TRANSITION IN POLAND

The basic scenario in Poland is thus one of steady but slow transition, with high unemployment for some time to come, a lowly expanding private sector, and little restructuring in state firms until labour market conditions have improved. Pessimistic scenarios imply the temporary abandonment of reform, the abandonment of the hard budget constraint, and macro destabilisation. How likely are those pessimistic scenarios? The experience of the last four years leads one to be reasonably optimistic. At many points, the future and the pace of reform have been in doubt. The policies of successive Polish governments have been highly responsible and farsighted. The hard budget constraint has been enforced, macroeconomic policies have been responsible, and structural reform, from banking reform to the introduction of more efficient taxation, is steadily proceeding. -from Author