PRIVATISATION VS. PRODUCTIVITY IN POLAND Paper prepared by: Jacek KOTOWSKI Izabella ZAGOŹDZIŃSKA Central Statistical Office of Poland

CONTENT OF THE PAPER Short description of privatisation process in Poland legal basis scale and present state Comparison of private and state owned entities’ behaviour survival rate employment basic financial results labour productivity Plans for the future

PROVATISATION – LEGAL BASIS Three transformation procedures: Indirect privatisation 1st step – commercialisation 2nd step – sale to private owners Direct privatisation Liquidation

PRIVATISATION – SCALE AND PRESENT STATE 1990 – beginning of the process Up to 2004 in total 5511 enterprises were included in ownership transformation process (excl. agriculture) of which 2358 entities were privatised 343 – indirectly 2015 – directly 961 entities were liquidated

PRIVATE VS. STATE ENTITIES Scope of the analysis: Enterprises active in 1999-2004 as: Panel A – private Panel B – state Enterprises with 10+ employed persons C, D & E NACE sections

POPULATION OBSERVED (1999) Private State Total industry 853 470 of which: C 23 25 D 741 428 E 89 17

SURVIVAL RATE 1999-2004 Private State Total industry 68.93 44.47 of which: C 91.30 64.00 D 66.40 42.29 E 84.27 70.59 Similar differences in manufacturing divisions

Average employment in 2004 (per 1 unit) Private State C 326 555 D 324 221 E 382 741

EMPLOYMENT REDUCTIONS BETWEEN 1999 AND 2004 Private State Total industry 36% 33% of which: C D 31% 35% E 54% 26% In general higher reductions at the beginning of the period. In private entities increase of employment in 2004.

TURNOVER IN 2004 (per 1 unit – in ths. PLN) Private State Total industry 121913 61270 of which: C 32490 77944 D 106262 46865 E 249624 256308 In C and E turnover in private entities increased faster than in state enterprises.

PRODUCTION COST RATE – 2004 Private State Total industry 92.8 93.5 of which: C 92.6 97.4 D 94.2 93.3 E 88.9 92.3 In D only in 2004 higher in private entities.

TURNOVER IN 2004 (per 1 employee – in ths. PLN) Private State Total industry 374 222 of which: C 204 140 D 328 212 E 654 346 In 1999-2004 growth rate higher in private entities.

PROFIT IN 2004 (per 1 employee – in ths. PLN) Private State Total industry 26.9 14.5 of which: C 15.1 3.6 D 19.0 14.3 E 72.6 26.5 In 1999-2000 higher in state enterprises but since 2001 very fast increase in private entities (sections C and E).

CONCLUSIONS Private owner better results higher labour productivity

PLANS FOR THE FUTURE Further analysis planned Larger use of statistical surveys’ results: B&R FATS