John Tagliabue, “Poland Tying Political Reform to Aid from West”, The New York Times – March 18, 1989

 

The Main Point

As negotiations for reforms progress between the Polish government and the Solidarity union, wildcat strikes over wages continue to cripple the economy. The growing consensus on both sides is that without considerable aid from outside countries, there will be no end to the country’s problem and no possibility of reform.

 

Summary

The government spokesman and senior Solidarity negotiator appealed publicly to US and Western governments to grant Polish requests for assistance, in particular for relief on payment of the country’s $38 billion debt. Wildcats strikes are rippling across all of the country by protesting groups including railroad workers, textile workers, bus drivers, forestry workers, and postal workers.

 

Some of Poland’s Economic Woes:

 

-         In recent months, Poland has devalued the zloty which raised prices for many goods including food, and moved to give wider freedoms to small private businesses and joint ventures between Poland and foreign companies. Many Poles wishing to boost their incomes have begun illegal exporting, by buying food cheap because of Government subsidies, transporting and selling the food for Western currencies in countries like Sweden and West Germany, then selling the currency back in Poland on the black market for a considerable profit in zlotys.

-         Most of the nation’s large businesses and industries are state controlled monopolies meaning they are often badly managed and inefficient, and managers are appointed for political reliability only. But since these businesses and the politicians and managers who run them support the Communist Party, they continue to receive Government bailouts. Thus, managements do not have incentive to restructure for profitability and efficiency and the Polish economy suffers the further waste of energy and raw materials due to bad management and inefficient factories.

-         Many are leaving the country. West Germany, the country of preference, estimates that Polish visa applications into the country will total more than one million this year.

 

Solidarity’s proposals for economic change include indexation to assure that wages keep pace with increases in prices. Their proposals for political change include the abolition of the requirement that appointments to senior management jobs must be party-approved.

 

The Polish Government, for the most part, appears more intent on gaining Solidarity support for the joint appeal to Western governments for debt relief. Economic planners and government officials argue that Poland’s $38 million debt is what is crushing the economy, choking investments to modernize production and increase exports. Not surprisingly, they disagree with Solidarity’s proposal to abolish the requirement that senior management jobs be party approved because the system has been a tool for patronage and support.

 

Many Poles, mostly those from the small private business sector that has grown since the Government has lowered barriers to private enterprises, express frustration that neither the Government nor the Solidarity union has the answer to Poland’s economic problems.