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Poland Table of Contents


The External Balance of the Economy

The collapse of Comecon put all former member countries in a state of economic crisis by completely changing the terms of trade among them. Those disturbances seriously damaged the Polish economy. Polish imports from the Comecon partners declined by 34 percent in 1990 and by 45 percent in the first three quarters of 1991, whereas exports declined by 13 percent and 44 percent during the same periods.

Beginning January 1, 1991, the former Comecon countries ceased using transferable rubles in most trade among themselves. In 1991 imports paid for in rubles declined by 83.0 percent, and ruble exports declined by 84.9 percent. At the end of the year, this category accounted for only 14.4 percent of Poland's overall imports and 9.8 percent of its overall exports. Only five years earlier, these proportions were 51.9 and 46.1 percent, respectively.

Particularly influential was the collapse of the Soviet Union's economic and geopolitical structure, an event that undermined that country's international commitments. Drastic declines in imports from the republics of the former Soviet Union rapidly eroded Poland's supply of fuels and raw materials critically needed for production. At the same time, Polish exports to the Soviet republics also declined dramatically. In the general chaos of economic restructuring, potential importers in Russia, Belarus, Ukraine, and other republics could pay in foreign currencies in amounts only up to 18 percent of their own trade earnings, and barter transactions were prohibited by their governments. Under these conditions, the overall share of Comecon partners and the former Soviet Union in Polish trade fell precipitously in 1990 and again in 1991.

Polish enterprises that traditionally had supplied the Soviet market suffered particularly strong losses as the Comecon system shattered. Before 1990 about 300 Polish enterprises exported a large proportion of their output to the Soviet Union, and more than thirty of them produced exclusively for the Soviet market. Producers of metalworking machinery, light airplanes, construction equipment, electronics, medical equipment, ships, textiles, clothing, and pharmaceuticals found themselves with little opportunity to adapt their product mix or shift exports to new markets before most or all of their traditional market was lost (see Foreign Trade , this ch.).

Especially in light industries, entire enterprises became idle and contributed heavily to Poland's unemployment problem. Particularly hard hit was ód , the main textile center and second largest city. ód experienced 16.3 percent unemployment in 1991, the third highest figure in the country. The metallurgical industry experienced the second biggest export decline in 1990. Ironically, this industry had received the largest share of investments in the 1970s drive for new technology. In 1990 declining demand led to worker layoffs at the giant Katowice Steel Mill and other centers.

Data as of October 1992