East-bloc Poland may be latest recruit to largely Western IMF
Economic reality is steadily edging debt-ridden Poland toward renewed membership in the International Monetary Fund. More and more Poles are acknowledging that such a move may be the only viable way to get the country's economic back on its feet. And France and Germany, two of its major Western creditors, have nudged it in that direction.
There have even been signs that the Soviet Union -- Poland's prime East-bloc creditor -- would not object if its biggest but currently least-stable ally in the bloc were to take up the option.
Doing so would be essentially a political decision -- to be taken by the top leaders of Poland's Communist Party. It would mean that Poland would be joining what is essenthat Poland would be joining what is essentially a Western establishment organization.
Poland would have to make substantial amounts of information as to monetary reserves and other economic statistics public. In the event of a major loan, an IMF team would review its economic policies and possibly insist on changes before approval.
In 1944 Poland, under the wartime government-in-exile based in London, was a founding member of the IMF; the communist regime installed after the war pulled it out in 1950 under pressure from Stalinist Russia.
Now leading officials in the government are known to be in favor of rejoining. They apparently do not forsee serious Soviet objections. But the revisions in price structure that membership might require could spur worker opposition at a time when the government is already beset with continuing strike threats.
The IMF is no longer the communists' bogey of "international capitalism" it was during the war. Romania has joined without communism collapsing (although its regime is more firmly in ideological control than Poland's has ever been).
In talks in Bonn with Polish Foreign Secretary Jozef Czyrek Aug. 18, West German Foreign Minister Hans-Dietrich Genscher forthrightly urged a return to membership.
The Poles owe more to West Germany than to any other Western creditors: West German banks cover about one-sixth of poland's total $27 billion debt to the West.
At present Bonn has budget problems of its own, however, and it obviously feels it has reached the limits of what it can do to help Poland. Unless, that is, Poland takes a step that would not only help stabilize its situation through access to considerably cheaper borrowing facilities but also restore a measure of much-needed confidence in its credit worthiness in international money markets.
Almost ever since the crisis began last summer, most of Poland's economic experts -- including some who lost their jobs in the Gierek period for opposing its economic policies -- have presented the IMF as the only way out of the current difficulties.
It is significant that it was West Germany that made the suggestion in public. Some months ago, Mr. Genscher paid a visit to Moscow that Bonn, the Russians, andm the Poles all obviously regarded as important in the present tense state of East-West relations. President Brezhnev indicated he would like to continue the talks in Bonn, and he is to come to West Germany later in the year.
Mr. Genscher may well have mentioned the IMF as a Polish option at that time. The Soviets said nothing subsequently to indicate disapproval of such a move.
The crunch of IMF membership for Poland just now is domestic. It would require the very conditions that Polish workers have rejected three times since 1970 -- drastic increases in food prices to attain a realistic price structure, an incentive-based fair deal for private farmers, and an end to the subsidies that burden the national budget.
Each time the workers blocked government moves in this direction. They still refuse to countenance higher food prices as the first stage of economic reform (as the government's experts argue it must be).
But many Poles, as well as Western observes, think the workers might accept this argument if the IMF said that it is the only way to get the reform process under way.
"Poland simply cannot get by without fresh money with which to buy raw materials and then go all-out for export," one of the most experienced Western diplomats in Warsaw commented to the Monitor. "Everything depend on convincing the workers and the nation there ism no other way. Perhaps the IMF can do it."