The Only Way to Help Poland

After 40 years of communism, Poland is an economic and environmental shambles. Its farmers have grown single cash crops for so long they will have to learn agriculture all over. Times writer Art Pine reported from Krakow recently that 30,000 workers at the Lenin steel mill produce no more than what a fraction of that number can turn out in South Korea. Inflation is running at an annual rate of 450% and economists warn it will be 900% next year without radical reforms. A recent Warsaw visitor reports the opening of a new office building that took 35 years to build, a paradigm for the way the whole country works. But there is a way out of this mess--and it rests with the old-fashioned notion of international economic cooperation.

The Poles already know that help is on its way from the United States, Japan and European countries and from the International Monetary Fund, but at a price. Under a proposed agreement with the IMF, wages must be capped and that will produce a 25% loss in buying power next year. Government subsidies must be wiped out and that means prices of things like electricity will soar. The Polish parliament has begun deciding these and other changes in economic rules that could lead to failures of many businesses and to higher prices as the nation moves to a market economy.

Alarming? Yes. But visitors find the professors and labor leaders who are suddenly in charge of a nation--with no experience in governing and only a vague idea of how a free market works--determined to change everything at once, remarkably optimistic that they can do it, able even to joke about it. When President Bush’s chief economic adviser, Michael Boskin, began lecturing members of the Polish Cabinet on the dangers of taking on too much at once, they heard him out and then one responded: The Cabinet member said that gradualism would not work and that Poland had no choice but to take what has been called the Big Bang approach. Then, with a smile, he added that, anyway, like war and generals, moving from communism to a market economy was too important a task to be entrusted to economists.

After a slow start, Washington is moving to provide not only food and cash but the kind of technical help Poland will need to do such things as create credit lines--something that’s second-nature in the West and all but unheard of under communism. Some estimates put the value of pledges of aid for Poland as high as $4 billion.

For a time, Warsaw was overwhelmed with visitors from the West, stumbling over one another with free-lance offers of aid, taking up the time of Polish officials that should have been spent on planning for the radical changes involved in creating a market economy from economic rubble. With the IMF about to agree on its own contribution of more than $700 million, the West will have a traffic controller on the scene to monitor the flow of aid and free up the time of Polish officials for more important things than chatting with well-intentioned visitors. Next to cash and technical advice, Western nations can make no more important a contribution to Poland than cooperating with the IMF’s traffic controls.