Poland: the dilemma of throwing good money after bad

Poland presents a combination of two of the most acute dilemmas of American foreign policy. One involves policy toward the Soviet Union and its East European clients; the other involves foreign aid.

The Carter administration would rightly prefer to pass this one on to its successor. It is the kind of long-range decision inappropriate for lame ducks. It is also the kind of complex decision with which governments naturally tend to temporize. Although the rush of events may force Carter's hand, Poland is likely to be one of the first and most difficult problems confronting Ronald Reagan.

The Polish economy is in crisis and in hock to the West to the tune of $21 billion. Of this, only about $1 billion is owed to the United States government; most of the rest is owed to commercial banks in the US and Western Europe. The Poles last month asked the US for an emergency package of $3 billion more.

At the same time, Poland is in a political crisis so profound as to threaten the Marxist foundations of the state. Workers, fed up with shortages of almost everything and with the company unions imposed by the communist party, have demanded and -- astonishingly -- got the right to their own unions independent of the party. In an effort to contain this crisis, the hierarchy of both the party and the government has been repeatedly reshuffled over the last few months. Looming always in the background is the specter of Soviet intervention and possibly even more domestic disorder.

The national interests of the United States run in two directions. On the one hand, it serves American interests to encourage diversity in Eastern Europe. This would be done by making it possible, or easier, for the Poles to assert at least some degree of independence and to move, however haltingly, toward a free market economy. To do this would mean acceding to the Polish request for $3 billion or most of it.

On the other hand, it also serves American interests for the Soviet Union to be preoccupied with troubles in Eastern Europe, threby reducing its capacity and taste for mischievous adventures in other parts of the world. If American and other Western aid to Poland is not forthcoming, the Soviets will have to supply more themselves and will probably also be confronted with the problem of keeping the lid on social unrest. In other words, an economic aid program to bail out Poland will have the result of also to some extent bailing out the Soviet Union.

If Poland were almost any other country, it would be a classic case for an International Monetary Fund program of stabilization and reform. One of the purposes of the IMF is to rescue countries from the results of their own follies. But Poland, in keeping with Soviet dogma, is not a member of the fund. The rescue, if there is to be one, therefore has to be performed either by the West or by Moscow.

The history of Western, and especially American, attempts at this kind of rescue operation in the absence of the IMF's discipline does not inspire confidence. American aid administrators have been notoriously prone to sacrifice economic discipline for what they perceive to be overriding political considerations. Since the programs are generally undertaken for political reasons to begin with, this is not surprising. But it has frequently meant that good money has been thrown after bad. In the case of Poland, it would mean that public money would be used to bail out not only Poland and the Soviet Union, but also the private American and West Europeans banks who are Poland's biggest creditors.

It may be that this is what ought to be done. But fi the Reagan administration decides to go down this course, it ought to level with the Congress and the country as to precisely what is involved.

It ought to make the decision, furthermore, only after carefully weighing the prospects of success and the risks of failure. Prominent in this equation is the unknown of how far the Soviet Union -- despite its difficulties in Afghanistan, its worries about China, and its ambitions in the Middle East -- will allow Poland to slip away from its control. If the Soviet Union is pushed beyond this point and intervenes militarily in Poland, what options would then be available as the American response -- and would NATO go along with them? The more we ourselves become involved in Poland, the more we limit those options by foreclosing the one of doing nothing.

That was the option followed by the Eisenhower administration in the 1950s after it had itself contributed to the unrest which the Soviets forcibly suppressed. The pressures to do something would probably be greater now. This is not only because of the Reagan group's penchant for a harder line toward the Soviet Union but also because the increased prominence of ethnic groups in US politics has given the millions of Polish-Americans a stronger voice. But Eastern Europe -- and especially Poland, about which the Soviet Union is extraordinarily sensitive on security grounds -- is not the best place for a confrontation.

Withal, it's quite a challenge to a new administration.

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