Monday, May. 01, 1989

Poland Getting to Know You, Part 2

By Guy D. Garcia

General Wojciech Jaruzelski was striding through a hallway in Warsaw's parliament building last week when he came across a man he had not met in more than seven years. "So, our roads have finally crossed," said the chief of Poland's Communist Party. Replied Lech Walesa, leader of the country's Solidarity trade union: "I hope they will not part again."

Both men have good reason to stay the course. Two weeks before the encounter, representatives of the government and Solidarity had signed an accord that paved the way for the legalization of the previously outlawed trade union and moved the country one step closer to what may become Eastern Europe's first multiparty system. Last week Solidarity backed a preliminary slate of twelve candidates, including a film idol, a schoolteacher and a former political prisoner, to run in the parliamentary elections scheduled for June. If successful, Poland's experiment could set an example to be followed by other reform-minded East bloc countries and prompt a further warming in U.S.-Soviet relations.

With so much at stake, Washington wasted no time in showing its support. On the same day that a Warsaw court officially legalized Solidarity, George Bush announced a plan to ease Poland's $39 billion foreign-debt burden, stimulate investment and improve its weak economy. "The Poles are now taking steps that deserve our active support," said the President, adding that the package was "carefully chosen to recognize the reforms under way and to encourage reforms yet to come now that Solidarnosc is legal."

Despite those generous words, however, Washington's aid is largely symbolic and does not signal a new, comprehensive policy toward Eastern Europe. For example, Bush promised to push for reduced import duties on certain Polish products, but the goods covered under the President's pledge amount to as little as $3.5 million out of a total of more than $400 million in Polish exports to the U.S. And loans of some $500 million from the World Bank and the International Monetary Fund have yet to be approved.

But how large a check should the U.S. write as a reward for reforms in Eastern Europe? Should it write one at all? The Administration's largesse is limited by its own budget deficits. More important, Bush advisers are wary of applauding reforms that may turn out to be more mirage than reality. "Poland has serious structural economic problems," observes a senior Administration official. "The money it has previously borrowed from the West has been used very poorly." Unless the Poles revamp their economic system, says the official, "it's going to be money down the drain."

The opposite danger, of course, would be to overestimate Poland's ability to institute Western-style reforms. Poland could become eligible for additional World Bank and IMF loans -- but only after implementing economic restrictions, including strict wage controls, that are bound to alienate Polish workers. At the moment, neither Jaruzelski nor Walesa can afford the political price tag attached to such a bargain.

With reporting by Dan Goodgame/Washington and Tadeusz Kucharski/Warsaw