A decade ago, Niepolomice was just another cash-strapped Polish municipality struggling to make the transition from communism to capitalism. The four state-owned enterprises based in the area were collapsing; the best and brightest young people were fleeing to the big cities; unemployment was climbing. Mayor Stanislaw Kracik was desperate. Realizing that "one can't build capitalism without capital," he decided to find some people who had it.
Though Niepolomice, which has a population of just 21,000 and lies some 20 km east of Krakow, was 25th on Coca-Cola's list of possible sites for a $30 million bottling plant, Kracik was determined to win it. At the time, it took years to get a new telephone line installed, yet Coca-Cola wanted at least five. So Kracik bought an old military switchboard and persuaded the telephone company to connect it to the public network. He paid to move a high-voltage line running through the prospective site, slashed through paperwork, and even enlisted a priest to preach the benefits of globalization to the skeptical local congregation. The opening of the Coca-Cola plant in 1993 marked the beginning of Niepolomice's revival. Today, Coke has been joined by over a dozen major investors that have created hundreds of jobs. Why isn't the rest of Poland like this?
Kracik's answer is bitter: "Poland is still waiting for a government that puts the interests of the average Pole above the next election results," he says. While years of political infighting on the national level have stymied economic reform and dented investor confidence (foreign direct investment dropped from $10.6 billion in 2000 to $6.1 billion last year), Niepolomice continues to grow and keeps unemployment in check. Poland's economy grew by a paltry 1.3% last year, while Niepolomice's surged 5%. Polish unemployment exceeds 18%, while in Niepolomice it's 7%. Before the global slump struck two years ago, unemployment in the municipality was as low as 5.5%. Kracik has kept local taxes at the maximum allowed by Polish law, but spends the money wisely on new roads and other infrastructure improvements. To many locals Kracik, a 52-year-old former labor organizer who was elected mayor in 1990, is living proof that Poland can change. "We are very lucky to have him," says Barbara Wlodarska, a 51-year-old coffee-shop owner. "Taxes are high, but we get a lot in return."
Krakow's proximity has been a major draw to investors, as well as Niepolomice's leisure facilities, which include an 18-hole golf course and a painstakingly restored 16th century castle, a venue for concerts and conferences. But Kracik's pro-business approach has been the key. His staff routinely handle the paperwork associated with new investments, and construction permits are granted within days rather than weeks. Last year, when PSA Peugeot Citroën was looking for a place to build a $700-million car plant, Niepolomice was the only municipality in Poland to offer the necessary 200 hectares of land in a single plot, a feat that required Kracik and his staff to convince some 600 individual owners to sell. "I like to hear the investors drop to the floor with surprise," Kracik says. However, the full-service approach is not foolproof. Try as he might to impress the French, Kracik lost the investment to a location in Slovakia.
The current slump has slowed Niepolomice down, but also presented new opportunities. Thanks to falling real-estate prices, Kracik picked up an old military garrison that he plans to develop into shops and a retirement community. "I believe in providing a fishing rod, not handing out fish," he says. "My responsibility is to ensure that schools are well equipped, the infirm and elderly taken care of, and there are jobs." The approach has worked for Niepolomice and it may be just what Poland needs as well.