POLAND: ECONOMIC PLAN

Created: 3/2/1981

OCR scan of the original document, errors are possible

POLAND: Economic Plan

Tha Kania regUe haa produced the draftomyraheneive program intended to stabilise the econom4 *ut hoe not uet released it. WMJ

The program will probably receive at least theapproval of Western bankers. Since theits draftersreduce the standard of living, it is likely to be opposed by Solidarity, and thus the regime may implement it only partially. Mmf

Despite some internal inconsistencies, the planar-reaching program that could substantially improve both economic efficiency and the balance of payments. It recommends organizational anddecentralization. It also calls for greater use of taxes, credit policy, and pricein influencing economic activity. Mh

The tone of the plan, with ita candid emphasis on the need for economic austerity, and some of itsrecommendations probably will generate widespread opposition. Especially controversialalready tried andlinking wages and productivity, lowering per capita meat consumption, and raising retail prices.

Some of the more provocative aspects of the plan are tempersd by other recommendations including one that retail prices should be raised only with public approval and with provision for at least partialfor higher food prices, fsjs

Among the more striking innovations ln the planallrogressive income tax. This proposalwill encounter opposition from the better paid, more influentialminers, for example. The plan alsoan on new social programs for the next threesuggestion likely to arouse protests from lower paid'workers. Mm

Some parts of the planood chance of being adopted because they are likely to raise, or at least not impinge on, living standards. These include measures to encourage private agriculture, ewitchlng productive capacity from Investment gooda to consumer goods,output of service industries, and increasing upplies for small industries and handicraftsApPpmaioM