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Bush's Visit to Poland

July 19, 1989

While events in Beijing remind us that communism with its iron fist is still alive, events in Poland remind us that democracy with its power in the ballot box is the clear victor in this era of reform. The union Solidarity came into action and scored unprecedented victories against Community Party members in the nation's first contested elections in nearly four decades.

The only reason the Communist Party maintained control of the Sejm, the lower house in the Polish Parliament, was because 65% of the Sejm was guaranteed to the Communist coalition. The rest of the lower house's 161 seats were easily swept by Solidarity. The union also took 99 out of the 100 seats in the newly created Senate. So there's no doubt, political reform is occurring very successfully in Poland.

But political reform towards democracy goes hand-in-hand with economic reform towards free-market capitalism. And while the political aspects of reform seem to be running like clockwork, the economic strain is hitting hard. Inflation is running at an annual rate of 100%. Prices have rocketed. And food lines are increasing. This is all stemming from Poland's $39 billion foreign debt. High uncontrolled inflation has always been a successful element in deterring reform towards a freer economy. That is why it's essential that Poland's debt be greatly relieved.

It was Bush's visit to Warsaw that could very well be the catalyst in shaping Poland's economic future. Bush seems to be endorsing a proposal that has been enacted for the Latin American debt-ridden nations (the Brady plan). Polish officials have called for some debt forgiveness, debt rescheduling or perhaps even conversion, plus IMF and World Bank loans. In return, Warsaw would move in the direction towards a free market by eliminating subsidies and privatizing industries.

That would enable Poland to carry on with its economic reform, alleviate its massive inflation, and further enhance the move towards democracy.

PETE BOWMAN

Escondido

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