Poles set for privatisation as parliament passes bill: Western bankers welcome positive signal for investors

Adrian Bridge
Friday 30 April 1993 23:02

THE Polish parliament yesterday re- confirmed the country's commitment to market reforms by passing a controversial privatisation Bill under which millions of Poles are set to become shareholders in some 600 state- owned enterprises.

The vote, which came just one month after the Sejm (parliament) rejected an earlier version of the Bill, was quickly hailed as a personal triumph for Hanna Suchocka, the Prime Minister, who described it as an 'important day for the Polish economy' and a 'significant step forward'.

Representatives of Western banking circles also welcomed the decision, suggesting it would send positive signals to would-be investors in Poland. 'We are elated. This is an absolute breakthrough,' said Christian Duvigneau, a representative of the World Bank in Warsaw. 'It is of major importance in the eyes of the world.'

Although Poland's privatisation programme was originally unveiled in 1991, its controversial nature resulted in a two-year delay before it was put to a parliamentary vote. In its original form, the privatisation bill sought to give all Poles, including children, the chance to buy the shares at nominal prices. They were then to be transferred to investment funds under the management of foreign consultants.

When the Bill first came before the Sejm last month, many MPs rejected it because they objected to foreign consultants getting so much power over Polish enterprises. Many of those who subsequently swung behind the Bill, however, were won over by arguments that a second rejection could damage the first indications of economic recovery since the collapse of Communist rule in 1989.

Without a clear majority in the Sejm, Ms Suchocka had to rely, ironically, on the support of many former Communist MPs. As a price for their support, the ex-Communist Social Democratic Left insisted on a series of amendments, including the free distribution of some of the shares to pensioners and public sector workers to compensate them for a pension and wage freeze.

One of the main aims is to create a viable stock market, adding a significant number of companies to the 16 listed on the Warsaw stock exchange.

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