Government Warns Poles That Reform Plan May Boost Prices

Food prices will double and rent and heating costs may rise by 200% next year if Poles vote for major economic reforms in a referendum later this month, government spokesman Jerzy Urban said Saturday.

The proposed increases were outlined in weekend newspapers as part of a government strategy for the next two to three years aimed at restoring the battered economy.

The disclosures prompted panic buying of such foods as sugar, flour and canned meat that could result in serious shortages.

“We expect the disturbances to grow and . . . to last for a long time,” Urban said. “I am afraid the fact that nothing is available (in shops) will be considered by the people as the first result of the economic reform.”

Urban also said the inflation rate in Poland stood at 17% and “will exceed the rate of 50% next year,” but he said it will drop to below 10% after that.

Help From Solidarity

Asked if the outlawed Solidarity trade union movement may be invited to assist authorities in solving problems brought on by the proposed reforms, Urban said that “everything was possible.”

Solidarity has called on its supporters to boycott the referendum because the questions are rigged to urge a “yes” vote.

Asked whether approval for the reform program in the Nov. 29 ballot would mean automatic price rises next year of the scope announced, Urban told Western reporters in Warsaw:

“Yes. But I can’t say that prices will not rise if people vote ‘no.’ ”

The plan, which aims to cut subsidies, bring prices into line with production costs and world market rates and link wages to productivity, is likely to have an impact on the way Poles will vote.

“We had to announce this before the referendum because otherwise people would say they had been cheated,” Urban said.

Price rises, traditionally a sensitive issue in Poland, have provoked riots in the past.

The government outline said rising living costs would be compensated for by higher wages, “though one cannot ensure this to everyone at once. A part of society will benefit and a part will temporarily lose.”

Asked for his reaction, a retired teacher said: “I hope I can still make ends meet. My pension is already so low that I have had to find extra work.”

The black market value of the dollar has surged recently because of fears of price increases.