Editor’s Note: Richard Benesevich is a Lecture at Panstwowe Wysze Szkola Zawodowe (PWSZ) in Walbrzych, Poland and a judge for the  APS Business Writers Scholarship.

A Bridgehead For Renewal
Invest Park: Walbrzych Special Economic Zone In Poland


By Richard Benesevich

          Think of Poland and the political and economic changes of the last few decades and it's likely Walbrzych (vowb-ZHICK), situated in the province of Lower Silesia, will draw a blank. No heroic images of workers with Solidarity banners facing riot police or papal visits. 
          Lech Walesa came here only once and got a rather cool reception from the local coal miners. Not hard to understand since in the Polish People's Republic, miners were a privileged class who even had their own special stores stocked with goods unavailable to other citizens. Even if the environment was unhealthy -- the town was described in an early 90’s guidebook as ‘one of the most heavily polluted cities in Europe -- life was good and jobs plentiful. Then the world turned upside down. 
          Having lost the heavy subsidies provided by the communist government, this former coal mining and industrial center was relegated to the rust belt. In 1990, five pits employed over 11,000 workers. Before the end of the decade the number had fallen to less than a thousand who were mainly engaged in turning off the lights. 
          Other local industry suffered as well so that today, this city of 140,000 today has an official unemployment rate of 26%. The region, with a population of 220,000 fares even worse with a mind-boggling 36.5% due, in part, to unemployment in the agricultural sector which provided many jobs in state-run ‘agricultural enterprises’ (PGRs).

          One solution to the problem of replacing these former industries and providing hope for such hard-hit regions has been the creation of so-called ‘special economic zones’ (strefa economiczna). Created by a series of legislative acts beginning in 1994, these business and industrial parks are actively engaged in seeking investors to revitalize these devasted local economies. The Walbrzych Special Economic Zone (WSEZ) , known as ‘Invest -Park’ is made of six subzones varying in size from 224.3 hectares to around 20 (550 to 50 acres). 

The incentives for potential outside investors investors include:

• Income and real estate tax exemptions;
• Reductions in legal costs connected with the purchase of property of up to 50% and speeding up the process of necessary permit applications and approval; 
• Inclusion in public subsidy programs for firms with a minimum investment of 100,000 EURO which includes salary and benefit costs of new employees provided that these workplaces are guaranteed for a minimum of 5 years; 
• Low labor costs: average wages (before taxes) in the production sector at end of November 2001 were 1,400 Polish zloty ( about 350 USD) in Walbrzych as compared to 2,300 PLN (650 USD) for the national average. Managerial, administrative and engineering salaries range from 3000 to 5000 PLN (8000 – 1500 
  USD); 
• Location – Walbrzych is located close to the borders with Germany and the Czech Republic and has historically been a commercial ‘crossroads’ town; 
• A developed infrastructure including easy access by road, rail and air; 
• Easily available and low-cost housing in the area for rental or purchase; 
• Numerous tourist attractions and recreational opportunities. 
  

          The largest of the six sub-zones is located within the city limits of Walbrzych on the main road to Wroclaw, the regional capital and fourth largest city in Poland. To date, it has succeeded in attracting nearly 40 investors including: Toyota Motor Manufacturing Poland (currently expanding its facilities), General Electric, Faurecia Steering Systems, Dallas International, Metzeler Automative Hose Systems, NSK Steering Systems Europe, Brussels Sealing Systems and Cersanit (porcelain). Invest-Park, Ltd., as the management and development company, is currently upgrading the infrastructure of all the sub-zones to meet modern standards. 
          Construction of a second stage of the Service Center which include a Customs Office, offices for legal and accounting firms, transport companies, shops, restaurants and apartments is projected to begin this year. 
          Poland is a leading candidate for membership in the European Union and hopes to gain entry in 2004. 
          The existence of the Special Economic Zones was one point which had to be negotiated so that they would not be in violation of European law. This point has been resolved for new investors (those applying after 2001). 
However, discussions still continue over terms and conditions for already existing investors. 

Further information is available on the Internet at: www.invest-park.com.pl 

The e-mail address is: invest@invest-park.com.pl. English inquires should 
be directed to Mr. Tadeusz Orlicz.