Leszek Balcerowicz, Polish economist: biography, career

Almost thirty years ago, Poland managed to radically change its economy. Without them, the country would never have been able to become one with the European states. And these reforms have two fathers. The first of them is Leszek Balcerowicz. This brilliant economist has just developed a plan for transforming the economy. The second is Lech Walesa. He introduced reforms during his presidency. Without these two outstanding figures, Poland, which we now know, simply could not exist. They succeeded in what none of the politicians of the post-Soviet space, who were so eager for market transformations and European values, succeeded in doing. Now the field of activity of Balcerowicz is Ukraine. Poland has become a member of the EU, but does "shock therapy" help this time?

Biography

The future Polish economist was born in the small town of Lipno, which is located between Wroclaw and Poznan, in 1947. Since childhood, he has shown good ability to learn. In 1970, Leszek Balcerowicz graduated from the Foreign Trade Department at the Warsaw School of Planning and Statistics with honors. Later, he continued his education abroad. In 1974, Balcerowicz received a master's degree at St. John's University, which is located in New York. After that, he returned to Warsaw. There, in 1975, he defended his doctoral dissertation. In the early 1980s, Balcerowicz joined Solidarity. This opposition Communist party included many pro-Western intellectuals-technocrats of his generation. Balcerowicz did not play a prominent role in Solidarity, but he liked to collaborate with the Network, the latter being a union of enterprises that joined together under the auspices of the party.This was the origin of the idea of "shock therapy" for Poland, which was needed in order to transform the planned Economy in the market.

Carier start

As one of the leaders of Solidarity wrote in his memoirs, only Balcerowicz could have an idea about his own program of economic transformation at a time when meat was given out on cards in the country. In 1989, the ruling Communist Party and the opposition seated themselves at the negotiating table. In this discussion, the future reformer was only one of the participants. However, within a few months, Rakovsky and the Communists resign. Solidarity comes to power. And in 42 years Leszek Balcerowicz becomes vice prime minister for economy.

In power

The first important post was given to the economist in the first non-communist office, headed by Tadeusz Mazowiecki. The leader of Solidarity, Lech Walesa, touched ten candidates for the post of economic vice-premier. Many prominent economists refused this post. But Balcerowicz agreed and did not lose.

Poland in the 1980s-1990s

This is an extremely difficult period in the life of the country. The financial system was completely destroyed, there was a general deficit in the economy, prices were constantly growing, and even the key products were disrupted. Without the formation of market mechanisms could not be dispensed with. This was the only way to ensure financial and monetary stabilization. Balcerowicz got tough times. There was no mechanism for the transition from industrialized to market economy. Everything had to start from scratch. After Balcerovich left the government, he returned to science. He taught in Warsaw, lectured at European and American universities, wrote several books about the Polish experience of reforms. However, he never had enough theory, it was necessary to test all the hypotheses in practice.

Back in the government

In 1994, the economist joined forces with former Solidarity figures and created the Freedom Alliance, which he headed. Over time, the new party became the most numerous in Poland. In the 1997 parliamentary elections, she took third place. So Leszek Balcerowicz returned to power. He again took the post of economic vice-premier and finance minister. In 2000, Baltserovich, foreseeing the rapid collapse of the coalition, left the government, managed to visit Shevardnadze's advisor, and in 2001 became president of the National Bank of the country. He left this post in 2007. In the same year he was awarded the title of "the largest reformer in the European Union" by the Brussels analytical center. In 2008, the economist became one of the eight members of an expert group that worked to develop solutions to the consequences of the global financial crisis. In 2016, Balcerowicz was appointed representative of the President of Ukraine in the Cabinet of Ministers of the country.

The essence of reforms

In the early 1990s, Poland was in a state of deep systemic crisis. In the country, such phenomena as a decline in the general standard of living, hyperinflation and a general decline in production were observed. The strategy for overcoming the crisis implied a transition to market mechanisms, a change in ownership structure, demonopolization of the economy, and reforms in all spheres. Balcerowicz's plan included:

• Carrying out a tight restrictive monetary policy. It assumed a reduction in the emission of money and an increase in interest rates.
• Liquidation of the budget deficit. Most of the tax benefits were abolished, as were subsidies for food, energy, raw materials, etc.
• Liberalization of prices. Only state energy, medicine, rent and transport tariffs remained under state control.
• Establishment of partial convertibility of zloty.
• A strict restrictive income policy. It included the abolition of full indexation of salaries and the establishment of high rates of progressive tax.

results

In 1990, the government launched a "shock therapy". Subsidies to agriculture were abolished. The government managed to strengthen the zloty. However, in enterprises there was a shortage of cash, bank loans became inaccessible. Therefore, the production decline began. The population quickly became poor. And unemployment has increased significantly. Thus, "shock therapy", although it balanced the budget and helped overcome hyperinflation, but became a factor in deepening the crisis. Therefore, it was decided to soften it. The structural adjustment of the economy, in the center of which was privatization, was placed on the first place. Already in 1992, it brought the first fruits.

Balcerowicz and Ukraine

Poland was able to overcome the legacy of the planned and administrative economy and even enter the European Union. But will this experience help Ukraine? Economic reforms in Poland were successful, now they are trying to adapt to new realities. "Shock therapy" in Ukraine began the government of Yatsenyuk. According to Balcerowicz, this helped to avoid even more difficult times. He believes that first of all, it is necessary to pay attention to the development of the private sector. And this means the need for large-scale deregulation. Corruption is also important. Relevant bodies must earn in full force. At the next stage, Balcerovich proposes to stabilize the hryvnia and reduce the budget deficit. Ukraine is hindered by the close connection between the authorities and the oligarchs. And this requires political will. Another side of the reforms is privatization. To attract foreign investment, reforms are needed, not their appearance. This is how it was possible to attract money to Poland. Therefore, Ukraine has only to work on its national economy and demonstrate real results. You can not justify your failures by military actions and difficult times. Investors need results, not assurances of their appearance in the future. As soon as they are, Ukraine will receive such a necessary inflow of foreign investment.