Kaczyński about Balcerowicz's reforms - then and now
According to Jarosław Kaczyński, PiS’ government is not decidedly fighting inflation, not to repeat Leszek Balcerowicz's alleged mistakes from the times of transformation: "We were making up for this shock for several years." In reality, however, reforms of Leszek Balcerowicz turned out to be a huge success, and Kaczyński himself was once a supporter of radical solutions.
After the bankruptcy of socialism, all countries of the collapsing Eastern Bloc experienced a crisis. The crisis also affected capitalist Finland, which had strong trade ties with the Soviet Union.
Poland is the European growth leader after 1989
The length and depth of the crisis depended mainly on how quickly and decisively free market reforms were started in each country. Poland entered the path of growth already in 1992, which is earlier than Estonia, which was considered to be the “European tiger”. Poland exceeded the 1989 level together with the Czech Republic in 1996 - at that time all other countries in the region were still "in the red".
Also, in terms of the depth of the GDP decline, Poland performs very well compared to other countries of the former Eastern Bloc. The crisis was shallower only in the Czech Republic, but we must remember about the breakdown of Czechoslovakia - in the other member country of this federation, the crisis was deeper. Countries where reforms were delayed plunged into prolonged stagnation. Poland has become a transformation’s growth leader.
Source: FOR’s own study based on Total Economy Database data
Kaczyński and Glapiński: the need for quick and shock privatization
Jarosław Kaczyński, who in the autumn of 1990 proclaimed the need of rapid and shock privatization, was also aware of the necessity to carry out radical reforms. On the other hand, in the draft of economic program of the Porozumienie Centrum party co-authored by Adam Glapiński, one can read that "Poland cannot remain in an unstable <> for many years, as this would be the greatest threat not only to the standard of living of Poles and the international position of our country, but also to the young democracy." We can also find there the suggestion of "radical acceleration of privatization" and "opening of the economy to foreign capital, opening that is radical, real and credible for the outside world."
PiS leader: I have a lot of respect for Balcerowicz
In the late 1990s, Kaczyński continued to defend radical reforms. In an interview conducted by Piotr Gajdziński, he said: "Balcerowicz restored basic economic categories in Poland, especially money, which did not exist in the People's Republic of Poland, and controlled hyperinflation. These were the foundations that pushed us towards a market economy. And this is his greatness, immortal merit, which no one can take away from him. [...] I have a lot of respect for Balcerowicz for making a decisive surgical cut. It was a painful but absolutely necessary operation."
Change in Kaczyński's rhetoric intended for the elections
So why is Kaczyński now trying to scare the public with a repeat of the "Balcerowicz shock" and promising not to let it occur? Parliamentary elections will be held next year. So instead of carrying out a "decisive surgical cut" to lay the foundations for long-term economic development, which usually brings positive results after some time, the Law and Justice government is doing everything to postpone the outbreak of the crisis until the elections, even if in the long run everyone will suffer economically.
Contact to author:
Marcin Zieliński, FOR economist
marcin.zielinski@for.org.pl
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