One of the first countries to shake off communist rule,
Before the elections, Prime Minister Oleksy spoke to CEOs at a Chief Executive forum in
With 38 million people,
Józef Oleksy (Polish Prime Minister):
In addition, our inflation rate has decreased from 650 1995. We hope it will go percent to 25 percent in below the 10 percent mark by 1998. This year, the government will reduce taxes from 5 percent to 3 percent, eventually eliminating them altogether.
Many of these developments are the result of the progress we’ve made in our privatization process. And we are pushing to make even more progress this year. In 1996, we plan to finalize the privatization of the tobacco, fuel, telecommunications, and power generation industries. Likewise, we are moving to restructure large ranches and the metallurgy and founding industries. With government assistance, metallurgy has found both domestic and foreign means to finance its modernization projects and technology. Unfortunately, the privatization means laying off 40,000 in staff, but that is a trade-off we must make.
We are beginning to privatize the copper mining industry, but have run into some problems in the coal mining industry. Coal mining has always been a source of social unrest in
Our next two challenges are reforming our insurance system and dealing with the agricultural situation. Adjusting our agriculture to European standards cost us a lot. We don’t have funds for this, and the EU doesn’t seem willing to provide us with any. However, we expect the EU eventually either will modify its approach or find extra funds to modernize
In the meantime, we are promoting close cooperation with our neighbors, including
Oleksy: The elections did not affect economic freedoms. Having a free-market economy is a predetermined affair and not subject to any political discussions. The elections were presidential ones, and the president has no constitutional powers applicable to the economy. Obviously, he can veto some laws, but the government has a parliamentary majority, which can override the veto.
Andrzej Wieczorkiewicz (Undersecretary of State, Office of the Council of Ministers): We have no trouble with the repatriation of capital and profits, though there may be some technical obstacles because of weaknesses in our banking system. However, more and more foreign banks are opening branches here, so that problem is being solved. While we have never had any problems regarding companies’ financing techniques, the cabinet and prime minister have decided to organize fluctuations in foreign exchange rates. Also, a new amendment is in the works authorizing companies to keep foreign currencies for some period of time, perhaps six months.
H. Onno Ruding (Citicorp/Citibank): In the first years of
Oleksy: We clearly realize what must be done, and we want to reassure everyone in the West that there can be no retreat in terms of market reform. Having said that, you must remember
Paolo Fresco (General Electric): Our company is very diverse—it deals with everything from lamps to aircraft engines to banking. Where can we make the best contribution to
Oleksy: First, in the banking system and the services provided to it. Second, in highway construction projects and management of the motorways themselves. Third, in the privatization of our fuel and telecommunications industries. In addition, GE should be more interested in copper processing. While we could sell you a few of our coal mines at a cheap price, unfortunately, I’m sure you would not buy them.
I can’t identify all the priorities; our government commissioner for foreign investments should be giving out advance information on our priorities and preferences. Then, we’ll make alterations to attract partners with foreign capital.
Susan J. Kropf (
Jerzy Kozminski (Polish ambassador to
In terms of trade between the U.S. and Poland, there is no sign that such an agreement will be signed in the future; however, both countries have joined the World Trade Organization, so that may be a step in the right direction. I believe that in a few years, goods produced in the
The bottom line is that investors in
Fresco: It seems European firms are investing heavily in
Oleksy: Right now, 33 percent of the foreign investment in
J.P. Donlon (CE): Moving to international politics, how will developments in
Oleksy: They won’t affect our EU plans, because that is not a political issue. On the NATO front, the Russians oppose
Simply put, we have to be persistent in pursuing a dialogue with
Pollard: What is your timetable for joining the EU?
Oleksy: We expect
Laborious negotiations and adjustments will be necessary—some within the EU itself. The Maastricht Treaty may have to be reworked. All this will take time and effort. But we hope for a happy ending. It would be a great disappointment to
WHO’S WHO OF FORUM PARTICIPANTS
Paolo Fresco, vice chairman and executive officer, $60.1 billion General Electric in
Harvey M. Hament, president and chief executive, privately held Harco International in
Jerzy Kaminski, undersecretary of State, Ministry of Foreign Economic Cooperation,
Jerzy Kozminski, Polish ambassador to the
Susan J. Kropf, senior vice president, global product and business development/president, Eastern Europe, $4.3 billion Avon Products in New York, beauty and related products.
Jaroslaw Kurek, press officer, Polish Embassy in
Robert W. Lear, executive-in-residence,
Jozef Oleksy, prime minister of
Jan Wojciech Piekarski, chief of Protocol, Ministry of Foreign Affairs,
H. Onno Ruding, vice chairman, Citicorp/Citibank in
Andrzej Wieczorkiewicz, undersecretary of State, Office of the Council of Ministers,
Boguslaw Zaleski, director, Department of International Relations, Office of the Council of Ministers,