ABSTRACT
Poland, a NATO member since 1999 and an EU member state since 2004, is also a former member of the Warsaw Pact. In 2017, it spent on defence €8.68 billion (1.9% of GDP). It also hosts a largely obsolete, mostly state-owned defence industry, which is a legacy of its Warsaw Pact past. This industry is mostly sustained by domestic defence spending. Military exports are negligible, although there are some successful pockets of activity. Unlike the Polish economy at large, the sector has been a laggard in the process of institutional transformation and capacity re-structuring. Paradoxically, it thrived when Poland was a member of the Warsaw Pact. Its vulnerability has been compounded recently by the Polish government’s commitment to import the US-made military equipment to demonstrate Poland’s credentials as a junior military ally of the US. This leaves the domestic defence industry fragile and underinvested as only some ‘residual’ spend and unspecified local content ‘offsets’ can effectively be used to source supplies from local producers. There are some bright spots in this gloomy tale but, overall, it is a tale of an industry weighed down by obsolete capacities, underfunding, resistance to change, political interference and nostalgia about its past export successes.
