Poland and Hungary are in Transition — страница 2

contribution to the wage explosion that took place toward the end of the decade). Moreover, on the eve of reform in Poland (the reform program began officially on January 1, 1990); macroeconomic conditions there were in a state of severe disequilibrium. Although the exact nature of monetary overhang in Poland (as elsewhere) has been the subject of debate, there was a significant budget deficit, wage increases were out of control, and hyperinflation had resulted. Poland's hard-currency debt position was better than that of Hungary, but the debt that had been accumulated did little to stimulate the Polish economy, the zloty was overvalued, and no debt relief from external sources was in sight. In autumn of 1989, most price controls were lifted (on both producer and consumer goods),

public spending was reduced, and the zloty was devalued. In the second stage of major reform, begun in 1990, the budget deficit was sharply cut, largely through a reduction of subsidies to state enterprises. A positive real rate of interest was to be implemented, and the market was to be used to signal changes in the value of the zloty. The latter was a critical measure, because foreign trade and the impact of this trade on the Polish industrial structure was to be a key component of the overall reform strategy. In January of 1990, the government set the exchange rate of the zloty at 9500 to the dollar (this represented a devaluation from 1989); a rate roughly approximating its value on the black market, and it established convertibility of the zloty for international trade. Many

trade restrictions were eliminated, and internal exchanges were set up to handle the buying and selling of hard currencies. Although these changes resulted in domestic inflation, the initial increases proved to be short-term and the exchange rate of the zloty has proved to be realistic. Finally, wage increases were to be controlled partly through the wage indexation and partly through a new tax on wage increases that exceeded established guidelines. Privatization Privatization is a major element of the Polish strategy of transition. In 1990 the Polish government passed a law creating a Ministry of Ownership Change, a mechanism to supervise the process of privatization. Privatization has proceeded rapidly, though it has been achieved mainly for small enterprises in the trade and

service sectors. Industrial output in the private sector grew by 8,5% in 1990 and is reported to represent roughly 17% of total Polish industrial output Though privatization has been very successful for small-scale enterprises, the picture for large state enterprises is quite different. Privatization of these enterprises has proceeded very slowly. In addition, the economic position of these enterprises worsened as the state took decisive measures to introduce a hard-budget constraint. In addition to price changes and wage limitations, subsidies have been ended and protection from foreign competition has been sharply reduced. This new setting has encouraged enterprise managers to reduce costs by restricting unnecessary output and reducing the labor force. However, the strong

commitment to rapid privatization was reinforced in June of 1991, when it was announced that a major portion of state industry would be privatized through creation of stock funds, with the population receiving vouchers. Beyond these changes in the state sector, new guidelines have been introduced to monitor enterprise performance. Furthermore, a new Industrial Restructuring Agency will consider how remaining state enterprises should be handled, to what extent privatization is possible, and what restructuring should take place for those enterprises that are not viable in the new setting. These new arrangements are designed to ensure a rapid transformation of the Polish industrial structure, to make it similar to and competitive with market economic systems, and to achieve this

result quickly and as openly as possible. It is clear that economic reform in Poland has been radical and has moved sharply and quickly away from the plan toward the market. In addition to the expanded influence of market mechanisms, decision making has been decentralized, private property introduced, and incentive arrangements changed. By most standards, the initial results have been encouraging. First, stabilization measures cut the rate of inflation sharply from a reported 40-50% per month at the end of 1989 to roughly 4-5% per month in 1990. At the same time output fell, though supplies of consumer goods in stores increased. Employment in industry declined by 20% during 1989 and 1990, although it is reported that only a relatively small portion of this reduction in the labor