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Borderlands

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Emmanuel Brunet-Jailly

Chapter 6. From Iron Curtain to Paper Wall: The Influence of Border Regimes on Local and Regional Economies – The Life, Death, and Resurrection of Bazaars in the Łódź Region

Martin van der Velde et Szymon Marcińczak

Texte intégral

1The history of the Łódź region of Poland is closely tied to the development of the textile industry, and the region has even been labelled the “Polish Manchester” or “Textilopolis.” Partly due to its location in central Europe, the Łódź textile industry has always been oriented toward the countries to the east of the Polish border. Its large bazaars, with their range of both Polish and foreign customers, could be regarded as the industry’s offspring. Many kinds of bazaar developed, both formal and informal, some publicly operated and others privately operated. (The terms “bazaar” and “open-air market” are used synonymously in this chapter.)

2Although Łódź has been located in the geographic centre of Poland since the Second World War, it has always been a focal point of trade with the former Soviet Union. Even after the collapse of the Soviet Union traders as well as buyers, especially from Belarus and Ukraine, continued to come to Łódź, crossing Poland’s relatively permeable eastern border. This permeability began to decrease, however, when Poland applied for membership of the European Union (EU), and it continued to decrease as Poland prepared to become a party to the Schengen Agreement.

3The bazaars of the Łódź region came into existence after 1989 and acquired considerable importance during the 1990s, along with bazaars elsewhere in Poland. It has been estimated that by 1998 the large bazaar in the Tenth Anniversary Stadium, a soccer stadium in Warsaw, accounted for no less than XEU 330 million in Polish exports, making it the country’s fifth largest “exporter” at that time. Moreover, bazaars in Poland were estimated to provide a living for 130,000 people in the actual bazaars and their ancillary services. In the Łódź region, for instance, budget hotels were built close to markets, while people living near the larger bazaars rented out their yards as parking spaces and rooms in their house as accommodations for traders who wanted to stay overnight. After the eastern border was tightened it was estimated that this economic activity fell by no less than 50 percent. Recent trends, however, suggest that the bazaars are recovering. Bazaars have thus been a major factor in the Łódź region’s economy. Not only have they served as outlets for locally and regionally produced textile products, but the taxes they pay have made up a major portion of the budgets of the municipalities in which they are located.

Figure 6.1 Location of Łódź and Main Highways

Figure 6.1 Location of Łódź and Main Highways

Figure 6.2 Location of Rzgów and Tuszyn

Figure 6.2 Location of Rzgów and Tuszyn

4In this chapter we trace the effects of the “Schengenization” of the eastern border of Poland on the functioning of the larger bazaars in the Łódź region, specifically those in Tuszyn and Rzgów, and on the local and regional economies. We analyze not only the changes in the functions and customers of the bazaars due to the Schengenization process but also the responses and policies of local government and development agencies. Through this analysis of the implications of Schengenization at the local and regional levels we hope to contribute to a further understanding of broader developments in Europe. In order to explain the current position and past performance of these two bazaars we examined the development of the bazaars within the local, regional, national, and European contexts. As well as playing a historic role within central and eastern Europe, the Łódź region and its bazaars have been shaped to a great extent by their political and institutional context. In this case it was not only the local and regional institutions that were in play but also the decision of the Polish government to join the EU and, eventually, the Schengen Agreement. The fate of the bazaars has come to depend on the decisions made and agendas set by the Polish government and by the EU.

5This chapter is based mainly on the ideas of structuration theory, in which “functional embeddedness” is an important issue. The structuration theory argues that people live in structures, according to organized sets of rules and resources that they have created, and that, as they enact them, they reproduce. Thus agents and structures are interdependent, they form a duality – that is, “the structural properties of social systems are both medium and outcome of the practices they recursively organize... Structure is not to be equated with constraint, but is always both constraining and enabling” (Giddens 1984, 25). In other words there is no independent dualism of structure and agency, for they are inseparably interconnected.

6This metatheoretical perspective, which stresses micro-macro dialectics, soundly resonates with the methodological claims of Storper and Scott (1986). These authors argue that in any viable study of industrial change “the micro and macro levels must be simultaneously and actively present... but at the same time, it is necessary to keep to the forefront the intermediating meso level...” (14) of theory and empirical inquiry. In this chapter a meso level is represented by entities that have spatial (territorial) dimension, that is, municipalities in general and bazaars in particular. This is implied by the fact that it is feasible to comprehend a structure-agency interplay while examining its spatial or scalar manifestations. In the present context the focus is more on agency, in the sense that agency responses to structural changes are central, thereby fully recognizing that their enacted responses have structuring capacity. The agency aspect of structure, that is, the structural responses to agency – if the bordering practices of the EU and the national government of Poland can be regarded as such – are dealt with less fully.

7The general line of argumentation is also in accordance with the framework of new economic geography, which gives greater emphasis to the spatial interactions between economic agents. Thus, instead of focusing on activities, the actors are given a more prominent role (Fujita, Krugman, and Venables 1999). In other words, according to Yeung (2003, 445)

the context in which the multiplicity of identities and logics shapes the social practices of economic actors constitutes the key starting point in most recent studies of new economic geography... [and] context sets the contingent in which economic action can be analyzed... Thus the context of economic situation becomes a critical component in any geographical explanation.

8Since the assessment of the actors is partly based on the regime theory (Stoker 1995), the actors (or their representatives) who were chosen have a coalition-building capacity.

9This analysis attempts to combine the importance of the temporal, spatial, and institutional contexts with a strong focus on actors and their interaction in order to gain insight into the significance of the changing interpretation of the EU’s eastern border, especially where it concerns the bazaar phenomenon. In doing so it incorporates the concepts laid out by Emmanuel Brunet-Jailly (2005) in his recent work toward a theory of borders, in which he clearly recognizes the multifaceted, multi-level, multi-actor, and integrated character of borders and borderlands. Notwithstanding his main focus on the border “region” proper, his general framework, which is aimed at mapping out the relative positions of different approaches, is useful in the context of this chapter, which focuses more on border “effects.” Brunet-Jailly (2005, 634) defines four different analytical lenses: “(1) market forces and trade flows, (2) policy activities of multiple levels of government, (3) the particular political clout of borderland communities, and (4) the specific culture of borderland communities.” These place the focus on economic issues, governance, organizational capacity and activism, and cultural issues, respectively. In the spirit of structuration theory both structure and agency are incorporated through all four lenses, and the different issues complement, enhance, and influence each other. In our analysis the lenses of political clout, market forces, and governance are used in particular.

10The first section of this chapter describes the bazaar phenomenon in general, while the second section looks at the preparation for, and the implications of, Poland’s acceptance of the Schengen Agreement, one of the institutional contexts of the bazaars. The third section elaborates on their regional setting by describing the development of the Łódź region, and the fourth focuses on the bazaars in the Łódź region and how the specific consequences of the Schengenization of the Polish border have been handled.

OPEN-AIR MARKETS

11The bazaars discussed in this chapter represent one form of the broader phenomenon of open-air markets. The term “open-air market” may be somewhat misleading, as the bazaars in Tuszyn and Rzgów currently both function in partially covered structures. They are among the wide varieties of forms that together constitute a continuum, running from small, haphazard street-corner markets to large-scale, mall-like market halls.

12Open-air markets have played and continue to play a major role in the distribution of goods throughout the world, and in that sense they have a long history. The term “bazaar,” certainly in the early days, has been associated most often with periodic markets in less developed countries, and the bazaar phenomenon was first studied by cultural anthropologists. In studies of more developed countries bazaars are still often characterized as having an air of folklore, or, are put in the category of “garage sale.”

Figure 6.3 Bazaars in Tuszyn and Rzgów

Figure 6.3 Bazaars in Tuszyn and Rzgów

13One of the first definitions of a bazaar was developed by Polanyi in 1957, as part of his examination of bazaars in terms of market relations (cited in Sik and Wallace 1999, 698). His straightforward definition of open-air markets as “places for the exchange of simple goods” was augmented by Bohannon and Dalton (1962), who included social, cultural, political, and economic characteristics as influencing factors for the manifestation of market relations.

14There are two dominant approaches to the bazaar economy. The first regards the bazaar as a prototype of the competitive market. The second, ethnographic approach stresses their exotic and sometimes bizarre character, in the sense that at first glance the entrepreneurs operating in these markets often display almost irrational behaviour (Fanselow 1990). Both perspectives may apply to the open-air markets of central and eastern Europe described in this chapter. Although they can be regarded as a stage in the development of capitalist markets since the 1990s, these bazaars continue to exhibit an exceptional character that extends to their products, the sellers, and the buyers. Not only are strange, exotic, and bizarre combinations of products sometimes on display, but the traders and their customers also come from unexpected locations. Originally the markets in Warsaw and Łódź did not cater to Polish people. Instead customers came largely from eastern countries to buy products made in Poland, often in the many small factories that were set up by Poles around these markets. Today Vietnamese traders sell textiles imported from Asia and some bazaars have become centres for contraband from eastern countries.

15Under the socialist regimes that dominated central and eastern Europe before the 1990s, open-air markets played an important complementary role in dysfunctional redistributive systems. Officially they were considered “as remnants of an outdated and unnecessary form of commerce or as a dangerous challenge to the socialized retail sector” (Sik and Wallace 1999, 697). After the fall of Communism they continued to play an important intermediary role between the collapsed socialist system and proliferating capitalism. As illustrated later, the markets of central and eastern Europe have become almost a substitute for, rather than a supplement to, the normal retail sector (Sik and Wallace 1999, 697). As Aidis (2003, 461) has noted, they are “officially despised yet tolerated.” According to Rada (2006), it is even possible to speak of a cross-border bazaar economy stretching from the Józsefvárosi V Market (or “Chinese Market”) in Budapest, to Tuszyn and, via the Tenth Anniversary Stadium in Warsaw, to the Seventh Kilometre (or Tolchok) Market in Odessa, Ukraine. Nowadays “they have developed from sites for illegal activities condemned as ‘parasitical’ by the former regimes (but nevertheless an important part of those regimes) to becoming increasingly open” (Sik and Wallace 1999, 701). Indeed, the existing open-air markets became the prototype of shopping malls (Shields 1992).

16The past adaptation and current functioning of these markets have depended greatly on the interaction of the state and the market in the everyday life of citizens, an interaction that is applicable not only on the national (Polish) level but also on the European level. The success and/or failure of these markets have also depended to a large extent on traders and customers coming from abroad, especially from eastern countries. In this sense the security regimes that have been imposed on the Polish border with Belarus and Ukraine are of great importance to the open-air markets.

17Notwithstanding the fact that these types of markets are increasingly claiming a regular position within the wholesale and retail system, there is still a penumbra of illegality surrounding them, supported by the fact that many of them may be characterized as examples of “raw” capitalism. This characterization implies that, although these markets do operate according to certain institutionalized rules, for a long time these rules were not formalized, so traders had to behave according to the rules, as when paying a fee to occupy a stall, without being protected by law. Furthermore, when these markets were first established they operated in what Elster, Offe, and Preuss (1998) have called an “institutional void,” in which the state withdrew and other institutions were not prepared to regulate market forces, which may have contributed to their unregulated character. Huge profits were possible, but failure also lurked.

18The topic of open-air markets is still very much a wasteland, which is remarkable considering that they are a form of intermediary between the market and the planned economy, as much in the socialist past as in the capitalist present. One exception to this “intellectual void” is a collection of academic papers on the issue of open-air markets in central Europe published in the International Journal of Urban and Regional Research in 1999. The core of this special issue was based on an extensive study carried out by Czakó and Sik (1999) in which they analyzed four open-air markets in Hungary. In their contribution to this special issue Sik and Wallace (1999, 701) attempted to systematize the structural changes that had influenced the development of the open-air markets of central and eastern Europe, formulating six major changes: (1) the deconstruction of the socialized retail sector, (2) the disappearance of bilateral international trade, (3) the opening of previously closed borders, (4) the “vanishing” of the strong and paternalistic state, (5) the growth of a “western” consumer culture, and (6) the rapidly decreasing standard of living. These six changes created a fertile bed for existing open-air markets. The skills of surviving in a Communist society also proved to be very valuable in dealing with these changes (Piirainen 1997).

19However, within the context of this chapter the changing interpretation of the border is of particular interest. Immediately after the collapse of the Communist system the border controls were alleviated, resulting in increasing cross-border flows not only of sellers but also of buyers. To illustrate, in 1989 fewer than three million people from the former Soviet Union entered Poland, but a year later that number had more than doubled, and it continued to grow, to reach more than fourteen million in the peak year of 1997 (Stola, cited in Iglicka 2001a). Until 1989 travelling within the Communist bloc had been difficult because many national borders were completely sealed most of the time, and even travelling within each national territory was difficult. The high level of cross-border interaction after 1989 was induced for the most part by price differences between countries, in addition to shortages of products. These factors stimulated what some have called “shuttle migration,” whereby migrants shuttled, or travelled, to certain places to sell products and stayed for some days before returning home (Iglicka 1999, 2001a, 2001b). According to Iglicka (2001a, 507), inhabitants of the former Soviet Union who were involved in this shuttle migration often gave up their jobs and positions because the differences in the currency exchange rates or the price differences between countries was much more profitable for them, and international commuting became their main source of income and, de facto, their “job.” Similarly, the so-called suitcase traders, sometimes also referred to as “ants,” travelled, literally, with their products in their suitcases (Sword 1999) because they sold only very small quantities on each trip. Notwithstanding that cross-border travel was possible, the borders were still barriers and thus also created opportunities for border traders (Thuen 1999). These traders earned a living by taking products across the border to sell and charging their customers extra fees as compensation for the risk they took (smuggling) or for the effort it took to get products back and forth across the border (transportation and other costs). When a border gets less permeable, as is currently the case in the Łódź region because of the implementation of the Schengen Agreement, this process becomes even more attractive to some traders.

20Given that increased border permeability was an important contributor to the rise of bazaars, not only in the border regions but also further inland, in Warsaw and the Łódź region, it is not surprising that the tightening of the borders and the intensification of border control in the run-up to Poland’s accession to the Schengen Agreement also had major consequences for the bazaars. Indeed, it may have been a fatal blow for them. In the case of the Warsaw bazaar it was estimated that the number of vendors fell from 7,000 in 1997, the year the first Schengen transitional measures were taken, to 5,000 in 1998. According to a report in the New York Times (Andrews 2001), sales fell from XEU 450 million in 1997 to XEU 200 million in 1998 to XEU 160 million in 2000, although this decline was also partly due to the financial crisis that began in Russia in 1998. Apparently, customers failed to return to the Warsaw bazaar immediately after its recovery, and its

decline reflects changes in central and eastern Europe. New markets have usurped Warsaw’s role as a shopping centre for Minsk, Kiev or Moscow. Asian producers selling through Poland’s sizeable Vietnamese community have undercut Poland’s sweatshops. And many companies now use Warsaw simply as a distribution centre.

21The fact that stricter border regimes are not the only factor influencing the functioning of bazaars may be supported by the observation that, after an initial decline, the open-air markets of central and eastern Europe, at least in the Łódź region, seem to have regained some of their position. (This observation is dealt with more extensively in a later section of this chapter.)

22To this point bazaars and open-air markets have been discussed only in general terms. The study by Czakó and Sik (1999) provides detailed information about four Hungarian open-air markets, but the data used in their study stemmed from a project carried out in 1995-96, and it is important to keep in mind that this was before the introduction of any transitional measures, such as introducing visas for certain countries, in anticipation of Hungary’s accession to the EU and the Schengen Agreement were in place. In other words this report more or less described the heyday of open-air markets in central and eastern Europe. Nevertheless, since the observations presented on the bazaars in Tuszyn and Rzgów in a later section are more global and anecdotal, and the questionnaires that were used dealt only with buyers, the data collected by the Hungarian scholars are used here to gain some insight into the “who” and “what” of these open-air markets as they used to be.

23The biggest bazaar in the Hungarian study was the famous Józsefvárosi V Market (or “Chinese Market”) in Budapest, which is still functioning today on 12,000 square metres of land owned by the Hungarian National Railway Company, although it is still run by a private entrepreneur. Its turnover in 1995 was estimated at XEU 75 million. Almost half the traders in this Budapest market were Asian, an indication of the international orientation of the bazaars. This high proportion of Asian traders was exceptional, however. In the other markets two-thirds or more of the sellers were Hungarian. Eighty-six percent of the products sold in this bazaar were items of clothing. In that sense it is comparable with the bazaars in the Łódź region. The high proportion of trade in textiles in Budapest may have been a result of the large number of Asian textile traders present in the market. The majority of the products sold in the other three Budapest markets also involved textiles, albeit not in such high proportions. The second most important category involved the geographic origin of the products, in the West, as the bazaars were likely satisfying the growing culture of western-style consumption. A particularly interesting aspect of the research by Czakó and Sik (1999) is the comparison of price levels. The prices in general would be expected to be lower compared to the national level, and this was especially true for textile products, the prices of which were about half the level seen elsewhere. However, chocolate, cigarettes, and deodorant, all of which were western products, were just as expensive or even more expensive. Moreover, the price differences were remarkably constant over the four markets that were scrutinized, almost as if the prices were subject to some regulation.

24Clearly, open-air markets in central and eastern Europe played an important role in the local, regional, and national economies, mediating between the incoming capitalist market and the fading socialist system. They were increasingly a substitute for “normal” retail and wholesale outlets, rather than playing their previous role as a supplement to them, and both traders and buyers exhibited a widespread geographical pattern. Thus, the changing regimes, especially at the eastern border of the current EU, may have had a major impact on these bazaars. The Schengen Agreement, which organizes and regulates the EU’s outer border (or, more precisely, the outer border of Schengen territory) is discussed next.

THE SCHENGEN AGREEMENT

25Initially, the removal of the Iron Curtain in the late 1980s enabled the inhabitants of central and eastern Europe to freely cross national borders. However, as a consequence of the aspirations of some countries in the region – Estonia, Lithuania, Latvia, Hungary, Poland, and Slovakia – to join the EU and the Schengen Agreement, this situation changed. In order to meet the requirements for joining, these countries had to virtually seal their eastern borders, as they would become the outer borders of the EU. This was achieved mainly by the introduction of visas for non-EU citizens.

26The Schengen Agreement was originally signed in June 1985 by five countries: Belgium, France, Germany, Luxembourg, and the Netherlands. Its aim was, as it still is, the free movement of people, goods, and services within the EU in parallel with a harmonized system of external border controls. In other words, the opening up of internal EU borders is accompanied by the sealing of its external borders. Five years later, in June 1990, the Convention Implementing the Schengen Agreement was signed. Its key issues relate to measures designed to create a common area of security and justice, following the abolition of internal border checks (Rakowski and Rybicki 2000). The implementation of these measures gradually led to the establishment of a set of rules and norms, the Schengen acquis, that created a uniform visa system enabling non-EU citizens to travel across Schengen territory. The Schengen acquis became EU law with the adoption of the Amsterdam Treaty in 1997 (Rakowski and Rybicki 2000). The Schengen Convention entered into force on September 1, 1993, but its provisions could not be put into practice until the necessary technical and legal prerequisites, such as databases and the relevant data protection authorities, were in place. The convention thus took practical effect only on March 26, 1995, for the original parties to the Schengen Agreement, as well as for Spain and Portugal. Italy followed suit on October 26, 1997, Austria on December 1, 1997, and Greece on March 26, 2000. Meanwhile, a Schengen cooperation agreement had been concluded with the non-EU members of the Nordic Passport Union, Norway and Iceland, in 1996, and both these countries fully implemented the Schengen regime, beginning on March 25, 2001, the same day that the Schengen Convention also entered into force for Denmark, Finland, and Sweden, the three Nordic countries that are member-states of the EU. Thirteen other countries have signed up to the Schengen system but have not yet implemented it, including the member-states of the EU in central and eastern Europe, while two EU member-states, the United Kingdom and the Irish Republic, remain outside the system (SCADPlus 2005).

27The visa is the main tool used to control the flow of migrants into the EU. It creates quotas and shapes the structure of the inflow by laying down prior numbers of permitted admissions and by imposing requirements on migrants that involve their personal history, income, and martial status. For individuals the process of obtaining a visa is usually problematic and at best time consuming. Apart from planning their trip beforehand, potential tourists must travel to a consulate, which may be quite remote from their place of residence. At the consulate they are interviewed, very often on detailed personal information, and have to pay for a visa without any certainty of receiving one. Those fortunate enough to be granted a visa may have to wait several weeks for it to be issued.

28In preparation for signing the Schengen Agreement and in order to adjust its border-crossing policy to EU norms, the government of Poland introduced the Aliens Law in 1997. This law stopped the free movement of people across the Poland’s eastern border, a movement that had been flourishing since the early 1990s. Individuals crossing the border were now required to possess a legal document stating their identity and a tourist voucher. Belarusians, Russians, and Ukrainians were affected the most by the new law, since citizens of neighbouring countries that were part of the ongoing “Schengenization” process were exempted from the this requirement, as were citizens of the existing member states of the EU. In order to diminish the negative impact of this policy, particularly the decrease in the number of visitors from the former Soviet Union, the Polish government allowed Belarusians and Russians to cross the border without vouchers for certain types of journeys, such as business trips or family visits, and also allowed Ukrainians who wished to stay in Poland for less than ninety days to travel without vouchers (Rakowski and Rybicki 2000). The situation became even more difficult after October 1, 2003, when visas were introduced for all travellers from non-EU countries. However, the Polish government, seeking once again to maintain the profitable influx of shuttle migrants from the former Soviet Union, introduced measures aimed at relaxing the emerging border congestion. According to Tokarz (2004), the “stream” method of visa-issuance is the most important of these measures, as it implies that the interviews formally required when applying are seldom carried out and, perhaps more significantly, a visa must be issued no later than two days after it is requested.

29Thus since 1997 the former Iron Curtain has been gradually replaced by a “paper wall,” created by visas, invitations, work permits, and so on. Furthermore, this process may be reinforced by future legislation. However, although Poland’s “liberal” visa policy has been tolerated by the EU, it will inevitably change when Poland actually becomes part of the Schengen territory, which is scheduled to occur in 2008.

THE ŁÓDŹ REGION

30A succinct description of the Łódź region is essential for understanding the environment in which the actors act – the bazaar managers in particular. Indeed, the absence of such a description may lead to spurious conclusions concerning the activities of individuals (Johnston 1986). Moreover, in order to achieve a proper insight it is necessary to use an extended time frame (Jones 2004). This is especially significant in the case of post-socialist urban regions, where the path-dependency narrative is very important (Andrusz, Harloe, and Szelenyi 1996). Therefore the Łódź region is described next, with a special emphasis on the development of the textile industry.

31Łódź was granted city status in 1423, although at the time it was only a small agricultural settlement with no more than one hundred houses. It led an obscure existence until the nineteenth century, when its situation changed completely and it began to grow (Koter, Liszewski, and Suliborski 1996) due to the parallel development of a textile industry and the opening of eastern markets. This particular set of events was enabled by the political and economic context of the nineteenth century. An independent Polish state did not exist at that time, since, following partitions in 1772, 1793, and 1795, Polish territory was divided among three powers: Austria, Prussia, and Russia. However, from 1815 relative autonomy was given to the Congress Kingdom of Poland under Russian supervision. As part of this political entity, Łódź used the opportunity to respond to the growing demand for textile products, particularly from the army and from Russia. The Russian market gained importance when Russia imposed a protectionist customs duty on imported goods produced in Prussia in 1821 and established a customs union with the Congress Kingdom of Poland a year later. These factors eased Łódź’s penetration of the vast markets of the Russian empire (Liszewski 1997).

32This period of uncontrolled development ended in 1830 when, following the failure of the November Uprising and the removal of most of the Congress Kingdom’s autonomy (Davies 1982), custom duties were imposed on the border with the Russian empire. During the ensuing period of relative idleness technological changes were implemented, such as the restructuring of the production process and the introduction of steam power (Liszewski 1997). Consequently, by 1851, when the customs duties were abolished, Łódź was a highly mechanized industrial city, producing high-quality textile goods, especially cotton products, that were competitive in the eastern market (Liszewski 1997). The introduction in 1877 of restrictive custom duties on goods imported into the Russian empire from western Europe (Owen 1985) led to an even more favourable market environment for Łódź industry, and from 1879 to 1913 about 70 percent of the region’s textile production was sold on the Russian market (Puś 1987).

33During the years between the two world wars three factors caused the collapse of Łódź’s industrial production: its textile machinery was confiscated by the Germans; its entrepreneurs lost the capital and securities they had deposited in Russian banks; and the eastern markets were closed. After the Second World War the region, together with the rest of Poland, found itself under the political and economic supervision of the Soviet Union. The traditional eastern market was opened again, but it was a controlled opening with no appreciation of free-market forces. Moreover, Poland, like the other countries forced into the Soviet bloc, was compelled to join the Council for Mutual Economic Assistance (CMEA, also known in the West as Comecon), an organization overseen and controlled by the Soviet Union. For Łódź, the socialist era (1945-89) generally meant further industrialization, but with limited possibilities to control the structure of the process. In effect the industrial structure, as in other Communist states (Elster, Offe, and Preuss 1998), was subordinated to the idea of economies of scale. In practice, even though new industrial activities were introduced, such as chemicals, electrical engineering, and machine industry, Łódź remained strongly tied to textile production. Because this ongoing industrialization required a larger labour force, inhabitants of the hinterland, mainly the suburbs, found employment in Łódź factories (Jakóbczyk-Gryszkiewicz 1997, 228). However, it can be argued that, overall, this was a period of relative stability (Liszewsk 1997, 18).

34The periods of prosperity and decline in the Łódź region were influenced by contemporary relations with the Soviet Union in general and by access to eastern markets in particular. As illustrated in the following section, this pattern seems to have prevailed in the economic performance of the region in general, and in the case of the Tuszyn and Rzgów bazaars in particular, in the years from 1990 to 2003, after the collapse of the Soviet system. Moreover, the region’s present socioeconomic situation bears a heavy socialist legacy. The former mode of production, which implied strong ties between suppliers and their customers (Elster, Offe, and Preuss 1998), undermined the regional economy during the early years of transition. It not only influenced the internal economic structure of the region, since the collapse of one link created severe problems for the whole production chain, but also affected external trade relations. The almost exclusive reliance on the CMEA market before 1989 meant that the city and the region lost all their customers in the early days of the transition. By 1991 some 100,000 people were unemployed and numerous factories had closed. Łódź and its region shared the fate of many other urban industrial regions in central and eastern Europe (Kovács 2000, 3), and, in general, it was perceived as having no immediate prospects for development (Walker 1993).

35Nevertheless, the region achieved a positive shift in its developmental trajectory by implementing a set of more or less successful projects (Dornisch 2002). Among these was the creation of bazaars on the outskirts of Łódź city by a consortium of private and public investors, including private businesspeople, city councils, and the Communal Bank of Łódź (Dornisch 2002). Two main factors facilitated their development. The first was the launch of two government organizations, the Enterprise Monitoring Department and the Debt Restructuring Department (Dornisch 2002). Apart from all kinds of other positive effects, this enabled individual actors to buy assets, especially machines, from liquidated factories and to start their own enterprises. This was of major importance to the inhabitants of Rzgów and Tuszyn, since the majority of the new textile entrepreneurs were former employees of Łódź factories who had backgrounds in textile production. The second factor was the phenomenon of the shuttle migration (also known as primitive mobility) from the countries of the former Soviet Union into Poland during the 1990s, after the collapse of Communism (Okólski 1996). This influx of “tourists” from the former Soviet Union had many positive effects, including the development of specific sectors of the Polish economy. Indeed, the foreign demand for textiles and leather products was one of the main factors behind the boom in the private textile and shoe businesses (Okólski 1996). Thus these “tourists” proved to be the major stimulus not only for bazaars in the Polish borderland (Potrykowski 1998) but also for markets located in the heart of the country, such as the Warsaw bazaar (Okólski 1996) and the Rzgów-Tuszyn textile-trade strip.

36Current development in the Łódź region is path dependent in nature. Employment in manufacturing industry still dominates total employment. In October 2005 51 percent of the Łódź labour force was employed in industry and of that proportion more than 30 percent was employed in the textile industry. The economy of the Łódź region is still influenced by the eastern markets, although to a lesser extent than before, thanks to the diversification of industrial activities and the development of a tertiary sector in the urban core. Given Poland’s chronic balance of payments deficit, the eastern markets will remain of vital importance to development in the Łódź region.

THE BAZAARS OF TUSZYN AND RZGÓW

37The history of the Tuszyn and Rzgów bazaars began in the early 1990s, when some local entrepreneurs, desperate to sell their products, started to set out their wares along the major north-south arterial highway that runs through the two municipalities. This, along with the growing influx of Russian visitors, stimulated the region’s textile-producing and trading activities, which were soon flourishing. By 1993 representatives of local government and businesspeople from the region were active in seeking to improve conditions at the bazaars. They began by delimiting the number of bazaar locations.

38In the case of Rzgów the local government provided a space and local businesses supplied the necessary funds, and this private-public collaboration led to the creation of a huge clothing bazaar known as PTAK (the initials of its founder’s name). The bazaars in Tuszyn had a different origin. Instead of one market, seven markets were established. In contrast to Rzgów, in Tuszyn the biggest bazaar is on public land and is maintained by the local government, a situation that inevitably influences the flexibility of the venue.

Figure 6.4 Number of Stalls, 1995-2004

Figure 6.4 Number of Stalls, 1995-2004

39The bazaars in both municipalities flourished, as measured by the number of stalls, until 1998, but particularly in 1995-96. In late 1997, however, the Polish government introduced stricter border-crossing requirements for inhabitants of former Soviet republics, in order to fulfill the obligations arising from its forthcoming accession to the EU. This, according to Iglicka (2001a), immediately affected movement from Belarus and Russia, which in turn affected the sales at the big bazaars in eastern and central Poland. This issue caused heavy lobbying at the national level, and Polish traders and manufacturers ultimately forced the central authorities to lower the cost of tourist vouchers and the amount of money necessary to enter Poland (Iglicka 2001a). A second blow struck the bazaars in October 2003 when the further fulfilment of Poland’s Schengen obligations led the government to introduce a visa requirement for inhabitants of former Soviet republics wishing to travel to Poland, further hindering international travel. However, despite these unfavourable circumstances, the bazaars have remained important to the local and regional economies. The taxes derived from them constitute a significant share of the municipalities’ revenue.

40The periods of prosperity and decline experienced by the bazaars have also had a crucial influence on the regional economy. This is reflected, albeit indirectly, in the numbers of people employed in both municipalities, as well as in the structure of employment, which both demonstrate the region’s dependence on eastern markets. In short, Poland’s economic and political relations with, and the situation of, its eastern neighbours affect employment in the region.

Figure 6.5 Share of Bazaar Taxes in the Revenues of Tuszyn and Rzgów, 1995-2003 (%)

Figure 6.5 Share of Bazaar Taxes in the Revenues of Tuszyn and Rzgów, 1995-2003 (%)

41Unfortunately, Polish employment statistics are biased in the sense that enterprises that employ up to nine workers have not been included in official statistics since 2000, a fact that is of great importance in that small enterprises constitute the predominant type of firm in the Łódź region. Consequently, a better measure of municipal economic performance and employment structure in Tuszyn and Rzgów is the number of enterprises in their industrial and service sectors (figure 6.6). The majority of industrial venues are related to the textile sector, and the service sector is dominated by bazaar-related activities.

42Clearly, not all of the volatility in the bazaar economy is accounted for by changing border regimes, and in any case it is likely too early to observe the effects of the visa measures implemented by the government in 2003. However, in general a decline has been witnessed since 1997, especially in the industrial sector.

Figure 6.6 Number of Enterprises Operating in Industry and Services in Tuszyn and Rzgów, 1995-2004

Figure 6.6 Number of Enterprises Operating in Industry and Services in Tuszyn and Rzgów, 1995-2004

Customers of the Bazaars

43Data from a study of four Hungarian markets at the end of the twentieth century (Czakó and Sik 1999) was presented earlier in this chapter to illustrate the “who” and “what” of open-air markets. Since that study was conducted, ten former Communist states in central and eastern Europe have been admitted to the EU (eight in 2004 and two in 2007), and many of these countries have had to prepare for their Schengen membership by tightening their border-security regimes and changing their attitudes toward illegal immigration. All of these events have had implications for the mobility of people and, as illustrated earlier, the market phenomenon relies to a great extent on people being able to travel to trading places. Given the continued dearth of scholarly literature on the topic, and in an attempt to start filling this empirical gap, we carried out a small-scale questionnaire project among the buyers at one of the larger markets in the Łódź region, the publicly run open-air market in Tuszyn.

44Together the markets in Tuszyn occupy an area of about fifteen hectares and traders have at their disposal about 7,000 stalls. The market where the questionnaires were conducted had a little over 1,100 semi-permanent stalls. As at many of the area’s markets, textiles and clothing were the most important products at this market, which was open from 3 a.m. to 11 a.m six days a week. The municipal authorities estimate that each year about seven million people visit the seven Tuszyn markets and spend about XEU 830 million, and that the markets contribute more than XEU 1.5 million in taxes to municipal revenues.

45In order to get some basic insight into the behaviour and attitudes of bazaar customers, about 97 individuals were approached with a questionnaire while they were visiting the bazaar. Of course, firm conclusions cannot be drawn from such a small sample, but indications are possible. Two respondents were from Belarus and two were from another EU country, while one respondent was Israeli and another refused to answer. The remaining ninety-one respondents were quite evenly split between forty-five from the Łódź region and forty-six from the rest of Poland.

46The first indication of changes in the regional composition of the local population may be that only two of the respondents came from countries outside the future Schengen zone, which in turn may be an early indication of the importance of the stricter border regime imposed in 2003. Although we are unable to prove it statistically, we believe that only a small proportion of the markets’ customers come from countries of the former Soviet Union. This is supported by the observation that few of the private cars and small trucks in the surrounding parking lots had come from the East, though the share of buses from these countries is much higher.

47However, the notion that fewer customers come from former Soviet republics does not imply that revenues have fallen. The two respondents from Belarus indicated that the amount of money they had spent in the market fell into the highest category, while the average for people from the Łódź region was about XEU 300 and that for people from the rest of Poland was XEU 800. (Please note that in figure 6.7 the złoty, the original Polish currency, is used, but in the text this currency is converted into euros, using an exchange rate of four złotych to one euro.)

48In general, people were mainly interested in buying textiles and clothing. About three-quarters of the questionnaire’s respondents had bought or were going to buy textiles. About two-thirds of the respondents indicated that low price was their main reason for coming to the bazaar. This pattern was true for people from the Łódź region, as compared to those from the rest of Poland.

Figure 6.7 Expected Expenditures, Łódź and Rest of Poland (złotych)

Figure 6.7 Expected Expenditures, Łódź and Rest of Poland (złotych)

Figure 6.8 Visiting Frequencies, Łódź and Rest of Poland (%)

Figure 6.8 Visiting Frequencies, Łódź and Rest of Poland (%)

49The biggest difference between these two groups involved whether they were buying products for personal use or for resale. Whereas two-thirds of the Łódź people who took part in the survey bought products for private use, two-thirds of respondents from the rest of Poland intended to resell their acquisitions. This may account for two other observations. Questions on the frequency of visits revealed that three-quarters of the visitors from outside the Łódź region came to the market at least once a month, while only one-third of the people living close by shopped at the market that frequently (figure 6.8). The age composition of the two groups was also quite different. About two-thirds of the respondents from the Łódź region were under forty, while about three out of every five respondents from outside the region were older than forty.

Before and After October 2003

50One of the presuppositions of this chapter is that the implementation of visa requirements has likely influenced the functioning of the bazaars. This could be expressed in the ways in which customers perceive the bazaar. Indeed, some effect was noticeable in the questionnaire results, albeit the small number of respondents again requires caution. About half the respondents stated that they had not noticed much change in the bazaars. Of those, only a small majority rated the change as negative, and this tendency was more pronounced among respondents from the Łódź region. Although we must be particularly careful in our analysis, it seems that respondents’ most frequent observation concerned the changing range of products, with positive and negative change being mentioned almost equally. Among those who indicated that things had changed for the worse, prices and suppliers were mentioned most often.

51Another possible effect of new visa requirements is that people were travelling to other markets, especially those to the east of Łódź, closer to the Ukrainian and Belarusian borders, although this could not be substantiated from the questionnaire results. Respondents indicated that they visited the bazaars to the east and west of the Łódź region as often as they visited those in the Łódź region, and that since October 2003 the frequency of their visits had hardly changed.

Local Responses

52A full and proper understanding of local responses to stricter visa requirements requires a prior theoretical contextualization. Thus we stress the need for a fusion of Giddensian structuration theory with the scalar approach (Brenner 2000; Cox 1996). Although the scalar approach is currently being contested (Marston, Jones, and Woodward 2005), its epistemological assets (Jones 1998) should be borne in mind: that is, that it requires a combination of societal structuration with geographical structuration. For our purposes scales can be associated with a set of overlapping institutions/organizations, from continental to local, that constrain and enable the activities of given actors (Marcińczak 2005). Obviously this approach narrows the meaning of institutions (Amin 1999, 367) at the same time as it highlights the crucial role of governmental and non-governmental institutions (organizations) of different scales. In doing so it sheds more light on how power is exercised in the interplay between structure/institutions and agency.

53In response to the unfavourable economic changes brought about by new visa regulations local private-public coalitions implemented their own initiatives. In order to investigate such responses in-depth interviews were carried out with the mayors of Tuszyn and Rzgów, and with the manager of the PTAK market. Based on these interviews the conclusion can be drawn that the character of visits and the purchasing habits of the markets’ customers have changed since 1997. In particular, only about twenty coaches now come from the former Soviet Union, as compared to the more than forty that used to come in the markets’ heyday. Furthermore, only the driver and a few passengers are on board, with textile products filling the places formerly occupied by shoppers.

54The first strand of local initiatives involved intensive marketing, especially commercials for PTAK on Russian television, on the internet, and in the press, as well as billboards welcoming “tourists” crossing the eastern border. Selected journalists and entrepreneurs from Ukraine were also invited to join a study tour introducing the business opportunities available in the PTAK bazaar and the Łódź region in general, which was organized in cooperation with the voivodship. (There are sixteen voivodships functioning as the first tier of subnational government in Poland. The idea underlying their inception was to create regional units with strong self-government.)

55In addition to the individual actions of the PTAK management other initiatives were conducted in cooperation with different levels of local government. The municipal government of Rzgów made it easier for residence permits to be obtained, in order to allow local entrepreneurs to maintain their informal contacts. Then regular (“preferred”) customers whose names had been placed on a computer database at the PTAK bazaar were allowed obtain visas more quickly and with fewer problems. Customers using this service were then obliged to shop exclusively at the PTAK bazaar, the process thus constituting a kind of loyalty program. To reinforce the exclusiveness of its customers’ shopping activities the PTAK’s management arranged with the company that provided transport from the border to the bazaar to ensure that these customers did not visit any of the borderland markets.

56Since post-socialist growth coalitions are strongly influenced by national governments (Kulcsar and Domokos 2005), the PTAK’s management sought partners from the voivodship council to take part in regional lobbying at the national level. An illustration of this mechanism was the struggle for national funds to develop Łódź Airport. Representatives of PTAK strongly supported this idea and stressed the need for regular flights between Łódź and the Ukrainian capital, Kiev. The PTAK’s management also began the process of converting the bazaar into a more regular shopping mall in an attempt to attract not only more Poles but eventually also people from western countries. Our three in-depth interviews indicated that the enhanced strategy put in place after the initial stricter border controls were implemented in 1997 remained effective after visas were introduced in October 2003.

57However, it should also be mentioned here that the municipality of Rzgów has since diversified the local economy by actively attracting other industries and by establishing a second bazaar close to the PTAK bazaar. These municipal initiatives were not greatly appreciated by the PTAK’s management and the coalition between the two has weakened accordingly.

58The situation of the Tuszyn bazaar has been somewhat different, to a large extent due to its public ownership, which inevitably narrows the range of possible activities. In Tuszyn only small-scale projects could be implemented, such as providing inexpensive meals for coach drivers, offering sellers discounts for renting stalls, and extending operating hours to create an almost 24/7 operation. However, because the Tuszyn municipality is responsible for the inhabitants at large, it also tried to protect the local economy. In 2005 the municipality joined the Association of European Textile Collectivities (ACTE) in an attempt to protect local textile producers and, more recently, the strong textile lobby in the Łódź region convinced the voivodship council to join the ACTE as well.

59These activities indicate that coalitions were being built and strategies were being pursued in the Łódź region to battle the negative outcomes of the tightening of Poland’s eastern border. Thus the interplay of structure and agency has been mediated by different institutions, as local actors, in addition to undertaking some actions on their own, have attempted to cooperate with organizations that have different territorial ranges and, consequently, different bargaining power.

CONCLUSION

60In this chapter we have outlined the effects of the changing interpretation of the eastern border of Poland on the local and regional economies of the Łódź region, in an effort to create some empirical basis for further research. In that sense the material presented has a strongly descriptive character.

61Clearly, the local and regional development of the Łódź region has a strong connection to developments on other levels of scale. It is by no means an isolated process – on the contrary, it is embedded in national, European, and global structures and processes, not only in the spatial sense but also in temporal and institutional senses.

62First, the region is burdened with the powerful legacy of its socialist past. This past explains its relative monoculture, which is still predominantly based on the textile industry. The industry’s hard infrastructure, in the form of available machinery, for example, kept the sector alive immediately after the collapse of Communism in the early 1990s, while its soft infrastructure, in the form of the expertise and craftsmanship of former textile workers, enabled the rise of new home-based companies. The local bazaars were the perfect outlet for their products. This may also account for the fact that, even in what is often called an age of post-industrialism, the industrial sector in the Łódź region grew, or at least remained stable. The survival strategies of its population, honed under socialist rule, proved to be useful in the post-socialist transition period.

63Second, the development of the region is embedded within the overarching process of continuing integration within the EU in general and, in relation to border effects, the Schengen framework. Because the bazaars of the Łódź region attracted customers from outside Poland, any and all border measures that were implemented to impede their mobility affect the region’s development. Indeed, the current cross-border policy within the Schengen framework, especially the visa requirements, may be viewed to a certain degree as a counterpart of former trade wars that excluded the Łódź region from its biggest market.

64Based on these observations, the development of the region is strongly tied to the changing regimes at the border in general and at the eastern border in particular. The initial success of the region’s bazaars, which was important to the regional economy, can largely be explained by the openness of the border in the early years of the economic transition. The differences between and within countries, both in prices and in mere availability, induced high levels of interaction, not only in flows of people but also in flows of goods. Moreover, the consequence of the institutional void that existed in those early days was the emergence of a form of “raw” capitalism.

65Poland’s accession to the EU and then to Schengen membership has led to a reinterpretation of the eastern border and, in effect, a process of tightening. Because the fate of the bazaars is so closely linked to the openness of the border, this process greatly influenced Łódź’s regional economy, as revealed in the responses to our questionnaires and our in-depth interviews with three groups of actors – bazaar management, local government, and bazaar customers.

66The management of the Tuszyn and Rzgów bazaars responded in quite different ways to the problems posed by the tightening of the borders, although both were closely linked to the institutional form of their respective bazaar. The management of the privately run PTAK bazaar actively and almost aggressively started to campaign in Belarus, Ukraine, and Russia, using every means available. They pampered their customers as much as possible; they formed a coalition with local government, based on their mutual interest in combating the decline in the number of visitors from the East; and they attempted to diversify by transforming the bazaar into a shopping mall, to increase its attractiveness to potential customers not only from the Łódź region but eventually also from western countries. Their reaction can be characterized as ex-ante and proactive. The response of the management conglomerate in Tuszyn seems to have been more ex-post and reactive. This was largely due the fact that it was a publicly run market and management had few options, although they may well have profited from the proximity of the PTAK bazaar and its activities in attracting new customers.

67With regard to the municipalities, as previously noted, the local government of Rzgów worked quite closely with the PTAK’s management in order to maintain the tax revenues it received from the bazaar. During the bazaar’s most successful period these tax revenues accounted for over 20 percent of the municipal budget, and thus the death of the bazaar would have implied the virtual collapse of the municipality. In Tuszyn the local government has remained strongly dependent on the bazaars, with 30 percent of its budget coming from the tax revenues generated by these open-air markets. The municipality’s most prominent action to date, as noted earlier, has been to join the ACTE in order to protect local textile production. Clearly there has been no change in Tuszyn’s dependence on the textile industry.

68As for the customers of the bazaars, the strategies of the cross-border sellers and buyers are particularly interesting. The fieldwork done at the Tuszyn bazaar revealed few customers from former Soviet republics and strongly suggested that the number of buyers from the East had already greatly diminished. Based on the responses to the questionnaires, those who still came from the East had changed their strategy, in that they bought greater quantities on each visit. Thus the seats on coaches that had been occupied previously by people were now filled with goods. Because sellers were not included in this research, it is difficult to know whether this strategy of buying bigger quantities has compensated for the loss of customers. However, it may be that the reinforcement of the eastern border has had far more consequences for the flow of people than for the flow of goods. To substantiate this supposition future research on this topic must include the sellers.

69Finally, as the subtitle of this chapter suggests, the region has been on a rollercoaster ride as far as the eastern border is concerned. Until 1990, Poland’s border could be characterized as an Iron Curtain that prevented almost all interaction with neighbouring countries. This was almost completely lifted during the first half of the 1990s. However, in the prelude to Poland’s accession to the EU and the Schengen Agreement the border was slowly reinstated as a barrier, although this time it was better characterized as a “paper wall.” The border remained permeable, but in a very selective way. The ability of non-EU citizens to cross it was now to be based on whether they belonged to the appropriate social networks, in which possessing the right expertise and attitude is crucial. The stronger actors will survive this new border regime, while the cross-border suitcase traders (the “ants”) will be confronted with virtually impassable barriers and will likely die out. This situation will also affect the functioning of the bazaars in the future, and consequently the local and regional economies.

70From an analytical point of view the Łódź region, as a region having to cope with systemic changes in border regimes, fits nicely into the framework of structuration theory. Some of the local and regional agency responses, in particular, have been brought to the fore in this chapter, while the structural responses to the implementation of the border regime were taken for granted. In order to fully grasp the structure-agency interplay in the context of the bazaar economy of the Łódź region, future research should include such structural responses.

ACKNOWLEDGEMENTS

71During the preparation of this chapter Szymon Marcińczak was hosted by the Department of Human Geography of Radboud University Nijmegen, the Netherlands, an arrangement that was made possible through a Huygens Scholarship.

72Both authors would like to thank the students from the Department of Geography at the University of Łódź who did the questioning of customers at the bazaar in Tuszyn.

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Table des illustrations

Titre Figure 6.1 Location of Łódź and Main Highways
URL http://books.openedition.org/uop/docannexe/image/1607/img-1.jpg
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Titre Figure 6.2 Location of Rzgów and Tuszyn
URL http://books.openedition.org/uop/docannexe/image/1607/img-2.jpg
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Titre Figure 6.3 Bazaars in Tuszyn and Rzgów
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Titre Figure 6.4 Number of Stalls, 1995-2004
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Titre Figure 6.5 Share of Bazaar Taxes in the Revenues of Tuszyn and Rzgów, 1995-2003 (%)
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Titre Figure 6.6 Number of Enterprises Operating in Industry and Services in Tuszyn and Rzgów, 1995-2004
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Titre Figure 6.7 Expected Expenditures, Łódź and Rest of Poland (złotych)
URL http://books.openedition.org/uop/docannexe/image/1607/img-7.jpg
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Titre Figure 6.8 Visiting Frequencies, Łódź and Rest of Poland (%)
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Auteurs

Department of Human Geography and Nijmegen Centre for Border Research, Radboud University, Nijmegen, the Netherlands

Department of Geography, University of Łódź, Poland

© Les Presses de l’Université d’Ottawa | University of Ottawa Press, 2007

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