Witold M. Orłowski: The Miracle of the Green Island

Data and forecasts from the International Monetary Fund make this clear. Since last year Poland's Gross Domestic Product (GDP) per capita, measured at purchasing power parity (taking into account that prices are lower in Poland and that the same amount of dollars can buy more goods and services), was still just over 1 percent lower than in Japan, and this year it is expected to be 1 percent higher, we can assume that halfway through the year – just over a week ago – we equaled the Far Eastern economic powerhouse, and this week we are already overtaking it.

Of course, purists will nitpick a few details. For example, the fact that the average income in a country is determined not by GDP, but by GNI per capita (Gross National Income). The difference may seem small, but it's significant – GDP tells us how much income was generated in total within the country, while GNI tells us how much the population generated both domestically and globally. The Japanese generated a significant portion of their income outside their home islands (for example, at the Toyota factory in Wałbrzych), and as a large investor, their GNI was 20 percent higher than GDP. Poles, on the other hand, don't receive as much income from abroad, and because they have to pay foreign owners of factories and service centers their due, their GNI is 4 percent lower than GDP. Therefore, we still fall short of the Japanese standard of living.

This doesn't change the fact that when Lech Wałęsa blurted something out 45 years ago about Poland catching up with Japan, it became the subject of mockery for decades. Today, this prospect is quite real, if not on June 30th of this year, then in a few years. So, yes. A miracle did happen on the Vistula River. And this statement isn't changed by the fact that the Japanese have greatly aided us in our pursuit, as their economy has stagnated for over 30 years, and GDP has grown by only 27 percent since 1991. At the same time, the Polish economy has been growing rapidly, especially since our accession to the European Union, with GDP increasing by 270 percent.

Yes, a miracle undoubtedly occurred, once carelessly dubbed the "Green Island" by the rulers. Carelessly, because a malicious nation immediately began mocking the term (no less than Wałęsa's "Second Japan"). A green island? More likely poverty and misery, Poland in ruins, some statistical trickery (or even fraud).

Meanwhile, there was no fraud. And what's more, there still isn't. In 2008, when recession gripped Europe, Poland was the only country to record GDP growth. In 2020, when GDP fell everywhere due to the pandemic, Poland's decline was the smallest of all major European economies. We are currently recording one of the highest GDP growth rates on the continent, despite a war raging across the border. So it turns out we truly are a green island.

Am I satisfied with the current GDP growth rate? Certainly not, even if it looks excellent compared to the rest of the continent. I'm even more saddened by the structure of this growth, which is still based on consumption rather than exports and corporate investment. And also by the excessively high inflation that accompanies this growth, which has been accompanied by a sharp increase in public debt for years. Yet, miraculously, Poland remains a green island, and our economy demonstrates remarkable flexibility and copes with shocks better than others. This is worth appreciating, especially in difficult times.