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Poles Try the Free Market, and It Fits

But perils persist: Economic growth has been uneven and the political situation remains `delicate'

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CONSIDER the Polish potato chip.

Available in barbecue, bacon, or plain salted flavor, and packaged in a shiny red and yellow cellophane bag, it could easily be mistaken for a Western import.

The same could be said about the Polish television set, which contestants can win on Poland's own version of "Wheel of Fortune," the American game show. Sleek, compact, and equipped with remote control and stereo sound, it could be a Sony. But - surprise! - it's produced by Elemis, a state-owned company in Warsaw on its way to privatization.

Polish entrepreneurs - and even state-run businesses - have shown an uncanny ability to adjust quickly to free-market conditions and give consumers products they want. It's this flexibility, and the government's adherence to economic reforms, that make Poland the first country in Eastern Europe to emerge from severe post-communist recession.

Largely without the help of foreign investors, the Poles last year boosted industrial production by 4 percent (it plummeted 24 percent in 1990). Inflation is on a downward trend. Still high at a targeted 32 percent for this year, it is a lot better than three years ago, when it galloped along at nearly 600 percent.

The private sector, meanwhile, has advanced beyond the stage of sidewalk kiosks and hot dog stands, although there are still plenty of those. More than half of working Poles now have jobs in the private sector, a strong incentive for them to make sure capitalism succeeds.

As far as private enterprise goes, "this country is more advanced than any in the region," says Henryk Szlajfer of the Polish Institute of International Affairs.

But like everyday life in Poland, in which BMWs speed past fields still plowed by horses, the economic and political scene is a dichotomy of positive and negative trends.

Reformers trying to move the country forward are often undermined by those who yearn for the way things were.

As one longtime observer of the country remarks, "Poland is striding boldly forward on a banana peel."

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