Transformation économique De La Pologne Depuis 1989

ECONOMIC TRANSFORMATION IN

CENTRAL EUROPE

INTRODUCTION:

In 1994, Poland started negotiations with the aim to be member of the European Union. Just to remember, economic conditions for it, are to have a viable market economy and to be able to resist in front of the force of the liberal market under competition inside EU.

10 years later, Poland is integrated to the zone. And seems to follow an economic dynamism which could make jealous every other countries.

It was on the 2nd of December 1989 that everything could finally change for People’s Republic. Indeed, during the conference of Malta, Mikhail Gorbachev decided with president Bush by his side to “gave up” these countries. Perestroika and glasnost were not efficient enough. People wanted change.

And the country has changed. Poland has taken a firmly liberal shift. Can we find a best symbol to illustrate that, now, instead of the old communism office in Warsaw, now we can find the polish stock exchange and a Ferrari dealer ship.

But before talking about “Arrinera”, Poland had to make a lot of efforts. Economic transformation since 1990’s was brutal, wild sometime. The solution to resolve the economy must be radical.

The solution was brought by the American economist Jeffrey Sachs with his « Shock Therapy » .

In economics, shock therapy refers to the sudden release of price and currency controls, withdrawal of state subsidies, and immediate trade liberalization within a country, usually also including large scale privatization of previously public owned assets.

In Poland, shock therapy was necessary to save the country in this new capitalist market economy from the inflation, which was peaking at around 600%, and to pay off the 40-billiards dollars debt.

The Balcerowicz plan adopted in 1989 was leaded by it author, the Polish minister and economist (liberal since he left the communist party), Leszek Balcerowicz, the father of new Poland.

In the short term, the reforms smothered the building hyperinflation before it reached high levels, ended food shortages, and restored goods on the shelves of shops.

In the long term, the reforms paved the way for economic recovery, with the GDP growing steadily to about 6-7% between 1995-1997.

Negotiations for the UE could begin for real.

Now, as we can see the success of this strategy is unanswerable and still progressing. But this new way to think the economy let appear some problems to resolve in this new Poland.

So, after highlighting in this introduction the liberal turning point that knew the country to access into the U.E, we will talk about the current situation of Poland since it accession in 2004 in a first point.

Then, in spit of apparent good results, we will see in a second part that this choice of capitalism shows some limits.

At the end we will try to answer to the following question: Can Poland begin a new economic model to follow inside the European Union?

CONTENTS.

I. The current situation of Poland since its membership to U.E in 2004.

A. The Growth. ……………………………………………………………………………………….…………………….4

B. Balance of trade……………………………..………………………………………………………………………… 6

C. Inflation. ……………………………………………………………….…………………………….………………….. 7

D. Labour Market. ………………………………………………………………………………………………………… 8

II. Social and Economics Limits of the polish dream.

A. Instability of the labour market. ………………………………….………………………………………… 10

B. Wage Inequalities. …………………………………………………………………………………………………. 11

C. The Polish Debt and Polish Deficit………………………………………………………………………….. 13

D. An Economy not able to respect the environment…….……………………………………………..14

E. Necessity to improve the health care system..…………………………….……………………………14

I. The current situation of Poland since the membership in U.E in 2004.

We have in Nicholas Kaldor (British economist born in Budapest) and his « magic square » the best way to speak about polish economic policy.

• The growth.

Poland has suffered, like all countries since the early 90s, about deep restructuring in every sector of its economy.

Just to remember, before the membership Poland knew it worth recession in 1990 with about -11.60%.

But now, growth in Poland is marked since 2004, by a further dynamic thrust.

The European Central Bank confirms growth figures in 2004 approximately 5.3% of GDP (much higher than the statistics of the great powers: the United States, Japan, Germany, France etc…), 3.3% in 2005.

But the most important, is an increase in the period 2006-2008 (6.80 in 2007 and 5.10 % in

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