Poland: Towards the Black Scenario

fot. Tomasz Gola / www.tomaszgola.com
FOR

Introduction

Download full article in pdf: Leszek Balcerowicz_Poland_Towards the black scenario 2016

In the first half of 2015, I was wrapping up the work on our report on the future of Polish economy – together with my young colleagues from FOR (the Civil Development Forum). Every fairly competent and unprejudiced man saw that, since 1989, we have achieved great economic success, unprecedented in our history and unrivalled by other post-socialist countries. For the first time in three hundred years we started to markedly reduce the gap in living standards between us and the West, and our GDP increased in comparison with those countries.

But success in the past does not guarantee success in the future. No effort, no result. We have to face new problems, namely to increase the resilience of the economy and state finances to shocks, and to facilitate the creation and development of enterprises – the most important job creators.

Our analysis showed that without a package of specific reforms, Poland will no longer be able to quickly catch up with the West, and perhaps even stagnate at approx. 60% of the average income in the European Union. The inevitable aging of the population has been threatening to decrease the workforce. We invest little. Finally, for the last few years, the overall efficiency of the economy has been increasing markedly slower, which means the slowing down of such processes as the transfer of workers to more productive activities, innovation and the elimination of wasting resources. This diagnosis did not raise major doubts. We focused the main effort on identifying reforms that are necessary to prevent the crisis, especially in state finances, and to ensure continued rapid growth in Poland. Both the diagnosis and the necessary reform package were presented in September 2015 during the Economic Forum in Krynica1 (report available online: http://bit.ly/1UAH35T).

While working on the report, I was wondering what political scenario will emerge in Poland after the presidential and parliamentary elections in 2015. My predictions were not original: I expected the victory of Bronisław Komorowski. I thought it very important to avoid the worst option: the installation of an anti-reformist in the Presidential Palace, as it was the case in the days of Lech Kaczyński. Taking the diagnosis that emerged from our research into account, it would be very dangerous. Therefore, I became strongly involved – through my activity in the media, including the Internet – in opposing this option. While I had strong disagreements with Bronisław Komorowski, especially about the money grab of the retirement savings in the OFE (Open Pension Funds), I had (and I still have) no doubt that he is a decent man who understood well (like Lech Wałęsa), that private enterprise, and not – inherently politicized – state intervention, is the source of economic development.

As for the parliamentary elections, I felt much more uncertain. Like many others, I took the possibility of a coalition around PiS2 (the Law and Justice Party) into account. In this variant, the president’s office in the hands of Komorowski became strategically important to prevent various anti-reforms (e.g. lowering the retirement age). I also did not rule out a weak coalition around the PO3 (the Civic Platform). In this scenario, anti-reforms were much less of a threat, but pushing through the reforms required – as it usually happens in the world – a large mobilization of the civil society. I saw (and I still see) my role in this mobilization.

The results of the presidential and parliamentary elections turned out to be – from the point of view of reforms – much worse than the predictions.

1 The 25th Economic Forum in Krynica.

2 Prawo i Sprawiedliwość, abbrev. PiS (Law and Justice), a Polish political party formed by Lech and Jarosław Kaczyńskis , ruled 2005 – 2007 in coalition, returned to power after 2015 elections. Lech Kaczyński was the President of Poland from 2005 till his death in a plane crash 2010).

Socially conservative, advocates economic interventionism, eurosceptical. Strong Catholic-nationalist tendencies. Condemns all previous governments.

3 Platforma Obywatelska, abbrev. PO, the Civic Platform, a Polish political party, ruled 2007 – 2014 under the leadership of Donald Tusk and later Ewa Kopacz. Its candidate Bronisław Komorowski was the President of Poland 2010-2015.

A Christian-democratic party, liberal on economic issues, conservative on social ones.

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Leszek Balcerowicz
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