Answering Poland's economics SOS
Poland's desperate economic situation seems to call for a Western "rescue" operation somewhat akin to the one that saved Yugoslavia from collapse in the early 1950s.Skip to next paragraph
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In 1948 Yugoslavia had been forced out of the Soviet bloc. For the next five years -- until Stalin's passing -- Russia clamped an economic blockade on the Balkan rebel that would have achieved its end but for Western aid. For 10 years from 1949 the United States, Britain, and France, concerned about a stable Yugoslavia, financed a tripartite program that stood the country on its feet with $2 billion worth of loans, industrial credits, and vast supplies of American grain surpluses.
Poland's difficulties are the economic sequel to a decade of overambitious expansion based on borrowing from the West.As a result it owes the US, the major West Europeans, and Japan a massive $22 billion to $24 billion.
Failure to heed the recessionary warnings of the mid-'70s, the energy crisis, a run of disastrously had harvests, all compounded by highly centralized bad management, terminated in a negative growth rate last year and in this summer's labor unrest, which brought most industry to a standstill for several costly weeks.
The political background to all this is, of course, totally different from Yugoslavia's 30 years ago.
Whatever the reservations of the large majority of Poles, Poland is a firmly committed and loyal member of the Soviet alliance through the Warsaw Pact and Comecon, the East's trading community.
Why then should the West step in with further help to keep a communist country afloat over the next few critical years, especially in the present state of East-West, especially in the present state of East-West relations for which Russia primarily is held responsible?
The argument -- and one most Western observers in Poland seem to hold valid -- in this:
A breakdown of Poland's economy in the 1980s is today no more in the Western interest than it would have been to allow Yugoslavia to succumb to Soviet pressure years ago. "IT is in no one's interest -- East or West -- to see the Polish economy collapse," said British Trade Minister Cecil Parkinson after talks with government leaders in Warsaw recently.
It is not merely the West's exixting financial involvement as a big creditor. There is also an interest in a stable Poland, able to grapple with its difficulties and avoid a situation which could, in the Kremlin's eyes, warrant pressures or intervention against the new Polish leaders and their plans for big social and economic reforms. No one doubts that intervention -- which, to be effective, would have to be military -- would spark a situation that could have grave consequences for the other East Europeans and for Europe as a whole.
Poland's reform priorities, summed up by a Warsaw paper as a "swift loosening of the 'corset' constraining the economy," involves managerial responsibility and incentives and a switch from major capital-intensive projects to modernization of existing plants. But this will take time to work out. It also will entail more carry-over borrowing for th e next few years for which there is scant option but to look again to the West.
Following the August strikes, the Soviet Union provided $690 million of aid, covering additional goods, low-interest credits for Polish food purchases from East European allies, and so on. But, with its own difficulties, the Soviet Union would find it hard to do much more except in some last resort in which it clearly would impose its own terms.
That is why Poland has approached several Western governments for more economic support. The US reportedly has been asked for as much as $3 billion in low-interest loans. During the summer the US advanced Poland 670 million Commodity Credit Corporation dollars to buy grain. This figure could be enlarged. But in the presidential transition period, the US probably can do little more than provide shorter-term or emergency aid. This would help Poland through the immediate hazards of a winter for which it has stopped its traditional food exports and plans meat rationing as of Jan. 1.
Trade-linked credits are one way the West may respond in a situation in which Poland's capacity to get through its present troubles seems as much a matter of common political interest as its ultimate ability to pay its debts.
Independence is not an issue as it was in Yugoslavia in 1948. In today's Polish context, however, stability seems just as important.