Poland AFTER THE FALL OF THE COMMUNIST SYSTEM
Wine caves, traditional part of local economy and culture
in Tatra Mountains
Courtesy Sam and Sarah Stulberg
In 1989 the NMP declined by 0.2 percent to a level 1
percent
below the 1978 figure, and industrial production also
declined
slightly. Despite price controls, inflation increased from
25.3
percent in 1987 to 343.8 percent in 1989. As the scarcity
of
goods rose sharply, lines in front of stores lengthened
and
social unrest grew. Shortages of materials and fuels,
unreliable
supply, and administrative disarray caused frequent
shutdowns of
industrial production lines.
Disequilibrium also increased rapidly in the external
economy. The balance of payments deficit in hard currency
(denominations exchanged on the world market) increased
from
US$392 million in 1987 to US$1,922 million in 1989, and
the
national debt grew from US$39.2 billion to US$40.8 billion
during
that period. In the last years of communist rule,
hard-currency
deficits were exacerbated by the priority still given to
economic
relations within Comecon. In its Comecon transactions
between
1987 and 1989, Poland converted a current account deficit
of 424
million transferable rubles (the artificial currency used
in
Comecon transactions but unrecognized outside the trading
bloc)
to a positive balance of 1,104 million transferable rubles
as its
ruble debt declined from 5.8 billion to 0.6 billion (see
table 13;
table 14, Appendix). These transactions meant that
Poland was
ignoring the catastrophic condition of its domestic
economy to
help alleviate the general shortages within Comecon by
supporting
a net outflow of capital (more exports than imports), most
of
which went to the Soviet Union.
In 1989 new policies in the Soviet Union made clear
that
Soviet retaliation against liberalization in Poland was no
longer
a real possibility. Under a new set of international
conditions,
the long history of riots and strikes by workers and
students,
criticism by the intellectual classes, and general lack of
cooperation by society with the economic programs of
successive
communist governments ended in the collapse of the
communist
regime of Wojciech Jaruzelski in May 1989. The proximate
cause of
its fall, however, was deepening economic crisis. Although
the
crisis was a very effective political weapon for Polish
noncommunist parties, the underlying structural defects of
the
national economy became a legacy of persistently
intractable
problems for the noncommunist governments that followed
Jaruzelski.
Data as of October 1992
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