Letters Feb 19th 2004
From The Economist print edition
The Economist, 25 St James's Street, London SW1A 1HG
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SIR - How can you claim that the monetary policy of Poland's
central bank and its governor "has been a huge success"
("The Balcerowicz effect", January 31st)? You point
out that inflation in 2003 was only 0.7%. But there is a wide
consensus that it will reach 3.0% by the end of this year. On
that basis, the disinflation over the past six years will not
have been all that impressive.
More striking have been the other effects of Mr Balcerowicz's
mistaken policies. During his tenure as minister of finance between
1997 and 2000, and then as the head of the central bank, Poland's
growth rate fell from 7.5% in the spring of 1997 to 0.2% by autumn
in 2001. Unemployment has jumped from below 10% then to about
20% now. The central bank's reserves have jumped to almost $33
billion, costing a lot to Polish taxpayers and businesses. Convergence
with the euro has been delayed by at least two to three years.
You may praise such a failure as "a huge success" from
the perspective of global speculators and hedge funds, which have
earned a lot of money from Poland, but definitely not from the
viewpoint of the Polish people. Please do not confuse the means
of the policy with its ends.
Former deputy prime minister and finance minister of Poland