SPECIAL ANALYSIS - POLAND: ASSESSMENT OF LABOR UNREST

Created: 8/4/1980

OCR scan of the original document, errors are possible

SPECIAL ANALYSIS

POLANDi Assessment of Labor Unrest

tha eerikea and work slowdowns that have sprung up inearly julyersist and labor unrest--perhaps to athanore erueial role in dames the increasingly cynical working class has littlethe system and is unwilling toeduction in itsliving. the regime cannotonciliatorybecause concessions negate efforts to relieve theproblem and to improve economicthese mounting problems, there are no signs thatbuilding within the party for the removal of First _

Any preliminary evaluation by the regime of the worker disturbances will, at best, result in rixed Some party leaders may believe that the increases on meat prices haveay believe that the absenceonfrontation on the issue demonstrates the party's ability to exerciseover the workers under difficult clrcxistarCES.

These developments, however, will be weighed against the fact that the regime caved in to worker demands for pay increases. The events also revealed seriousin the activity of the party and its mass

provincial party organs apparently made tactical errors that caused certain strikes, and at times local party officials disobeyed orders fromoreover, come party members participated in strikes.

The failure of the trade unions to play any role ln the negotiation of worker grievances, and the strikers' demands for unions that represent worker Instead ofinterests will be' particularly worrisome to tho

proved tor Ml; Dal* I

Tco^cret ^uguTtl9M

Leadership. It may not confident that until worker interest in more representat diminishes, as it did0

temporise trade unions

party leadership also must be concerned that political dissident groups seized upon the events to act as an alternate news service, compelling the regimeto be more forthcoming with Western journalists, rhe dissidents' apparent success in establishing direct contacts with worker?, is another setback.

The disturbances probably have not diminished Gierek's personal status or his control over the party. No other" member of tho current leadership appears willing, orosition; to offer either himsolf or newroaches as alternatives.

Gierek is not likely to press for high-level scape* goats, if only because numerous personnel changes were Tiade at the party Congress in Pebruary. With some the authorities in Warsaw may place the blame

for inept handling of the situation on lower level M

Economic

The economic implications of the unrest are In particular, the regime's conciliatoryto the striking workers has seriously setcritically important austerity prograa. 'Wagehave been granted that are far in excess ofprice increases implemented last month and willthe national wage bill far more than

In addition, large production lossesduce exports and increase the need for compensatory imports. The Minister of foreign Trade has conceded that the ernment has abandoned hope forard trade surplus 4fe

-u factors beyond Poland's control ensure that the Polesrolonged period of austerity. As the Poles refuse to tolerate higher prices and a

--continued

lower standard of livingi as producers, they havoresisted linking wage increases to greater flat*

Any policy of appeasing the workers would require diminished exports of food and other consumer goods and probably even an increase in imports of these goods.hift of resources would severely complicate Polish efforts to borrow in Western capital markets,

To ease pressures in the consumer sector, the regime is left with the alternative of further cutting itsprogram or moderating defense spending.cuts, however, would seriously harm the economy over the long run, while any cutback ln defense spendingwould be opposed by the Soviets.

Soviet Concern

The Soviet leadership showed its heightened concern about recent Polish events by reducing the level of its representation at the Polish National Day celebration in Moscow onuly. The Soviet media also portrayed the Brerhnev-cierek taLks ofulyomewhat cooler tone than is normal.

The Soviets will be particularly sensitive to any sign that Gierek would be willing to allow greaterby unofficial worker groups, although there is no Indication that Moscow has lost its confidence in Gierek. Under current unstable conditions in Poland, Moscow would be uncertain what consoquences would result from withdrawing its support and it probably sees noin settingower struggle in Warsaw. fjk>

Outlook

For the next few months, the Pollen leadership will assess thef thetill not run itsseek to regain the initia-

i V If . unclear now cho disturbances will.affect theillingness to pursue essential out unpopular economic policies, or the pace at which it might proceed

Gierek probably will not retreatassive mood as he did after6 riots. He aay instead choose to proceed with wholesale price increases and other policy changes that are least likely to provoke wcrkors. He might alsoroader discussion about econooic reform, even though neither he nor Prime. Minister Bebiuch seen interested in radical changes.

The limited economic resources a* Gierek's disposal and his unwillingness to stray too far from traditional.-Communist practice leave hia with few alternatives. His mrin challenge will be to convince the people to accept austerity as the only realistic course. Toward that end, he probably will appeal increasingly to Polish patriotism and count on the Catholic Church to continuo its efforts to moderate public opinion, flfe

Original document.

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