An Overview on Polish Defence Market

Issue 46

During the Cold War era, Central and Eastern European (CEE) countries-Czechoslovakia, Hungary, Poland, and Ukraine were among the major defence industry producers of the world. However, the end of the Cold War and the breakdown of the Warsaw Treaty Organisation (WTO) caused the end of industrial partnership agreements and created significant challenges for the functioning of the countries’ defence manufacturing bases. Production capacities of defence companies were too large for the diminished needs of foreign customers and their own armed forces. As a consequence, CEE governments introduced several measures, including industrial conversion and re-orientation to civilian production, privatisations and severe downsizing. These measures caused the size of the arms industry to be drastically reduced in a very short time period.

As a result of this drastic downsizing, CEE countries’ defence industries experienced a period of stagnation in the post-Cold War era. However, the industry has undergone something of a revival, partially stimulated by political shifts within these countries towards the West. After the historic lows of the 1990’s defence expenditure in the CEE region is expected to remain fairly stable at now-heightened levels, with a slight growth in expected expenditure from 17.5 billion dollars in 2011 to 17.9 billion dollars in 2020. Polish defence expenditure is responsible for over half of this figure, with growth of approximately 800 million dollars over the forecast period.