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NAVIGATING WITHOUT A COMPASS – Assessment of draft Polish RRP released in February 2021

The flaws of the RRP are a manifestation of structural problems of Polish economic policy, while its strengths stem from the framework provided by the EC. Rather than treating the Plan as yet another, not entirely successful transfer of governance mechanisms from Brussels to Warsaw, it is better to draw conclusions from the last six months and focus not only on recovery of the economy, but also on strengthening the state’s capacity in pursuing a well thought-out development policy.

 

Conclusion:

The draft RRP was developed under enormous time pressure during a period of unprecedented social and economic crisis. The preparation of such a comprehensive program of reforms coupled with a large-scale investment package would be a substantial organisational challenge for public administration in any circumstances. Therefore, both the strategic shortcomings and deficiencies at the level of individual investment projects understandable. However, it would be a mistake to accept these weaknesses as the inevitable result of a lack of adequate resources during the pandemic, especially since over the last several months the government has had the opportunity to draw on the detailed guidance from the European Commission, use the Ministry’s vast expertise in designing the frameworks for EU funds disbursement, and reach out for the support to stakeholders representing local governments, business and the civil society.

The weaknesses of the RRP should be regarded as symptoms of structural problems of policymaking in Poland that have become exposed during the crisis. They include:

  • systemic neglect – and in the case of green transition, outright suppression – of the impact of global megatrends (climate, digital, demographic, economic) on the country’s development prospects,
  • a reactive approach to reforms that are associated with initial adjustment costs, but eventually strengthen Poland’s long-term potential,
  • focus on subsidies – in particular, those financed from the EU funds – while neglecting the role that private capital should play in the achievement of the strategic goals of public policy,
  • engagement of stakeholders only in late stages of the policymaking process; this refers in particular to representatives of the key sectors targeted by RRP such as telecommunications, energy, healthcare. The preparations of the RRP’ relied almost exclusively on the administration’s own resources,
  • underinvestment in the analytical capacities of the public, private and non-governmental sectors, which could assist the public administration in strategic and operational decisions. The government’s lack of awareness of this deficit is further emphasised by the lack of relevant investments in the RRP.

Conversely, the strengths of RRP stem mainly from the implementation of the framework provided by the European Commission, which underlined the importance of structural reforms and of monitoring of the impacts of investments on the achievement of long-term development goals. However, rather than treating the Plan as yet another partial and not entirely successful transfer of the policy governance framework from Brussels to Warsaw, it is better to draw conclusions from the last six months and focus not only on recovery of the economy but also on strengthening the state’s capacity in pursuing a well-thought-out development policy. Revision and implementation of the RRP provide a good foundation, but to fulfil this role, changes to the RRP must include:

  • adding provisions on the development of a new generation of strategic documents that address the challenges of the 2020s and prepare the Polish economy for long-term transformational processes, in particular in the area of decarbonisation and digitalisation of the economy. These should include not only drafting of the documents themselves, but also developing analytical capacity in key areas (such as better understanding of the implications of building a zero-carbon economy, the introduction of new business models based on digital technologies for the labour market and competitiveness of the economy) and strengthening cooperation between the public administration, the private sector and the expert community,
  • urgent preparation of a plan to use the loan component from the Recovery and Resilience Facility, including a revision of the list of investments currently slated for grant support in the RRP with a view to potentially changing the financing instrument from grant to loan,
  • revision of the reform plan to ensure the RRP has transformative potential, supports investment processes with real institutional changes, which should be laid out in detail and have clear implementation schedules, and includes reforms aimed at improving the business environment and efficiency of the justice system, and strengthening of the rule of law,
  • adding a list of cross-sectoral indicators focused on the results of interventions, and revision of the list of investments and allocations assigned to them, taking into consideration their impact on the achievement of these indicators,
  • an analysis of complementarity of the planned measures with other instruments of public intervention, including in particular the Multiannual Financial Framework,
  • a provision on including representatives of local authorities, private sector and civil society in the Monitoring Committee for the implementation of reforms and investments envisaged by the RRP.
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