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Poland's Austerity Plan Takes Hold

TOWARD A MARKET ECONOMY

By Klas BergmanSpecial to The Christian Science Monitor / January 8, 1990



WARSAW

``THE darker the night, the closer the dawn,'' said Polish Labor Minister Jacek Kuron on television the other night. One week into the Draconian new economic program, which is to transform Poland from communism to market economics, it is very dark here, and the dawn is nowhere in sight.

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``This is a painful moment,'' admitted government spokeswoman Malgorzata Niezabitowska Friday, ``but if the people remain patient and calm and let the economic mechanisms start working, things will improve.''

At least, that is the hope of the government, while the changes during the first week, according to Ms. Niezabitowska, created confusion, chaos, and even panic.

The signs of the steep price hikes were everywhere. Suddenly, after a doubling of the gas prices, the usually huge lines to the gas stations have completely disappeared. Gas now costs 2,400 zlotys a liter (8,500 per gallon). One dollar equals 9,500 zlotys.

``I just had to laugh the other day,'' said a woman who paid one quarter of an average monthly salary (92,000 zlotys) for a tank of gas. ``I need my car for work, and I need to fill it up every 10 days. But how can I afford that now?''

The shops are more empty than usual, especially the meat shops, because farmers appear to be anticipating even higher prices and are not selling their meat. On Saturday, the meat shop on Wiejska Street in central Warsaw was completely empty a couple of hours after it had opened with only a few sausages for sale.

``We haven't had meat since New Year,'' said one of the shop assistants, who added that there probably won't be any until Jan. 18, when some meat from a private supplier is due.

``But people are calm and orderly,'' another shop assistant said. ``They buy smaller amounts now, but they say that they'd rather eat salt and drink water than have riots like in Romania.''

The prices on sausages, pork, beef, veal, and chicken have gone up between 40 and 50 percent. In another shop around the corner, there were a few chickens for sale at 4,700 zlotys a pound. But there was nothing else. In a corner, there was a bunch of egg cartons, but no eggs. An egg now costs up to 650 zlotys - up from 330 zlotys.

``I had eggs yesterday, but they all sold,'' said the woman behind the counter.

Apparently, people still have money, even though an elderly woman just said straszny (``terrible'') and turned and walked out of a meat shop when she saw the price of ham, 30,000 zlotys - up from 19,400, - and hot dogs 9,000 - up from 6,000.

The open-air market outside Hala Mirowska in central Warsaw last Saturday was full of people, in spite of the raw cold. They stood in long lines to buy chicken and every kind of meat in great quantities, which private farmers had hauled in from the countryside. There was also milk, butter, and flour. Business was very brisk.

However, no one seems to know how next week will be - if the prices will continue to increase sharply, and if people will still have money. But the government is watching the development closely, vice finance minister Marek Dabrowski said Friday at a press conference. He criticized the wait-and-see and speculative behavior of farmers, which had actually reduced the purchase of meat and butter, in spite of existing reserves. But he also said that these people were miscalculating the situation for, eventually, prices will start to decrease.

On the positive side, however, Dabrowski cited the ``healthy and stabilizing'' fact that the official dollar rate was now higher than the unofficial, which is probably the first time ever since the Communists took power. If this development continues, the black marketeers and private-exchange offices could soon go out of business. It could also speed up the government's goal of complete convertibility for the zloty.

So far, the economic program has enjoyed both wide political and popular support. The main criticism has come from the conservative faction of the Communist Party, represented by the official trade union OPZZ and its leader Alfred Miodowicz.

``The program is dictated by the International Monetary Fund and it is not realistic,'' says Mr. Miodowicz. ``The program has not taken into account the limits of what people can stand.''

Miodowicz, like other Communists, agrees reforms are very much needed, but he says he does not believe in quick solutions. Others in his party are less critical and more cautious, and no one in the present Communist leadership says he wants the government to fail, for, as one said, ``it will not allow us back into power.''

Rather, they say, the fall of the Solidarity-led government, in which the Communists participate, would have dire consequences for the whole country - a stop in the democratic process and a possible new dictatorship.

Whether these somber Communist voices are correct or not, is too early to say. But they are an indication of how high the stakes are in the Solidarity-led government's shock-like attempt to rescue Poland's economy.