Senator Brock: Move Carefully on Aid to Poland
FORMER Senator Bill Brock likes to recount a recent lunch he had in Warsaw that illustrates one aspect of Poland's mangled economy. The total tab for a group of six - including taxi fares and some small gifts bought along the way - was the equivalent of $3.50.
``The (Polish) currency has no value,'' says Mr. Brock, adding that there's very little to buy in the shops anyway. Dinner at one of Warsaw's ritziest hotels, he says, figured at the unofficial ``street corner'' exchange rate, cost him 96 cents.
But unrealistic prices are only a symptom of deeper problems.
Poland is saddled with a $39 billion foreign debt, a system of hopelessly inefficient state enterprises, and a population rattled by constant consumer shortages and slumping living standards.
Now come the reformers - a new government headed for the first time by a noncommunist prime minister, Tadeusz Mazowiecki - but it's clear they won't be able to succeed without outside help. The Poles have appealed for United States aid. And in July, President Bush offered an assistance package worth about $100 million. That disappointed some Poles, including Lech Walesa, the Solidarity trade union leader, who had pushed for $10 billion.
Brock, like many other Western analysts, says the West needs to move carefully in offering economic aid to Poland and other reform-minded governments in Eastern Europe.
``Big money may not help at all,'' says the former US trade representative. ``It may even make it worse.'' Large government loans, he explains, could be used to prop up Poland's inefficient state enterprises - and ultimately slow the pace of economic reform. Some analysts contend this already happened once. During a wave of economic reforms in the early '80s, the West poured billions of dollars into Poland. But very little went toward making fundamental changes in the structure of the economy.