Poland is often presented as a success story — a country that abandoned Communism in the early 1990s, joined the European Union in 2004 and experienced significant economic growth. This story is largely true. The Polish economy had an average annual growth of 5.4 percent between 2004 and 2008, and while expansion slowed down with the beginning of the European crisis, Poland was the only EU member to avoid recession. Simultaneously, unemployment decreased dramatically, from 19.1 percent in 2004 to 9 percent in 2014.
Strong foreign direct investment, business-friendly policies, EU cohesion funds, low labor costs and a young and talented workforce defined Poland's economic resiliency. In addition, Warsaw's decision not to join the eurozone largely spared the country from the currency union's instability and allowed Poland to apply an independent monetary policy to cope with the economic crisis.
A More Nuanced View
However, Poland's "economic miracle" has a flipside. Income inequality in Poland has increased substantially over the past two decades, as the country replaced its centrally-planned economy for a liberalized one. In this new market-driven economy, labor demand shifted from the public to the private sector, meaning that wages for highly-skilled workers increased exponentially while the need for manual labor diminished. Of course, this phenomenon is not unique to Poland, but it led to a perception among some voters that Poland's success was not equally distributed among its citizens.
Eurostat data shows that Poland has a Gini coefficient of about 30 percent in a scale where 0 represents perfect income equality and 100 implies perfect inequality. The number suggests that Poland is less fair than the Czech Republic, Slovakia and other Central European countries. Poverty in Poland has decreased over the past decade, but according to the World Bank the share of total income by the lowest-earning 20 percent of the population has remained almost unchanged. Though inequality in Poland is lower than that of some Western European countries, such as Italy and Spain, many Poles believe that the ruling Civic Platform government has not done enough to build an economically fair society.
Poland's high emigration rates offer a more nuanced view of the country's "economic miracle." Despite Poland's strong economic growth, a quarter of the country's youth are unemployed. Poland's accession to the European Union also opened the door for legal emigration to stronger economies in the West, including Germany and the United Kingdom. Emigration grew rapidly: from roughly 19,000 people in 2004 to about 276,000 in 2013. Low-skilled workers sought work in the West's construction sector, while more highly-skilled workers sought higher wages.
In addition, eight years of governing have strained Poland's coalition government. Corruption scandals, resignations and unpopular measures, such as a rise in the retirement age, have taken a toll on the party's popularity. Though Komorowski left Civic Platform when he won the presidency in 2010, he remained closely linked to the party and, as a result, the president's popularity was connected to that of the Polish Cabinet.
These factors explain Duda's victory in Poland's presidential elections. During the campaign, the Law and Justice frontman appealed to working-class citizens amid promises to increase benefits for families, cut the retirement age, raise the threshold for income tax and help households repay their foreign-denominated debt. In a campaign mostly focused on social issues, Duda's message focused on social equality and assisting those who have not benefited from Poland's spectacular growth. This socially-minded position attracted a broad base of supporters, including retirees, rural voters and the young — particularly in Poland's underdeveloped eastern regions.
What Happens Next
Despite campaigning on a message of change, the president-elect is unlikely to honor all of his campaign promises, at least for the remainder of the year. The president has the power to propose and veto legislation, but Duda will have to work with a parliament that is still controlled by the Civic Platform and its junior coalition party, the Polish People's Party. The real opportunity for the president-elect to pass his agenda will not arrive until October when Poland holds general elections. Duda's victory is a boon for Law and Justice, and the party will probably perform well in October.
This is not the first time the nationalist party achieved political success. Law and Justice was briefly in power from 2005 to 2007, during which time Warsaw maintained cold relations with Russia and had several disputes with the European Union. The party campaigned on a nationalist agenda, but a series of fragile political alliances with other parliamentary parties prevented it from implementing most of its program. Should Law and Justice return to power, Warsaw's foreign policy is unlikely to change significantly.
Because of Poland's geopolitical imperatives, Warsaw needs to preserve its membership in the European Union and NATO. But joining the eurozone is not a priority for the current government, and a Law and Justice administration would not bring Poland any closer to the monetary union. Poland's relationship with Russia is already diminished, and Warsaw has consistently campaigned for a larger NATO presence in Central Europe, in addition to stronger sanctions against Moscow. A government led by Law and Justice would be slightly more Euroskeptic in tone, though it is not likely to take any radical steps against the European Union's already stagnating institutional integration process.
There is room, however, for Law and Justice to change domestic policies. During the campaign, Duda criticized foreign investors and businesses, even suggesting that Warsaw should introduce special taxes against foreign companies. He also spoke in favor of the domestic takeover of Poland's predominantly foreign-run banking sector. In this context, a future conversion of foreign-denominated loans into zlotys should not be ruled out. The party's position on the nationalization of companies that were recently privatized is still vague, but Law and Justice would probably use state-owned companies to create more jobs, a measure that could reverse the current government's plan to reorganize the energy sector.
Yet Duda's victory was not the only surprise in Poland's presidential election. In the first round of voting, Pawel Kukiz, a former musician with no previous political experience, won 20 percent of the vote, heralding the rise of new anti-establishment politicians and political parties that could steal protest votes from Law and Justice. Should this trend continue, Poland could face a fragmented parliament after the general elections. Though Law and Justice is positioned to dominate Poland's next government, the Civic Platform could still end up leading a multi-party coalition. Duda's role would become critical, with the Polish constitution allowing the president to participate in the negotiations to form a government.
Poland's situation cannot really be compared with that of eurozone countries such as Spain and Greece, where voters have also punished the ruling elites. Still, voters in each of these countries have echoed each other in their calls of inequality, discontent and disenfranchisement. Should these shared sentiments continue, or grow, Poland's past history of EU integration and economic liberalization could soon be threatened.
