Poland's Economic Dilemma

...Poland is now the world's fourth largest producer of coal, is ninth in both steel and cement production, 10th in refined copper, and 12th in shipbuilding...

...and targets were missed in the transport sector...

...The meat shortage has proven to be one of the most intractable and embarrassing problems facing the government...

...In need of a scapegoat, the Party ousted Piotr Jar-oszewicz from the prime ministership, though not without first extracting from him a public confession to "a lot of subjective errors, which were our fault and the fault of the quality of the work of the government...

...This did little, though, to cushion the battering the Polish economy took in 1979: Industrial development virtually stagnated...

...He has been replaced by Edward Babiuch, a close associate of Gierek's who has earned a reputation for being a skilled administrator...

...Not for long, perhaps...

...As a first step toward satisfying these prerequisites, Gierek mortgaged Poland's future by borrowing heavily, especially in the West...

...An unidentified worker in the "Milan" enterprise recently complained, "We don't have the right to discuss whether the plan is too high or too low, but only how best to carry it out...

...Consequently, in June 1976 a set of overdue price increases was announced, the largest of which was to have been a 92 per cent price hike for wheat-coffee, a coffee substitute...

...Then, as they were coopted into the legal political system, they were progressively emasculated...

...In a recent talk with cattle breeders, Gierek said that further increases in grain imports and cattle feed are impossible...

...Workers Councils arose in Poland spontaneously during the heady days of 1956...

...The political casualties of the past decade have included one Party secretary, Wladyslaw Go-mulka, and two prime ministers...

...Such frustration notwithstanding, no one has had the courage to come forward and protest the changed nature of council sessions...

...Current Party Secretary Edward Gierek is determined not to be added to the list, yet has been unable to put the economy on a more rational footing...

...But it does hope to regain lost ground in agriculture, where the growth rate has been set at 9.4 per cent...

...Sociologist Graszyna Gierszewska has echoed that sentiment, lamenting that the councils have been assigned "purely formal functions...

...A reasonable solution would be to involve them in the decision-making process, at least to the point where they would be forced to face the reality and accept the necessary adjustments...

...Should he fail now to upgrade the Workers Councils in a way that makes it possible to finally deal with the country's deep-seated economic malaise, his credit may collapse too...

...Moreover, agricultural production has grown only a marginal 30 per cent since 1970...

...Feeling themselves far removed from the center of power, workers have viewed government price hikes as the unilateral acts of an alien force...

...The first law on the subject formally empowered the councils to manage the factories...

...Chastened by its failures, the Polish Planning Commission also has moderated its ambitions for industrial growth in 1980, calling for a 3-4.2 per cent increase in production...

...But a revised law, passed in 1958, spoke of co-management, suggesting that they had already become mere sounding boards with strictly advisory prerogatives...

...Legislation in 1974 reduced the councils chiefly to disciplinary organs, to prescribing penalties for malingerers and dealing with recurrent cases of absenteeism...

...But this does not excuse the fact that mismanagement on the part of government was clearly at fault, too...

...When Gierek came to power in December 1970, Poland was seething with discontent...

...Yet, despite the crash development program set in motion by Gierek and financed by Western credits, shortages of meat, matches, sugar, and even coal continued, and it became commonplace for Poles to cross into Czechoslovakia to buy such items...

...Rocked by major upheavals in December 1970 and June 1976, this country continues to be plagued by an underlying economic malaise...

...As might have been expected, the atmosphere at the Eighth Congress of the Polish CP, held last February 11-15 in Warsaw, was tense...

...For example, Josef Buszynski, president of an important industrial town, has charged that "the administration does not sufficiently appreciate the role of worker self-management...

...The masses not only were unhappy with their lot, they were demanding a voice in improving it...

...He quickly recognized that for stability to be restored, substantial economic progress and a modicum of democratization had to be achieved...

...But all this progress has been purchased at a high price: With a foreign debt of $17.5 billion—roughly $430 for every inhabitant—Poland is today the most indebted country of the Communist bloc...

...Gierek replied with a promise that he would take steps to gradually eliminate the imbalance between wages and prices, and announced an immediate 10 per cent hike in the Polish minimum wage...

...No progress of any kind is likely to be made, however, until the constant threat of worker disapprobation is confronted...

...On the consumer side, in the same period, the number of televisions and radios per capita has risen 50 per cent, the number of cars per capita has doubled, and the number of refrigerators per capita has more than doubled...

...Inevitably this means that meat supplies will be affected...

...Strapped for cash, the Polish leadership decided early last year to freeze its defense budget, despite a Soviet request that its Warsaw Pact allies substantially step up their outlays for arms...

...By early 1978, a group of 14 top Party members, including former President Edward Ochab, also submitted a letter to Gierek demanding a clear-cut program of political and economic reform...

...The worst news came last year when domestic grain production fell 5 million tons short of the plan, and sugar beets fell 2.5 million tons short...

...Having failed to bridge the gap between the Party and the people with his strain of populism, Gierek needs to convince the workers that they have a voice...

...The Workers Councils in Poland provide a ready-made vehicle for this, and in the wake of the Congress, Gierek has pledged "to strengthen the role and position of workers' self-management...

...astonishingly, agricultural production fell by 2 per cent from 1978...

...Interestingly, dissatisfaction with the role of the councils has spread to the upper echelons of the managerial class as well...

...The councils' political impotence has rankled rank and file for several years, earning them the pejorative epithet, "fifth tire on a car...

...Thus the country, traditionally an exporter of food and grain, has had to import some 30 million tons of grain in the last four years, at a price tag of $4.2 billion—an expenditure that has precluded the purchase abroad of other needed goods...

...This made possible such remarkable development during the '70s that some observers began talking about the "Polish miracle," referring both to the industrial expansion and to the qualitative changes in patterns of consumption...

...worker riots against Gomulka's Christmas Eve price escalations, he won popularity during his first five years in office by freezing food prices and granting meaningful wage boosts...

...And it appears that the current inadequate levels of livestock, lately propped up by imports of cattle feed, are about to take a plunge...

...Always mindful that he rose to power on a wave of Pedro Ramet, a specialist in Soviet and East European affairs, is spending the present academic year at the University of Belgrade as a Fulbright fellow...

...Since Gierek took over, industrial production has climbed 130 per cent (a rate considerably higher than the world average), and national income has risen 85 per cent...

...Residential housing has expanded over the last decade as well...

...Gierek therefore finds himself in a very difficult situation...

...Experts outside the government have long argued that the only answer to Poland's economic plight is to cut back sharply on the heavy investment policy and to restructure prices...

...Meanwhile, in an effort to mollify a price-conscious public, Warsaw earmarked a full one-third of its national budget for subsidies of consumer goods —a policy that has become increasingly untenable...

...An extremely rough winter, requiring many factories to shut down for extended periods, contributed to this poor performance...

...Even a 35 per cent advance in meat prices decreed before another 69 per cent was added in June met stiff resistance and had to be scuttled...

...By September, the adverse public reaction forced Warsaw to pull back and promise that there would be no increases in basic food prices until mid-1978...