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                          Go8 European Scholarship Report

by
Dr Katarzyna Zawalińska, Deputy Director, Institute of Rural and Agricultural Development, Polish Academy of Sciences (IRWiR PAN)

General information

My research visit took place at the Monash University, Center of Policy Studies (CoPS) in Melbourne. It lasted from 1st October 2009 to 5th January 2010. I was there with my husband and 4-year old son. We lived in a flat rented by Short Term Accommodation services of Monash University, very close to the campus in Clayton. My research supervisor was Dr James Giesecke, but I received also lots of advice on the daily basis from other researchers of CoPS, especially Prof. Mark Horridge and Dr Glyn Wittwer. In CoPS I was placed in a very nice office with a view on the Ocean (bay). The atmosphere was extremely friendly and I had very good relationships with all the researchers including Directors - Prof. Philip Adams and Prof. John Madden - regular staff and the PhD students. I was integrated with CoPS also through emailing list, so I was very well informed on what was going on in CoPS during the time of my stay. There were a lot of events and information on: Institutes’s life, publishing activities, software release etc. circulating, from which I also learned how is such a modern and efficient research institute as CoPS is operating.
Prof. Mark Horridge (CoPS) and Dr Katarzyna Zawalińska

Research results

The main goal of the cooperation was to build a sophisticated regional economic model (Computable General Equilibrium model) for Poland which in a nutshell reflects the economy of 16 Polish regions. CoPS is the best Institute in the world specializing in this kind of economic modeling with self developed software GEMPACK. Polish model POLTERM was constructed based on thousands of mathematical equations (after its blueprint Australian TERM) filled with detailed regional Polish account data. In Poland are very few CGE models and no regional ones of this type. TERMPOL is the first Australian type of regional general equilibrium model for Poland, and only one of 7 of this kind in the world, after Brazil, Finland, China, Indonesia, South Africa, and Japan. Once it was created it can be used for many policy relevant questions relating to various sectors in Poland (eg. education, health, public administration, manufacturing, agriculture, etc). The first application of the model was an impact analysis of the Common Agricultural Policy (CAP) on the Polish economy. Poland joined EU in May 2004 and the first full period of CAP financing started for period of 2007-2013. So we analyzed how CAP payments from Pillar I (direct payments to farmers) and Pillar II (Rural Development Programs) influence regional Polish economies. The CAP reform is a hot and ongoing issue, so the aim of our analysis was to contribute some new thoughts to the CAP reform, which starts after 2013. Generally, the findings of CAP influence on Polish economy can be shortly summarized as follows:
- Polish farmers and rural areas are the largest beneficiaries (in terms of direct money flows) of Poland’s EU accession
- The CAP funds have positive effects on Polish farmers, however for most of the farmers they play a role of social safety net rather than efficiency improvement.
- The losers of the policy are urban regions and export oriented sectors. This is a negative aspect of the policy, because export is an engine of Poland’s growth. Besides agricultural funds put a large burden on Polish budget. Never spending on agriculture were so high, and they are growing because most of EU funds require national co-financing; besides the obligations for national contribution make the budget reform more difficult as agricultural funds are long term obligations and they are also vulnerable to exchange rate changes. When Polish currency appreciates the payments from EU are smaller in zloties so top-ups from national budget have to be bigger to compensate for it.
- The EU funds cause Polish currency appreciation and that is why they also negatively affect the exporters.
- The winners are the most agricultural areas (Podlaskie, Lubeslkie and Warminsko-Mazurskie regions).

I presented the results of my research at an open seminar in Center of Policy Studies at the Monash University on 4th of January 2010, under the title: “Modelling the Effects of the EU Common Agricultural Policy with PolTERM”. I got a very good feedback, support and an approval of my work.

Activities undertaken and goals achieved

Building an economic multipurpose model and carrying out simulation with it was the main and most important part of my study stay. However, apart from that I also actively initiated other forms of cooperation with CoPS. First, it was a new research proposal which we submitted in reply to a tender for the 7th Framework Program of the European Union. It deals with modeling regional impact effects of European Neighborhood Policy. Second, together with Dr James Giesecke and Prof. Mark Horridge we drafted a journal article on regional effects of selected Common Agricultural Policy programs on Poland, which after finishing is planned to be submitted to a peer reviewed journal of Regional Science. Third, we submitted an abstract of this paper and got accepted to the European Regional Science Association Congress which will held in August 2010, in Sweden. Fourth, we drafted a plan of a training session on CGE modeling in GEMPACK which will be taught by CoPS in cooperation with Polish Academy of Sciences in Warsaw in November 2010.

Promoting relationship between Australia and Poland

Upon my arrival I had a very friendly meeting with Ms Ambassador of Australia to Poland Ms Ruth Pearce and her staff (among the others Mr Simon Stringer). We talked about further development of Polish-Australian cooperation via projects, trainings, conferences and other mutually beneficial forms.

I also signed up to Fun Club of Australia in Poland which is a very active body, organizing trips to Australia and exchanging lots of valuable information on both countries.

Besides, I found out that parents’ of Sir John Monash (after whom my hosting University was named) came from Prusia in Poland. So I can proudly say that Sir John Monash had some Polish roots.

In Australia we also got in touch with many Australian Poles (some of them even hosted us over the Christmas). We visited Polish Schools, learned Australian-Polish culture and history of Polish emigrants in Victoria.