Polish Leaders Urge US Investment

Nation to relax rules on foreign investment, opening to repatriation of profits, capital gains. EAGER PARTNER

FORTY-FIVE years ago communists turned the Warsaw stock exchange into a "revolution museum." Recently restored to democracy, Poland plans to open a stock exchange this June - in the former headquarters of the Communist Party. This "small historical revenge" was related by Janusz Lewandowski, the minister of privatization, during the visit last weekend of a Polish government delegation led by President Lech Walesa.

The story drew the expected laugh and also made a point: Democracy has come faster to Poland than a market economy has. According to Mr. Lewandowski, "the whole reconstruction of the Polish economy is unthinkable without a bigger inflow of foreign capital," which the delegation's visit to four American cities was intended to stimulate.

Foreign investment in Poland stands at $350 million, mostly from Germany and Sweden. The United States ranks third, with investments of $30 million in 214 joint ventures. Those sums are small compared to Poland's economic challenge. Lewandowski, for instance, has 8,000 state-owned factories to sell.

In calling for greater US investment, Polish officials dwelt partly on their need but also on government action to enhance the opportunity for profit.

Visa restriction lifted

Americans no longer need visas for travel in and out of Poland. One bill before parliament would replace a cumbersome system of permits and concessions with a simple commercial registration. Limits on repatriation of profit and capital gains from foreign investments are to be junked. Investments exceeding $2.8 million will receive an income tax exemption.

In Washington, Mr. Walesa promised US businessmen: "You will see that my country is the best area for American economic expansion." He urged US companies to participate in telecommunications, shipping, and banking. "We welcome all foreign partners. Do come."

The delegation also called for larger US import quotas on Polish textiles and steel, and for negotiations on a Polish-US free-trade agreement.

One step toward increased trade and investment, announced Sunday, was the formation here of the US-Poland Chamber of Commerce (USPCC), a clearinghouse to help businessmen in each country get information and make contacts.

After Warsaw, the Chicago area has the world's largest Polish community, numbering around 1 million. But the chamber "is not intended to be an organization of Polish-Americans," says Adam Zakrzewski, a USPCC organizer. Rather, "corporate America, the Fortune 1,000" are the chamber's intended members.

"We will be glad to give anybody and everybody all the advice we can," says Sidney Epstein, a member of the chamber's advisory board. As chairman of A. Epstein & Sons International, an engineering, architecture, and construction firm, Mr. Epstein has been doing business in Poland since 1972.

Until a few years ago, all of his work in Poland was on competitively bid construction projects in the food industry. The projects totaled hundreds of millions of dollars and all were profitable, he says. Now his company is taking equity in projects like meat plants, office buildings, and hotels.

Some of Epstein's equity projects anticipate a return in hard currency. He points to the Marriott hotel, Warsaw's newest. It charges Western currency and is "full all the time." The zloty is convertible and has remained for over a year at around 9,500 to the dollar, he says, wondering whether it will remain stable.

"It's exactly that sort of information that we want to get to our members," says Mark Chudzinski, a lawyer with Winston & Strawn and the chamber's acting chairman.

Wide market potential

Michael Radnor, a chamber adviser and executive director of International Business Development at Northwestern University's Kellogg Graduate School of Management, cautions against assuming that a US product would not be welcomed. That would be to fall into "the old trap of central planning."

Take cable TV. "Many would say that's the perfect example of what the country doesn't need," Professor Radnor says. Yet a Connecticut company that offers cable TV in Poland is "on the verge of a massive success." It turns out that, with so few entertainment opportunities, Poles spend lots of money on television equipment.

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