Poles await Govt decision on prices

Press, 28 July 1989, Page 8

Poles await Govt decision on prices

NZPA-Reuter Warsaw Poland’s outgoing Government is expected to wrestle today with a plan for steep price rises which critics say would bring hyperinflation and unrest. But political sources said it was not clear whether the Prime Minister, Mieczyslaw Rakowski, would stick to his August 1 timetable for implementing the programme, which some top Communists want postponed and angry farmers demand immediately. Meanwhile there was apparent deadlock in the search for Rakowski’s successor after Solidarity’s crushing win over the Communists in last month’s partlyfree elections. Solidarity said yesterday that President Wojciech Jaruzelski, empowered to find a new Prime Minister, had told the movement it could not form a Government, partly because it would upset Warsaw Pact neighbours. Solidarity Parliamentarians then vowed not to join a Communist-led Cabinet, which would probably be shortlived because it would have to take harsh economic measures. The programme would raise food prices to or near to their market value to try to get food back into empty shops and cut the budget deficit.

People are now resigned to queueing overnight for scarce rationed meat, and simple items like matches are unavailable.

But if the programme were implemented, workers would need to be compensated for 20-to-240 per cent price increases. Critics, including top Solidarity economists, want a more gradual shift to a market economy that would also involve dismantling State monopolies. An economist, Jan Mujzel, predicted inflation could run to more than 500 per cent and added, “What is more, there is the danger of social explosion.” Ryszard Bugaj, an adviser to the Opposition movement, attacked the Rakowski plan as totally unprepared and said it would be adventurist to implement the scheme on August 1, when a month-long wage and price freeze is due to end. The plan “will not increase supplies in the long term, production costs will jump and farmers will have to raise prices. We would soon have hyperinflation,” said Jacek Szymanderski of Rural Solidarity. One black market dealer told a newspaper the rate for one dollar was likely to reach 7000 zloties this week, over eight times the official rate.