Untapped Potential

AMIDST the media attention over British Prime Minister John Major's participation in the CII Partnership Summit in Calcutta, the visit of Polish Deputy Prime Minister, Grzegorz W. Kolodko, who is also the minister for finance, went relatively unnoticed. While both Indian and Polish officials described the visit as successful, Kolodko himself went back quite pleased with his interaction with Indian political and business leaders. In fact, he was so impressed that he suggested that a partnership summit with Poland and other east central European countries be organised on the lines of the Calcutta meeting.

The idea has been well received in India. Kolodko wants Poland to have the "leading edge" in the summit. As he explained to 바카라, Poland and India are termed as great emerging markets by the US. "Let us take advantage of it and not allow only the Americans to do so." Though till the end-'80s, Poland was India's second largest trading partner in the socialist bloc after the former Soviet Union, bilateral trade declined sharply after political changes in Poland in 1989. Kolodko describes this as the natural result of the "transition and transformation" of the political and economic system of Poland. The Rupee Trade and Payments Agreement between the two countries gave way to trading in convertible currency and both countries granted each other MFN status from January 1991. Trade is once again picking up—from Rs 350 crore in '94-'95, it jumped to Rs 718 crore in '95-'96.

But problems remain. Kolodko concedes that everything is not satisfactory. While political relations between the two countries are good, they are not exploiting each other's potential. Part of the problem is the lack of information and knowledge about latest developments in the two countries. And perhaps, that is what the two governments are trying to change through high-level exchanges which have been taking place quite frequently in the last couple of years.

The problem becomes evident in the nature of bilateral trade. Tea and coffee are the largest Indian exports to Poland. Both sides agree it's time for diversification. Polish officials feel India can easily export computer hardware and software, consumer electronics, drugs and pharmaceuticals, etc. Poland in turn could increase exports of railway equipment, mining machinery, machine tools, mineral products, ship engines and non-ferrous metals. Kolodko stresses that Poland has a certain expertise in biotechnology, which India can meaningfully use.

Indian officials realise the importance of Poland in the new European configuration. Poland is on the verge of being admitted to the European Union. "This will provide us access to markets in central and western Europe. This is the time to boost ties, at the incipient stage," says an Indian official. Concurs Kolodko: "You should use Poland as a gateway to the European Union (EU) and the former Soviet Union." Among the former Soviet bloc countries, Poland has made the smoothest transition to the market economy and its economic progress has been quite remarkable. Kolodko, a leading economist in his country, is himself the author of two major programmes, Strategy for Poland and Poland 2000. Describing Poland as the 'soaring eagle of Europe', he disagrees with the assessment that Poland is turning its back on Asia as it moves to join the EU. He argues: "Of course, our destiny, our priority is the EU. We are at the heart of Europe. If India joins APEC, we won't say that you are turning your back on Europe. We belong to west Europe." According to him, despite the Polish orientation to west Europe, trade relations with India will grow at a faster rate than with the EU or Poland's big neighbour, Germany. That's because the "market in India is growing much faster. And to be frank the EU market is a much more difficult market than India's". The Polish leader says that politicians can only act as 'middlemen' to bring the businessmen of the two countries together.

There are very few joint ventures between India and Poland though some of the earliest tractors and motorcycles, like Rajdoot and Royal Enfield, were built on Polish designs. Both Kolodko and Indian officials agree there is a great potential for joint ventures. Says Kolodko: "In fact, last September we signed a credit guarantee agreement with India which businessmen on both sides can use but it is up to them to decide whether they are going to make money selling tea or biotechnology products."