The Ugly Side of Poland’s Booming Economy

(Bloomberg Businessweek) -- Curators at the Museum of the History of Polish Jews noticed a change among their visitors earlier this year: More people were pushing back against its version of history. Some asked why there was no mention of Jews selling out their neighbors to various enemies over the centuries. Others questioned whether Poles were really involved in a notorious World War II massacre. Anti-Semitism, it seemed, was acceptable again. Museum guides had to be trained to handle the verbal aggression.

“The dynamic changed overnight,” says Dariusz Stola, the history professor who runs the museum, observing that prejudices apparently had free rein in the wake of a proposed law. “The problem is that young people get used to hate speech. Some people don’t like chips, some people hate Coca-Cola—and some people hate the Jews.”

It’s a jarring piece of recidivism, set amid Poland’s economic boom. Every few months, a new glass building or office complex expands Warsaw’s skyline, which is anchored by the Palace of Culture and Science, the sand-colored gift from Stalin in the 1950s. Young office workers in smart skinny trousers and New Balance running shoes zip around on the city’s new cycle lanes. Poland’s $470 billion economy is expanding at more than 5 percent a year, based on its performance in the latest quarter, about double the neighboring euro area. A journey on an Italian-built high-speed train south from Warsaw to the old mining city of Katowice is like traveling through the pristine French countryside. New highways and railways funded by the European Union crisscross the country. Local manufacturers are thriving as they help keep the German industrial machine across the border stocked with parts and components.

This seemingly inexorable transformation into a showcase of European integration has been thrown into reverse by Poland’s culture wars. The trigger was a proposed law making it a crime to suggest Poland was in any way responsible for the Holocaust. A two-year-old populist government decided that Polish honor needed to be protected, so it set to rewriting history, opening a Pandora’s box of anger and nativism.

Some investors are beginning to worry, says Maciej Dyjas, a managing partner at Griffin Real Estate, whose €6 billion ($7 billion) of assets make the company Poland’s biggest real estate investor. “People are observing these things, and some people are asking if it’s a safe place to invest,” he says on the sidelines of an economic conference in Katowice.

The Polish conundrum—prosperity and prejudice—is much more than just a history lesson gone awry. The Warsaw government has increased its sway over the courts, fearing an independent judiciary could block its sweeping reforms. The overhaul of the justice system reached the Supreme Court in July with new laws forcing as many as 27 of the 73 judges into retirement unless they get a waiver from President Andrzej Duda and making it easier to replace the tribunal’s chief justice. The legislation sparked protests by pro-democracy groups in Polish cities. Even Mick Jagger warned Poland not to go back to the dark days as he addressed the crowd at a Rolling Stones concert in Warsaw in July.

The key instigator in recasting the nature of Poland is the governing Law and Justice party. It shot to power in 2015 promising to champion Poles left behind by the Western-leaning “elites” who, according to the party’s nationalist and xenophobic narrative, ran the country for their own benefit.

The message resonated. While Poland has seen its economy expand faster than that of any other EU nation since it joined the bloc in 2004, the country’s per capita gross domestic product was still only 70 percent of the EU average last year. About 2 million Poles, many using the brand-new airports and highways built with EU aid, left to seek a better life in Germany, Britain, and Scandinavia. “People stopped making progress,” Dyjas says. Not only did Law and Justice win the election, it did so with an unprecedented parliamentary majority. It still has a commanding lead in the polls after boosting the economy with government handouts. Polish families started to get bigger stipends for raising children than those in oil-rich Norway relative to salaries in the countries.

The ruling party also swept out the old elites and installed new ones. Law and Justice loyalists, often regardless of experience or talent, were deployed to run state-controlled companies. Within months of taking power, the regime recast Lech Walesa, the former union leader credited with helping topple communism, as a collaborator. Ministers have called the Nobel Peace Prize laureate a “puppet” of the communist regime, whose actions allowed party apparatchiks to benefit during the tough transformation to a market economy. The government also quickly joined the chorus of Central Europeans shunning Muslim refugees. That helped burnish its credentials with conservative factions of the Catholic Church, whose support Law and Justice counted on to win power and whose political influence has been increasing. Two years ago, Duda attended a church service at which bishops declared Jesus Christ the King of Poland.

Law and Justice harnessed the nationalist forces in the country and needs to cater to its customers, Dyjas says. Extreme groups in Poland “existed always and were always making noises, but today they have a real influence on politicians,” he says. “Law and Justice no longer ignored the beast—they listened to it and gave it a voice.”

When you see enemies everywhere, it doesn’t take long to find the Jews. As Duda prepared to sign the Holocaust law in February, its supporters urged him to ignore the world’s entreaties against it. One banner told the Catholic head of state: “Take off your yarmulke. Sign the bill.”

The onus is now on Poland’s allies in the U.S. and Europe to bring the country back in line. The nation is too important to be allowed to stray into a different orbit. France has suggested linking aid to restoring democratic norms. The EU has funneled €229 billion to Poland, making it the bloc’s biggest net aid recipient. The union’s executive has threatened to sue Poland, strip it of its voting rights, and curb financial assistance unless Law and Justice repeals some of its judicial overhauls. The prospects for compromise look bleak.

U.S. military strategists consider Poland a regional bulwark against the Russians. Indeed, the country looked like a neat fit for Trump: It’s a NATO member meeting his defense spending targets and would be a reliable ally at a crucial time, with Brexit redrawing Britain’s role in Europe. But, Dyjas says, “the U.S. is particularly sensitive around the Holocaust.”

“The perception I’m picking up in Washington is there’s a palpable increase in concern about what the government is doing with the judiciary, press freedom, and the Holocaust issues,” Ian Brzezinski, a senior fellow at the Atlantic Council and a former U.S. deputy assistant secretary of defense, told the Katowice conference. “It would be foolish and irresponsible to not talk about this dynamic that could push our relationship in the wrong direction.”

Prime Minister Mateusz Morawiecki says his country is simply misunderstood. Poland needs to stand up against what it calls “anti-Polonism”—hostility toward Poles—and promote “economic nationalism,” says the Western-educated banker who was handpicked by Jaroslaw Kaczynski, the éminence grise of Law and Justice. In a February interview with Bloomberg, Morawiecki said the outcry over the Holocaust law exposed how Poles are too often vilified.

The government has cited examples of foreign media using the term “Polish death camps” when referring to German-built sites in occupied Poland, Auschwitz being the most notorious. President Barack Obama mistakenly used the phrase in 2012 at a ceremony honoring a Pole who helped tell the world about Nazi plans to eliminate European Jews. Obama apologized, but Morawiecki and others cite his faux pas as an example of Poland’s inability to halt anti-Polonism at the highest echelons of power.

On June 27 the Polish government watered down the Holocaust law to make the crime punishable by fines rather than jail. But attempts to whitewash history continue. In a joint statement signed at simultaneous press conferences in Warsaw and Jerusalem, Morawiecki and Israeli Prime Minister Benjamin Netanyahu praised wartime support for Jews by the exiled Polish government, something later challenged as historically inaccurate by Yad Vashem, the world Holocaust remembrance center in Jerusalem.

The Museum of the History of Polish Jews is a poignant reminder of the consequences of hatred and prejudice. Its enormous steel-and-glass façade stands strikingly among gray communist-era apartment blocks in the heart of what was once the Warsaw Ghetto. Poland’s Jewish community—Europe’s largest, numbering 3 million, or almost 10 percent of the country in 1933—was decimated by the Nazis. Its number has dwindled to about 10,000 from the 250,000 who remained after World War II. After a March 1968 purge by Poland’s communist authorities, the Jewish population dropped to as low as 5,700 in the late 1970s.

The Museum of the History of Polish Jews opened in 2013, and three years later it won the European Museum of the Year Award, which has gone to such iconic spaces as the Guggenheim Museum Bilbao and the refurbished Rijksmuseum in Amsterdam. It was a tribute to Poland’s modernity and its seeming coming to terms with the past. Seeking to contrast the image of Nazi death camps and the 20th century destruction of Jewish life, the museum tells the story of how Jews lived on Polish soil for almost a millennium. It shows Poland as a safe place for Jews expelled from Western European nations such as Spain and Portugal in the Middle Ages. “We’d begun to be perceived internationally as a normal nation,” says Lucja Koch, head of the museum’s education department.

Lately she’s been spending more time tracking recent examples of anti-Semitism within its halls—incidents that peaked after the passage of the Holocaust law—and hate speech in the media and online. “We were met with something that had never happened before,” Koch says. “There’s a change in the language, what’s allowed to be said. The borderline has moved.” She says more and more people are differentiating between “ethnic Poles” and those who are Jewish or of some other descent.

Even at Auschwitz, a half-hour drive from Katowice, caretakers spend more time than ever defending history. Newspapers and social media users accuse the people managing the historic site of ignoring the wartime suffering of Poles and giving only the Jewish narrative. “What’s surprising is that in 2018 you can use anti-Semitism for political gain after for so many years it was such a taboo,” Koch says.

Toward the end of an exhibition at the museum called “Aliens at Home” on the 1968 purge, there’s a collection of posters, online snippets, and notes that compare the anti-Semitism from 50 years ago and that of today. Looming large is billionaire George Soros, vilified as a malevolent meddler by Hungarian Prime Minister Viktor Orban, an ally of the Polish government. “Soros puppets, get out of Poland. We will replay March 1968,” reads one poster. The exhibition invites people to send in more samples of anti-Semitism.

With the parliamentary opposition split and without a clear leader after former Prime Minister Donald Tusk left Poland to become president of the EU, demonstrations against Law and Justice have been organized by civic groups. But it’s tough to fight the “defenders of the nation.”

Stola, director of the museum for most of the five years since it opened, says the current climate is comparable to 1968. Back then, it was the communists who were the self-styled protectors of the Polish nation against slander. Now it’s Law and Justice. “The Holocaust law ostensibly was to defend Poland’s name, but it’s done a lot of damage to Poland’s standing,” he says. “We were a model for looking at the past. And with trust, you build it slowly but lose it very quickly.” —With Marek Strzelecki and Dorota Bartyzel

To contact the editor responsible for this story: Howard Chua-Eoan at hchuaeoan@bloomberg.net

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