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So Long, Lech. Now What? (Int'l Edition)


International -- Intl' Business: POLAND

SO LONG, LECH. NOW WHAT? (int'l edition)

The era of Lech Walesa is over. In presidential elections on Nov. 19, Poland's hero of Solidarity lost to Aleksander Kwasniewski, chief of the ex-communist Democratic Left Alliance and a former communist minister. The 41-year-old Kwasniewski shrewdly cobbled together a voter base of farmers and pensioners who have missed out on market reforms, as well as young people irritated by Walesa's virulent red-baiting and the Catholic Church's ham-handed intervention.

Even though many of his supporters miss the security of the old regime, Kwasniewski claims a commitment to market capitalism: "I want to assure everybody that Poland will not abandon the reforms." Many outsiders think the Polish economy, growing at 6.5% a year, has progressed too much to reverse course. In fact, former communists in control of parliament for two years have lowered inflation. Now, "it's a question of speed, not direction," says World Bank representative Paul Knotter.

But Kwasniewski has to prove he can tame the left wing of his party. Walesa, despite his often savage outbursts against friend and foe alike, acted as a brake against the leftists. And cronyism sponsored by Kwasniewski could award positions of power to oldtimers who would balk at further restructuring.

A key indicator of Kwasniewski's true intentions will be his approach to privatization. Although Kwasniewski got a mass program going, individual sell-offs have slowed in the past two years, and his supporters are sounding lukewarm about any pickup in the pace. Comments Jerzy Wiatr, a senior Democratic Left Alliance member: "We do not believe that by definition, privatization is better than public ownership." Yet if privatization slows, warns Lescek Balcerowicz, the architect of Poland's early shock-therapy reforms, "the economy could lose momentum."

Kwasniewski plans to reform the ponderous state pension system by supplementing payouts with private pensions. Another goal is membership in NATO and the European Union. Says Jerzy Milewski, a former top defense official under Walesa who also advised Kwasniewski: "He has the political will." No doubt. The question is how this skilled but opportunistic politician will use his newfound clout.By Karen Lowry Miller in Bonn


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