Milk lines lengthen, inflation soars, but Poles see light at end of tunnel
Every day Poland's inflation is fed by another billion zlotys (about $30 million), and there are no goods to absorb them. That, in a nutshell, is the problem of this country's beleaguered economy.Skip to next paragraph
Subscribe Today to the Monitor
When Prime Minister Wojciech Jaruzelski visited the Ursus plant to discuss the drop-off in tractor production, the workers' first questions were about day-to-day shortages.
One told him there were no cigarettes, no matches, no razor blades. Another, that people queue for two hours for a liter of milk.
In a supermarket, I watched 150 people line up to buy 100 grams of coffe beans apiece. A line of 120 dispersed when candy ran out. Such items often are kept at the cash registers, where customers may buy a bag when paying their bill.
Things are slightly better at the peasants' own fruitstands. More fresh vegetables are appearing -- cauliflower, spinach, tomatoes, even strawberries -- but there is apparently no attempt to control speculative prices. They soar far beyond all but a few purses.
The latest economic report indicates that the consumer situation will get worse as the year progresses. It will be 1982 before the most modest improvement is realized, and two more years before any meaningful upturn can be expected. The promised increase in supports for private farms has hardly begun.
At this juncture everything depends on the assistance Poland gets from abroad , both from the West and from its East-bloc allies.
Western governments have already agreed to provide short-term financial help, pending final rescheduling of debt repayments due in the next few years. But the banks -- to whom Poland owes hfalf its total of some $25 billion of debts to the West -- are still making up their minds about the Poles' three-year "stabilization program." It includes greatly reduced investment and more stringent rationing of food.
Nonetheless, a positive reply is certain because the banks -- like everyone else -- have no alternative if they want to see their money again.
A rub of a different, political kind could come from the bloc.
Thus far, the Soviet Union and some of the East Europeans have rendered considerable assistance. They have increased deliveries of raw materials, foodstuffs, and other consumer items well beyond the 1980-81 trade agreements, even though the Poles default on most of their major exports in return.
They, too, have no option but to try to prop Poland up, since any move to help "correct" its economic situation by greater political pressure or more drastic action would prove infinitely more costly.
Polish officials stress that Soviet deliveries overall this year have increased 26 percent, and raw materials 41 percent over the same period of 1980.
Soviet assistance since the crisis started includes not only 240 million rubles (about $170 million) worth of additional goods and extensive ruble credits, but also $1 billion worth of free exchange -- about half in real greenbacks.
Unpopular as they might be with many Poles, without this support from the Soviets the economy obviously could have collapsed. But how long can the Poles expect this "generosity" to continue if they cannot meet their own trading commitments fairly soon?
Coal, their No. 1 export commodity, kept their books in balance not so many years ago. This year, despite an upturn shown by the May figures, production seems to certain to fall below the year's target (itself nearly 20 million ton below the 1980 target, also unmet).
Sales to the West are virtually halted. The Soviet Union is apparently getting nothing either, and deliveries to East Germany and Czechoslovakia have dropped 17 percent already this year.
Although they contribute to the bloc's "rescue" program, they remind Poland that they have to buy in the West, for hard currency, things they should be getting from Poland. And they indicate that such assistance cannot continue indefinitely if the Polish party does not gain control of the political situation and get the country back to work.
The Poles know this. "Our allies have taken no reprisals in trade with us," Trybuna Ludu, the party newspaper, warned. "But we must realize such trade cannot be conducted long term."
Possibly the most vital question for Poland in its current plight is at last under active discussion: Should it rejoin the International Monetary Fund and the World Bank?
Poland was a founding member in 1944 but had to pull out during the cold war. The Soviets consider both to be Western instruments for imposing conditions on weaker countries.
For years now the Poles have been interested in rejoining. Their economic experts see no hindrance in IMF insistence on the proper utilization and safeguards on money lent.
"Had we had such criteria five or seven years ago, the country might never have fallen into its present credit trap," one remarked to this writer.
A decision is expected by the end of the summer and, it is said, even if the Soviets disapprove, it has to be positive.
"If that is so," a veteran Polish politician observed, "then it will be the first g limmer of light at the end of our dark tunnel."