TIME: Almanac 1990/1990 Time Magazine Compact Almanac, The (1991)(Time).iso/time/050189/05018900.024

Text File | 1990-09-17 | 3KB | 57 lines

WORLD, Page 46

POLAND

Getting to Know You, Part 2

But how much should the U.S. pay for East bloc reform?


    General Wojciech Jaruzelski was striding through a hallway in
Warsaw's parliament building last week when he came across a man
he had not met in more than seven years. "So, our roads have
finally crossed," said the chief of Poland's Communist Party.
Replied Lech Walesa, leader of the country's Solidarity trade
union: "I hope they will not part again."

    Both men have good reason to stay the course. Two weeks before
the encounter, representatives of the government and Solidarity had
signed an accord that paved the way for the legalization of the
previously outlawed trade union and moved the country one step
closer to what may become Eastern Europe's first multiparty system.
Last week Solidarity backed a preliminary slate of twelve
candidates, including a film idol, a schoolteacher and a former
political prisoner, to run in the parliamentary elections scheduled
for June. If successful, Poland's experiment could set an example
to be followed by other reform-minded East bloc countries and
prompt a further warming in U.S.-Soviet relations.

    With so much at stake, Washington wasted no time in showing
its support. On the same day that a Warsaw court officially
legalized Solidarity, George Bush announced a plan to ease Poland's
$39 billion foreign-debt burden, stimulate investment and improve
its weak economy. "The Poles are now taking steps that deserve our
active support," said the President, adding that the package was
"carefully chosen to recognize the reforms under way and to
encourage reforms yet to come now that Solidarnosc is legal."

    Despite those generous words, however, Washington's aid is
largely symbolic and does not signal a new, comprehensive policy
toward Eastern Europe. For example, Bush promised to push for
reduced import duties on certain Polish products, but the goods
covered under the President's pledge amount to as little as $3.5
million out of a total of more than $400 million in Polish exports
to the U.S. And loans of some $500 million from the World Bank and
the International Monetary Fund have yet to be approved.

    But how large a check should the U.S. write as a reward for
reforms in Eastern Europe? Should it write one at all? The
Administration's largesse is limited by its own budget deficits.
More important, Bush advisers are wary of applauding reforms that
may turn out to be more mirage than reality. "Poland has serious
structural economic problems," observes a senior Administration
official. "The money it has previously borrowed from the West has
been used very poorly." Unless the Poles revamp their economic
system, says the official, "it's going to be money down the drain."

    The opposite danger, of course, would be to overestimate
Poland's ability to institute Western-style reforms. Poland could
become eligible for additional World Bank and IMF loans -- but only
after implementing economic restrictions, including strict wage
controls, that are bound to alienate Polish workers. At the moment,
neither Jaruzelski nor Walesa can afford the political price tag
attached to such a bargain.