Poland Economy Overview

Poland Economy Overview

Reconstituted into a state unit in 1918, according to itypejob.com, Poland was still in a rather backward position at the outbreak of the Second World War, with an eminently agricultural economy. The war completely upset the modest production structure, profoundly modifying even the very structure of the territory. In particular, Poland lost almost all the oil fields located in the Northern Carpathians, the fertile lands of Volhynia and Podolia., the rich forests of the eastern territories, but on the other hand it acquired a large outlet on the Baltic with the ports of Szczecin and Danzig, also taking possession of some regions of Pomerania and above all of the coal resources of Silesia. The annexation of the Silesian region, where the Germans had already created powerful industrial infrastructures, contributed to the birth of the great Polish industry. The new socialist regime, under the directives that in those years Moscow had imposed on all European countries that passed into the Soviet orbit, started an intense industrialization with absolute prevalence of heavy industry, whose further strengthening found favorable conditions in wealth. mining in the country. As part of agriculture the land reform was continued (which had already begun in the pre-war period and which had seen the dismemberment of large estates in favor of direct farmers), redistributing to the peasants, between 1945 and 1949, about 6 million hectares of arable land, partly obtained from former German properties. Overall, however, the agricultural structures remained backward and not very productive. Although a process of modernization was taking place compared to the past, the rigid planning with which the economic reforms had been implemented progressively manifested its inadequacy and its shortcomings. The poor improvement in the standard of living of the population led to a situation of general discontent and deep crisis, which culminated in 1970 in a series of protests and strikes which resulted in the fall of the government in office. An economic policy of clear break with the past was then established, aimed at overcoming the inertia accused over many years of prudent waiting. The new directives were mainly aimed at revitalizing the economy, increasing investments in the various production sectors, modernizing plants, diversifying industries, mechanizing agriculture, encouraging the competitiveness of companies, which were also given a large decision-making autonomy, and intensifying the production of consumer products, which had hitherto been strongly compressed. The path chosen to achieve these objectives was the integration of the Polish economy into the world economy: this was an element of fundamental novelty for a country that had traditionally pursued a very cautious programmatic line, with a substantially autarchic approach.

This inclusion, which should have made Poland an authentic industrial power, significantly raising the income of the population, no longer focused on basic industries, but on the development of processing ones, importing raw materials from the East and advanced technologies from Western countries., to then export finished products with high added value. The first results were extraordinarily flattering, so much so that they spoke of a real “Polish miracle”: in the years 1971-75 the national income increased by an average annual rate of 10%. But this development rush soon triggered those disharmonies and tensions that would have produced the very serious difficulties of the following years, also due to the inevitable repercussions of the changed international economic framework, which entered, starting from the second half of the 1970s, into a recessionary phase of enormous reach. In particular, the lack of structural reforms necessary to make the rigidly centralized systems of the economic system more flexible and the low level of specialization of the workforce soon became evident, unable to adequately exploit the technologically advanced machinery, which at very high costs the country was buying.

To complete the picture, also the lack of a global coordination of the various productive sectors since the clear priority assigned to the strengthening of industry went to the detriment of agriculture, which became less and less profitable, so much so that in the decade 1970-80 one million workers abandoned the work of fields, swelling the ranks of those who wished to enter industry or tertiary activities, both sectors not yet adequately developed. Inexorably, all the contradictions exploded, aggravated by the energy crisis and subsequent years marked by particularly adverse weather conditions and therefore with heavy consequences on agricultural yield. Industrial production began to decline and foodstuffs began to run low, forcing an increase in imports. Exports encountered ever greater difficulties, while the external deficit assumed gigantic dimensions, as did the burdens that the state had to assume to guarantee food subsidies. At the end of the Eighties, the continuous persistence of the strikes, the increase in prices and the foreign debt which, mainly due to the accumulation of interest, reached US $ 45 billion, exasperated the social and economic crisis of the country, contributing to the collapse of the communist regime in 1989. Faced with the difficulties of the nation, the new government implemented drastic economic maneuvers, such as the liberalization of prices and trade, the privatization of state enterprises, the reduction of social expenses and the virtual convertibility of złoty. However, these measures had serious social consequences such as the 50% increase in the price of basic necessities, the drop in demand and internal consumption and the emergence of the scourge of unemployment. However, after the initial crisis, the Polish economy experienced a gradual recovery.

Poland Economy

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