaw with two men suspected of being responsible for carrying out the attack.

The July 2012 Burgas explosion killed seven people, including five Israeli tourists.

The bomber was also killed,

but Bulgarian authorities have named two other suspects, both currently living in Lebanon, who according to Bulgarian prosecutors were responsible for organizing the attack and fled the country before the attack was carried out.

The bombing was the first attack on Israeli citizens on EU soil, and led to the bloc’s decision to designate Hezbollah’s military wing, which is widely suspected of being responsible for the attack, as a terrorist organization.

As of press time, Polish

prosecutors had confirmed only that they were asked by Bulgarian investigators if one of the suspects had traveled through Polish territory. News portal TVN24.pl reported that one of the perpetrators took a flight from Warsaw to Beirut, Lebanon before the

manhunt began. The flight in question occurred two days before the attack in Burgas.

Prosecutors did not confirm whether they were asked to investigate if parts of the bomb had been smuggled from Polish territory.

KW

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NEWS

AUGUST 5-18, 2013

www.wbj.pl

Government

Opole construction to start mid-August

Nomination for new watchdog president raises eyebrows Senate has approved his appointment, a formality. The new NIK president will replace Jacek Jezierski whose term in office expires in August.

Krzysztof Kwiatkowski, MP from the ruling Civic and Platform, has been appointed as the new president of the Supreme Audit Office (NIK) by the lower house of parliament, the Sejm. The upper house, the Senate, still has to approve his appointment. He was the only candidate for the office, but as a former member of Prime Minister Donald Tusk’s cabinet, his appointment is proving controversial.

The NIK is a politically independent office that oversees how government money is spent. It looks to identify waste or irregularities. Mr Kwiatkowski’s candidacy was supported by both coalition parties, Civic Platform and the Polish People’s Party, as well as by one of the opposition parties, the Democratic Left Alliance. The main opposition party, Law and Justice opposed his appointment.

Mr Kwiatkowski will be sworn in on August 27, after the

A matter of impartiality His appointment has ruffled some feathers though, since he is a Civic Platform member and a member of parliament. Mr Kwiatkowski was also justice minister in the first cabinet created by PM Donald Tusk. This may pose some questions as to whether he can remain unbiased while auditing various ministries and their spending. Law and Justice MP Zbigniew Girzyƒski called this “the most political candidacy for NIK president in recent history.”

Mr Kwiatkowski distanced himself from these comments and said that he would like “to be evaluated on the basis of the work he is doing, just like the former NIK presidents,” he said in an interview on Polish Radio.

He emphasized that, as per Polish regulations, once his appointment is final, he will no longer be an MP or a member of Civic Platform. “All NIK presidents so far, except for my

Energa to file prospectus in September

Krzysztof Kwiatkowski immediate predecessor, held political positions prior to their nomination,” Mr Kwiatkowski said and added that “what really matters is not their position at the moment of being chosen by the parliament but how they do their job afterwards.”

Mr Kwiatkowski vows he will remain impartial at all times. “If my office had to audit matters I was involved in as a justice minister, I will immedi-

Religion

Next World Youth Day to be held in Kraków

COURTESY OF WIKIMEDIA COMMONS

Pope Francis has decided that Poland’s picturesque city will host millions of young Catholics in 2016 In late July, Pope Francis announced that Poland’s former capital and one of its most beautiful cities, Kraków, will host World Youth Day, an event for young people organized by the Roman Catholic Church, in 2016.

“This is a joy for us, an honor and a responsibility.

That same year we will also be celebrating the 1050th year of the adoption of Christianity as the official religion in Poland,” said Cardinal Stanis∏aw Dziwisz, the archbishop of Kraków, in a statement.

“By this, the pope has fulfilled the wish of so many young people who for a long time have wanted to celebrate their faith in the fatherland and home city of Karol Wojty∏a [later Pope John Paul II],” he added.

World Youth Day was initiated by Pope John Paul II in 1984. It is celebrated at the

Pope Francis diocesan level annually, and at the international level every two to three years at various locations around the globe.

Meanwhile, Pope Francis recently announced that the much-loved and late Pope John Paul II could be declared a saint as early as November 24, 2013 or April 27, 2014. John Paul II’s road to sainthood has been described as the quickest

Treasury Minister W∏odzimierz Karpiƒski announced that he hopes expansion work on the 900-megawatt coal-fired Opole power plant will be launched in mid-August.

State-controlled PGE, which owns the Opole plant, returned to the previously abandoned expansion project after pressure from the government. Meanwhile, the public investment vehicle Polskie Inwestycje Rozwojowe is mulling involvement in the project.

COURTESY OF THE JUSTICE MINISTRY

The appointment of a ruling party MP has raised some questions over his impartiality

5

in the modern history of the Roman Catholic Church.

The process was started in record time. The former pope Benedict XVI initiated beatification procedures just a month and 11 days after the death of the pope in 2005.

The final canonization date will be decided by the Church’s cardinals under the leadership of Pope Francis.

RA

ately recuse myself from taking any decisions regarding such matters,” he said.

Risky tenders The issues Mr Kwiatkowski considers of utmost importance for the Supreme Audit Office are “the areas which carry the most risk ... including the largest tenders for IT and infrastructure projects, as well as those involving EU funds.” He also

believes that NIK needs to establish a dialogue with the agencies, institutions and local governments it audits and help them avoid making mistakes that could result in a withdrawal of EU funds.

Between 1997 and 2001 Mr Kwiatkowski was an advisor to then-prime minister Jerzy Buzek. He was justice minister from 2009 to 2011.

Beata Socha

Poland’s Treasury Ministry wants the IPO prospectus of Poland’s fourth-largest utility Energa to be filed with the Financial Supervision Authority in September, Deputy Treasury Minister Pawe∏ Tamborski said. On August 1 the ministry announced it had chosen financial and legal advisors for Energa’s bourse debut. ●

6

BUSINESS

www.wbj.pl

AUGUST 5-18, 2013

Manufacturing

Airlines

PMI shows improvement for LOT denies receiving first time in 16 months compensation from Boeing, mulls legal action Poland’s national carrier says it is demanding “specific sums” from the aircraft maker

COURTESY OF LOT

LOT’s Dreamliner aircraft began flying again in June figure in the z∏.100 million range.

LOT’s CEO said he is not ruling out the possibility of taking Boeing to court, but only as a last resort. “We’re not eager to go to court as these proceedings can go on for a long time.

It would be easier to reach an agreement on our own,” said Mr Mikosz, adding that his company prefers a “nonaggressive” approach to the negotiations, which as of press time were still ongoing.

The Dreamliner planes

were grounded in January due to battery failure, shortly after LOT received them. It took Boeing six months to repair them and put the machines back in the air. The Polish airline, currently undergoing restructuring due to financial problems, was the first European airline to receive Dreamliner planes in late 2012. Since the grounding of the original two planes, it has received two more, and expects the delivery of anothKW, JC er four.

decision earlier this month to end the easing cycle. The PMI survey is yet another data piece that shows that the Polish economy has bottomed in H1 2013,” she added. “Going forward big question is about the pace of recovery.”

“The increase in Poland manufacturing PMI shows the probability of the economy being in a phase of deep slowdown has dropped sharply,” said economists at Citi Research in an e-mailed statement. “This also reinforces our view that 2H growth in Poland could reach 1.5-2.0% YoY after only 0.5% in 1Q,” they added.

Andrew Kureth

Manufacturing growth Poland’s manufacturing PMI reading*, July 2011- July 2013

55.0 52.5 50.0 47.5 45.0

*A reading above 50 indicates expansion, below 50 indicates contraction

Source: Markit Economics, HSBC

Official launch of PGNiG’s new extraction site

COURTESY OF KPRM/FLICKR

Poland’s national airline LOT will continue to demand compensation from Boeing for the grounding of two of its 787 Dreamliner aircraft earlier this year, the company’s CEO Sebastian Mikosz said.

“We are demanding specific sums from Boeing that we have been able to calculate,” Mr Mikosz said. “Unfortunately, it is not possible to estimate all the damage to our company’s image caused by the loss of credibility with some of our customers,” he added.

Mr Mikosz made the statement in response to Boeing CEO Jim McNermey saying that the aircraft manufacturer had already finished paying out compensation to airlines affected by the Dreamliners’ grounding.

The amount that LOT seeks was not disclosed, however media reports put the

Business conditions in Poland’s manufacturing sector improved in July, coming on the back of a strong rise in new orders and in purchasing activity, according to HSBC and Markit, which compile the monthly manufacturing Purchasing Managers’ Index (PMI) report.

The index showed a score of 51.1, rising from 49.3 in June. A score over 50 indicates improving business conditions in the sector, and July was the first month with a reading over 50 since March 2012. The score was the highest since January 2012, when it reached 52.2. The month-on-month climb was the second-largest in a full 44 months, according to the report.

Business intakes increased again, after having done so in June, and this was supported by both export and domestic demand. “The volume of international new business increased at the strongest rate since January 2012,” the report read.

New business expansion was also a positive, ending a 14-

month run of contraction.

The reading was viewed as positive, and as an indicator that the much-expected improvement in Poland’s economy in the second half of this year may be underway.

“The PMI index has importantly broken into the growth zone in July driven by strong output and new orders indices,” said Agata Urbaƒska, an economist for Central & Eastern Europe at HSBC, in a statement.

“The reading will lend support along with better industrial production and retail sales data in June, to the [interest-rate setting Monetary Policy Council’s]

Jul Au . ’11 g Se . ’11 p Oc . ’11 t No . ’11 v De . ’11 c Jan . ’11 Feb. ’12 Ma . ’12 r Ap . ’12 r Ma . ’12 Juny ’12 .

Jul ’12 Au . ’12 g.

Se ’12 p Oc . ’12 t No . ’12 v De . ’12 c Jan . ’12 Feb. ’13 Ma . ’13 r Ap . ’13 r Ma . ’13 Juny ’13 .

Jul ’13 . ’1 3

Experts say the data are a strong indicator that the Polish economy is beginning to rebound

Prime Minister Donald Tusk speaks with employees of the newly opened PGNiG extraction site Prime Minister Donald Tusk officially opened a new oil and gas extraction site, the Lubiatów-Mi´dzychód-Grotów field, operated by Poland’s largest natural gas company, PGNiG. The site was completed in March this year and extraction has already commenced.

PGNiG’s total investment in the project amounted to nearly z∏.1.4 billion. The company said that thanks to the new venture, it has doubled its oil extraction volume in the first half of 2013.

The new site has approximately

7.25 million metric tons of oil and 7.3 billion cubic meters of gas.

Treasury Minister W∏odzimierz Karpiƒski announced at the opening that PGNiG will spend some z∏.8 billion over the next 4-5 years on extracting oil and gas and looking for potential new sites.

This was confirmed by the firm’s acting CEO Jerzy Kurella, who stated that the company will maintain its earlier strategic goals, but may “shift accents towards extraction and evalua-

tion of new sites.”

“At the end of August and September we are going to present new accents in the strategy and show how it will be reflected in the numbers,” he added.

The company wants to speed up the process of exploration of unconventional gas sources, by encouraging all the firms in the sector seeking such sources to exchange information through a data room.

Kamila Wajszczuk, Jacek Ciesnowski

BUSINESS

AUGUST 5-18, 2013

www.wbj.pl

7

Media

Statistics

Prostitution, drug trafficking to TVN CNBC to be be factored in to Poland’s GDP taken off the air

From next year Poland will be required to include the black market in calculations of its gross domestic product (GDP).

That means economic activity derived from illegal sources such as drug trafficking, prostitution or even extortion, will be counted along with regular economic activity such as car sales and consulting services in the total of the value of goods and services produced in the country.

“The rules [that require this information to be compiled] have been in effect since 1996, but only few countries provided such data. The European Parliament and European Commission passed a new regulation, which will come into force in August of next year, which will fully enforce these rules,” Central Statistics Office (GUS) spokesperson Artur Satora told WBJ.

For now, the data will be collected only for statistical purposes, with the first full-year data being available for 2015, but Mr Satora said he expects that the data will eventually be calculated into official GDP figures for all EU member states, once all the methodology issues have been sorted out.

In most European countries the black market usually amounts to around 0.4-1 percent of a country’s GDP, according to Mr Satora. In Poland’s case that would put its value somewhere around z∏.16 billion.

Importing prostitution Methodology presents the biggest challenge in measuring the black market. Since the activities are illegal, the statistics are hard to obtain. However, the Organisation for Economic Co-operation and Development (OECD) provides certain guidelines on how to measure such activities. It suggests gathering the information from police, health care organizations or academic studies. Still, some of the information might be difficult to prop-

Poland’s number-2 business channel has apparently proven unprofitable

SHUTTERSTOCK

Illegal activities are usually a fraction of a nation’s GDP, but the methodology of how they are counted raises some unusual questions

Soon to be part of Poland’s gross domestic product? erly calculate. Prostitution, for example, is technically legal in Poland, so police don’t compile data on it. (Procuring prostitution services, otherwise known as “pandering” or “pimping,” is illegal in Poland.)

The Kielce-based OÊrodek Badaƒ Gospodarki Nieobserwowanej (the Center for NonObserved Economy Research) claims it has its own methods of measuring such statistics, but has refused to reveal the details.

Its director, Agnieszka Piotrowska-Piàtek told daily

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Gazeta Wyborcza that the center divides sexual services into various categories, estimating prices and the number of people purchasing such services.

There is also the matter of what can be counted as exports, imports or domestic product.

For example, according to the OECD, the services of “nonresident prostitutes staying less than one year in the host country” should be counted as imports and not included in domestic output.

Jacek Ciesnowski

Polish television broadcaster TVN is carrying out major changes in its business channel outfit TVN CNBC and plans to withdraw from producing it under that brand, TVN’s spokesperson Karol Smolàg confirmed in late July. TVN has laid off key staff of the business channel while longtime director Roman M∏odkowski is reported to be on “involuntary leave.”

TVN will stop broadcasting the TVN CNBC channel in late 2013. The broadcaster wants to replace it with a different news channel covering not only economics but also other areas, including politics.

However, the new channel will be produced without CNBC’s involvement.

TVN CNBC was originally launched as a business and financial news channel in Poland in 2007. It was established in cooperation with CNBC Europe as part of NBC Universal’s global worldwide

network of business-oriented channels.

It also serves as CNBC’s Polish Bureau, providing live news material for Poland and Central and Eastern Europe.

The channel is part of TVN Group, the television arm of ITI Group, which is the largest media company in Poland.

A better ‘TVN24’ According to news portal Wirtualne Media, the station’s plan is to create a “better TVN24,” which is the television organization’s 24-hour news station.

TVN24 has been cooperating with CNN since early 2013 and therefore has access to material from the latter. Polish media have reported that the news channel replacing TVN CNBC could be called TVN CNN. According to Nielsen Audience Measurement, TVN CNBC had a 0.04 percent share of viewership in the first quarter of 2013. Its main competitor Polsat Biznes had a 0.05 percent share.

Kamila Wajszczuk, Remi Adekoya

8

INTERVIEW

www.wbj.pl

AUGUST 5-18, 2013

International relations

Polish-Lithuanian relations marked by cooperation, controversy COURTESY OF THE EMBASSY OF LITHUANIA IN POLAND

Lithuania’s ambassador to Poland, Loreta Zakareviciene, sits down with WBJ to talk EU and NATO cooperation, bilateral relations, and the difficult issues still dividing the two nations

Ambassador Loreta Zakareviciene of Lithuania Ewa Boniecka: Poland and Lithuania are both members of the EU and NATO and share several centuries of common history, yet there is plenty of tension in bilateral relations. How would you describe the relationship between the two countries?

Loreta Zakareviciene: It’s impossible to to characterize Polish-Lithuanian bilateral relations simply. They are neither very bad, nor even bad, as

some media have presented them. This is a very irresponsible evaluation. Our relations are multilayered. For example, the youth from our countries communicate without any problems, as do businesses and the majority of our peoples. The problems occur only on one level – the political level – because politicians on both sides play games for their voters. But I will never say that our general bilateral relations are bad; that is only a description of a very narrow part of them.

How has European Union membership broadened the scope of relations?

Both countries are members of the EU and NATO. We are neighbors, and this means we face very similar problems. To resolve them in order to get the best results, we must act together. This is why our cooperation in EU and NATO is

perfect, there are no differences there between our countries.

Lithuania has taken over the presidency of the Council of the European Union at a difficult time for the bloc. What are Lithuania’s priorities for the presidency?

The general motto of our presidency is: “a credible, growing, open Europe.” We need to continue building a Europe that is credible to its citizens and to the world, a Europe which grows its economy and offers jobs, and a Europe which remains open to its partners and neighbors.

One of our main priorities is to move forward in advancing the Eastern Partnership.

We hope that before the Eastern Partnership Summit in Vilnius in November this year, Ukraine will manage to finish its “homework” and the Association Agreement with the EU will be signed during the summit.

The issue of energy is also one of our priorities. Lithuania will seek to strengthen

implementation of the commitments by the member states in this field, with particular focus placed on the Third Energy Package. In November, Lithuania will host a highlevel conference, concentrating on relevant issues in developing modern energy infrastructure for the EU, and discussing the first list of energy projects of common interest.

Baltic and Nordic states have already created a so-

has it prepared its economy for the move?

After two years in which our GDP dropped severely, in 2012 we recorded growth of 3.6 percent. In the first quarter of this year growth was 3.5 percent, so there are no signs of recession. However, unemployment is still high, at around 13 percent. In the last few years we have undertaken some difficult reforms to cut budget expenses: there were

“It’s impossible to to characterize PolishLithuanian bilateral relations simply.” called “common electricity market,” which allows us to choose the most appropriate price. In order to be more independent from Russian gas, in 2014 we will be ready with our LNG terminal in Klaipeda.

Poland is doing something similar in building an LNG terminal in ÂwinoujÊcie.

Lithuania has decided to adopt the euro in 2015. How

cuts in public sector salaries, while pensions and social expenses were also reduced.

But Lithuanians have accepted this, since they understand the difficult situation elsewhere in Europe.

Our deficit-to-GDP ratio is decreasing. For 2012 it was around 3.2 percent and according to government forecasts, it will be 2.5 percent this year. Our exports are growing,

mainly to Russia, Germany and Scandinavian countries.

We have a very efficient banking sector which did not see any of the troubles that appeared in the West. There is now only one state-owned bank in Lithuania and it operates very efficiently.

How do you see economic relations between Lithuania and Poland?

They are quite good. Poland holds second place in terms of foreign investments in Lithuania; in 2012 the value of Poland’s foreign investments in Lithuania was LTL5.52 billion (z∏.6.73 billion, €1.6 billion).

There are many small Polish firms that have invested in Lithuania, but the main big Polish investors are [insurance provider] PZU, as well as [oil refiners] Lotos and Orlen.

Unfortunately, the operation of the refinery in Mazeikiu, which was bought by Orlen in 2006, faces difficulties related to the stoppage of Russian oil deliveries through the Druzhba (Friendship) pipeline.

INTERVIEW

Among Lithuanian firms investing in Poland are [fertilizer producer] Achema, [automotive sector firm] Skuba and [clinical development and consulting services] Scope Baltija.

Construction of a direct power connection between Lithuania and Poland – called LitPol Link – has entered its last stage. LitPol Link, which should be ready at the end of 2014, will connect the Baltic States with the European energy system.

The plan to build the Visaginas nuclear power plant in Lithuania together with Latvia and Estonia is in its final stages. Poland, which initially planned to join the project, decided to withdraw at the beginning of last year. Poland plans to build its own nuclear power plants in the future.

As far as the final construction of the long-awaited Via Baltica route [European Route E67 between Warsaw and Tallinn] is concerned, the Polish portion remains unbuilt. I understand the reasons for this include financial difficulties and certain problems with distributing EU funds for the investment.

All of this shows how many challenges our countries have in common in dealing with various economic issues. This strongly underlines the need for even closer cooperation within the framework of EU economic policy.

Lithuania and Poland cooperate closely within NATO – Polish pilots take part in NATO operations defending Lithuanian air space. How important are those operations and NATO’s role in maintaining Lithuania’s security?

Our membership in NATO is the anchor of our security. We are participating in NATO operations in Afghanistan and we very much value NATO’s Baltic air-policing mission. As Lithuania does not have its own fleet of fighters, NATO air policing is crucial. We use every opportunity to thank Poland for its rotating participation in that NATO mission.

How do you see Lithuania’s current relations with Russia?

I would say our relations with Russia are pragmatic. If partners treat each other with respect, dialogue is possible, even if the issues are really difficult. But if one of the partners behaves as if it is bigger, better or smarter, then the conversation ends with zero result.

Polish-Lithuanian cultural ties go back centuries. How are they developing now?

Our cultural relations are very vibrant. There are constant contacts between our artists, intellectuals, painters, and various cultural institutions. Conferences are organized in both countries dealing with com-

SHUTTERSTOCK

AUGUST 5-18, 2013

mon culture, history and education. It’s a pity that Polish media show no interest in what is going on in the field of culture, science, history or education. Polish media, unfortunately, are not interested in the positive sides of our bilateral relations. And this is why ordinary Poles know almost nothing about this.

Polish people cherish Polish and Lithuania’s common historical heritage, the fact that the two countries were a single state until the partitions of the 18th century. What is Lithuania’s attitude towards that heritage?

There are Lithuanians who look at that heritage with understanding and love, there are people who do not care about it. We are not as fascinated by history as Poles are.

“Our cooperation in the EU and NATO is perfect.”

Maybe this is due to the fact that under Soviet rule we had no Lithuanian history at school. I agree with the words of Tomas Venclova, the Lithuanian writer, now a professor at Yale University, that sensitivity on the part of both nations is needed when we look at our common heritage.

But as Mr Venclova observed, there is often a lack of sensitivity among historians and politicians. They often treat history and its interpretation as a tool to serve political interests.

The Poles living in Lithuania constitute 6 percent of the population, and as such represent the country’s biggest national minority. However, they complain that they are not allowed to write their names using Polish characters, that they have to pass graduation exams in Lithuanian and that authorities refuse to write street names in Polish areas in both languages. How do you see the situation?

I think that national minorities around the world all have their complaints, so the Polish minority in Lithuania and the

Lithuanian minority in Poland are not exceptions from that general picture.

Nobody is discriminating against the Polish minority in Lithuania. Independent research has found that 75 percent of Lithuanian Poles have never felt as if they were discriminated against. However, again, Polish media have never mentioned this.

As to names, according to our constitution, names of Lithuanian citizens in official documents must be written in the official state language. I want to underline that this is required for all Lithuanian citizens without regard to background, whether they are Polish, Russian, Ukrainian, Belarusian or any other nationality.

Our constitution was ratified shortly after we regained our independence from the Soviet Union. At the very beginning we were sensitive about everything that was a possible threat. This is why, when writing our constitution, we included all the possible safeguards. I am sure that the day will come that this question about names will disappear.

When it comes to the language of the graduation exam for Lithuanian citizens with Polish or Russian heritage, or any other minority which has schools in its native language, it is important to note that the transition period [for the law requiring Lithuanian language exams to come into force] has been prolonged from two to eight years. However, this was never mentioned by Polish media.

Moreover, I think it is logical that Lithuanian citizens of Polish or other origin should graduate from school with a good knowledge of the official language and should be well-prepared to study at any university in Lithuania or to hold a position of civil servant.

All incidents against minorities, including the Polish minority, are punished when they occur. We – Lithuanians and Poles – know each other well and we are aware of the fact that we are living together in the European Union. We are all European citizens. ●

www.wbj.pl

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OPINION & ANALYSIS

www.wbj.pl

AUGUST 5-18, 2013

Europe’s new Jewish question Ronald S. Lauder

In

March 1936, Poland’s Sejm (the lower house of parliament) almost succeeded in outlawing “shechita” (slaughter according to Jewish law). Only the Polish constitution prevented an outright ban. Had the majority of legislators gotten their way, many of Poland’s 3.2 million Jews would have gone meatless.

A few days ago, the ghosts of the past returned to the Sejm, when deputies rejected a government bill intended to keep religious slaughter legal. Even many of the bill’s supporters (including Prime Minister Donald Tusk) were concerned not with defending the rights of religious minorities, but rather with protecting meatpacking jobs.

Assault on freedom The vote was an assault on freedom of religion that flies in the face of Article 53 of the Polish constitution, which states that “Freedom of conscience and religion shall be ensured to everyone” and specifies that the “performing of rites” is protected. It was also a slap in the face for Poland’s Jewish community, which has been part of the country’s social landscape for more than a thousand years, and which, despite the Holocaust, has witnessed a remarkable renaissance over the past two decades.

Indeed, Poland, with its rich Jewish heritage and history, was believed to be among the most fertile environments

for a Jewish revival after the fall of communism.

Yet the Sejm’s decision raises the question: Do Poles really want Jewish life to return to their country? Or do they see Poland’s Jewish legacy only as something that benefits their tourism and food industries?

Not every Jew keeps kosher, and some are vegetarians. Hence, not every Jew relies on kosher meat. But almost every Jew will defend the right of others to live according to Jewish dietary laws. Shechita is an indispensable, non-negotiable part of Jewish religious life.

Today, Poland’s Jewish population numbers only a few thousand. Everyone knows why. That, of course, makes it easier for today’s politicians to ban shechita. Such populist measures are vote winners. The civil rights of small religious minorities do not matter much politically; the perceived rights of animals (and economic motivations) do.

But was this decision really motivated by concern for animal welfare?

For some deputies, it undoubtedly was; but others discovered their love of animals only when it seemed popular to do so. As The Economist noted succinctly, “Poland is not a country hitherto known for championing animal rights.” Indeed, it is hypocritical that hunting for sport and unsupervised home slaughtering continue to be per-

mitted, whereas shechita, which is carried out by experienced people according to well-established procedures, is not.

In recent months, Polish politicians became agitated about “ritual slaughter.” Granted, the term sounds archaic; but the Torah is the first systematic legislation that forbids cruelty to animals and mandates that they be treated with consideration and respect.

Those who argue that ritual slaughter is “foreign” to Polish culture not only know nothing about their country’s history; they also exploit and reinforce anti-Semitic sentiment.

Not the only one Poland is not the only place where established religious practices are being questioned. In other Western countries, such as Germany, France, the Netherlands, and New Zealand, heated debates about religious slaughter and circumcision have taken place recently.

A year ago, a German judge ruled that religious circumcision was a cruel practice that inflicted bodily harm on boys and was therefore illegal – a view supported by many commentators in the media. But German politicians strove to find a solution that accommodated the concerns of the Jewish and Muslim minorities. They demonstrated real leadership. Within weeks, Chancellor Angela Merkel’s govern-

ment proposed legislation that put religious circumcision on a solid legal basis, with the support of most members of the Bundestag.

In the Netherlands, a covenant was signed that allowed religious slaughter.

It received the backing of the legislature, which had previously favored a ban.

Likewise, in Poland, following a Constitutional Tribunal ruling in November 2012 that struck down on technical grounds a provision permitting religious slaughter, the government promised that the practice would remain legal. Yet when legislators voted on the government’s bill earlier this month, following a sometimes-hysterical debate on ritual slaughter in the media, three dozen deputies from Prime Minister Tusk’s Civic Platform, the largest faction in the Sejm, opposed it.

By taking this step, Poland has become the ringleader for those in Europe who want to deny Jewish citizens the right to practice their religion freely. If not halted, such measures could call into question the Jewish presence on the Continent in the longer term. Yet Mr Tusk has ruled out a reversal of the ban, and one of his ministers asked the Jewish and Muslim communities to challenge it before the Constitutional Tribunal.

Triumph and tragedy

The relationship between Central and Eastern European countries and the Jewish people has always been characterized by both triumph and tragedy.

In recent years, it has been strengthening, especially in Poland. Encouraging developments have taken place, such as the construction of a new state-ofthe-art Jewish Museum in Warsaw.

A few months ago, I participated in the March of the Living at Auschwitz.

Many Jews with European roots who now live in America or Israel were in attendance. As usual, it was a bittersweet experience. For my part, and for many years now, I have tried to highlight the sweet.

But now I am left wondering: Can the Jewish renaissance in the heart of Europe continue if essential elements of Jewish life are declared illegal? Or will Europe’s leaders stand up for the civil rights of their Jewish compatriots?

As Pinchas Goldschmidt, president of the Conference of European Rabbis, recently remarked, one cannot be proud of the Jews of yesterday and tell the Jews of today that their religious practices are no longer welcome. The Jewish heritage is part of Europe’s heritage. It should be protected, not restricted. ● Ronald S. Lauder, a former United States ambassador to Austria, is President of the World Jewish Congress.

Copyright: Project Syndicate, 2013.

Project-syndicate.org

Silicon Valley or Demand Mountain?

Edward Jung

E

veryone wants to know how to build the next Silicon Valley: an innovation hub that draws talent and capital, and that creates jobs, companies, and whole new industries.

Developed-country governments scramble to subsidize technology that could be the Next Big Thing. Emerging-market policymakers hope that incentives like tax breaks and free land will induce innovators to settle and prosper there. But most of these wellmeaning schemes are missing an essential ingredient: demand.

Demand for innovation in specific areas of technology has been the common force behind all high-tech hot spots, as well as the most important inventions. Technological breakthroughs such as antibiotics and cars responded to a compelling need felt by a huge number of consumers. Government projects such as the United States’ Apollo program – intended to put a man on the moon – drove demand for more basic technologies (which are simply inventions that no one has asked for yet).

Silicon Valley itself was built on demand. The US Department of Defense put up tens of billions of dollars in contracts for microelectronics, a commitment that both paid down innovators’ risk and created an infrastructure that would support the growth of start-ups.

Predictable demand All demand is not created equal,

though, and it is instructive to examine the differences.

Consumer or market-driven demand – the kind most of us think of when we hear the word – is far less predictable, and therefore much riskier, than state-sponsored demand of the sort that landed a man on the moon. Companies that depend solely on their products’ commercial appeal are limited in the kinds of innovations that they can safely introduce, because if one of their products fails in the marketplace, they may not survive to build another one. This is especially true of startups and small companies – the very players that everyone hopes will show up in the next-wave of Silicon Valleys.

Fortunately, by sponsoring longterm, targeted initiatives, governments can stimulate more predictable demand. The Apollo program gave innovators clearly defined goals and a roadmap for getting there: first put animals in orbit, then put people there, then send probes to the moon, then send people there.

Equally important, the government offered rewards for interim progress, not just ultimate success. Putting a monkey in space may not have been the most exciting achievement, but the government was paying for it, so it happened. A smart government creates guaranteed demand not only for the solution itself, but for the steps along the way.

Guaranteed incentives Coupling intermediate technical milestones with guaranteed incentives enables companies to focus on problems that might take 10 years or more to solve. It also motivates innovators from a variety of industries to take on complex problems that must be addressed by more than one kind of invention. The US Defense Department’s microelectronics initiative required not only new materials and circuits, but also new methods of fabrication. Because of the reward structure, these efforts could be coordinated, rather than pursued in isolation.

Unlike market-driven demand, which too often results in a winnertake-all dynamic, state-sponsored demand creates an environment in which multiple solutions to technical problems can proliferate and coexist.

The pioneers of microelectronics tried many strategies to supplant vacuum tubes, and they delivered a host of semiconductors and chip designs: germanium, silicon, aluminum, gallium arsenide, PNP, NPN, CMOS, and so on. Some of these research efforts were never implemented, but many found their way into specialized devices. The diversity of options allowed widespread adoption, paving the way for the digital revolution.

As with the microelectronics program, government incentives don’t have to line the road all the way to commercial success. At some point, companies will be ready to sell prod-

ucts, and market demand can take over. The US Department of Defense was the only customer for integrated circuits in 1962, but by the end of the decade consumers were buying transistor radios and pocket calculators in droves.

Betting big Likewise, state-sponsored demand should not take the form of subsidies to specific technologies or companies; the government has no business gambling taxpayer money on particular ventures. Assuming that risk is the job of venture capitalists and others in finance, not public officials. But there is little risk in offering a contract for a job well done: there is no payout if the problem remains unsolved.

And those payouts are modest compared to the research and development efforts they stimulate. A program offering rewards of $1-5 billion in contracts or deployment commitments can generate many times that value in private-sector R&D. Innovators and their investors are willing to bet big on these opportunities, because they know that the eventual reward in revenue from a global customer base will far exceed the initial investment. That makes state-sponsored demand a very efficient mechanism for generating innovation.

Because of the multiplier effect, small governments and states, and even large cities, can successfully sponsor the kind of demand that fosters a

world-class innovation epicenter. Certain Scandinavian countries, Chinese provinces, and the city-state of Singapore, for example, are ideally positioned to try this approach.

Chasing taillights Some years ago, I calculated how many units of product need to be sold to launch a technology. The number is actually quite modest: If you can move between 100,000 and one million units of a disruptive product, you can establish the technology standards for that category and in time become the global leader of a new industry. Government sponsorship ensures that a certain number of people will adopt your product. At the start, it need not be that many.

The economic planners and policymakers who are chasing Silicon Valley’s taillights are learning that they cannot always replicate the entrepreneurial culture and finance mechanisms that flourish there now. But they have forgotten how it all started: guaranteed demand, which stimulates the most ambitious kind of innovation.

The lesson is a simple one: Don’t try to build another Silicon Valley.

Instead, build a Demand Mountain, and the innovators will come. ● Edward Jung, former chief architect at Microsoft, is chief technology officer at Intellectual Ventures.

Copyright: Project Syndicate, 2013.

Project-syndicate.org

OPINION & ANALYSIS

AUGUST 5-18, 2013

www.wbj.pl

11

Europe: is the economic crisis abating?

Stratfor

E

urope’s economic situation may not be improving, but currently it is not degrading as dramatically as it once was. Indeed, several recent surveys and economic data seem to have instilled a sense of optimism over Europe’s economic future. Europe may be transitioning from a period of fast economic decay to a period of relative economic tranquility, but the Europeans’ success in stabilizing the financial aspect of the crisis belies the fact that high unemployment and its indirect consequences, including decreased consumption and reduced credit, are still as dangerous for the future of the Continent as ever.

On July 23, French Finance Minister Pierre Moscovici said that France’s recession ended in the second quarter of 2013 as the French economy grew by 0.2 percent. It had contracted the three previous quarters. Also on July 23, the Bank of Spain announced that the Spanish economy was still contracting, albeit less severely. In the second quarter of 2013, the economy contracted by only 0.1 percent after having contracted by 0.5 percent in the first quarter. Finally, a survey conducted by Nielsen showed strong consumer confidence in Germany and the United Kingdom and a growing confidence in Greece. Although consumer confidence in Greece was the fifth-lowest in the European Union, it rose seven points between the first and the second quarters of the year – the biggest increase in the world.

Then on July 24, business media heralded the end of recession in the euro zone after the Purchasing Managers’ Index, an economic indicator made from monthly surveys of private sector companies, rose from 48.7 points in June to 50.4 points in July (results higher than 50 points mean an increase in economic activity).

That same day, a survey by the European Central Bank highlighted that credit conditions in the euro zone are still tightening, but they are expected to do so at a slower rate in the coming months.

These figures are interesting for several reasons. First, gross domestic product is an extremely imprecise indicator of economic activity. In fact, there is no substantial difference between a 0.1 percent contraction and a 0.2 percent increase in GDP. Subtle changes in GDP may be a welcome reprieve for France and Spain, but the countries’ economic realities did not change appreciably between the first two quarters of 2013. In this context, GDP statistics are only use-

SHUTTERSTOCK

Interesting figures

Despite some positive news, don’t count on the winds of economic change picking up in Europe in the near future ful politically because they allow governments to say that their economies are faring better to mute the criticism from the opposition and to send positive messages to financial markets.

movement of people within the Continent, and are interested in preserving them. But this same generation is less prepared than their parents to deal with a severe economic downturn.

Still fragile In any case, the European crisis appears to be stabilizing somewhat – economies will shrink in some quarters and grow in others, but most countries in Europe will remain in a fragile economic and political situation. Despite the promises of sustained economic activity by national governments, we expect weak economic growth to be a prominent trend in Western Europe.

In fact, this trend is hardly new in the euro zone periphery. From the mid-19th century to the mid- to late20th century, weak economic performance, high levels of unemployment and significant rates of emigration were common features in countries such as Spain, Portugal and Greece. For most countries in the euro zone periphery, the economic boom that took place between the mid-1990s and the mid-2000s is more the exception than the norm.

But what differentiates the euro zone periphery’s current crisis is that 20- and 30-year-olds were born and raised in the context of their countries’ EU membership. These people enjoy and appreciate the benefits of EU membership, such as the free

Europe in transition The main challenge for the stability of the European Union comes from core countries, where severe economic downturns traditionally occur less frequently. Their residents are

with the euro zone average, but has grown steadily since the beginning of the crisis.

Those in the euro zone periphery understand that their future is tied to the rest of the European Union to some degree. But in Europe’s core there is a perception that being less integrated with Europe could solve some of the current problems. This explains why voters in the periphery favor left-wing parties that promise a larger welfare state within the EU

“While there is no reason for extreme pessimism in the short term, neither is there reason for extreme optimism.” relatively unaccustomed to economic decay. Eurostat data shows that unemployment is higher in absolute terms in Greece (26.6 percent), Spain (26.5 percent) and Portugal (17.6 percent), but it is growing at a faster pace in some northern countries.

In the Netherlands, unemployment rose from 5 percent in the first quarter of 2012 to 6.2 percent in the first quarter of 2013 – a 24 percent increase. During that same period, Greece’s unemployment rate grew by only 21 percent, Portugal’s grew by only 18 percent, and Spain’s grew by only 11 percent. In France, unemployment is at 10.8 percent, in line

framework, while voters in the core increasingly support nationalist parties that promise to reduce their ties with the European Union.

Getting worse, more slowly Large segments of the EU member states’ populations still believe that the European Union could return to its pre-crisis prosperity. According to a EU-wide survey published July 23, more than two-thirds of the German, Dutch and French populations support the euro, and 49 percent of the population in the European Union is “optimistic” about the regional bloc’s future. However, there are also

marked differences between the north and the south – support for the common currency is around or below 50 percent in Spain, Portugal and Cyprus, all of which recently received bailouts. In addition, 55 percent of Europeans believe that the worst of the crisis is still to come. This is a 7 percent drop since 2012 – reinforcing the general sentiment that things are getting worse but not as fast as before.

The statistics and surveys released July 23 and July 24 suggest that the crisis is stabilizing in Europe, and economic decline is slowing overall.

This is the result of several factors, such as the moderate success of some of the reforms applied in the past two years, a generalized easing of fiscal consolidation policies in Europe and stimulus policies by the European Central Bank. But record high unemployment levels in the periphery, rising unemployment in core countries, a lack of credit to small- and medium-sized companies, and varying views regarding the future of the EU suggest that the crisis is far from over. While there is no reason for extreme pessimism in the short term, neither is there reason for extreme optimism. ● This edited version of “Europe: is the economic crisis abating?” is reprinted with permission of Stratfor Stratfor.com

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COVER STORY

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Macroeconomics

Factors point to fragile recovery in H2 Andrew Kureth

Is Poland’s economy ready for a rebound? That is the question economists and the business community – not to mention the average Kowalski – are asking themselves as Poland slogs through another year of slow growth. Now, just after the midway point of the year, the economy remains sluggish and unemployment high. But there are indications that Poland may just be turning the corner.

Firstly, it’s important to note that major government and global institutions are expecting Poland’s economy to pick up speed. In the first quarter, Poland’s gross domestic product grew at a rate of 0.5 percent compared to the same quarter of 2012, its slowest pace since Q1 2009. Poland’s statistics office, GUS, hasn’t revealed second-quarter GDP growth figures yet, but economists think that economic growth sped up to a rate of 0.70.8 percent. By the end of the year though, both the National

Bank of Poland and the International Monetary Fund expect Poland’s GDP to grow by 1.1 percent. The Gdaƒsk Institute for Market Economics (IBnGR), a think tank, expects Poland’s economy to grow by 1.2 percent. In order to achieve that, growth will have to speed up significantly in the second half of the year.

There are signs that a recovery could be coming. Two forward-looking indicators calculated by the Bureau for Investments and Economic Cycles (BIEC) – one on the general economic climate and one on the labor market – show positive signs. BIEC’s economic climate indicator reached 146.1 points in June, an increase of 4.2 points, the largest such rise in nearly three years. The bureau’s labor market indicator was also positive: it fell two months in a row in June and July, a strong signal that a drop in the unemployment rate is on the cards. Economists at the bureau said the figures indicat-

ed that a rebound in the second half of the year was becoming more likely.

In a hopeful signal for businesses looking for capital and households looking for loans, the Pengab banking sector sentiment indicator, calculated by the Polish Bank Association (ZBP) and pollster TNS Polska, grew by 5.2 points monthon-month to 11.3 points in July. Polish bankers’ forecasts for corporate loans grew, as did the forecast for household loans.

But the strongest signal yet that Poland’s economy is on its way up was the Purchasing Managers’ Index, which in July showed that the country’s manufacturing sector was finally growing, after 15 months of contraction (see story, p. 6). The index score was 51.1 – any score above 50 indicates an improvement in business conditions, and it was the first such reading since March 2012. The score beat analysts’ expectations. Economists said it was a harbinger of stronger growth in the second half, with those from Citi Handlowy, Citibank’s Polish arm, saying growth in H2

could reach as high as 1.5-2 percent.

Three keys If Poland’s economy does indeed post much stronger growth in the second half of this year than it did in the first half, three key factors will have to align. First, domestic consumption (the engine that powered Poland’s economy during the first years of the global economic slowdown) will have to pick back up from their current doldrums.

Second, investment – both foreign and domestic – will have to increase. Finally, exports, one of the few bright spots in Poland’s economy in the first half of the year, will have to continue to remain strong.

Much of that will depend on the health of the economy of Poland’s largest trading partner, Germany.

Consumers ready to spend again?

By now most economists agree that the biggest factor that made Poland the only EU country not to go into recession in 2009 was strong domestic consumption. Powered by a

Wallets closed Retail sales growth in Poland (% y/y), January 2011-June 2013

20 15 10 5 0 -5 Jan Feb. ’11 Ma . ’11 Ap r. ’11 r Ma . ’11 Juny ’11 Jul . ’11 Au . ’11 g Se . ’11 p Oc . ’11 t No . ’11 Dev. ’11 c.

Jan ’11 Feb. ’12 Ma . ’12 Ap r. ’12 r Ma . ’12 Juny ’12 Jul . ’12 Au . ’12 g Se . ’12 p Oc . ’12 t No . ’12 Dev. ’12 c Jan . ’12 Feb. ’13 Ma . ’13 Ap r. ’13 r Ma . ’13 Juny ’13 . ’1 3

The economic indicators are looking up. If the global economy remains stable, the muchhoped-for improvement in Poland’s economy looks likely

Source: Central Statistical Office

flood of EU funding and government spending on construction projects, Polish wages continued to grow throughout the crisis, and consumers continued to spend.

That lasted through 2011, when retail sales averaged annualized growth of a whopping 11.5 percent each month.

But by the second quarter of 2012, that growth had slowed sharply to about 6.5 percent. In the third quarter of that year it slowed to 5.3, and the fourth quarter, to just over 1 percent. In December, when the holiday season traditional-

ly leads Poles to open their wallets, retail sales actually dropped by a full 2.5 percent.

The slowdown had reached such proportions that Poles had decided to spend less on Christmas gifts and trimmings than the year before.

Economic growth followed the same trajectory, growing a relatively strong 3.5 percent in the first quarter, and then slowing to 2.3 percent in the second, to 1.3 percent in the third and 0.7 percent in the fourth quarter.

While retail sales rebounded slightly in January this year,

COVER STORY

to 3.1 percent, subsequent months saw spending fall back down, and economic growth with it. But the above-mentioned manufacturing numbers indicate consumers may be buying again. Indeed, the report’s authors said domestic demand was one of the factors behind the growth.

And there’s more evidence that consumers may have decided to spend again. Retail sales increased by 1.8 percent year-on-year in June. While that’s a far cry from the heady days of 2011, the figures were a strong improvement on the previous month’s 0.5 percent growth and strongly beat market expectations of just 1.1 percent.

Economists from Bank Zachodni WBK said that they expected the trend to last for several months. “We expect the pace of growth of retail sales to reach ca. 2 percent in H2 vs. 0.8 percent in H1 2013,” they wrote in an e-mail. Citi economists also said that the figures were a good sign of going forward. “All in all the improvement in real sales in Q2 was quite substantial, which we treat as a positive signal for GDP growth,” they said.

Moreover, the “Carrefour Barometer” an index of consumer sentiment compiled by IBnGR for the Polish branch of the FMCG retailer, grew by 1.9 points in July and amounted to -11 points. While the indicator was still in negative territory, it was also the second time the index had grown month-on-month. In June, it had increased by 2.6 points compared to May. The researchers that compiled the report said that factors behind the growth included increases in consumers’ propensity to

buy and in consumer confidence.

One reason Poles may be more willing to spend is that the labor market is looking more favorable. Wages in the corporate sector grew by 1.4 percent in June – slower than the previous month, but continuing a growth trend that economists saw as positive.

Employment also grew in June by 0.8 percent y/y. Analysts had expected it to decline by 0.9 percent.

“This was already [the] second month in a row of rising employment,” BZ WBK economists wrote. “We find this a positive sign though it is too early to say for sure whether this was due to higher seasonal activity or some broader revival,” they added.

Unemployment also dropped in June, to 13.2 percent. While this was mostly due to seasonal factors, economists at Citi said the data suggested that there were “signs of stabilization in the labor market.” “Combining this with previously published data on employment growth it seems the labor market may be actually (albeit very slowly) turning the corner,” they added.

Investment on the up?

As Poland geared up to host the 2012 European soccer championships along with Ukraine, investment by both the government and private firms reached record levels, totaling over z∏.300 billion in 2011. But once the games were over, the government began spending less on infrastructure. Moreover, to meet budget goals, the government froze public sector wages and cut administrative spending.

That was met with a wind-

Unemployment wave Poland’s unemployment rate, (% monthly), January 2010-June 2013 14.5 13.8 13.1 12.4 11.7

Jan Feb. ’10 Ma . ’10 r Ap . ’10 r Ma . ’10 y Jun ’10 .

Jul. ’10 Au ’10 g Se . ’10 p.

Oc ’10 t No . ’10 v De . ’10 c.

Jan ’10 Feb. ’11 Ma . ’11 r Ap . ’11 r Ma . ’11 y Jun ’11 .

Jul. ’11 Au ’11 g Se . ’11 p Oc . ’11 t No . ’11 v De . ’11 c Jan . ’11 Feb. ’12 Ma . ’12 r Ap . ’12 r Ma . ’12 y Jun ’12 .

Jul. ’12 Au ’12 g Se . ’12 p Oc . ’12 t No . ’12 v De . ’12 c Jan . ’12 Feb. ’13 Ma . ’13 r Ap . ’13 r Ma . ’13 y Jun ’13 . ’1 3

11.0

Source: Central Statistical Office

On its way back up?

Poland’s quarterly GDP growth (% y/y), Q1 2007-Q1 2013

Q1 2 Q2 007 2 Q3 007 2 Q4 007 2 Q1 007 2 Q2 008 2 Q3 008 2 Q4 008 2 Q1 008 2 Q2 009 2 Q3 009 2 Q4 009 2 Q1 009 2 Q2 010 2 Q3 010 2 Q4 010 2 Q1 010 2 Q2 011 2 Q3 011 2 Q4 011 2 Q1 011 2 Q2 012 2 Q3 012 2 Q4 012 2 Q1 012 20 13

10 9 8 7 6 5 4 3 2 1 0

Source: Central Statistical Office

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13

COURTESY OF FIAT

AUGUST 5-18, 2013

Poland’s manufacturing sector picked up speed in July. Experts say it could be a sign of recovery down of EU fund spending, as the seven-year budget period for which the funding is allotted began nearing its 2013 end date. Firms pulled in as well – and that was especially true of construction firms, which had overstretched during the preEuro 2012 building frenzy.

The sector saw a wave of bankruptcies.

A huge drop in the value of foreign direct investment did not help matters. Early estimates from the National Bank of Poland put FDI into Poland in 2012 at just €5 billion, a huge drop from the €13.6 billion in 2011.

So how much will change in the second half of this

“Right now, the signs in the Polish economy look good.” year? When it comes to government investment, Prime Minister Tusk will be hardpressed to increase budget spending. Already he has been forced to increase the budget deficit for this year due to tax revenues undershooting expectations by an estimated z∏.24 billion. His government has proposed over z∏.8 billion in spending cuts and has had to change legislation in order to increase the deficit by z∏.16 billion, or 47 percent of the originally proposed z∏.35.6 billion.

However, early last year the government created an investments program, called Polish Investments, which would be managed by a special investment vehicle that would gain capital by leveraging stakes in state-owned firms, thereby keeping the spending off the government’s budget books. Polish Investments has already signed on to its first investment, the construction

of a rail line in Gdaƒsk, but the program isn’t expected to give a significant boost to the economy until the first half of next year.

Nevertheless, investment may be picking up in the private sector. According to data collected by daily Rzeczpospolita, in the first half of 2013 companies declared investment outlays of z∏.2.84 billion in Poland’s special economic zones. The figure is almost z∏.370 million higher than during the same period of 2012. The number of planned new jobs also increased from 2,452 a year ago to as many as 3,790. SEZs have also issued 91 investment permits, nine more than a year earlier. The data was better than analysts had expected. Last year investment value decreased in SEZs, as did the number of permits issued and the number of new jobs planned.

In terms of FDI, the jury is still out as to whether Poland will attract more than it did last year, but Poland has received some high marks in investment attractiveness rankings. Surveys by both Ernst & Young and the German-Polish Chamber of Industry and Commerce listed Poland as the most attractive investment destination in the region. And while the value of FDI fell in Poland last year, the number of projects increased strongly, indicating that firms were still interested in investing in the country.

Finally, while Poland will have to wait until at least next year before it sees a significant inflow of EU funds from the next budget period, the European Investment Bank has said that it is increasing its investment volume in Poland this year to €5.5 billion.

Exports and Germany Amid falling GDP, sales, consumption and investment figures last year, exports remained a hopeful bright spot. In 2012 Poland exported

€143.5 billion worth of goods and services, according to data compiled by Poland’s statistics office. The figure was a record high and indicated an increase of 4.9 percent year-on-year.

But for Poland to boost growth in the second half of this year, that trend will have to continue, and the signs on this front are positive. Polish exports amounted to €12.87 billion in June, according to estimates from the Export Credit Insurance Corporation (KUKE), posting growth of 8.2 percent year-on-year. For the whole of 2013, exports should reach €158.3 billion, KUKE said, a rise of over 10 percent on last year.

While foodstuffs, chemicals, and products from the metallurgy sector are important exports for Poland, machinery comprises the largest share of the country’s exports, worth about €56 billion last year. Germany, by far Poland’s largest export market and accounting for over a quarter of the goods Poland sells outside its borders, is a big market for all of these goods, but especially machinery. Polish-made components go into many of the finished products created by Germany’s enormous manufacturing sector, so the health of its economy, and especially its manufacturers, are an important factor in how well Poland’s exports fare.

Optimistically, Germany’s manufacturing sector PMI figures for July showed positive business conditions, with a score of 50.7, an 18-month high. “A solid expansion of production levels and rising volumes of new work were the main positive influences on the headline index in July,” said the report accompanying the data release.

Importantly, the increase occurred despite slowing demand from China and the euro zone. “Improvements in the manufacturing sector were heavily linked to greater

domestic spending, which stood in contrast to weakness evident abroad, as subdued demand from China and within the euro area kept new export work on a downward tilt,” said Tim Moore, a senior economist at Markit, which compiled the data.

Questions abound Put together, these factors show that Poland has a betterthan-even chance of increasing its economic growth in the second half of this year. But the degree remains questionable – no one is sure just how strong the rebound will be, if it does indeed come. Economists seem to agree that Poland’s GDP will grow at a rate of about 1 percent or slightly faster this year, the slowest pace since 2001. If Poland wants to catch up to the development level of its Western European neighbors, it needs to grow much faster – at a rate of between 4 and 5 percent at least, experts say.

Polish businesses aren’t expecting huge improvement this year. A survey by the NBP showed they don’t expect conditions to improve until sometime in 2014. “In Q3 the respondents expect a slight increase in demand and an improvement of the situation, however they do not see it as an economic rebound,” the NBP’s report read.

But whether recovery comes within the next six months or the next 18 months is less important than whether it comes at all. Right now, the signs in the Polish economy look good. But if the global economic whirlwinds of the past five years have taught us anything, it’s that the outlook can reverse at a moment’s notice, often due to changes in economies far removed from one’s own.

For that reason, Polish businesses will be hoping that what looks like a nascent global economic recovery continues. ●

Historical buildings are gaining popularity with investors looking to open high-end hotels

CBRE’s David Close talks about trends and investment opportunities in the European retail market

16

17

LOKALE IMMOBILIA

W a r s a w B u s i n e s s J o u r n a l ’s w e e k ly s u p p l e m e n t o n re a l e s t a t e , c o n s t r u c t i o n a n d d e v e l o p m e n t

Record cargo at the Chopin Airport in H1 2013 Chopin Airport handled over 23,000 metric tons of cargo in the first half of 2013, an 8.5% increase on the corresponding period last year. The Warsaw airport handled a total of 23,100 tons of freight in H1 of 2013, including 22,700 tons internationally (up 8.8 percent) and 308 tons domestically (down 5.1 percent), with imports (13,300 tons) exceeding exports (9,400 tons). The volume of mail handled stood at 7,400 tons.

Docdata at P.P.H. Post´pu in Âwiebodzin E-commerce services company Docdata has leased 2,500 sqm in P.P.H. Post´pu in Âwiebodzin, in the Lubuskie voivodship in northeastern Poland. The complex will act as the company’s main operational hub for the Polish market. ●

In this issue Panattoni’s new warehouse . .15 Atrium 1 topped out . . . . . . . . .15 Warsaw office market . . . . . . .16 Historical buildings . . . . . . . . . .16 David Close interview . . . . . . .17

Panattoni to build huge BTS warehouse The 50,000-sqm warehouse facility, the biggest in Poland since 2010, will be built in Stryków DIY retailer Castorama Polska will lease 50,000 sqm of warehouse space in the builtto-suit (BTS) warehouse facility Panattoni Europe will build on a 12-ha plot in Stryków in central Poland.

Not only is the lease the biggest warehouse transaction in the Polish market since 2010, but the project is also the largest warehouse construction investment that has been launched in Poland this year.

Panattoni has already launched construction on the scheme, which is scheduled for completion in February 2014.

“The opening of a new central warehouse is connected with our rapid development in recent years,” Dariusz Barszczewski, logistics director at Castorama Polska,

explained. “The center in Stryków will help us optimize the storage and transport costs in the supply chain.”

The warehouse will be located near a junction of the A2 (east-west) highway and road no. 71. It will also be close to national road no. 14 connecting Warsaw and ¸ódê, which is less than 20 km away. The proximity of ¸ódê, a city with population exceeding 700,000, will provide the tenant with an ample labor pool.

Panattoni’s Stryków warehouse complex, where the BTS warehouse for Castorama is to be developed, already comprises three buildings with total warehouse space of over 100,000 sqm. Its tenants include another DYI chain Leroy Merlin, logistics operator Raben Polska and furniture manufacturer Abra.

Ma∏gorzata Zbróg, associate director at Colliers International, one of the brokers

a large amount emphasis on the building’s functionality and quality.

Castorama Polska is one of the biggest distributors of

responsible for the transaction, commented that the new center will be tailored to Castorama’s requirements, and that the company has put

complete solutions in the construction industry and home and garden equipment in Poland.

Karolina Kowalska

The project is the largest warehouse construction project launched in Poland so far this year

Office

Atrium 1 topped out The project, which boasts several highly touted environmentally friendly solutions, is due for completion at the end of this year Skanska Property Poland has topped out its “deep green” office investment Atrium 1, located on Al. Jana Paw∏a II, near the Rondo ONZ roundabout in the center of Warsaw.

Construction on the 15storey, 16,300-sqm building is now nearing its final stages.

The building is missing only its facade, which is due to be completed within the next few weeks.

The project, which has been growing at a pace of one

floor per week over the last few months, is scheduled for completion at the end of the year.

The scheme will contain windows with triple glass panes, which will significantly reduce energy consumption for heating the building in the summer and cooling it in the winter. Skanska wants the project to set new building standards in Poland for energy and environmental performance, the company said.

The geothermal heating and cooling system, with probes reaching a depth of 200 meters below ground level, will cut operating costs by 20 percent, Skanska said.

“Atrium 1 is a special project for us, not only because of its prime location in the very

heart of the city, but also owing to innovations which will create superb working conditions,” said Arkadiusz Rudzki, leasing and asset management director at Skanska Property Poland.

The building will be able to accommodate 2,000 people and will be the latest addition to a complex of commercial buildings that the company has been developing along Al. Jana Paw∏a II since the 1990s.

Apart from the Nordea House and Green Corner investments on ul. Ch∏odna and the Atrium 1 development, Skanska is planning another project, Atrium 2, which will be built on a plot adjacent to the one where Atrium 1 stands.

Karolina Kowalska

COURTESY OF SKANSKA PROPERTY POLAND

Shopping mall operator Czerwona Torebka signed a term sheet for the sale of real estate properties to special purpose vehicles whose assets will be held by Fundusz Aktywów NieruchomoÊciowych FIZ, a real estate fund co-managed

by Querton DM. The value of the agreement is about z∏.60-70 million net.

Logistics

COURTESY OF COLLIERS INTERNATIONAL

Czerwona Torebka to sell properties

AUGUST 5-18, 2013, LI 18/30-31

The Atrium 1 building has now been topped out

Warsaw Business Journal presents Real Estate weekly newsletter • Know about the newest projects before they’re on the market • Keep up to date on the latest tenders and auctions • Learn the latest trends in Poland’s dynamic office, residential and retail sectors • Find out who’s who in Polish real estate To subscribe: e-mail subscribe@wbj.pl or call +48 22 639 85 68, ext. 201 and sign up for free two-week no-obligation trial subscription

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LOKALE IMMOBILIA – REAL ESTATE

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Office

Despite strong tenant demand for the 4 million sqm of office space in Poland’s capital, new completions have meant higher vacancy rates and pressure on rent Warsaw’s modern office supply exceeded 4 million sqm in Q2 2013 and approximately 188,000 sqm is expected to be delivered in the coming months, according to a new report by Jones Lang LaSalle.

Despite the robust tenant demand recorded in the first half of the year, the vacancy rate in Warsaw continued to climb and reached 10.5 percent (from 9.9 percent in Q1), due to the large number of projects completed, the report said. Still, according to JLL, Warsaw’s relatively low vacancy rate – one of the lowest among capital cities in the CEE – is a sign that Warsaw office market remains attractive to companies planning to establish or expand their operations.

Completions aplenty In H1 2013, gross demand (including renewals) amounted to 334,000 sqm, up 12 percent year-on-year. Total gross

and net take-up in Q2 were 178,000 sqm and 130,500 sqm respectively. The largest new transactions in Q2 2013 were signed outside the city center and included the Office for Registration of Medicinal Products (13,000 sqm in Ochota Office Park), Unilever (5,400 sqm pre-let in Eurocentrum Office Complex) and Grupa ˚ywiec (a new deal, 4,300 sqm in Konstruktorska Business Centre). The largest renewals were concluded by Johnson & Johnson (7,250 sqm) and the Royal Bank of Scotland (5,300 sqm, expansion and renewal) both in WiÊniowy Business Park.

Some 152,000 sqm was delivered in H1 2013 in Warsaw (76,000 sqm in Q2 alone) and the total completion volume in 2013 is expected to be at its highest since 2000.

Approximately 188,000 sqm will be delivered in H2 2013 bringing the year’s total volume to 336,000 sqm.

The second quarter of 2013 brought nearly 47,000 sqm of new office space to the market outside Warsaw, of which 84 percent was delivered almost evenly between Tri-city (BPH Office Park A&B, Oliva Business Park – Alfa and Port Gdynia Office Building) and ¸ódê (mainly in Green Horizon phase II and MediaHUB).

Currently, 512,500 sqm of office space is under active construction in Poland’s major cities excluding Warsaw, the majority of which is being built in Wroc∏aw, Kraków and Poznaƒ.

COURTESY OF ADGAR GROUP

Large volume of completions, high tenant demand characterize Warsaw market

Ochota Office Park saw 13,000 sqm of new take-up in Q2 put pressures on rents. Prime headline rents have been revised slightly downward in the central districts to €2224/sqm/month. The best non-

Pressure on rents The rise in the vacancy rate in Warsaw in the second quarter

central locations, such as prime buildings in Mokotów, are fetching €14.50-14.75/sqm in rent monthly.

Outside Warsaw, prime

headline rents currently range from €11-12.5/sqm/month in Lublin up to €15.5/sqm/month in Wroc∏aw and Poznaƒ.

KEK

Warsaw office stock exceeds 4 million sqm Key office market data for Poland in Q2 2013 Q2 2013

Warsaw

Kraków

Wroc∏aw

Tri-city

Katowice

Poznaƒ

¸ódê

Szczecin

Lublin

Total stock (sqm)

4,011,150

551,400

504,700

430,250

300,700

292,950

267,100

108,800

92,900

Completions (sqm) Q2 2013 / H1 2013 76,000 / 152,000

0 / 1,800

2,800 / 42,000

21,100 / 52,000

2,150 / 8,300

0 / 2,400

18,300 / 18,300

0 / 16,900

2,450 / 2450

Under construction (sqm)

586,000

112,500

121,300

67,300

53,600

74,160

26,800

23,050

33,850

10.5%

3.3%

10.5%

13.1%

8.3%

14.6%

14.0%

18.5%

6.7%

Vacancy rate (%)

Source: Jones Lang LaSalle

Hospitality

Historical real estate is becoming increasingly popular among the Polish investors There are a few thousand historic castles, palaces or manor houses currently on sale in Poland, according to Adam UrbuÊ, head of the Historic Real Estate Agency in Silesia, the biggest Polish agent of old or historic buildings. The majority of them are located in the Mazowieckie, Ma∏opolskie and Lower Silesia voivodships.

A little palace or a manor can be purchased for as little as z∏.150,000. For the most expensive ones, the sky is the limit.

But the purchase cost is not the biggest chunk of money that a potential investor will have to put in. The renovation of such schemes, usually under the supervision of the curator of historic buildings, can cost as much as z∏.20,000 per sqm. The refurbishing costs can be

brought down to z∏.3,000 per sqm if the investor hires a less professional crew, but in most cases such investments require highly skilled workers.

According to Mr UrbuÊ, most of the buyers purchase historic buildings for their own use but there is also a large group of people who treat them as a business enterprise.

“Organizing weddings, christenings or anniversaries in historical properties is becoming increasingly popular in Poland.

Therefore some people buy historic properties with parks and large gardens to turn them into hotels or resorts,” Mr UrbuÊ explained.

Restoring pre-war beauty After World War II, historic buildings in Poland were seized by the state and given to public institutions or turned into multifamily residential buildings.

Only after the country’s transformation in 1989 were the pre-war owners or their

descendants able to reclaim their properties. Many of them were too badly damaged to be habitable and those who could not afford the costly renovations sold their palaces and manor houses to enthusiasts of historical buildings.

In 2003 Anna Molgo and her husband Pawe∏ bought Pa∏ac Rozalin, a palace built in 1847, and a 24-ha park surrounding it, from the heirs of the property’s pre-war owners.

The renovation work on the investment, located only 20 km outside the Polish capital, started in 2005 and managed to restore the 19th-century palace to its former beauty.

The owners also restored the French-style garden surrounding the building, and planted boxwood trees along its alleys and rose bushes in front of the palace.

Now, 10 years after the purchase, Pa∏ac Rozalin is beginning to bring in a return on investment. Jakub Pietrzak, the palace’s general manager,

COURTESY OF PA¸AC ROZALIN

Hotels with history

The 19th-century Pa∏ac Rozalin has been restored to its former beauty and will now be used as a venue for weddings and anniversaries says it has already hosted christening parties and is ready to host weddings, as there is a 200-person party tent close to the palace. The owners are talking with the local parish about organizing a lavish wedding reception on the premises.

Another historical building, a manor house Pa∏ac Chojnata in Wola-Chojnata, 60 km

southwest of Warsaw, built in the second half of the 19th century, was bought by the USbased Krzysztof Malarecki in 1995. Now it is serves as a hotel, conference center and spa, hosting high-profile parties and celebrations. Many embassies operating in Poland hold their celebrations there.

Adam UrbuÊ from the Historic Real Estate Agency says

that apart from purchasing pieces of historical real estate for the purposes of running a hospitality facility, some people choose to simply reside in such buildings. Some of these people are art collectors who need space and suitable surroundings to display their paintings, sculptures and pieces of installation art.

Karolina Kowalska

AUGUST 5-18, 2013

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

17

Interview

Shopping centers won’t disappear Karolina Kowalska: There were two major retail transactions closed in H1 2013 – Silesia City Center in Katowice was sold for €412 million, which was also the biggest retail transaction in the CEE region this year, and Galeria Dominikaƒska in Wroc∏aw, sold for €151.7 million. Do these big deals signal an end to the slowdown in the sector?

David Close: There is a big discussion around Europe whether Spain, Germany, Italy and Great Britain are performing well and which markets are not doing well, but even in a market that is not supposed to be performing well people are still making money, doing shopping and some brands are opening new locations. Everything from luxury brands to low-priced products are still being bought.

Of course the crisis had its impact on the market, as there have been a number of brands we have seen disappearing from high streets. Big chains have sold their stores, like [clothing brand] Jackpot, which sold locations in some markets. Some furniture brands in the UK have also disappeared.

But others have consolidated their portfolios and are now looking to buy stores again.

The crisis is seen by good retailers with good products and good businesses as a great opportunity. You can use this

environment to get better deals. In Spain or Italy you can get better leasing terms, short leases, and lower rents now.

A lot of new brands have come to Poland recently. Why are they choosing to invest in Poland now?

Poland continues to appear as one of the top locations for a lot of international brands to go to. Germany, the UK and Poland seem to be perceived as the most demanded locations for a lot of brands. That’s not

“Germany, the UK and Poland seem to be perceived as the most demanded locations for a lot of brands.” only because these brands are not there yet, but also because Poland’s economy is one of the strongest in Europe and they see the opportunity to get a good return on investment. A lot of the clients that we work with, like [outdoor equipment store] North Face, Nike, [fashion retailer] Michael Kors, all have very strong requirements for the market and I think you will continue to see a lot more of brands that are native to Europe or international brands coming into the market.

and see a product. You can’t do that online, so stores will always be there. But I don’t think retailers in the future will have that many stores, as we’ve already seen that happen to a certain extent. Retailers are very clever people, and the best retailers are using and embracing this change in a different way. It’s quite exciting, I think.

At the same time, we can see changes in the tenant mix, especially in retail centers. A lot of brands are being replaced by new ones. What’s behind this?

It depends on who the brand’s actual owner is and how they are positioned financially.

Some people in some markets are being forced to sell because of the debts they owe to banks. When the market is low there will always be different reasons for people to sell.

But at the same time, Poland is a strong market and it can be perceived as a good investment.

There is a boom in outlet centers in Poland. In Warsaw there are two of them and two more are currently being built in eastern Poland, one in Bia∏ystok and one in Lublin.

Do outlet centers fare better in times of weaker economic performance?

Investors obviously do their research and there is obviously a market there with disposable income for retail in Poland.

Outlet centers are well established in Western Europe and they are always built in places where people are spending money on fashion and clothing brands, as well as on household goods.

In Western Europe outlet centers tend to be outside of major cities. In Poland they are built inside the cites. Why is that?

It could be for many reasons, like developed public transportation – subway network, trains that go to shopping centers and so on. The location of the outlet center is mostly

COURTESY OF CBRE

Lokale Immobilia sits down with David Close, director for cross border retail in EMEA at CBRE, to talk about the current trends in retail, the differences between Polish and European retail markets and the influence of online shopping on brick-and-mortar stores

David Close about accessibility. The city is much more accessible to customers of all ages and incomes and easier to travel to.

In Western Europe more people drive cars than in Poland. What’s more, a lot of Western cities like Paris, Rome, London and Berlin are very well established with very expensive land. It’s going to be relatively cheaper to build such centers outside of the city. But while a city is still developing, like Warsaw, Bia∏ystok or Lublin are, there may be still good opportunities within their limits to build outlet centers.

In a recent report you discussed the influence of internet shopping on traditional

brick-and-mortar stores.

What is the future of retail centers? Will they be replaced by online stores?

You can never replace them. I think what’s interesting is that retailers are really embracing [internet shopping] and consuming it. How people buy is going to change. Stores are always going to be there.

Maybe in the future you will be able to go to a store to collect the items [you bought online], or you could go to a store and have [your purchase] delivered to your home.

I don’t think online will ever take over anything completely, because people still want that [physical] environment. They want to touch, feel

What are the key trends in the retail market in our region and in Europe?

Every shopping center in Europe wants to have Apple, Hollister and other big brands and every shopping center wants to be the first to have them, whether it is Westfield or in Bia∏ystok. Retailers also want to change, to refresh and to keep the shopping centers exciting.

Will stores move to shopping centers and vanish from regular streets?

It depends on the distance, but the reality is that most shopping centers would work on their own merit and a high street would work on its own merit, too. London has two big Westfield malls and they both work in harmony together.

When they opened, retailers did not suddenly disappear from the streets and move into the malls, but they complement one another.

City centers work more with tourists and people working in the city and on weekends with people coming into the city. They all have their own purposes. I don’t see stores disappearing from the city and moving into shopping centers. ●

18

THE LIST

www.wbj.pl

AUGUST 5-18, 2013

Education

Largest Business Schools Ranked by number of lecturers in business departments in 2012/2013

Doctoral Postgraduate studies studies

MBA

Accreditations

✓ ✓ ✓

2012/2013 / 2011/2012 / 2010/2011

Wy˝sza Szko∏a Bankowa we Wroc∏awiu ul. Fabryczna 29-31, 53-609 Wroc∏aw 1 71 359-4646/71 359-3680 wsb@wsb.wroclaw.pl www.wsb.pl/wroclaw

Wy˝sza Szko∏a Bankowa w Poznaniu Al. Niepodleg∏oÊci 2, 61-874 Poznaƒ 61 655-3333/61 655-3227 wsb@wsb.poznan.pl www.wsb.poznan.pl

Logistics Tourism and recreation Computer science Other business

Bachelor’s Master’s studies studies

Majors Administration / Economics / Econometrics / Finance and accounting

Number of extramural students in business departments

Number of full-time students in business departments

Institution name Address Tel./Fax E-mail Web page

Number of lecturers in business departments

Rank

Number of students

2

www.bookoflists.pl

Przewodnik po polskim biznesie i gospodarce

Urban planning / Accounting / International relations / Management

A guide to Polish business and industry

International academic programs

Year founded

Rector

✓

✓ ✓ ✓

Erasmus; Projekt Business Week; Coventry University; University of Northampton; Franklin University; Franklin University MBA; National Mining University in Dnipropetrovsk

1998

Stefan Forlicz

1,022 816 145

2,457 2,208 2,044

12,403 9,758 7,006

11,546 9,541 9,194

3,426 2,425 1,690

-

2,394 1,758 1,830

110 176 293

The Higher Learning Commission; IACBE; Polish Accreditation Committee; Foundation for the Promotion and Accreditation of Economic Education; European Language Licence Quality Alliance; LCCI IQ

832 915 191

1,928 2,001 1,936

11,019 10,707 9,978

9,245 9,155 8,466

3,702 3,553 3,448

-

2,865 2,487 2,511

191 128 64

Association of MBAs; Polish Accreditation Committee; Foundation for the Promotion and Accreditation of Economic Education

✓ ✓ ✓ ✓

✓ ✓

✓ ✓ ✓ ✓

Executive MBA (Aalto University School of Economics); MBA (Franklin University); MBA (Coventry University); University Abertay Dundee; Matej Bel University; Ukrainian Academy of Banking

1994

Beata Filipiak

✓ ✓

✓

EURO*MBA (France, Germany, Netherlands, Spain); Double Degree Bachelor Program in Management with Professional Placement; Alliance for Business Education International Master in Management; Bradford University Master in International Business and Management

1993

Witold T. Bielecki

Akademia Leona Koêmiƒskiego ul. Jagielloƒska 57/59, 03-301 Warsaw 3 22 519-2100/22 814-1156 akademia@kozminski.edu.pl www.kozminski.edu.pl

789 154 157

2,720 2,502 WND

WND 2,968 WND

3,784 3,288 WND

2,150 2,182 WND

140 150 WND

1,800 1,780 1,770

WND 460 380

AACSB; EQUIS; AMBA; CEEMAN

✓ ✓ ✓

Wy˝sza Szko∏a Biznesu w Dàbrowie Górniczej ul. Cieplaka 1C, 41-300 Dàbrowa Górnicza 4 32 262-2805/32 295-9344 info@wsb.edu.pl www.wsb.edu.pl

760 720 610

1,794 1,135 752

3,314 3,756 3,789

4,133 1,873 1,992

1,128 863 847

38 -

1,791 1,850 1,730

-

Polish Accreditation Committee; Foundation for the Promotion and Accreditation of Economic Education

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓

7th Frame Program; Erasmus Mundus; Erasmus Mobility; Leonardo da Vinci; DAAD; Norwegian Financial Mechanism; Polish-Lithuanian Youth Exchange Fund

1995

Zdzis∏awa DackoPikiewicz

Uniwersytet Ekonomiczny w Krakowie ul. Rakowicka 27, 31-510 Kraków 5 12 293-5200/12 293-5017 kancelaria@uek.krakow.pl www.uek.krakow.pl

755 733 738

11,686 11,120 10,366

9,413 9,825 10,381

12,254 12,165 12,000

8,845 8,780 8,747

312 276 265

2,246 2,434 2,682

117 111 118

Polish Accreditation Committee

✓ ✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓

Leonardo da Vinci (Finland, Italy, Greece, Spain, UK, Czech Republic, Romania, Ireland); 7th Frame Program; Central Europe Program

1925

Andrzej Chochó∏

✓ ✓ ✓

✓ -

FLAGSHIP (Italy, Austria, Spain, Belgium, Bulgaria, Netherlands, Portugal, France, Luxembourg, Estonia); GATOM (Austria, Finland, Germany, Ireland, Romania, Spain, Switzerland); CBCED (Finalnd, Estonia, Germany, Greece, Bulgaria); IASMINE (Italy, Spain, Germany, Austria); EEDRIPART (UK)

1995

Roman Patora

Spo∏eczna Akademia Nauk ul. Sienkiewicza 9, 90-113 ¸ódê 6 42 664-6666/42 664-6649 uczelnia@spoleczna.pl www.spoleczna.pl

549 491 132

1,186 1,385 1,228

21,489 20,044 16,151

11,076 11,815 10,525

5,003 3,558 2,124

37 29 15

380 356 285

603 510 411

Clark University; Polish Accreditation Committee; NEASC; FEDE

✓ ✓ ✓

Wy˝sza Szko∏a Zarzàdzania i BankowoÊci w Krakowie Al. Kijowska 14, 30-079 Kraków 7 12 635-6836/12 635-6838 wszib@wszib.krakow.pl www.wszib.krakow.pl

548 521 556

1,793 1,820 2,135

5,256 5,060 5,590

5,329 5,419 6,036

1,413 1,461 1,689

-

328 256 278

-

Polish Accreditation Committee; SEM FORUM

✓

✓

-

Association of Chartered Certified Accountants; MSc

1995

W∏odzimierz Roszczynialski

Krakowska Akademia im. Andrzeja Frycza Modrzewskiego ul. Gustawa Herlinga-Grudziƒskiego 1, 8 30-705 Kraków 12 252-4650/12 252-4651 rektorat@afm.edu.pl www.ka.edu.pl

493 531 526

1,543 2,463 3,005

2,578 4,064 5,135

2,867 2,988 3,872

1,254 3,539 4,268

194 109 98

349 205 122

54

Polish Accreditation Committee; Krajowa Rada Akredytacyjna Szkolnictwa Medycznego

✓ ✓ ✓

✓ ✓ ✓

✓ ✓

"Science - Art - Education" (Ukraine, Slovakia, Slovenia)

2000

Jerzy Malec

Wy˝sza Szko∏a Bankowa w Gdaƒsku ul. Dolna Brama 8, 80-821 Gdaƒsk 9 58 323-8910/58 323-8925 kancelaria@wsb.gda.pl www.wsb.gda.pl

383 457 259

1,315 1,220 1,063

7,099 4,870 4,000

6,001 5,150 4,301

1,278 940 762

-

1,030 989 525

105 60 -

Polish Accreditation Committee

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓ ✓

University of Northampton; International Business and Finance; University of Troyes; California International Business University; Universita degli Studi del SanninoBenevento; Erasmus; Pomorski Port Edukacji i Praktyki

1998

Jan WiÊniewski

✓ ✓

✓ ✓

Youth Entrepreneurship; Entrepreneurship in Vocational Education; Young Academic Entrepreneurs; Youth Enterprise and Unemployment; Local Goverment in the Baltic Sea; VETPRO; M-Astra; Policy for Educator Evidence in Portfolios; Leaonardo da Vinci; Erasmus

2000

Micha∏ Jarmu∏

Wy˝sza Szko∏a Ekonomii i Innowacji w Lublinie ul. Me∏giewska 7/9, 20-209 Lublin 10 81 749-1777/81 749-1777 sekretariat@wsei.lublin.pl www.wsei.lublin.pl

369 376 347

538 486 WND

7,803 8,658 WND

4,347 5,381 5,984

2,930 3,678 3,137

-

WND 2203 1,815

-

Polish Accreditation Committee; Krajowa Rada Akredytacyjna Szkolnictwa Medycznego

✓ ✓ -

Uniwersytet Gdaƒski - Wydzia∏ Zarzàdzania ul. Armii Krajowej 101, 81-824 Sopot 11 58 523-1434/58 523-1173 wzr@wzr.pl www.wzr.pl

154 151 154

2,722 2,783 2,860

2,291 2,424 2,526

2,383 2,502 2,788

2,630 2,705 2,598

143 128 135

454 987 1,002

WND WND WND

Polish Accreditation Committee; CEPI Eur label

✓ ✓

✓

✓ -

Erasmus; Baltic Sea Virtual Campus; EDEN; Information Systems Academic Heads International

1968

Bernard Lammek

Wy˝sza Szko∏a Zarzàdzania i Prawa im. Heleny Chodkowskiej Al. Jerozolimskie 200, 02-486 Warsaw 12 22 539-1900/22 539-1901 uczelnia@chodkowska.edu.pl www.chodkowska.edu.pl

151 136 124

115 134 162

2,042 2,236 2,195

1,214 1,490 1,613

943 880 744

-

244 215 157

-

WND

✓ ✓

✓

-

Erasmus; Leonardo da Vinci

1992

Ryszard Grosset

Szko∏a Biznesu Politechniki Warszawskiej ul. Koszykowa 79, 02-008 Warsaw 13 22 234-7089/22 234-7016 mba@biznes.edu.pl www.biznes.edu.pl

134 106 94

21 30

252 279 190

-

-

-

130 175 199

122 125 135

EPAS

-

✓

✓

WND

1991

Jan Szmidt

THE LIST

AUGUST 5-18, 2013

www.wbj.pl

Majors Urban planning / Accounting / International relations / Management

Logistics Tourism and recreation Computer science Other business

Wy˝sza Szko∏a Handlowa we Wroc∏awiu ul. Ostrowskiego 22, 53-238 Wroc∏aw 14 71 333-1102/71 333-1152 rektorat@handlowa.eu www.handlowa.eu

129 180 190

403 350 390

2,313 3,200 3,400

1,832 1,950 2,400

1,031 1,600 1,390

-

280 340 280

12 20 -

Polish Accreditation Committee

✓ ✓ ✓

✓

✓ ✓

Leipzig Graduate School of Management; Erasmus; American University Washington DC; TOPSIM International Management Strategic Game

1997

Irena Tomys

Wy˝sza Szko∏a Humanitas w Sosnowcu ul. Kiliƒskiego 43, 41-200 Sosnowiec 15 32 363-1200/32 363-1207 sekretariat@humanitas.edu.pl www.humanitas.edu.pl

94 89 42

27 38 80

1,128 1,641 2,052

417 716 1,028

740 963 1,104

-

425 176 238

-

Polish Accreditation Committee; Fundacja Rozwoju Edukacji i Szkolnictwa Wy˝szego

✓ -

✓

-

Erasmus; Management Studies Distance Learning; Partnership in Science; Lecture Humanitas; International Centre for Research on Media and Social Communication

1997

Jerzy Kopel

Wy˝sza Szko∏a Ekonomiczno-Humanistyczna ul. Sikorskiego 4C, 43-300 Bielsko-Bia∏a 16 33 816-5169/33 816-5169 wseh@wseh.pl www.wseh.pl

72 63 31

-

294 537 480

255 248 480

225 89 -

-

200 -

-

Polish Accreditation Committee; FEDE

-

✓

-

Erasmus; Silesian University in Opava

1997

Czes∏aw Bugdalski

Warszawska Szko∏a Zarzàdzania Szko∏a Wy˝sza ul. Siedmiogrodzka 3A, 01-204 Warsaw 17 22 862-3224/22 862-3247 manage@wsz-sw.edu.pl www.wsz-sw.edu.pl

44 WND WND

-

365 WND WND

171 WND WND

194 WND WND

-

280 WND WND

-

Polish Accreditation Committee

-

✓

-

WND

1992

Andrzej ZawiÊlak

Krakowska Szko∏a Biznesu Uniwersytetu Ekonomicznego w Krakowie / Cracow School of Business NR ul. Rakowicka 27, 31-510 Kraków 12 293-5560/12 293-5868 ksb@uek.krakow.pl www.ksb.uek.krakow.pl

WND WND WND

WND WND WND

WND WND WND

WND WND WND

WND WND WND

WND WND WND

1,229 1,469 1,706

117 115 119

WND

✓ ✓ ✓

✓ ✓

-

Heller College of Business Administration, Roosvelt University; University of Johannesburg; Lviv Institute of Banking of the University of Banking of the National Bank of Ukraine

1991

Andrzej Chochó∏

Szko∏a G∏ówna Handlowa w Warszawie(1) Al. Niepodleg∏oÊci 162, 02-554 Warsaw NR 22 564-6000/22 849-5312 informacja@sgh.waw.pl www.sgh.waw.pl

WND WND WND

WND WND WND

WND WND WND

WND WND WND

WND WND WND

WND WND WND

WND WND WND

WND WND WND

WND

WND WND WND WND

WND WND WND WND

WND WND WND WND

WND

1906

Tomasz Szapiro

Rank

Administration / Economics / Econometrics / Finance and accounting

Number of extramural students in business departments

Number of full-time students in business departments

Number of students Number of lecturers in business departments

19

Institution name Address Tel./Fax E-mail Web page

Bachelor’s Master’s studies studies

Doctoral Postgraduate studies studies

MBA

Accreditations

2012/2013 / 2011/2012 / 2010/2011

Notes: Notes: NR = Not Ranked, WND = Would Not Disclose. Research for The List was conducted in February 2013. Number of employees is as of February 2013. Schools not responding to our survey are not listed.

Footnotes: (1) SGH chose not to participate in the survey due to objections to the methodology.

International academic programs

Year founded

Rector

To the best of WBJ ’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Corrections or additions to The List should be sent, on official letterhead, to Warsaw Business Journal, attn. Monika Brysiak, ul. Elblàska 15/17, 01-747 Warsaw, via fax to +48 22 257-7500, or via e-mail to online@bookoflists.pl. Copyright 2013, Valkea Media SA. The List may not be reprinted or reproduced in whole or in part without prior written permission of the publisher. Reprints are available.

20

MARKETS

www.wbj.pl

AUGUST 5-18, 2013

Stocks report

world stock indices DJIA

NASDAQ

15,628.02 (Aug 1 close)

S&P500

3,675.74 (Aug 1 close)

0.47% (for the week)

FTSE100

1,706.87 (Aug 1 close)

1.96% (for the week)

DAX

6,647.87 (Aug 2 close)

0.98% (for the week)

1.42% (for the week)

Bulls charging

NIKKEI225 8,406.94 (Aug 2 close)

14,466.16 (Aug 2 close)

1.97% (for the week)

2.38% (for the week)

CHANGE: 16.52%

CHANGE: 18.11%

CHANGE: 16.72%

CHANGE: 10.29%

CHANGE: 8.08%

CHANGE: 35.35%

(year to August 1)

(year to August 1)

(year to August 1)

(year to August 2)

(year to August 2)

(year to August 2)

52-week high: 15,650.69

52-week high: 3,678.50

52-week high: 1,707.85

52-week high: 6,875.60

52-week high: 8,553.74

52-week high: 15,942.60

52-week low: 12,471.49

52-week low: 2,810.80

52-week low: 1,343.35

52-week low: 5,605.60

52-week low: 6,621.36

52-week low: 8,488.14

Omar Arnaout Noble Securities SA On July 31 the US’s Federal Open Market Committee released a meaningful statement: “The Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, but it anticipates that inflation will move back toward its objective over the medium term.” The statement was a signal that the current modest growth of the US economy will not allow for a scaling back of the stimulus provided by quantitative easing, despite the fact that in the last few weeks macroeconomic data has been significantly better than anticipated. This data has allowed stock markets globally to continue their rises.

These factors have had a big influence on the Warsaw Stock Exchange, with the

Major indices WIG

48,325.33 (August 2 close)

WIG20

2,401.85 (August 2 close)

02.08

01.08

31.07

30.07

29.07

26.07

25.07

24.07

23.07

22.07

19.07

18.07

17.07

02.08

01.08

31.07

30.07

29.07

26.07

25.07

24.07

23.07

2,200

22.07

44,000

19.07

2,260

18.07

45,000

17.07

2,320

16.07

46,000

15.07

2,380

12.07

47,000

11.07

2,440

10.07

48,000

09.07

2,500

08.07

49,000

16.07

52-week low: 2,170.95

15.07

Change year to Aug 2: -8.54%

12.07

52-week low: 39,876.95

11.07

52-week high: 2,628.36

Change year to Aug 2: 0.45%

10.07

Change for the week: 4.83%

09.07

52-week high: 48,495.01

08.07

Change for the week: 4.47%

Top 5 ALTERCO IDEON MEDIATEL LSTCAPITA COALENERG

Closing 1.47 0.05 0.42 0.52 2.78

% change (week) 52-week high 110.00 4.40 66.67 0.20 44.83 1.98 36.84 0.70 35.61 18.00

52-week low 0.61 0.03 0.24 0.35 1.80

Top 5 HANDLOWY BRE PKOBP TAURONPE GTC

Closing 106.00 445.50 39.00 4.54 8.47

% change (week) 11.58 8.67 7.73 6.82 5.88

52-week high 108.60 469.25 39.26 4.87 10.25

52-week low 72.35 281.82 31.85 3.67 5.77

Bottom 5 BUDOPOL GLOBALNRG BBIZEN BNPPL FON

Closing 0.14 1.07 0.07 63.60 0.08

% change (week) -33.33 -27.21 -22.22 -20.20 -20.00

52-week low 0.08 0.55 0.07 44.00 0.07

Bottom 5 EUROCASH SYNTHOS KERNEL TPSA PEKAO

Closing 58.50 4.39 51.68 7.76 164.90

% change (week) -1.85 0.23 0.74 0.91 2.42

52-week high 66.56 6.00 76.00 16.22 167.15

52-week low 36.08 4.12 45.10 5.83 134.04

52-week high 0.38 2.16 0.30 150.00 0.18

Currency report

Central banks disappoint

Other indices sWIG80

12,096.51 (August 2 close)

NewConnect

304.44 (August 2 close)

52-week high: 12,096.51

WIG-Banki

7,371.22 (August 2 close)

SOURCE: WSE

02.08

01.08

31.07

30.07

29.07

26.07

25.07

24.07

23.07

22.07

19.07

18.07

17.07

02.08

01.08

31.07

30.07

29.07

26.07

25.07

24.07

23.07

22.07

6,300

19.07

296.0

18.07

6,520 17.07

297.8 16.07

6,740

15.07

299.6

12.07

6,960

11.07

301.4

10.07

7,180

09.07

303.2

08.07

7,400

16.07

52-week low: 5,631.61

15.07

Change year to Aug 2: 9.64%

12.07

52-week low: 296.29

11.07

52-week high: 7,371.22

Change year to Aug 2: -8.36%

10.07

Change for the week: 6.38%

09.07

52-week high: 353.60

08.07

Change for the week: 2.17%

305.0

Adam Narczewski X-Trade Brokers DM SA

02.08

01.08

31.07

30.07

29.07

26.07

25.07

24.07

23.07

22.07

19.07

52-week low: 9,252.57

16.07

15.07

02.08

01.08

31.07

30.07

29.07

26.07

25.07

24.07

23.07

11,500

22.07

2,700

19.07

11,620 18.07

2,780

17.07

11,740

16.07

2,860

15.07

11,860

12.07

2,940

11.07

11,980

10.07

3,020

09.07

12,100

08.07

3,100

12.07

Change year to Aug 2: 14.86%

11.07

52-week low: 2,211.09

10.07

Change year to Aug 2: 17.57%

09.07

Change for the week: 1.39%

08.07

52-week high: 3,020.01

18.07

3,020.01 (August 2 close)

Change for the week: 4.63%

17.07

mWIG40

WIG Futures index noting another week on the plus side. The market once fell as low as 2,240, but has grown to as high as 2,360.

As to stocks on the bluechip WIG20 index, investors were likely satisfied with the rise of Citi Handlowy shares, which increased in value from z∏.95.55 to z∏.104.85.

Handlowy has now noted three weeks of rises out of the last four and has broken a significant resistance level based on its highs from midMay. From a technical point of view, this is a signal that growth should continue in this market in the coming weeks. As usual, investors must pay close attention to events from the US market, as they have a strong influence on what takes place in markets globally. ●

The summer is usually a time of decreased activity on financial markets. While that may be the case in equities markets this year, currency trade volume is higher than usual.

Traders had hoped that central banks would provide some strong indications but were disappointed. The US Federal Reserve has said it will continue its quantitative easing (QE) program in its current form for now, the Bank of England said it would announce its forward guidance numbers later and the ECB plans to start releasing the minutes of its monetary policy meetings starting in the autumn.

Those announcements didn’t move markets much.

The EUR/USD traded in the range of $1.32-1.34.

In Poland, the manufacturing PMI report surprised with a reading of 51.1 points,

showing increased economic activity. Still, this is just one of many indicators and only if more positive data is released could it give support to the Monetary Policy Council’s statement that no more interest rate cuts are necessary to lift the economy. Without any clear stimuli, the EUR/PLN reached z∏.4.20, its lowest level since May. The positive US macroeconomic data, which supported the dollar, caused a corrective movement on the z∏oty and the EUR/PLN headed towards z∏.4.25. Similarly the USD/PLN, after reaching a six-week low of z∏.3.16, rebounded to reach z∏.3.21 by the end of the week.

Further developments on the z∏oty market will be dependent upon major central banks’ decisions, mainly those of the US’s Fed. ●

currency rates 3.2328 02.08

SOURCE: NBP

3.2418 01.08

3.2449

3.2674

30.07

31.07

3.2516 29.07

3.2

26.07

3.2257

0.0973 02.08

0.0967

0.0968

100JPY/PLN

3.3

01.08

31.07

0.0966 30.07

29.07

0.0975 26.07

3.4372

3.4350 02.08

0.09

0.0971

RUB/PLN

0.10

01.08

3.4465 31.07

3.4198 30.07

29.07

3.4308 26.07

4.8576

4.8794 02.08

3.4

3.4318

CHF/PLN

3.5

01.08

4.8577 31.07

4.8724

4.9071 29.07

4.8

26.07

4.9009

3.2201 02.08

3.1961 01.08

3.1929 31.07

3.1798 30.07

3.1859 29.07

3.1

26.07

3.1831

4.2558 02.08

01.08

GBP/PLN

5.0

30.07

USD/PLN

3.3

4.2339

4.2427 31.07

4.2202 30.07

29.07

4.2295 26.07

4.2

4.2319

EUR/PLN

4.3

SPORTS

AUGUST 5-18, 2013

www.wbj.pl

21

Soccer

Soccer

The boys are back

Neymar makes Barcelona debut in Gdaƒsk

X-NEWS/T-MOBILE EKSTRAKLASA

Fans like to complain about the quality (or lack there of) of Polish soccer. And while it’s true that the national team is 75th in the FIFA rankings (its lowest place ever) and that a Polish club has not played in the UEFA Champions League group stage in 17 years, fans are still eager for the season to

begin.

Because of scheduling changes, the season started earlier than usual, with clubs having to play seven more games than the year before. The reigning champions – Legia Warszawa, began its current campaign with a bang, winning two games with ease, scoring eight goals and giving up only one. Other teams that have a full set of points so far are Jagiellonia Bia∏ystok and Piast Gliwice.

Last season’s second-place

Sebastian Steblecki, Cracovia (right) and Kebba Ceesay, Lech Poznaƒ (left)

team, Lech Poznaƒ, had a bit of a slump, drawing both of their games, but it is too early to count them out of the championship race, especially since after the first 30 games, the points will be slashed in half in order to make the last seven rounds more exciting.

The only teams without a point so far are Zag∏´bie Lubin, which placed ninth last season, and the newly promoted Zawisza Bydgoszcz. As a result, Lubin’s coach Pavel Hapal became the first casualty of the season, getting fired after failing to win any points.

UEFA club competition has started as well, confirming Polish soccer’s continuing slump.

Lech Poznaƒ lost its first game in the Europa League third qualifying round against Lithuanian Zalgiris Vilnius 0-1, while Legia drew in Norway with Molde FK 1-1 in Champions League qualifiers. Legia’s draw was a relatively good result, but the Warsaw side’s form in that game left much to be desired. On the other hand, Âlàsk Wroc∏aw provided a nice surprise, winning at home against higher-ranked Belgium’s Club Brugge 1-0 in the Europa League qualifiers.

Jacek Ciesnowski

Poland’s Lechia Gdaƒsk held one of the world’s best clubs to a draw in front of their home fans FC Barcelona was supposed to start its pre-season preparations this year in Gdaƒsk, with a friendly game against Lechia Gdaƒsk scheduled for July 20.

The match was to be Barcelona’s first exhibition game of the campaign, but had to be rescheduled after manager Tito Vilanova decided to leave his post due to a recurring illness. The game was played on July 30 instead, and still managed to provide some interesting storylines.

The friendly was the first time Brazilian superstar Neymar played in a Spanish club’s jersey.

Touted by many as the second coming of Pele, the 21-year-old striker played a little over 10 minutes. He did not manage to impress fans, and some were disappointed that they were not able to see Neymar and Lionel Messi on the pitch at the same time. The Argentinian was substituted three minutes before Barca’s newest signing stepped onto the field.

SHUTTERSTOCK

After two rounds of T-Mobile Ekstraklasa games, fans have more questions than answers

Neymar

Lechia had the lead twice in the game, with Jaros∏aw Bieniuk scoring the first goal of the game in the 14th minute, and after Piotr Grzelczak managed to put the ball in the net at the 50-minute mark. Sergi Roberto equalized for Barca in the 25th minute, and Messi leveled the score a second time in the 57th.

The game ended in a 2-2 draw.

In the end the quality of play was less important to the fans than the simple appearance of superstars Neymar and Mr Messi. Barcelona did not seem to push exceptionally hard to win, with its new coach Gerardo

“Tata” Martino staying in Barcelona with most of the first-squad players.

The more excited fans point out that while the game was only an exhibition, it was a huge success for Lechia to have tied with such a successful club, especially since the day before, the Spanish side had crushed Norwegian team Valerenga 7-0. Others point out that the same Lechia team couldn’t manage to beat Ruch Chorzów and Podbeskidzie Bielsko-Bia∏a in the Polish league this season.

Jacek Ciesnowski

22

LIFESTYLE

www.wbj.pl

AUGUST 5-18, 2013

Music festival

Wu-Tang, Florence and the Machine at Coke Live

Classical music: past meets present

COURTESY OF WIKIMEDIA COMMONS/FLOWISM

Music festival

GZA, one of the founding members of the Wu-Tang Clan

Coke Live Festival August 9-10 2013 Airfield – Aviation Museum Kraków The Coke Live Festival in Kraków is the last of the major events on Poland’s summer music calendar this year and will showcase some of the biggest names in hip hop and indie rock. The headliners

include Florence and the Machine, Franz Ferdinand and the Wu-Tang Clan.

On the first day of the event, British indie rock will rule the stage. Along with Franz Ferdinand on that day, Biffy Clyro will perform. Biffy Clyro will play tunes from their latest album “Opposites” which reached the top of the UK charts, while Franz Ferdi-

nand will most likely play songs from their still-unreleased album, which they have been writing and recording for two years now.

Polish singer Monika Brodka and Regina Spektor, the Russian-born American singer-songwriter and multiinstrumentalist, complete the first day’s line-up.

The next day is also heavy on

British music, with indie band Florence and the Machine performing on the main stage. A collaborative project between singer Florence Welch and musician Isabella “Machine” Summers, the band is one of the most refreshing rock acts in recent years.

Singer-songwriter Katy B., best known for her single “Anywhere in the World,” which was used in the promotional campaign of one of the sponsors of the London Olympics, will complete the British contingent for this year’s edition.

The Wu-Tang Clan, a formative band for the hip hop genre, will cap off the performances on the second day.

The band’s debut album, “Enter the Wu-Tang: 36 Chambers,” was was released 20 years ago, and has influenced countless rap and hip hop artists. The band’s latest album is scheduled for release this summer.

Two-day tickets start at z∏.245, while single-day passes are z∏.155.

Cathy Liu

For more information, log on to livefestival.pl/en

Chopin and His Europe August 15 – September 1, 2013 Various locations in Warsaw The 9th Chopin International Music Festival, Chopin and His Europe, will welcome renowned musicians from Poland and around the world to play classical music masterpieces as well as contemporary pieces from the most acclaimed Polish composers.

The festival will take place from August 15 to September 1 across Warsaw. Programs during the festival will provide audiences a chance to appreciate the interpretations of the legendary Polish composer’s famous pieces along with some interesting debuts from the latest generation of musicians and composers.

The inaugural symphony will be held at the Warsaw Philharmonic. Barry Douglas, winner of the International Tchaikovsky Piano Competition in Moscow and Dang Thai Son, winner of the 10th International Fryderyk Chopin Piano Competition in Warsaw, will give their piano performances with the Russian National Orchestra under conductor

Krzysztof Penderecki.

Various piano recitals, symphonic and chamber concerts will continue to offer opportunities for audiences to enjoy pieces by Chopin and other Polish composers. Winners from previous international piano competitions and the youngest finalist of the 16th International Chopin Piano Competition will add their unique contributions to the festival. Besides contemporary pianists, internationally famous cellists, vocalists and period pianists will also contribute to the the festival. Some special events, such as several film presentations, will also be included in the festival.

After the final symphony on the evening of August 31, a special concert will be held at 8 pm on September 1 to mark the festival’s conclusion. Opera singers from Italy, Bulgaria and Argentina will perform alongside Polish musicians from the Warsaw Philharmonic Choir and Symphony Orchestra.

Ticket prices vary depending on the event and start from z∏.20.

Cathy Liu

For more information, log on to en.chopin.nifc.pl/festival

AUGUST 5-18, 2013

LAST WORD

www.wbj.pl

23

Tech Eye

blackmail material. No luck.

After being rejected so many times, Techeye concocted one final scheme to LE win Google’s OG GO OF SY E favor. We planned RT U CO to give its latest product a glowing review and post the article on their Facebook page. A Techeye has always wanted to work fool-proof plan – or so we thought.

In fact, we’re unable to give for Google. We’d do anything to work there, even that thing that Google’s newest gadget two thumbs up. It’s not due to journalistic Meatloaf won’t do for love.

Why? Well, duh. It’s the Candy- integrity – thankfully we’ve never land of work environments, the had much of that – but because we Mecca of jolly nerd-dom. Also, the don’t think Chromecast is worthy of cafeterias serve the most delicious- unreserved praise. looking cake. Once we even saw a Chromecast is, in Google’s picture of a Google cafeteria cake words, “is a small and affordable shaped like the numbers 3.14159. device that you simply plug in to Get it? A π cake? Those guys are your high-definition (HD) TV and it allows you to use your phone, awesome.

Alas, Google has never recipro- tablet or laptop to ‘cast’ online concated our affection. We’ve applied tent to your TV screen.” It is also for a few positions, flirted with just what is generally referred to as a about everyone in the HR depart- “dongle” – a USB hardware key – ment and even dug through the but Techeye strenuously objects to company’s garbage in search of the term because it brings to mind a

The Chromecast “dongle”

rather nasty condition we caught in the jungles of Bolivia. So we’ll just call it a USB device, thank you very much.

Anyway, Chromecast is a way to make your TV “smarter” without having to buy an expensive smart TV. It turns your mobile device into a remote control and lets you stream videos via apps like Netflix or YouTube (up to 1080p). You can also surf the net via Google’s Chrome browser.

On the plus side, Chromecast is cheap ($35) and simple to use. On the negative side, it requires a separate power cable and it is part of a product category that consumers simply haven’t fallen in love with.

Not everyone wants to stream content from a mobile device after all.

We expect this to be a moderately popular product, but a relatively short-lived one, because new TVs hitting the market will naturally incorporate more and more smart functions.

Google has also recently unveiled an update to its popular Nexus 7 tablet. As you may recall, the original Nexus 7, a joint project

by Google and Asus, was released last year. It was a seven-inch tablet

COURTESY OF GOOGLE

New Google devices and dream-job tragedy

The second-generation Nexus 7 with a modest price tag ($199 for the base model with 8GB of internal storage) and respectable specs.

The device soon dominated a size category that Apple, the tablet market’s standard-bearer, had ignored at its own peril (at least until the iPad Mini was released last autumn).

The second-generation Nexus 7 ups the ante by doubling the internal storage options (now 16GB/32GB), increasing display resolution to 323ppi (trumping the

iPad Mini), adding a 5MP rear camera, including 1080p video support and improving the processor to a 1.5GHz quad-core CPU. That’s a swanky spec sheet, but battery life reportedly suffers as a result of the display upgrade. And the price of the base model has increased to $230, though this is still about $100 lower than the competition. So the new Nexus 7 is about as easy to recommend as its predecessor, even if its sister-product, the Chromecast, is less enticing. ●

Ever knowingly sabotaged your last shot at a dream job? Let us know: techeye.wbj@gmail.com

reklama_I_IN_POLAND_2012_v2.indd 1

2011-08-08 09:38:47