Regulation Optimism in Poland

“Poland is to become the easiest country in Europe to run a business,” said Mr Waldemar Pawlak, the Minister for the Economy in Poland, during a meeting with the American Chamber of Commerce in April, 2008. The Deputy Premier said that his Ministry’s priority is to put in place laws that encourage “better regulation,” i.e. regulations easing the running of businesses.

The Minister’s priority is part of the new government’s goal to better integrate Poland in the market economy. Internally, it created the Parliamentary Commission to promote deregulation- a process that has been tried many times by consecutive governments but with no success. This time, the government decided on a new approach- not to nominate a special Ministry with change-resistant civil service to handle this process, but rather to put lawmakers in charge.

The commission started off its functions by engaging the public and setting a positive tone to the change. It launched a public competition to identify the silliest rule. For example, the requirement that most businesses handling cash must keep receipts in paper for five years. As these are printed on thermal paper, they fade unless kept cold. With the commission’s work, that and the other silliness should go next year.

The commission adopted a sensible approach by not advocating complete deregulation but careful re-regulation. It called on national regulators to take a critical look at existing rules with an open mind to see if they are the most efficient and least restrictive of competition to achieve their desired public interest objective. Moreover, it called for a process of a systematic review of regulations.

The commission’s approach is to ask regulators to promote smart regulations that contribute to a better enabling environment for small and medium sized business. It promotes doing away with outdated regulations that serve no purpose. Systematic review of regulations is one way to ensure that regulations are suitable for a country’s level of development and its future development plans. Poland is on the right track- starting with small steps to create big momentum- but success depends on not stopping there.

For now, it seems that the new changes have brought optimism to Polish entrepreneurs. This year, Poland ranked in 6th place in terms of the optimism among entrepreneurs in an international report by Grant Thornton. Last year it was in 21st position. According to the report which assessed the moods of the representatives of medium sized businesses, the preponderance of optimists over pessimists was 78%, whereas in 2007 it was 42%. According to the report, entrepreneurs are encouraged the most by the economic situation and changes in the political climate.