Impact of Economic Reform in Poland

Economic Reform in Poland had been implemented in 1982. The impact of economic reform in Poland was positive initially for which, Poland witnessed an economic growth. The other several impacts of economic reform are discussed below.

The national income increased by 0.5% from the previous year’s (1983) figure due to economic reform. But still this growth was proved insufficient to compensate the previous years’ deficit in income. So a new reform plan was made in 1990. However, a significant growth in industrial production had been achieved. Selling of industrial production also increased by 5.3%, and growth in the manufacturing sector had been achieved. Although in some areas the performance was not good, for example, steel production increased by only 1.9%, but the electronics sector achieved a good growth percentage and so was the agricultural sector.

The main aim of the Polish government was to extend the enterprise autonomy in financing and planning. At the factory level, the government also wanted to initiate a method of worker councils. So the reform had been continuing, and the economic condition of Poland was improving slowly.

In 1984, Poland witnesses a currency trade surplus for the third time in a row and this allowed Poland to repay its foreign debts in time. In this year, Poland was also able to import the required raw materials for the industries. But in 1985, this surplus came down and the import increased by 37.9% from the previous year’s. So the Polish government devalued the currency (zloty) by 16.8% to promote the export businesses.

During the economic reform process, the government shifted the composition of overall trade to raw materials. The share of exportable products like, food and farm produce, mineral industry and fuels and energy increased. In the same time, the share of chemical industry equipment, power-generating equipment and engineering industry products fell down.

Through the economic reform the planned economies had been decentralized which resulted in an unstable financial condition. So the Polish government started a new reform plan in 1990. The impact of this new reform was also good. Poland gained more than 50 billion dollars through direct foreign investment, but the government took a strong position in the economy. Moreover, opportunities for trading and investing was increasing over all the different sectors. Through the privatization of the small and medium scale state enterprises helped to develop the private business sector which drove the economic and financial growth of Poland.