Learning to love restructuring
Over the past seven years Polish companies have had to restructure to survive. New accounting rules have helped improve the quality of management. And Polish workers have begun to understand that foreign investment brings with it security and new technology. By Graham Field
Poland has emerged as the Wunderkind of the central European economies. The drastic reforms launched in January 1990 turned it into the fastest-growing economy in Europe by 1995. At the micro-level, enterprises were subjected to competition from the start. The lesson of Poland is that the restructuring process is affected more by market conditions than by the form of ownership.
"The discipline of the market has been exerted from day one," says Mark Schaffer, a British economist who studies eastern Europe. From early on employees and managers whether in state, private or employee-owned companies have known that their future depends on the performance of their enterprises and that there will be no state-funded bail-out. In Poland's free-market environment, companies which do not pay their bills find that suppliers quickly refuse to do business with them. The word "bankruptcy" may not technically apply, but the consequences are just as harsh.
The private sector has mushroomed in this environment and now accounts for around 60% of GDP (compared with 31.4% in 1990). It has been growing at more than 20% each year and private companies are likely to remain the motor of growth for the economy.