Strengthening Polish-Malaysian Relations Can Lead to Greater Opportunities

This year, both Poland and Malaysia will be celebrating their 50th anniversary of the establishment of their diplomatic relations. Despite the Covid-19 pandemic, this exceptional year, could be an opportunity to increase Polish-Malaysian economic cooperation mostly thanks to many complementarities of both economies.

In 2019, the turnover of Polish trade in goods with Malaysia amounted to US$1.218 billion of which Polish exports reached the value of over US$ 254 million and imports from Malaysia over US$964 million. The Polish export to Malaysia were dominated by machinery products such as turbines, electronics for data processing and telecommunications and copper alloys while from Malaysia, Poland mainly imported electrical equipment and rubber articles.

BusinessToday speaks to the Polish Ambassador to Malaysia, His Excellency Prof. Krzysztof Dębnicki, joined by the Head of the Trade Office of the Polish Investment and Trade Agency (PAIH) in Kuala Lumpur, Przemysław Zaręba to discuss further on the growing relationship between both countries.

“The geographical distance has not stopped us from trading and continuing to foster our economic ties. To further strengthen this positive trend, the Polish government decided to establish a trade office here in Kuala Lumpur back in 2018,” Ambassador Dębnicki says.

The PAIH Trade Office in KL is one of six in the region.

Head of the Trade Office, Przemysław Zaręba says that Malaysia has always stood out as one of the most attractive countries for investment and has the potential to be an ideal market for Polish products. However, that position is now not so secure with the rising power of Vietnam and Indonesia, he highlights.

Polish Ambassador to Malaysia, His Excellency Prof. Krzysztof Dębnicki and Head of the Trade Office, Przemysław Zaręba

“We want to make Malaysia easy and more approachable for Polish businesses because it is usually the regulations which are the biggest hurdle” he highlights. 

According to Zaręba, many Polish businessmen that venture into Malaysia often choose to invest here due to the affordability the country offers. So far, Polish investments in Malaysia were concentrated in the field of IT services, defense and cosmetics.

And while the number of Polish businesses in the country is growing, Ambassador Dębnicki says the level of awareness among Malaysian companies to invest in Poland is still low. He urges Malaysian business to look outside the conventional European areas of interest.

“Positively enough, this trend started slowly changing in recent years with the first Malaysian investments in Poland. A good example is Employees’ Provident Fund (EPF) that decided to invest RM 1.6 billion in various Polish cities (i.e. Galeria Katowicka shopping mall in Katowice or Gdanski Business Center in Warsaw),” says Ambassador Dębnicki.

“A good economic performance during the pandemic confirms Poland’s place as one of the most attractive places to invest globally. Poland has been ranked number 3 in the world in the CEO Magazine’s ranking of the “10 best countries to invest in post-COVID”. What is more, Financial Times’ “fDi’s Global Cities of the Future 2021/22” has two Polish cities (Wrocław and Warsaw) in the Top20 of best cities to invest in,” adds PrzemysławZaręba.

Since the 90s, Poland has been modernising and transforming its economy to create a business-friendly environment. Zaręba added that Poland has one of the world’s best economic zones and businesses can benefit from many tax incentives depending on the location.

For example, in 2020 the special economic zone in Łódź was acclaimed the first in Europe and third in the world in terms of effectiveness and hospitable environment for companies aiming at developing their business not only in Poland but also the rest of the European Union, he says.

Polish representatives also highlighted that the strength of Poland lies to a large extent in the number of fast-growing technological companies.

“We are very proud of our IT and videogames industries – one of the most dynamic in the world. We also have one of the most advanced banking services globally and a lot of innovative solutions to offer in the areas of waste management and green technologies,” says the Ambassador.

According to Zaręba, there are ample of opportunities for cooperation also in other areas: the halal sector, food, e-commerce together with FinTech and cosmetics. “Since 2018, 9 Polish cosmetic companies, actively supported by our Agency in KL have signed contracts to export their products onto the Malaysian market. It shows the potential for greater cooperation,” he says.

Challenges ahead

“There are 13 Polish companies invested now in Malaysia with most of them in the IT field. The problems they face involve the difficulty in dealing with government agencies primarily connected with getting specialists to Malaysia,” the Ambassador says.

“For companies to work more efficiently, they need to bring in experts to help the in-country teams to achieve what is required. This single issue can influence foreign investors to move out of Malaysia,” he tells BusinessToday.

Despite a global reduction in trade due to the aftermath of the pandemic, Malaysia has remained the second biggest Polish trade partner in ASEAN in 2020. During that time, Polish – Malaysian trade in goods expanded, to reach – according to preliminary data – the highest level ever – over US$ 1.5 billion.

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