POLAND

The Third Republic

SOLIDARITY

THE ROUND TABLE TALKS AND THE DEMISE OF THE

COMMUNIST GOVERNMENT

PRESIDENT

• 1ST non communist government formed by Tadeusz Mazowiecki

• Lech Walesa – president 1990-1995

• Aleksander Kwasniewski – President 1995-present

                                                      

100 Senators elected in the provinces by secret ballot for the term of the Sejm, in free, general, direct elections.

The Republic of Poland: Marketization and

Stabilization

Geopolitical Perspectives

• The “Heart of Europe”

• 39 million people

• 121,000 sq miles of territory

{Land area (sq. kms)313,000}

• Bridge between East & West

Transition Choices

• Slow Transition – mitigate pain in the short run – take longer to establish new order of living

• Fast Transition “Shock Therapy” – bring about new order quicker – great risk to elected governments

Stages of Transition

• First Stage – “Handel” = buying low abroad selling high at home.

• Modest investment

• Achievement motive

• Need to reform the safety net

Second Stage of Transition – “Takeoff”

• Political stability• Admitting Poland into NATO(1999) & EU• Legal environment• Sound monetary & fiscal policies• Budget deficit• Improve education• Mechanisms of enforcement

Key Points

• Privatization

• Restructuring Debt

• Reforming the Banking system

• Creating Capital Markets

• Direct foreign investment

• Unemployment

• The Farm economy

Third Stage – “Competitive Parity”

“When communism fell, you had companies with 100 employees, 80 of whom did nothing”

Foreign Investors

• General Motors

• Ford

• South Korea / Daewoo Corporation

• ABB Asea Brown Boveri Ltd

State owned enterprise

• KGHM Polska Miedz – state owned mine which holds one-fourth of the worlds copper market

• Lot – Polish national airline carrier

Imports / Exports

Trade Balances With All Trading Partners

(US $ billion) 1993 1994 1995 1996

Imports -$17.087 -$18.930 -$26.687 -$37.000

Exports 13.582 17.121 23.463 24.000

Trade Balance -$ 3.505 -$ 1.809 -$3.224 -$13.000

(Source: The Europa World Yearbook, 1997; Business Opportunities in Poland, 1997)

Trade Balances with the U.S.(US $ million)

1991 1992 1993 1994 1995 1996 %Increase

(1991=100)

Imports $456 $630 $913 $622 $776 $968 212.3

Exports 357 374 455 651 664 624 174.8

Trade Balance -$99 -$256 -$458 +$29 -$112 -$344 *

(Source: Business Opportunities in Poland, 1977, p. 24)

World Bank Involvement

44 Lending Projects & Operations supported by the World Bank in Poland from 1990 to the Present

International Monetary Fund Involvement

“Shock Therapy was approved and given financial support by the IMF in 1989. From that point on the IMF along with the World Bank, has been involved with Poland’s development.

CONCLUSION

EUROPEAN UNION? … And other burning questions….