Poland - Economic development



After World War II, the economy of Poland was centrally planned and almost completely under state control, especially in nonagricultural sectors. The nationalized industries and businesses operated within the national economic plan and were governed by the directives issued by the pertinent ministries. After 1963, however, centralized planning and management were somewhat relaxed, and state-owned enterprises gained more freedom in the design and implementation of their programs. Private undertakings were confined to personal crafts and trades and agriculture.

Economic planning followed Soviet lines, setting production goals that determined tasks for each sector on a long-term basis. Under the three-year plan for 1947–49, principal emphasis was placed on the reconstruction of war-devastated areas and industries, in order to raise production and living conditions at least to their prewar levels. Under the six-year plan for 1950–55, the emphasis continued to be on heavy industry, and the housing, transport, agriculture, and consumer sectors lagged. The five-year plan for 1956–60, originally cast along the same lines, was modified after the 1956 disturbances. It called for a lessened rate of industrial expansion and for increases in agricultural output, housing, consumer goods, and social services. Under a long-range plan for 1961–75, which governed the three five-year plans falling within that period, emphasis was placed on a direct improvement in living standards. The first and second of these plans (1961–65 and 1966–70) were oriented toward investments intended (1) to develop the raw-material base of the country, especially the newly discovered resources of sulfur, copper, and lignite; (2) to secure employment opportunities for the rapidly growing population of working age; and (3) to improve Poland's international trade balance. The five-year plan for 1961–65 reached its industrial targets but fell short in the areas of agriculture and consumer goods. The period 1966–70 witnessed two poor agricultural years in addition to export lags, and there were shortages of basic food commodities in 1969–70.

In late 1970, violent protests erupted over the government's stepped-up efforts to increase production. After the change in political leadership from Gomulka to Gierek, government emphasis shifted from heavy industry to light, consumer-oriented production. In addition, through a concentration of investment in mechanization, fertilizers, and other farm improvements, the government sought and achieved a 50% increase in food production. Overall, the 1971–75 five-year plan achieved its main targets by a wide margin, with industrial production up about 73%. The 1976–80 plan, which aimed at a 50% increase in industrial production and a 16% increase in agricultural output, ran into difficulty almost from the beginning, and by 1979 the economy had entered a period of decline and dislocation that continued into 1982. An economic reform stressing decentralization of the economy was introduced in January 1982, but it failed to produce any significant improvements. With price rises and consumer goods shortages continuing to fuel popular discontent, the government in March 1983 announced a three-year austerity plan for 1983–85. Its aims included a general consolidation of the economy, self-sufficiency in food production, and increased emphasis on housing and the production of industrial consumer goods. By 1986, the economy had rebounded. The 1986–90 plan expected the national income to grow 3–3.5% annually, industrial output to increase by 3.2% each year, and exports to grow by 5% (in fixed prices) annually. These goals were not reached. A "second stage," proclaimed in 1986, called for more autonomy for individual enterprises and for more efficient management, with top jobs filled without regard to political affiliations.

The Economic Transformation Program adopted in January 1990 aimed to convert Poland from a planned to a market economy. Measures were aimed at drastically reducing the large budget deficit, abolishing all trade monopolies, and selling many state-owned enterprises to private interests.

The slow pace of privatization picked up somewhat in 1995, as 512 smaller state enterprises were transferred to private National Investment Funds under the Mass Privatization Program, but large-scale industry remain largely in state hands. However, the government subsequently made an attempt to privatize such large-scale sectors of the economy as banks and oil, arms, and telecommunications. Poland in the early 2000s was in the process of bringing its economic policies in line with EU standards. These policies promise even further liberalization and foreign investment into the Polish economy. Poland was officially invited to join the EU in December 2002, with accession planned for May 2004. In 2002, the government announced a new set of economic reforms, including improving the investment climate (particularly for small- and medium-sized enterprises), and improving the country's public finances to prepare the way for the adoption of the euro.

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Feb 17, 2011 @ 8:20 pm
An explanation of hw values and opposing viewpoints impacted public policy proposals in relation to the six economic goals??

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