Getting Poland's Economy in Gear
POLAND is nearing the crunch. The economic program being debated in the country's parliament and scheduled to be implemented in the new year is a decisive turn from the communist policies of the last 45 years. Those policies have bankrupted and polluted the country. The journey away from them will be jarring. Among the austerity measures put forward by the Solidarity-led government: deep cuts in state subsidies to balance the budget, an end to artificial pricing, limits on wage increases, and selling off state-owned companies. All are aimed at shifting the Polish economy from central planning to market mechanisms. All will test the resolve of Poles long used to socialism's assurances of a job and at least a minimal level of social services.
The program itself comes as a surprise to no one. Solidarity's leadership has long been pondering what would happen when the huge, inefficient plants its membership populates fell before a new economic order.
Lech Walesa and his lieutenants are, after all, labor leaders. Polish reform began on the shop floors. The interests of workers need primary attention, or the country's peaceful revolution could lose its logic and its popular moorings.
Hence Mr. Walesa's ongoing campaign to generate Western aid to cushion the blow for Polish workers. His goal of $10 billion to get the country over the hump is far from reached, but support is mounting. Poland has already received $385 million in food aid this year, and more will be coming. The Group of 24 industrialized nations, which includes Japan, Canada, the US, as well as Western Europe, is putting together a $1 billion stabilization fund. Hundreds of millions in US aid is on the way, with President Bush and Congress likely to approve more.
A crucial step is approval of an $710 million loan agreement with the International Monetary Fund, contingent on the economic reforms now on the verge of implementation. With the IMF aboard, other lenders will be reassured.
The Polish people are being asked to understand all this, and bear with the short-term hardships. Indications are they will give their new, more democratic government a chance to make the economy work. A social safety net is being pieced together within the country to aid the thousands likely to find that their old jobs are gone. All possible resources have to be aimed at retraining workers as the economy shifts from reliance on old, inefficient heavy industries.
Entrepreneurs are still a rare breed in Poland, but a few hearty pioneers are showing that new businesses can spring up even in the depleted economic soil left by communism. Still, investment capital is hard to come by.
The tasks ahead in Poland are Herculean. But their importance, in showing that an economy like Poland's can be turned around, can't be overstated. The Polish example will help set a course for all of Eastern Europe.
