POLAND’S ECONOMIC COOPERATION WITH THE ARAB STATES

POLAND’S ECONOMIC COOPERATION WITH THE ARAB STATES

Contents

Piotr Wachowiak, Krzysztof Drynda

Foreword – Arkadiusz Michał Kowalski

Introduction – Arkadiusz Michał Kowalski

C h a p t e r 1 International Comparative Analysis of the Competitiveness and Innovation Performance of Poland and the Arab States

Krzysztof Falkowski

C h a p t e r 2 Trade between Poland and the Arab States 29

Tomasz M. Napiórkowski

C h a p t e r 3 Foreign Direct Investment between the Arab States and Poland

Małgorzata Stefania Lewandowska

C h a p t e r 4 Dimensions of Culture and Innovation Linkages in the Arab States and in Poland

Marta Mackiewicz

C h a p t e r 5 Experiences of Polish Companies Operating in the Arab States

Foreword

The Arab world has been attracting growing interest from economists due to an increasing importance of the Arab states in today’s global economy. The strategic importance of the region goes beyond the fact that it is where numerous transport and trade routes intersect, as it is also an invaluable source of energy resources and a vast market with a huge potential. At the same time, the Arab states have been departing from an economic monoculture based on oil and gas resources towards diversification of their economic structure, developing high-tech industries and investing in the science sector and research and development. The potential and the development opportunities for Polish-Arab cooperation can therefore be sought not only on the part of enterprises but also on the part of higher education and research institutions.

Interest in the Arab countries is also growing among the research staff of the SGH Warsaw School of Economics, as exemplified by this monograph.

The area occupied by the Arab states, especially those located in the Middle East, is widely perceived as the cradle of human civilization. It was in this region where the first cities emerged over eight thousand years ago, and then the first nation states came into being. The region played a significant role in technical progress as well as in science, philosophy, linguistics, arts, and architecture. Over successive millennia, the Middle East remained at the core of civilization, alongside Middle Asia, the Indian subcontinent, China, and certain parts of Europe, particularly in the times of the Greek and Roman empires. Thus, for thousands of years the Arab world was among the leading centers of human civilization, to finally fall victim to centuries of stagnation. Nowadays, in many respects the Arab states stand out as a region where there is a strong contrast between the old and new worlds. Region-specific conditions merge here with more universal factors: the globalization wave, technological progress, and implementation of new communication tools. The platform that integrates all nations in the Arab world is formed by the Arabic language and the Arab culture. At the same time, it should be kept in mind that the Arab world is not a uniform monolith, as it forms a mosaic of diverse economic, political, and social systems.

Development trends in the Arab states show that the region has been and will be gaining in importance in the world economy. Research conducted by academics of the SGH Warsaw School of Economics proves a progress in the development of Polish- Arab cooperation over the past decade, as reflected, for instance, by the growth in the overall value of trade and foreign direct investment. Despite cultural differences and geographical distance, the Arab world offers great opportunities for Poland’s economic involvement. Success stories of Polish enterprises in the Arab market, demanding yet offering unlimited prospects for development, may become an inspiration for further ventures to be undertaken through Polish-Arab cooperation. It is therefore advisable to widely build awareness of the potential of the Arab world and the opportunities for the development of economic cooperation with the region, which this publication will hopefully promote.

Piotr Wachowiak  – Rector of the SGH Warsaw School of Economics

Krzysztof Drynda – President of the Polish Investment and Trade Agency

Introduction

Arkadiusz Michał Kowalski

The Arab states are situated in the Southwest Asia and North Africa region. The strategic significance of the region arises from the fact that it is located at the interface of three continents of the Old World: Asia, Africa, and Europe. It is where numerous transport and trade routes intersect and there are huge energy resources, mainly oil. On the other hand, the region seems to embody the turbulences, conflicts, and uncertainties of today’s world. While all Arab states are facing more or less the same challenges, their social and economic context is highly divergent. The Arab states include some of the world’s wealthiest countries, but most of them have moderate income levels, with a large number of their citizens living in poverty.

The purpose of this monograph is to assess the level of cooperation between Poland and the Arab states, with a particular focus on foreign direct investment, trade, and cultural conditions, as well as to compare the competitiveness and innovation performance of the countries concerned and the experiences of Polish enterprises operating in the Arab markets. In this publication, the term “Arab states” includes 22 countries which form the Arab League and which are classified by the World Bank as the Arab World. They are:

• Saudi Arabia, Kuwait, Bahrain, Qatar, United Arab Emirates (UAE), Oman, Yemen (Arabian Peninsula),
• Iraq, Syria, Lebanon, Jordan (Middle East),
• Libya, Tunisia, Algeria, Morocco, Mauritania (Maghreb states),
• Egypt, Sudan, Somalia, Djibouti, the Comoros, the Palestinian Autonomy.

A comparison of Poland with the Arab states is not a simple task for several reasons.

On the one hand, we are comparing one country with the group of 22 which are additionally located in a region characterized by diverse political, geographical, climatic, social, and economic conditions. The Arab states themselves are also a heterogenous group, with some of them generating high income while others are struggling with multiple developmental problems. As is the case with many developing countries around the world, those states have poorly developed statistical reporting systems and lack input data for many indicators used in economic analyses. The low availability of statistical data posed a challenge for the authors of the monograph, who sought to collect and use in their research statistical data which is available at least for the majority of the economies under study.

The monograph consists of five chapters.

The first chapter, by Arkadiusz Kowalski, presents the social and economic situation of the Arab states and Poland in an international comparative approach. The analysis covers both basic indicators differentiating the countries being studied are analyzed, such as the size of the economies measured by GDP, population, and land area, and long-term income competitiveness measured by GDP per capita. Owing to the need for transition to a knowledge-based economy, special attention has been placed on an analysis of the innovation potential and innovation position of Poland and the Arab states, with the use of metrics such as the proportion of residents using the Internet, the number of patents, or the share of high-tech exports in total exports. Chapter two, by Krzysztof Falkowski, analyzes trade between Poland and the Arab states. In particular, the volume and dynamics of change in Poland’s trade with the Arab states, both overall and with individual countries, are studied, as is the commodity structure of trade between Poland and those Arab states that play a major role in Poland’s trade (Saudi Arabia, the United Arab Emirates, Algeria, Morocco, and Egypt). It the third chapter, by Tomasz M. Napiórkowski, the analysis concerns foreign direct investment (FDI) between the Arab states and Poland, both in terms of stock and flows, as well as related income. Chapter four, by Małgorzata Lewandowska, deals with the dimensions of culture in the Arab states and in Poland, analyzed mainly in the context of the innovative capacity of the economy. The fifth chapter, by Marta Mackiewicz, presents examples of successful Polish firms operating in the Arab markets and recommendations arising from their experiences.

Table 1 Basic indicators for comparison between the Arab states and Poland

State	GDP (in USD m), 2020	GDP per capita (in USD, current prices), 2020	Population (in millions, 2020)	Land area, in thousands of km2, 2018	Urban area, in thousands of km2, 2010
Algeria	145 164	3 310.39	43.9	2 382	30 196
Bahrain	38 475*	23 443.43*	1.7	1	549
Comoros	1 220	1 402.60	0.9	2	196
Djibouti	3 384	3 425.50	1	23	150
Egypt	363 069	3 547.87	102.3	995	24 270
Iraq	167 224	4 157.48	40.2	434	12 430
Jordan	43 698 4	282.77	10.2	89	3 384
Kuwait	136 197*	32 373.25*	4.3	18	3 942
Lebanon	33 383	4 891.00	6.8	10	2 317
Libya	25 418	3 699.23	6.9	1 760	10 083
Mauritania	7 779	1 672.92	4.6	1 031	772
Morocco	112 871	3 009.25	36.9	446	12 057
Oman	76 332*	15 343.04*	5.1	310	5 651
Qatar	146 374	50 805.46	2.9	11	1 495
Saudi Arabia	700 119	20 110.32	34.8	2 150	41 224
Somalia	4 918	309.42	15.9	627	399
Sudan	26 111	595.47	43.8	1 849	6 518
Syria	n.d.	n.d.	17.5	184	11 955
Tunisia	39 236	3 319.82	11.8	155	9 898
UAE	421 142*	43 103.34	9.9	71	8 568
Yemen	23 486**	824.12**	29.8	528	4 703
Palestinian Autonomy	15 561	3 239.73	4.8	6	2 496
Arab World ***	2 530 186	5802.10	436.1	13 082	193 255
Poland	594 165	15 656.18	38	306	30 501

* – 2019 data

** – 2018 data

*** – values for the Arab World category in the World Development database are calculated from separate estimates and

do not have to be the exact sum of values for the individual countries.

n.d. – no data

Source: World Development Indicators database of the World Bank, last updated 21.07.2021.