Government/Macro
The government is in talks with the World Bank on a $250-$300 million loan to restructure ailing industries in the mining region of Silesia. The loan will be used to launch a large training and job-creation program in the region, where many miners and other industrial workers are being laid off as unprofitable collieries are gradually closed down.
Poland's four sugar holdings, created last month to group close to 50 state-owned sugar refineries, should become operational at the end of September. In June, the government decided to privatize several dozen sugar refineries by selling minority stakes in four holding companies into which the refineries would be grouped.
The International Monetary Fund has postponed its half-year assessment of Poland's economy because it wants to see the fuller effects of the recent partial floatation of the zloty. An IMF mission said it was generally pleased with Poland's performance and with its budget plans for 1996. Poland has an agreement with the IMF, valid until the end of the year, but it has already paid back a $1 billion credit attached to the stand-by.
The Privatization Ministry is likely to invite bids for the retail chain Domy Towarowe Centrum SA (DTC) in September. A DTC consultant said the company planned to offer 75% of shares in packages of at least 10%. The state will keep a 5% stake and the remaining 20% of shares would be put aside for employees. DTC, which owns several department stores in Warsaw, Lodz and other provincial cities, earned zl. 80 million ($34 million) in 1994 and expects a similar profit this year.
Banks are planning to create a completely computerized register of borrowers and collateral for loans by early 1996. Access to the registers will be limited by regulations the association will draw up in line with Poland's laws on banks and protection of economic activity. The registers will play a key role in helping banks, burdened with big portfolios of bad loans, to avoid risky investment and frauds.
Registered trade exports grew 39.8% in the first five months of 1995 from the corresponding period last year, while imports increased by 37.3%. The trade deficit grew in April by some $616 million and reached $1.84 billion for the first five months, 26% higher than in the 1994 period. Germany remained Poland's main trading partner, accounting for 37.9% of Poland's exports and 26.8% of imports, both slightly down from April, with bilateral trade worth about $6.2 billion.
Foreign companies that have entered partnerships with firms reinvest most of their profit in Poland, a study by an independent think-tank showed. The study, by the Market Economy Research Institute, showed that in 1994 some 85% of such profit was reinvested domestically and only 8% transferred abroad. It showed that foreign-Polish joint ventures export on average about 25% of their production.
The government's 1996 budget plan would slow down economic growth by encouraging imports and widening the trade gap, said Miroslaw Pietrewicz, head of the Central Planning Office. He said that the proposed budget, which calls for lowering import hurdles, could lead to a slowing of Poland's economic engine. He said that next year import barriers would be lowered by 24% on average.
Industry Minister Klemens Scierski said Parliament would have to approve any privatization of the oil sector, referring to a new draft law which would give the lower house a decisive say on sales of several key industries. Scierski said that no matter what happened to the bill, which was vetoed by President Lech Walesa and then overturned by parliament, selling stakes in oil refineries and the state-owned petrol distribution network, the CPN, was still an open question. He added that he had mixed feelings about earlier planned western participation in the restructuring of the sector.
Poland's four sugar holdings, created last month to group close to 50 state-owned sugar refineries, should become operational at the end of September. In June, the government decided to privatize several dozen sugar refineries by selling minority stakes in four holding companies into which the refineries would be grouped.
The International Monetary Fund has postponed its half-year assessment of Poland's economy because it wants to see the fuller effects of the recent partial floatation of the zloty. An IMF mission said it was generally pleased with Poland's performance and with its budget plans for 1996. Poland has an agreement with the IMF, valid until the end of the year, but it has already paid back a $1 billion credit attached to the stand-by.
The Privatization Ministry is likely to invite bids for the retail chain Domy Towarowe Centrum SA (DTC) in September. A DTC consultant said the company planned to offer 75% of shares in packages of at least 10%. The state will keep a 5% stake and the remaining 20% of shares would be put aside for employees. DTC, which owns several department stores in Warsaw, Lodz and other provincial cities, earned zl. 80 million ($34 million) in 1994 and expects a similar profit this year.
Banks are planning to create a completely computerized register of borrowers and collateral for loans by early 1996. Access to the registers will be limited by regulations the association will draw up in line with Poland's laws on banks and protection of economic activity. The registers will play a key role in helping banks, burdened with big portfolios of bad loans, to avoid risky investment and frauds.
Registered trade exports grew 39.8% in the first five months of 1995 from the corresponding period last year, while imports increased by 37.3%. The trade deficit grew in April by some $616 million and reached $1.84 billion for the first five months, 26% higher than in the 1994 period. Germany remained Poland's main trading partner, accounting for 37.9% of Poland's exports and 26.8% of imports, both slightly down from April, with bilateral trade worth about $6.2 billion.
Foreign companies that have entered partnerships with firms reinvest most of their profit in Poland, a study by an independent think-tank showed. The study, by the Market Economy Research Institute, showed that in 1994 some 85% of such profit was reinvested domestically and only 8% transferred abroad. It showed that foreign-Polish joint ventures export on average about 25% of their production.
The government's 1996 budget plan would slow down economic growth by encouraging imports and widening the trade gap, said Miroslaw Pietrewicz, head of the Central Planning Office. He said that the proposed budget, which calls for lowering import hurdles, could lead to a slowing of Poland's economic engine. He said that next year import barriers would be lowered by 24% on average.
Industry Minister Klemens Scierski said Parliament would have to approve any privatization of the oil sector, referring to a new draft law which would give the lower house a decisive say on sales of several key industries. Scierski said that no matter what happened to the bill, which was vetoed by President Lech Walesa and then overturned by parliament, selling stakes in oil refineries and the state-owned petrol distribution network, the CPN, was still an open question. He added that he had mixed feelings about earlier planned western participation in the restructuring of the sector.
