Kingdom of Galicia and Lodomeria - Economy

Economy

Galicia was economically the least developed part of Austria and received considerable transfer payments from the Vienna government. Its level of development was comparable to or higher than that of Russia and the Balkans, but well behind Western Europe.

The first detailed description of the economic situation of the region was prepared by Stanislaw Szczepanowski (1846–1900), a Polish lawyer, economist and chemist who in 1873 published the first version of his report titled Nędza galicyjska w cyfrach (The Galician Poverty in Numbers). Based on his own experience as a worker in the India Office, as well as his work on development of the oil industry in the region of Borysław and the official census data published by the Austro-Hungarian government, he described Galicia as one of the poorest regions in Europe.

Statistics indicate the Galicia and Lodomeria was poorer than areas west of it. The average income per capita did not exceed 53 Rhine guilders (RG), as compared to 91 RG in the Kingdom of Poland, 100 in Hungary and more than 450 RG in England at that time. Also the taxes were relatively high and equalled to 9 Rhine guilders a year (ca. 17% of yearly income), as compared to 5% in Prussia and 10% in England. Also the percentage of people with higher income was much lower than in other parts of the Monarchy and Europe: the luxury tax, paid by people whose yearly income exceeded 600 RG, was paid by 8 people in every 1,000 inhabitants, as compared to 28 in Bohemia and 99 in Lower Austria. Despite high taxation, the national debt of the Galician government exceeded 300 million RG at all times, that is approximately 60 RG per capita.

All in all, the region was used by the Austro-Hungarian government mostly as a reservoir of cheap workforce and recruits for the army, as well as a buffer zone against Russia. It was not until early in the 20th century that heavy industry started to be developed, which would be comparable to much of Russia and the Balkans. Even then it was mostly connected to war production. The biggest state investments in the region were the railways and the fortresses in Przemyśl, Kraków and other cities. Industrial development was mostly connected to the private oil industry started by Ignacy Łukasiewicz and to the Wieliczka salt mines, operational since at least the Middle Ages.