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Poland The Foreign Trade Mechanism
Centrally planned economies typically minimized trade
with
free-trade markets because their central bureaucratic
systems
could not adjust quickly to changing situations in foreign
markets. The high degree of self-sufficiency that was a
declared
economic objective of Comecon made trade with the West a
difficult undertaking for an economy such as Poland's. On
the
other hand, the basically bilateral barter agreements that
characterized trade within Comecon often had made
expansion of
trade within the organization problematic.
State monopoly of foreign trade was an integral part of
centrally planned economic systems. Even after some
decentralization of this field in Poland during the 1980s,
the
Ministry of Foreign Economic Relations maintained direct
or
indirect control of all foreign trade activities.
Originally,
trading activities in the communist system were conducted
exclusively by the specialized foreign trade organizations
(FTOs), which isolated domestic producers of exportables
and
domestic buyers of imported goods from the world market.
Then, in
the late 1980s, some state and cooperative production
enterprises
received licenses from the Ministry of Foreign Economic
Relations
to become directly involved in foreign trade, and by 1988
the
number of economic units authorized to conduct foreign
trade had
nearly tripled. Nonetheless, many enterprises still
preferred the
risk-free, conventional approach to foreign trade through
an FTO,
relying on guaranteed Comecon markets and avoiding
marketing
efforts and quality control requirements.
Prior to 1990, the Polish foreign trade system included
the
following elements: a required license or concession to
conduct
any foreign transactions; allocation of quotas by planners
for
the import and export of most basic raw materials and
intermediate goods; state allocation and control of
exchange and
transfer of most foreign currencies; an arbitrary rate of
currency exchange lacking all relation to real economic
conditions; and artificial leveling of domestic and
foreign
prices by transfers within a special account of the state
budget.
Even among Comecon countries, Poland's foreign trade had
particularly low value. Its share of total world exports,
0.6
percent in 1985, dropped to 0.4 percent in 1989. The share
of
imports dropped even lower, from 0.5 to 0.3 percent, in
the same
period.
In early 1990, Poland entered a painful process of
massive
transformation for which reintegration into the world
economy was
a primary objective. The first postcommunist government
dismantled the existing foreign trade mechanism and
replaced it
with a mechanism compatible with an open market economy.
This
change eliminated license and concession requirements for
the
conduct of foreign trade activities, eliminated quotas
except in
trade with the Soviet Union, introduced internal
convertibility
of the zloty and free exchange of foreign currencies, and
accepted the rate of exchange as the main instrument of
adjustment of exports and imports, supported by a liberal
tariff
system.
Data as of October 1992
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