n Poland Freedom From Government, Corruption and Labor Freedom Weak - Report

n addition to inflexible regulations that hinder productivity growth in Poland, other factors that create an unfriendly business environment have caused the Heritage Foundation to rate Poland only as the world's 87 th freest economy.

Of significant interest, the rapor (http://www.heritage.org/research/features/index/country.cfm?id=Poland) singles out the problems of small business that complain of the labor code as a "barrier to the creation of new jobs."

This is a problem for Poland. Small business is the economic engine of any economy. A healthy small business sector is essential for growth. Small business is not healthy in Poland.

In Poland, running a small business is more a matter of survival than making a profit. The small business owner is constantly looking over its shoulder and waiting for a government hammer to drop. Owners spend many unproductive hours trying to fulfill vague legal requirements.

A particular problem for Poland and small companies is that the small companies avoid hiring new employees. Those that they do hire are often hired in creative ways to avoid taxes and government regulations.

This reluctance to hire stifles the growth of small companies.

And the problems related to hiring also discourages many from starting a business in the first place. They find it easier to emigrate to the West rather than to try to run a business in Poland.

The effect on the country is significant. Unemployment and tax revenues in Poland are affected by the difficulties small business faces.

Creative employment contracts reduce tax income. And reduced employment also reduces revenues.

Additionally, unemployment figures are distorted and are said to include people who are illegally employed. This increases government expenditures.

Both workers and employers are accomplice in the distortion. Employers work schemes to keep employees off the official payrolls and some register as unemployed while working illegally. Workers also start their own businesses and register as unemployed.

This is a form of corruption on the part of business. But bureaucrat corruption is also prevalent, even though the Kaczynski Government has pitched itself as an anti-corruption government

The Heritage Foundation seems to think that the Kaczynski Anti-Corruption Government has a long way to go to fit the definition.

Corruption only adds to the problems of small business. And the more control is centralized in the Government, as it is now being done by the Kaczynski Government, the more people will have to make special favors to get things done.

The Heritage Foundation has pointed out what the problems are.

The Government must find the solutions.

Whether it has the mind set to consider small business important is a major question that has to be answered by deeds and not words.

Source:masterpage.com.pl