Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, July 14, 1990 TAG: 9007140027
SECTION: NATIONAL/INTERNATIONAL PAGE: A-10 EDITION: METRO
SOURCE: The Washington Post
DATELINE: WARSAW, POLAND LENGTH: Medium
Finance Minister Leszek Balcerowicz said the privatization bill, which applies to 7,600 state enterprises making up 80 percent of the national economy, "is going to change the Polish economy more radically than anything done up to now."
"Nobody has every faced an undertaking on a scale as huge as this," Balcerowicz told legislators in introducing the bill. "We must transform ownership faster than any nation has done before."
The bill is the centerpiece of the Solidarity-led government's plan to restructure the centrally planned socialist economy along Western free-market lines. Its passage was a much-needed victory for government leaders, who recently have been accused by Solidarity union leader Lech Walesa of offering Poles little more than economic hardship.
Austerity measures in the first six months of the year have ended hyperinflation, but at a higher than predicted social price. The country is mired in a severe recession that has cut economic activity by 30 percent. Unemployment, which did not officially exist before this year, has soared. At the end of June, 570,000 people, or 4.2 percent of the work force, were jobless, and that figure is expected to double by year's end.
The privatization bill, after surprisingly little debate, was approved overwhelmingly by the Sejm, or lower house. The vote was 328-2 with 38 abstentions, as former Communists and independent lawmakers voted with the Solidarity caucus. Approval by the Solidarity-dominated Senate is expected to be a formality.
The bill had been bogged down in committee for more than three months as the government wrestled with workers' demands that they be granted special rights to own shares in the companies that employ them.
There also were widespread fears among Poles that privatization could lead to an uncontrolled, bargain-priced sell-off of Polish industry to foreigners.
The compromise that overcame these concerns gives workers a chance to buy up to 20 percent of their companies' shares at half price. It also offers them low-interest loans for buying stock.
Workers had demanded far more generous concessions. Some had argued that all company stock be handed over to employees. But Balcerowicz insisted that worker ownership was a dangerous idea that would keep Poland from joining the economic mainstream of Western Europe. He also said it was an unfair way to divide up the country's wealth.
The bill passed Friday borrows a concept that was first publicized several months ago as a reform option in Czechoslovakia. It grants all Poles free certificates with which they will be able to buy shares of stock in any privatized industry or business.
To help win worker support for privatization, Balcerowicz said the government intends to exempt privatized companies from strict government controls on wages. The clampdown on wages in the past six months has resulted in a 40 percent drop in buying power for the average Pole.
The government privatization office said recently that as many as 340 enterprises may be privatized in the next 12 months. It said 12 enterprises employing more than 48,000 people had been chosen for the first phase of the program.
Poland has many large industrial enterprises, such as money-losing steel and chemical plants, that no investor is likely to buy. The disposal of these plants presents the government with a major problem for which privatization offers no solution.
by CNB