How Will It All End?

By Thomas A. Sancton

As the crisis deepens, the Soviets threaten to play the economic card

Day after day, the rhetoric grew shriller. TASS, the Soviet news agency, fired barrages against the Solidarity union federation, accusing its leaders of spreading "dirty and slanderous" anti-Soviet propaganda. As part of a well-orchestrated proletarian protest, workers at Moscow's Hammer and Sickle steel plant approved a letter denouncing Solidarity as a band of "counterrevolutionaries" and invoking the Warsaw Pact's duty to "defend socialism and its achievements from any encroachments." Soviet Foreign Minister Andrei Gromyko, in a speech before the United Nations General Assembly, bitterly accused the West of "interference in [Poland's] internal affairs" in the hope of "shaking loose the socialist foundations of the Polish state."

U.S. and European officials doubted that the Soviets would risk the wrenching consequences of an invasion, and Secretary of State Alexander Haig reiterated Washington's strong opposition to such a move in his meeting with Gromyko last week. Still, the Soviets were firmly pressuring their Polish comrades to crack down on the troublesome union just as Solidarity delegates were preparing to assemble in Gdansk for the second round of their national convention.

Authorities in Warsaw were getting ready for a possible confrontation. Addressing a tense session of parliament, Polish Premier Wojciech Jaruzelski announced that special army units would join police to suppress "deepening anarchy, hooliganism, antistate and anti-Soviet excesses." He implied that force might be used unless Solidarity retreated from the boldly political demands it had adopted at the first Gdansk session two weeks earlier. That meeting had called for free democratic elections, worker control of industrial enterprises and--most provocative of all--the spread of independent labor movements throughout the Soviet-controlled East bloc.

Once again the union and government seemed to be tottering on the brink of a showdown. If Solidarity leaders pursued their political demands, the authorities, urged on by the Kremlin, might have little choice but to move against them. But the bitter verbal attacks from Moscow and Warsaw made it difficult for union leaders to back down without losing face--and possibly weakening their control over Solidarity's 9.5 million rank-and-file members. Said Solidarity Spokesman Janusz Onyszkiewicz: "There is enough fuel now to start up everybody."

Politburo Hard-Liner Stefan Olszowski eloquently summed up the nation's sense of impending disaster in a televised address. "Social tensions have been intensifying recently like an avalanche," he said. "People, tired and confused, are asking ever more dramatic questions: How will it all end? Will there be civil war in Poland?"

While the possibility still remained that the Soviets might use military force to bring the Poles to heel, Olszowski suggested another tactic that Moscow might very well employ: drastically reducing aid and trade, which would leave Poland's crippled economy completely paralyzed. "The Soviet Union can cope without imports from Poland, but Poland cannot do without Soviet supplies," Olszowski declared.

His warning seemed to confirm recent Western intelligence assessments that the Soviets had temporarily shelved the idea of military intervention in favor of economic pressures. The presence in Warsaw last week of a high-level Soviet trade delgation, headed by Planning Chief Nikolai Baibakov, made that theory seem all the more credible.

Under the barrage of threats from Moscow and Warsaw, Solidarity's presidium moved to defuse the potentially explosive issue of worker self-management. Scaling down its previous demands for worker autonomy, the union proposed to draw up, with the government, a list of strategic enterprises whose managers would be appointed by the state; managers of all other enterprises would be appointed by workers' councils. Each side would have a right to veto the other's appointments, with the courts acting as final arbiter. At week's end parliament passed a self-management bill almost identical to the Solidarity proposal, which was still subject to approval at the Gdansk convention.

The parliamentary vote appeared to strengthen the hand of Solidarity Leader Lech Walesa and his fellow moderates, who faced a crucial showdown with union radicals as the ten-day Gdansk session opened on Saturday. Solidarity Secretary Andrzej Celinski hailed the government measure as a "victory for the union." When a number of congress delegates grumbled during opening sessions that the legislation did not, go far enough, Solidarity spokesmen argued yet again that some compromise was necessary. Said one State Department analyst: "Basically, the government has said that if the moderates come through, we'll try it. If they don't, something close to all hell will break loose."

That could include, of course, intervention by the Soviets, but Moscow inevitably would pay a heavy price. An invasion would destroy any Soviet hope of strategic arms limitations talks with the Reagan Administration; it would ruin any immediate chances for a renewal of detente; it would probably bring on a new grain embargo at a time when the Soviets face a disastrous harvest; it would alienate Third World countries; it would almost certainly be resisted by Moscow's Polish "allies," an especially distasteful prospect when some 85,000 Soviet troops in Afghanistan are already tied down trying to subdue another "fraternal" nation. Moreover, a military invasion by the Kremlin is not necessary. There is no present threat to the Soviet strategic position, and no one in the Solidarity leadership is seriously questioning Poland's status as a Communist nation or membership in the Warsaw Pact.

A far easier way to force the Poles back into line would be the exercise of economic muscle. As a senior British official puts it: "It is economic, and not military, war that the Kremlin appears to have decided to wage against Poland." Indeed, Moscow can exert almost irresistible economic pressure in view of Poland's dependence on Soviet supplies (see chart). In addition, the Soviets have extended some $4.2 billion in aid and credits since 1980 alone.

A eduction of Soviet aid and trade would be a devastating blow to an economy that is already on the verge of collapse. While the nation labors under a $27 billion foreign debt that is still rising, national income is expected to fall by 15% this year. The statistics for the first half of 1981 are grim: coal output fell by 22%; copper, 11%; refined oil, 19%; animal feed, 14%; cattle herds, 7%; swine herds, 13%; exports to the West, 21.5%. Says John Hardt, an economist for the Congressional Research Service: "The Polish economy is 'growing' negatively at a rate that is unprecedented in peacetime. It's a wartime economy."

The situation is so critical that the Soviets could bring Warsaw to its knees by refusing to increase their aid. Says Richard Portes, professor of economics at the University of London: "They simply need to continue the present levels of deliveries, do nothing out of the ordinary, and let the economy disintegrate."

The real question is what Moscow might expect to gain from such tactics. Some observers feel that the immediate target of a Soviet economic squeeze would not be Solidarity and its group of radical leaders but the Polish Communists, who have so far failed to rein in the unruly union. Says Georges Mink, an expert on Poland for the Paris-based Centre National de la Recherche Scientifique: "If the Soviet Union wants to obtain a more conciliatory attitude from the government and make it easier for the hard-liners in the infighting, then the economy is a logical weapon."

But the squeeze tactic could cause I more problems than it solves. Says one I U.S. State Department expert: "Of all ithe approaches to conquer the Poles, that has to be one of the most ludicrous. All it will do is make the Poles even more angry. It will increase the chances of having them declare a civil war." Provoking Poland's economic demise could also hurt other East bloc nations, whose economies are closely interlocked. Because of military reasons, the Warsaw Pact nations also do not want Poland to plunge into chaos; the country occupies a strategic position in the alliance's defenses. Even before Moscow began threatening to play the economic card, Warsaw's creditors in the West were seeking ways of shoring up their ailing almsman. Last April, 15 Western governments delayed repayment of the principal on $4.4 billion due them this year. Western commercial banks are currently considering a similar payment postponement for the $3.1 billion owed them in 1981.

Before they extend any new aid, Western lenders would most likely want to see a workable program for economic recovery in the country. The possibility of increasing U.S. economic assistance is "under review" by the Reagan Administration; the subject figured prominently in a meeting last week at the United Nations between Haig and Polish Foreign Minister Jozef Czyrek.

As bleak as Poland's economic plight may seem, experts are not unanimous in writing the country off as incurable. Says the University of London's Portes: "Poland has the industrial capacity and the skilled labor force to come back quickly.

It is surprising how fast a developed economy can recover given the right conditions." Finding those conditions, both political and economic, is Poland's hope of salvation. --By Thomas A. Sancton.

Reported by Richard Hornik/Warsaw and Frank Melville/L ondon

With reporting by Richard Hornik/Warsaw, Frank Melville/London

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