Poland's Prime Minister Looks Ahead to Reform

AFTER a severe recession, the Polish economy has finally "turned the corner," says Prime Minister Hanna Suchocka. But "one false move may make us roll back."

The prime minister described the economic and political situation in Poland today as "very delicate," and warned of populist pressures that harked back to communist ideology.

Still, it is under Ms. Suchocka's leadership that Poland is seeing the first signs of political stability since the demise of communism in 1989.

Heading the fourth government in as many years, Suchocka is succeeding where others failed. In the 10 months since she took office, her coalition government has persuaded the fragmented Sejm (parliament) to accept a mini-constitution, an austerity budget crucial for securing international aid, and last week, the long-awaited mass privatization plan for state-owned industry.

"The Suchocka government seems to have literally snatched Poland's economy from the brink of failure ... and created the conditions to see it emerge again as the leader among the post-communist reforming countries," says Ian Hume, the World Bank director in Warsaw.

Ready to compromise, Suchocka is a stark contrast to her predecessor, Jan Olszewski, who was a strong partisan often at odds with President Lech Walesa, and unwilling to continue painful economic reforms.

Public opinion surveys show that more than 75 percent of Poles express confidence in Suchocka. An attorney by training, Poland's prime minister has been dubbed another Margaret Thatcher by the press. Yet while she may have Lady Thatcher's energy, she is hardly an unbending "iron lady." As a close aide put it, "she can be very tough, but she's caring."

Given the turbulent parliament made up of more than 20 political parties and the fragile seven-party coalition government, "the whole situation in Poland requires willingness to make compromises," Suchocka said in an interview with the Monitor.

"Perhaps it is because I'm a woman that I have more patience and more of this willingness to compromise," she says. "My closest staff frequently says, `No! Enough! We just cannot go on like this' [whereas] I still feel that there is some work that can be done and that a compromise can still be found."

This approach may well have saved her government from collapse last week. The test was the reintroduction of the mass privatization bill, which has been been waiting in the wings for more than 18 months and which the Sejm rejected when the government first submitted it last month. Giving in to demands from the left, the government modified the plan, and it passed. It was widely speculated that a second rejection would have brought down the government. The plan calls for the privatization of 600 state-own ed companies through foreign-managed investment funds. Shares of the funds will be made available to the general public.

Firmness on the fiscal front has earned Suchocka high praise from economists in the international community. Sticking to a deflationary monetary policy and limiting spending are the means by which "Poland has achieved some growth - not big, but still, some growth," Suchocka says.

Last year, industrial production grew 4 percent and gross domestic product rose 2 percent. Inflation fell from 550 percent in 1989 to an expected 32 percent this year. More than half of Polish workers are now employed in the private sector.

Suchocka emphasizes that economic reform in Poland is not yet safe. With wages unable to keep pace with higher costs of living and 2.5 million Poles unemployed, "the greatest danger for reform in this country is the difficulty as far as living standards are concerned," she says.

The political left, she says, is playing upon popular dissatisfaction, encouraging the public's "habit" of communist-era thinking in which the state is the only provider. The left is promoting early parliamentary elections this year. If this happens, it would be bad for Poland, Suchocka says.

The prime minister's immediate problem is that one of her smaller coalition partners, a party representing farmers, is threatening to quit the coalition if the government does not set certain minimum agriculture prices. Technically, it would be no great loss if they left, she says, but it would reflect badly on her government's image. While Poles like Suchocka personally, they are far less enthusiastic about her coalition government.