POLAND

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POLAND
The Third Republic
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SOLIDARITY

• THE ROUND TABLE TALKS AND THE DEMISE OF THE
  COMMUNIST GOVERNMENT

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PRESIDENT

• 1ST non communist government formed by Tadeusz
  Mazowiecki
• Lech Walesa president 1990-1995
• Aleksander Kwasniewski President 1995-present

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100 Senators elected in the provinces by secret
ballot for the term of the Sejm, in free,
general, direct elections.
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The Republic of Poland Marketization and
Stabilization
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Geopolitical Perspectives

• The Heart of Europe
• 39 million people
• 121,000 sq miles of territory
• Land area (sq. kms)313,000
• Bridge between East West

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Transition Choices

• Slow Transition mitigate pain in the short run
  take longer to establish new order of living
• Fast Transition Shock Therapy bring about new
  order quicker great risk to elected governments

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Stages of Transition

• First Stage Handel buying low abroad
  selling high at home.
• Modest investment
• Achievement motive
• Need to reform the safety net

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Second Stage of Transition Takeoff

• Political stability
• Admitting Poland into NATO(1999) EU
• Legal environment
• Sound monetary fiscal policies
• Budget deficit
• Improve education
• Mechanisms of enforcement

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Key Points

• Privatization
• Restructuring Debt
• Reforming the Banking system
• Creating Capital Markets
• Direct foreign investment
• Unemployment
• The Farm economy

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Third Stage Competitive Parity

• When communism fell, you had companies with 100
  employees, 80 of whom did nothing

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Foreign Investors

• General Motors
• Ford
• South Korea / Daewoo Corporation
• ABB Asea Brown Boveri Ltd

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State owned enterprise

• KGHM Polska Miedz state owned mine which holds
  one-fourth of the worlds copper market
• Lot Polish national airline carrier

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Imports / Exports

• Trade Balances With All Trading Partners
• (US billion)
• 1993 1994 1995
  1996
• Imports -17.087 -18.930
  -26.687 -37.000
• Exports 13.582 17.121
  23.463 24.000
• Trade Balance - 3.505 - 1.809
  -3.224 -13.000
• (Source The Europa World Yearbook, 1997
  Business Opportunities in Poland, 1997)

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Trade Balances with the U.S.(US million)

• 1991 1992 1993 1994
  1995 1996 Increase
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  (1991100)
• Imports 456 630 913
  622 776 968 212.3
• Exports 357 374 455
  651 664 624 174.8
• Trade Balance -99 -256 -458 29
  -112 -344
• (Source Business Opportunities in Poland, 1977,
  p. 24)

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World Bank Involvement

• 44 Lending Projects Operations supported by the
  World Bank in Poland from 1990 to the Present

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International Monetary Fund Involvement

• Shock Therapy was approved and given financial
  support by the IMF in 1989. From that point on
  the IMF along with the World Bank, has been
  involved with Polands development.

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CONCLUSION

• EUROPEAN UNION? And other burning questions.

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