Date: 	Sun, 2 Nov 1997 15:10:29 -1000
From: Stephen E Philion <philion-AT-hawaii.edu>
Subject: Re: M-I: Re: Working class politics in Poland


Dennis,

How do you explain that Poland is not going the smart route?  What
constraints keep it from doing so?

Steve

On Sun, 2 Nov 1997, Dennis R Redmond wrote:

> On Sat, 1 Nov 1997, Louis R Godena wrote:
> 
> > Further cuts in social spending
> > will have to be especially deep if this year's growth rate of about 7 per
> > cent is slowed to avoid a balance of payments crisis and a resulting loss of
> > confidence in foreign capital markets.   
> 
> Polish growth has been based on exports to Central Europe, not an internal
> credit bubble a la Thailand. They're more likely to devalue their
> currency, thus boosting exports and keeping the growth cycle in
> gear, and then hitting up the Germans for debt relief. Lots of German
> multis have big-time investments in Polish manufacturing; devaluation
> would cheapen the cost of intermediate inputs into lots of German products
> and generate juicy surplus-profits for Deutsche Bank etc., which could
> then loan the money back to Poland. If the Poles are smart, they'll
> replace expensive imports with domestic industrial goods, and export their
> way to Taiwanese-style prosperity. 
> 
> -- Dennis
> 
> 
> 
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