Foreign Direct Investment (FDI) is an important form of transferring both capital and technologies from highly developed countries to those with a lower level of social and economic development. Since 2005, the value of the yearly global FDI has increased by over 60%, to approximately USD 1,540 billion. Investments located in developed countries account for over half of the global FDI, but their share has decreased since 2005, while the value of FDI flow to developing countries has increased from 35% to 44% of the global FDI over the same period. The remaining part of the global FDI (about 4%) goes to countries undergoing transformations. Among developing countries, those located in Asia receive the most of the invested capital (over 60%), over 20% goes to countries in Latin America and the Caribbean, and nearly 10% to African countries.

Total value of Foreign Direct Investment (billion USD)

Development assistance, offered by Poland on the basis of the Development Cooperation Act of 16 September 2011 and Multiannual Development Cooperation Programmes, has been an integral part of Poland’s foreign policy. In recent years, its scope has been defined by the Multiannual Development Cooperation Programme for 2016-2020. The priority directions for the Polish development assistance have been the countries of the Eastern Partnership (Belarus, Georgia, Moldova and Ukraine), and selected countries of Africa, Asia and the Near East (Ethiopia, Kenya, Lebanon, Myanmar, Palestine, Senegal, Tanzania and Uganda). According to the Programme, the assistance offered by Poland focused on six thematic areas, i.e. good governance, democracy and human rights, human capital, entrepreneurship and the private sector, sustainable agriculture and the development of rural areas, and environmental protection.

The main objective of activities undertaken by Poland is extending support to developing countries, especially the country’s partners, following the principles of the international solidarity. In the recent decade, the ODA provided by Poland, measured by the grant equivalent¹, has increased over two-fold, to nearly PLN 3 billion. At the same time, the proportion of ODA to the gross national income has grown from 0.08% in 2010 to 0.12% at present, and is planned to further increase to 0.33% by 2030.

Total value of Polish ODA in 2019 according to the largest recipients (million PLN)

* The amount includes the payment of PLN 39.92 million to the EU Facility for Refugees in Turkey to support Syrian refugees.

In order to be able to provide developing countries with stable and long-term financial aid, it is of key importance that the donor countries maintain their public finances in a good condition. In the EU, the necessary financial discipline is to be kept by the member states’ adherence to the Stability and Growth Pact, according to which the general government deficit should not exceed 3% of GDP, and the debt should not go beyond 60% of GDP. In the past, economic downturns caused countries to struggle to adhere to budget discipline and meet the two above-mentioned criteria at the same time; in many cases both the general government deficit and the debt significantly exceeded the reference values. As the economic situation improved, so did the condition of public finances, and in some countries record-low deficit or even a budget surplus was observed. Nevertheless, public debt in many countries still exceeds the permissible level of 60% of GDP.

Deficit of the general government sector (in % GDP)