Poland's Economy Bucks As Capitalism Kicks In

EVERY weekday morning at six, Krystyna Kuranska unfolds a little cloth mat on the cold, wet concrete floor of one of Warsaw's busiest underground pedestrian passageways. After tucking her legs under a rickety wooden crate and wrapping her ankles in a filthy blanket, she carefully arranges her wares: A pair of old shoes, a battered purse, mittens, a Turkish-made scarf, and an assortment of Soviet-made wooden trinkets. The shoes cost 10 cents; the scarf is a bargain at 20,000 zlotys (about $2), she says.

``I guess I've become a businesswoman in my old age,'' Mrs. Kuranska, a widow and retired accountant, says with a wry grin.

Across town, revelers tumble out of Michel Badre, a fancy new shop that offers a wide selection of French cheeses, goose and duck foix gras, snails, Perrier water, and other goodies at prices that cause frugal shoppers to gasp.

Kuranska and the insouciant patrons of Warsaw's new posh restaurants and shops are indicators of both the grim, and promising, changes emerging from Poland's radical economic reforms.

The shock of the Solidarity government's determined course toward a free-market economy has lowered real incomes by 40 percent this year and pushed unemployment above 1 million. Widespread disenchantment over the reforms brought down the government of Prime Minister Tadeusz Mazowiecki and has forced a runoff next Sunday following the nation's first popular presidential elections.

Experts predict tougher times ahead. Unemployment is expected to double by next year as moribund industries collapse without the help of subsidies they enjoyed for years from the previous communist government.

Higher prices have hit pensioners and people with fixed incomes the hardest. ``I can't afford clothes, books, or even newspapers,'' Kuranska says. Even after a recent increase in pension benefits, Kuranska receives only 514,000 zloty (about $54) a month, about half the average monthly salary in Poland. Yet she insists she's fortunate. ``I know of others who get less.''

But the transition from a communist command economy has also brought unparalleled opportunities. Although foreign investment has been sluggish, largely because of dithering over privatization issues, thousands of entrepreneurs have jumped in.

``Everything is still for the taking,'' the Warsaw Voice newspaper said in a recent editorial. ``Given just a little bit of good will ... a small timer who used to deal in currency on the streets may rise to be a respected banker, while a laid off metal worker might start off as a grocery wholesaler.''

Many are seizing the opportunity. Poland's cities are now a vast bazaar, where money is made openly and kept. Hundreds of small businesses have opened in Warsaw's once dour streets; lines have disappeared, and the indolence that was the hallmark of the capital's restaurants has disappeared. New hotels have opened.

Workers are busy sandblasting away grime from buildings caked by decades of pollution.Although much of the city remains leaden and littered, blasts of color from newly- painted facades increasingly jar the eye.

Still, free enterprise comes as a shock for many. ``I've been a taxi driver for 40 years and I've never had to face this kind of competition,'' says Stanislaw Janecki. He says there are now more than 50,000 taxis in Warsaw. City taxis, once scarce, now swarm around the capital prowling for fares.

Spiraling costs have also started to pinch the housing industry, which is already saddled with a waiting list of 1.2 million. While many Poles took advantage of a government offer to buy their cooperative apartments and houses cheaply, keeping them up is starting to bite into the monthly paycheck. ``It cost me $340 to buy a new window and frame,'' says Andrzej Stylinski, a Warsaw journalist. ``Then the carpenter charged me $150 to install it.''

Building a home is also getting harder and taking longer. After a bout of hyper inflation earlier this year, the value of real savings was slashed. Although government statistics indicate more than 300,000 houses are under private construction in Poland, it now takes about seven years to complete the work.

Some government ministries have also been slow to implement changes. ``All the old [communist] administrators are still here,'' says a Warsaw physician, referring to the management at his hospital. He says bureaucratic bungling in the Health Ministry and poor distribution have caused new shortages in basic medicines.

Other government offices are simply overwhelmed.

``We're swamped,'' says Teresa Popiel, director of Warsaw's main unemployment office. Along the dim, cracked linoleum corridors that lead to her office, jobless men and women wait for their dole. Mrs. Popiel says its easier to place ``unskilled workers who really want to work.'' But she says most job seekers have skills or advanced degrees.

Popiel says better coordination between unemployment centers around the country would help ease the problem. ``If only we had more computers.'' A bulky obsolete desktop computer already dominates her desk. No, she says, it's not linked to the unemployment office headquarters across town.

``We're lucky to get them on the phone,'' she says.