The European Union as a Challenge for the Polish Society, Polish Economy and the Polish State

Antoni Kukliñski

Zakopane August 28th 1996


Introduction

The Special Day on Pan European Cooperation and Technology Transfer in Zakopane is a most valuable inducement to analyze the role of the European Union in the comprehensive transformation of Poland at the turn of the 20th and 21st century. I would like to discuss this challenging problem in the following topical framework:

1. The integration machine,

2. The greatest chapters of Polish history,

3. The challenge for the Polish society,

4. The challenge for the Polish Economy,

5. The challenge for the Polish State,

6. The challenge of the ability to create and absorb innovations,

7. The opportunities created by Technology Transfer,

8. The special role of the Polish regional scene,

9. The passive and active role of the European Union,

10. The challenges of the art and wisdom of long terms approaches.

Naturally, this framework and the content of my paper is related not only to the objective reality but also to the subjective sphere of my academic experience and value judgments in analysis of the Polish and European scene. I hope, however, that my [presentation will be an useful contribution for this Special Day.

The Integration Machine

The European Union is one of the greatest institutional innovations created by the glorious and horrible experiences of the 20th century. The Union can be described as a magnificent machine of economic, social, and political integration overcoming the limits and divisions of European history and leading to a new united and prosperous Europe of the 21st century. The changing nature of the Union is well grasped by Albert Bressand.

"The Maastricht Treaty had been conceived as a a coronation for the European integration process whereby the Community would become a genuine "union". Unsatisfied with bottom-up dynamics of economic integration, federalist circles - in Brussels as well as in Paris - have endeavored to use the momentum of "Europe 1992" as a launching pad for top-down political integration. Monetary union and a common foreign security policy appeared to them as the route to follow in order to elevate the Community from its economic integration routine toward fully-fledged political integration. Such was at least the intent behind Maastricht. Yet, progress toward monetary union is made far more difficult by the cost of German reunification while the only elements of common foreign policy vis-a-vis ethnic wars in Yugoslavia seem to be disarray, indignation, and impotence. The danger exists that much more is being lost in the Maastricht Treaty by giving up the notion of "community" than is being gained by putting forward a still ill-defined "union" that public opinions in Denmark, In France and elsewhere have a hard time making sense of".

This point of view should be considered very deeply. It is worth while to quote the definition of European Community formulated by A.Bressand:

"A community is a region in which free trade fosters many other forms of economic integration and in which economic integration combines with a sense of shared cultural and political destiny. Unlike a juxtaposition of independent states, a community bestows upon its members shared sense that they have also some degree of collective control over their inter-locked fates. Common institutions are natural features for a Community precisely because there is more at stake than intergovernmental give-and-takes. That does not mean sovereignty has to be given up, but it does imply that some sharing of sovereignty, or some joint exercise of it, can be perceived by public opinion as a natural development."

Let me suggest an optimistic interpretation of the shift in the nature of the European Union which will not loose the important qualities of the European Community as defined by Bressand.

From the Polish point of view - it is very important - if the European Union of the 21st century will be explained by the analogy to the Society of Charles Darwin or the analogy of the Association of the Saint Francis. The first analogy is the interpretation of the European Union as a machine responsible for the global success of the European economy. The second analogy is the interpretation of the European Union as a machine responsible for social cohesion of Europe. The eternal conflict - efficiency vs equality will be solved in favour of efficiency in the former interpretation and in favour of equality in the latter interpretation. In this context my suggestion for Poland is very simple - We should pray for the success of Fransciscan Europe - but we should prepare ourselves to live in the Darwinian Europe and on the Darwinian global scene.

The greatest Chapters of Polish History

I am convinced that there are three greatest chapters in Polish history:

a. The Acceptance of Christianity-The Baptism of Poland 966,

b. The Union of Lublin - The Creation of the Commonwealth of Poland- Lithuania -Belarus and the Ukraine -15 6 9,

c. The full membership in the European Union-around 2000.

The comparative analysis of these three chapters is outside the terms of reference of this paper. Let me say only that in each case we have an comprehensive integration of two elements: the transformation of Polish society, Polish economy and the Polish State and the transformation of the geopolitical location of Poland on the map of Europe.

In the analysis of this third chapter let me present the following generalizations:

1. The adaptation of Poland to the parameters and conditions prevailing on territory of the European Union is a very deep intervention in the structure and functions of the Polish society, Polish economy and the Polish State.

2. This process of adaptation can be seen as an endogenous /process of voluntary adaptation related to the growing knowledge of the great trends of global change. In this interpretation the endogenous motivation is the basic power to overcome the conservative resistance of all social, political and economic forces which in an explicit or implicit way would like to perpetuate the reality of a parochial Poland.

3. The process of adaptation can be seen as an exogenous process of compulsory adaptation driven by the necessity to meet the conditions imposed by the European Union. I am representing an pessimistic interpretation - expressing the point view - that without the growing external pressure of the European Union the deep transformation of the Polish society, the Polish economy and the Polish state would be impossible.

However, this pressure is only a necessary condition and not a sufficient one. Without the internal will of Poland manifested in real and not only in formal terms - we will not join the European Union.

Adam Mickiewicz - our great romantic poet has told us

"Bóg mo¿e œwiat zburzyæ i drugi postawiæ,

Ale bez woli naszej nie mo¿e nas zbawiæ"

(God can destroy this world and can create another one-

But God cannot open the door of our salvation without our will).

The door to the European Union cannot be opened without the strong and explicit will of Poland. The final measurement of this will be performed by the Referendum in which all Poles will answer the question "Should Poland join the European Union". I am convinced that the answer will be positive - but this Referendum will be very dramatic contrary to the present simplistic expectations.

4. The process of the institutional preparation of Poland to enter the European Union is smaller and slower than a comparative effort of other countries which have already joined the European Union. It would be interesting to compare the great professional mobilization in Sweden in order to meet the institutional challenge of the Union - with a much smaller effort in this field in Poland.

5. Stressing the necessity of Polish adaptation to the parameters and conditions prevailing on the territory of the European Union - I am not a follower of Polish surrender in the future membership negotiations with the European Union. We should defend very skillfully the Polish national interest in these negotiations. I am told that the Spanish experience in this field is especially valid for Poland.

The chapter of the European Union is the most important chapter for the 21st century' Poland. The success of this chapter will be determined to a large extent by the scale and content of our activities in the crucial years of the turn of the 2oth and 21st century.

The Challenge for the Polish Society

The competitive economy is created only by the competitive society. It is a society which accepts the principle of competition as the fundamental principle of development.

This principle - naturally defined in the categories of the 20th and 21st century should dominate the whole system of guidance of the society, economy and the state including the system of national education. These are five barriers on the road to develop a competitive society which will be able to live successfully in Darwinian Europe.

1. The first barrier is this segment of the traditional Polish peasant society which is related to very small inefficient holdings which will not survive in the conditions of the European union. This segment is very influential in the Polish Peasant Party (PSL) and is pushing this party into conservative positions promoting de facto the paralysis of structural change in the Polish agriculture. If we compare the situation in Poland and Hungary in this field then it is easy to find out that the agricultural process of restructuralization will be less dramatic in Hungary than in Poland. One of the reasons of this difference is the fact that the traditional peasant society and peasant agriculture in Hungary were destroyed by the collectivization drive of the early fifties. In this context a paradoxical judgment can be formulated that the failure of the collectivization drive in Poland has not only positive but also negative historical consequences.

2. The second barrier is the industrial working class in heavy industry and mining. This industrial working class was artificially overdeveloped in the framework of the Stalinist industrialization drive. This class is now smaller than in the time of real socialism. But, it is still strong enough to change the Labor Unions of all ideological denominations into a force creating barriers for structural change in the dinosaur segments of Polish industry and mining.

3. The third barrier is the tax system slowing down the emergence of the Polish middle class representing contemporary standards of European competitiveness stability and innovation. A prestigious and honest middle class is created by a tax system in which you can get rich in a honest way. A transparent, simple and efficient system of low taxes with tax evasion in minimal scale- is still a dream of the future in Poland. Unfortunately, the surrender to short term populist pressures is an evident barrier on the way to create a tax system in Poland which would accelerate the development of the Polish middle class as the main carrier of the prosperity of our country.

4. The fourth barrier is the credit system in Poland which is very inefficient and unable to find criteria and instruments to create a proper system of decision making in this field. This system should promote the dynamic, honest and innovative enterprenership in Poland. This enterprenership should be supported not only by commercial banking (domestic and foreign) but also by public credit institution. One should at least try if only a very small part of subsidies for the industrial dinosaurs could be reallocated as credits to innovative small and medium medium size enterprises. May be one could prepare a macroeconomic and macrosocial cost benefit analysis of this reallocation.

5. The fifth barrier is the system of national education from Kindergarten to the University. This system is the main instrument in the long term process to create the competitive society and competitive economy. Unfortunately, the transformation of the system of national education in Poland is very slow and grosso modo inefficient. This system is in financial crisis unprecedented in Polish history. This is a relative crisis in relation to other human activities.

The consecutive governments following the populists pressures are spending more for subsidies of the dinosaur elements of Polish economy- then for the comprehensive reconstruction and expansion of the system of Higher Education. In a time of a historical turning point of the European adaptation of the skills, abilities and knowledge of the Polish society the system of national education is neglected and not recognized as a domain of the highest priority. This is worse than a crime - it is a macropolitical and macrosocial mistake. The consequences of this mistake will be very painful for Poland of the 21st century. A deep reversal of the educational policies is still possible. In the path breaking book of Lester C. Thurow one finds the following observation:

"Technology and ideology are shaking the foundations of twenty-first-century capitalism. Technology is making skills and knowledge the only sources of sustainable strategic advantage. Abetted by the electronic media, ideology is moving toward a radical form of short-run individual consumption maximization at precisely a time when economic success will depend upon the willingness and ability to make long-run social investments in skills, education, knowledge and infrastructure. When technology and ideology start moving apart, the only question is when will the "big one" (the earthquake that rocks the system) occur. Paradoxically, at precisely the time when capitalism finds itself with no social competitors - its former competitors, socialism or communism, having died - it will have to undergo a profound metamorphosis."

This is real dilemma for Poland - "is the willingness and ability to make long run social investments in skills, education, knowledge and infrastructure".

This short review is giving a negative answer to the fundamental question if Poland is removing quickly and efficiently all barriers on the road - to create a competitive society which will be able to survive in Darwinian Europe not only in jobs which require low qualifications - but also in jobs representing the higher and the highest levels of European competence income and prestige.

The Challenge for the Polish economy

The present good performance of Polish economy might create an impression that the long term problem of competitiveness of this economy is already solved. However, following the thesis of A.G.Aganbegyan we can formulate the question - if capitalism in Poland has developed already deep roots - as a source of dynamic and sustainable economic growth - or only shallow roots with no assurance of long term success. Contrary to simplistic opinions - only in a limited member of countries - the deep roots of capitalism are really existing.- Will Poland join this exclusive Club?

There are four barriers in this field:

The first barrier is the strong position of the dinosaur elements in Polish economy. These elements must be eliminated using the long term socially sensitive restructurization polices..

The second barrier is the relatively low level of sophistication of Polish private enterprenership. The islands of very primitive performance are well visible. The change in the tax system should stimulate the development of honest and prestigious enterprenership. The private enterprenership should understand that the principle of competition is not eliminating the principle of cooperation. The experience of Third Italy in this field should be studied very carefully in Poland.

The third barrier is the low level of sophistication in the field of communication between the Polish partners and foreigner enterprise and especially the Transnational Corporations.

There are two sides of this coin - one: our deficiencies to make Poland an open country, two: our deficiencies to defend the Polish national interest. We should study the Irish experience in this field.

The fourth barrier are the deficiencies of the consecutive Polish governments in the ability to develop and implement a comprehensive and effective system of long term policies and strategic planning. This system should promote the development of deep roots of capitalism in Poland - and long term competitiveness of Polish economy. To my mind the process to develop a competitive economy is more advanced than that of competitive society. Thus, I am less pessimistic in this part of my paper. However, I understand that we have still a long way to create a fully competitive economy able to meet the challenges of the European Union.

The Challenges for the Polish State

To meet the challenge of the European Union we need a small, efficient, liberal and strong state. Only the representatives of such a state will be able to negotiate and maintain a proper place for Poland in the European Union. In the beginning of the transformation period it was wrongly assumed - that a liberal state is a week state. The first governments of Polonia Restituta have been dominated by the ideology of Solidarity and accepted this equation. In consequence, these governments have to pay later an immense price for this macro political mistake. This present Leftist Coalition has a much stronger motivation to promote the strong state. But, this Coalition has also a very limited success in the development of a small , efficient, liberal and strong state in Poland.

In brief -Polonia Restituta after 1989 - has two deficiencies in this field:

1. the low level of sophistication and motivation of our political elites which have basic difficulties to accept the fundamental principle - that

Salus Rei Publicae

Suprema Lex esto.

2. The second problem is to low level of motivation and consequence to create in Poland a competent, professional, nonpolitical Civil Service. The traditions in this field in Polish history are very weak and the achievements of the last six years very poor. On the present political horizon- there are no signs of any significant change in this field. It is clear - that without a professional Civil Service there will be no fully efficient Polish State. Contra spem - sperare - Let us hope that the 21st century will solve this problem.

The Challenge of the Ability to Create and Absorb Innovations

The ability to create and absorb innovations is the greatest challenge for Poland at the turn of the 20th and 21st century. In the discussion of this grand dilemma the following observation should be quoted:

" The concept of innovation has recently changed dramatically as the focus has shifted from single act philosophy of innovation to the complex mechanisms that underlie new production processes and the production of new products" .

In the long historical experience of Poland those complex social mechanisms have never functioned too well and the difference between the innovative civilization of Western Europe and the grosso modo imitative civilization of Poland was more or less visible in the differentiated historical conditions.

Naturally, there were many exceptions in relation to this tentative observation but these exceptions are probably not changing the general historical landscape in this field. Especially important is the heavy legacy of the quasi communistic past - when the whole economic,social and political climate did not produce positive inducements for complex mechanisms that underlie new production processes and the production of new products. In this context, both the generally negative and, in some fields, positive role of the Warsaw Pact and COMECON should be mentioned.

If at the turn of the 20th and 21st century the Polish society and the Polish economy will not multiply the capacities to produce and absorb innovations - then, in the next Millenium, Poland will continue to function as a peripheral country. The problem of innovative thought and activity will be especially dramatic in this historical hour - when Poland will join the European Union as a full member. The space of Poland will change itself into an open space in the European and in global scale. The open space which is not an innovative space at the same time is turning itself into a dependent space in economic, political and scholarly dimensions.

The creation of the Polish innovative space is, in a large scale, related to the dynamic activity of spontaneous market forces. This problem is, however, too great and too important to be solved only within the framework created by the lottery of the free market. We need in this field an active long-term strategic policy of the State seeing the complex interrelations generated by the European, national and regional scales in which the pro innovative policies are designed and implemented.

Unfortunately, the consecutive Governments of Polonia Restituta have not recognized the pro innovative policy as a domain of the highest priority.

"Better late than never". The Council of Ministers on November 22nd of 1994 approved a document prepared by the State Committee for Scientific Research - "The Assumptions of the Pro innovative Policy of the State" (Za³o¿enia Polityki Pro-innowacyjnej Pañstwa).

According to this document - "The main goal of the pro-innovative policy of the State is the intensification of the implementation of new technological and managerial solutions in the sphere of material production, exploitation and services.

This goal will be achieved via the stimulation and promotion of the innovative attitudes of the society and the subjects of economic activity. This goal will be achieved also via the support of institutions which are contributing to the growth of innovations. The innovativnessons of the economy is the fundamental condition for the growth of the competitive qualities of the commodities and services which leads to the development of export and the improvement of the quality of life.

The innovations will determine the position of Poland in the process of integration with the global and particularly European economy".

This document is not reflecting a grand long-term vision of the role of innovation in the transformation of Polish Society, Polish Economy and the Polish State. Particularly, disappointing is the elimination of the most vital issue - of the creation of innovation. The whole attention is concentrated on the absorption and diffusion of innovations.

Nevertheless, this document is an important achievement of the present Polish government which h as - at least - broken the barrier of silence in the field of pro innovative policies.

The Opportunities created by Technology Transfer

From the Polish point of view there are two scenarios of technology transfer:

a mechanistic and passive scenario, and

an organic and active scenario.

The first scenario will function in a climate in which Poland will be a very weak peripheral country in the global processes of innovation, creation and diffusion. In this case the Polish and foreign enterprise in Poland will apply the imported technology in crudo radice without any participation of the local scene.

The second scenario will function in a climate in which the innovation processes will be deeply embedded into the Polish entrepreneurial, scientific and cultural environment, i.e. in which Poland will be not a passive and mechanistic recipient but an active actor on the global and European innovation scene. To implement the second scenario - Poland must mobilize the endogenous forces of the innovation process. In this mobilization the role of the European Union and especially DG 12 is extremely important. The advice of A.J. Hingel should be taken very seriously.

"The regional capacity to participate in and to draw benefits from European integration is relatively spread, but highest in a few regions in the core of Europe. European integration as a process of increasing transfers, of best practices, of new technologies and of new knowledge, will strengthen relatively the position of a few central core regions in Europe . To improve regions capability of drawing benefits from, and participating in, European integration would have two major effects which are both central to the future of regions and the Community. First of all, it would provide ground for counterbalancing, in the medium and long term perspective, the relative strength of the core regions, but, secondly, it would also provide the less favoured regions with means to draw the maximum benefits form the strong core regions".

The special role of the Polish Regional Scene

There is no doubt that Poland must to develop "the regional capacity to participate in and draw benefits from European integration". Unfortunately, the present territorial organization of the country, created in 1975, is very inefficient from both the Polish and the European point of view.

The two-tier system consisting of forty nine provinces (województwa) and 2400 communes (gminy) must be replaced by a new three-tier system consisting, for example, of ten provinces, hundred counties and thousand communes. Poland must be changed into a system of great and strong provinces - which could be actors on the European scene - provinces which "would have the capacity to participate in and draw benefits from the European integration". This means, however, not that Poland should be changed into a Federal State. Poland must remain a Unitary State - due to our geographical location and due to the semianarchistic psychology of the Polish national character.

However, in the framework of the Unitary State there is an ample space for an efficient rational and socially and politically responsible territorial organization of the country - able to use opportunities created by the European Union.

Unfortunately, at the present moment the well advanced and designed reform of the territorial organization of the country - is paralyzed by the political conflict inside the ruling coalition. Let us hope that this conflict will be solved in a positive way before or after the next Parliament election in 1997. Anyway - Poland must have an efficient European territorial organization of the country before the year of 2000. In this territorial organization - the great regions-provinces will function not only as units of Regional Government but also as a Regional Innovation Systems visible on the European Scene.

The passive and active role of the European Union

There are two scenarios of the role of European Union in Central Europe:

A passive scenario - establishing the criteria for membership in the Union for Central European countries and monitoring the progress in this field, and,

An active scenario creating pressures and opportunities to accelerate the process of adaptation of Central Europe to the parameters and conditions prevailing on the territory of the European Union.

I understand very well that the role of the European Union must be passive in this sense - that the activity of the Union cannot replace the endogenous effort and will of the Central European countries. This idea has been very clearly expressed in the earlier part of this paper.

However, to my mind, the Union could use different situations in a more active way. Let me quote two examples:

The first example: In October 1992 in Brussels a TEMPUS conference took place. The title of this Conference was - "The Role of Higher Education in the Reform Process in Central and Eastern Europe". I had a privilege to present the Keynote Speech at this conference. In this speech I was trying to cross the border between the passive and active domain. Let me quote the proper part of my paper .

"The entrance into the twenty-first century - the last six years of the twentieth century

When looking at the immense machinery of the European Communities we see that in the activity of this machinery there is a lot of imaginative, careful planning adapted to the empirical reality of the 12 countries. The same amount of careful imaginative planning should be applied to the countries of Central and Eastern Europe.

In this context, I would like to propose organizing in 1993 a conference on 'higher education in Central and Eastern Europe - the last six years of the twentieth century".

Each country should - under the auspices of the European Communities - prepare a clear comprehensive study on what should be done in the field of higher education in the years 1994-1999, the last six years of the twentieth century.

We will find out very soon how badly prepared we are to start and implement such a study. The prevailing climate of short-term thinking, the absence of strategic planning in Central and Eastern Europe, the absence of long-term visions of the transformation of the society, economy and the state, the current political and economic crises are the factors which make it very difficult to start comprehensive studies on the immediate future of higher education in Central and Eastern Europe. The proposed conference would create a comprehensive framework for the European Communities to establish long-term programmes in the field of higher education in Central and eastern Europe".

Unfortunately, nobody has taken up this proposal. I think the opportunity is not yet lost. We can shift the time horizon to 2005 or 2010.

The second example : In 1992-1994 years DG 12 has sponsored an International Research Programme "Eastern and Central Europe 20000". The Final Report of this Programme could create an excellent opportunity to discuss the art and wisdom of long-term thinking about the Future of Central Europe. Maybe this opportunity can be used in 1997 ?

I am convinced that we need a general comprehensive discussion concerning the role of the European Union in the transformation of Central Europe

The Challenge of the art and wisdom of long-term approaches

The dialogue and cooperation between the European Union and Central Europe must have a very strong background in long-term thinking - diagnostic and prospective studies and strategic planning.

Unfortunately, these domains are highly neglected in central Europe both in political and academic dimensions. This intellectual and pragmatic gap should be reduced and eliminated in the near future. This can be done only by joint efforts and activities of the Central European countries and the European Union. I think. however, that the technocratic machinery of the European Union is the stronger actor in this field. This strong actor is well endowed to create the 'big push' which will be highly appreciated by the experiences of the 21st century.

Conclusions

The European Union is a great challenge for the Polish society, Polish economy and Polish state. To my mind the Union should consider- how to make this challenge more active and more explicit. The constructive pressure of the Union could be recognized as a positive force in the transformation of Poland. Facing this challenge and this pressure Poland should respond by efficient mobilization of endogenous forces . It will help to enter in a good shape into the Paradise, the Purgatory and the Hell of the European Union


Warszawa ¯oliborz June the 2nd 1996


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