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War and COVID-19 and the economy. Paweł Borys, president of PFR: we are talking about at least a decade of serious economic turbulence

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First the COVID-19 pandemic and now Russia’s invasion of Ukraine have put us in a difficult economic time. – We are talking about at least a decade of serious economic turbulence – said Paweł Borys, president of the Polish Development Fund (PFR) on Monday. In his opinion, the world economy will move from globalization to regionalization, and Poland and our region have a chance to strengthen their position.

The head of the Polish Development Fund, Paweł Borys, during the European Financial Congress in Sopot, pointed out that many crises have recently accumulated in a short period: the COVID-19 pandemic and a deep recession, followed by a quick recovery of the economy and problems on the supply side, and supply chains breakdown. In his opinion, it did inflationon top of it war in Ukrainewhich triggered a very sharp increase in energy and food prices.

As Borys emphasized, we have entered a difficult period for the economy and it is not a short-term phenomenon. “Rather, we are talking about at least a decade of severe economic turbulence,” he said.

Changes in the world economy

– If we assume that the current economic problems are largely due to a supply shock related to the energy sector, energy independence, prices and availability of raw materials, the disruption of supply chains, and we overlay it with a geopolitical situation related to an aggressive policy Russia and the impending stronger conflict between United States and China, this means that we are talking about the fact that the current system of the world economy based on free trade and globalization is coming to an end – said the head of the Polish Development Fund. In his opinion, we are approaching the period of regionalization, where the main regions are Europe, China, India and the United States.

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Borys added that, in his opinion, the change in the economic paradigm results from the collision of globalization and imperialism. He noted that the economic changes in Russia and China were not accompanied by political changes – these countries remained autocratic.

As he said, departing from globalization will cause a reflecting trend – investment decisions will be made not where it is cheaper, but where it is safer. – Certainly, we have several years of shaping a new system in the world economy – assessed the head of the Polish Development Fund.

Paweł BorysPAP / Adam Warżawa

Boris also expressed the opinion that if Europe did not change its economic strategy during this decade, it would lose its position. He pointed out that in recent years Europe has become dependent on the supply and export sides of two autocratic blocs – some countries have based their raw material policy on the import of cheap raw materials from Russia, this assumed being competitive in exporting products to the Chinese market.

In the opinion of the head of the Polish Development Fund, this approach should be changed in the coming years, and more emphasis should be placed on cooperation within the framework European Union and our region and ties with the United States as closely as possible, e.g. under a free trade agreement.

Borys also presented the thesis according to which Poland and our region have a chance to strengthen on the map of the European economy. – If we make good use of this time to strengthen the resilience and competitiveness of our region, by expanding the transport and logistics infrastructure, energy connections, reindustrialization in many industries, we will focus on close economic cooperation with Ukraine, this may mean that Europe will not be divided into Eastern Europe and Western Europe, but we will all join the ranks of rich EU countries, summed up Borys.

Main photo source: Shutterstock

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